Ukraine risks missing out on up to €1.5bn from EU

Ukraine could miss out on up to €1.5 billion in aid from the European Union due to delays in carrying out reforms stipulated in the Ukraine Facility programme.

Source: press service for the Centre for Economic Strategy, a Ukrainian economic policy think tank 

Details: The Ukrainian government failed to meet three structural benchmarks under the Ukraine Facility for the first quarter of 2025. The country could miss out on up to €1.5 billion in EU assistance as a result.

This conclusion is presented in the RRR4U Consortium’s monthly Monitoring Report, which tracks Ukraine’s implementation of IMF and EU programmes.

The unfulfilled commitments include expanding the staff of the High Anti-Corruption Court of Ukraine, reforming the Asset Recovery and Management Agency (ARMA), and overhauling the territorial organisation of executive power. Of the eleven benchmarks to be achieved by the end of the second quarter, only three have been met.

"The high regularity of ERA loan disbursements is not a panacea and not an excuse to derail the Ukraine Facility," commented Bohdan Slutskyi, an economist at the Centre for Economic Strategy. He noted that in 2025, Ukraine plans to increase state budget spending by UAH 400 billion (about US$9.6 billion), largely by issuing expensive domestic government bonds with interest rates exceeding 16% per annum. 

In contrast to the EU funding, all IMF requirements related to integrating public investment into the budget process have been fulfilled on time. This will enable Ukraine to receive the next IMF tranche of US$490 million. However, the overall situation concerning reforms under the programme remains complex. Notably, the government has already agreed to postpone the customs reform benchmark until the end of the year.

Background:

• Ukraine has received another €1 billion in EU aid funded by revenues from frozen Russian assets.
• During 2025-2026, Ukraine is expected to receive US$3 billion from windfall profits on frozen Russian assets.
• The European Union has officially announced plans to allocate nearly €1.9 billion for military support for Ukraine.

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