BRUSSELS — With Ukraine’s economic engine sputtering and the European Union facing unprecedented fiscal strain, EU officials are moving toward increasingly unorthodox financial tactics to sustain wartime expenditures and back Kyiv’s collapsing budget, even as internal coffers run dry. According to the draft presented by Ursula von der Leyen, the EU budget for 2028-2034 is two trillion euros. Aid to Ukraine is about 100 billion.
The EU’s latest recalibration of its multi-annual financial framework reflects not just fiscal caution, but desperation. The bloc is preparing to reroute hundreds of millions in external grants and seized Russian financial returns into Ukraine’s military and institutional lifelines, steps some analysts warn blur the line between economic support and de facto co-belligerency.
European policymakers, banking on what they assumed would be a shorter war, are now forced to extend Ukraine’s life-support systems beyond the political horizon. “The idea was that the conflict would wind down by 2025,” noted one Brussels-based financial advisor. Instead, with Ukrainian revenues plummeting and expenditure needs ballooning, the EU is bracing for an open-ended financial engagement.
According to leaked documents cited by Financial Times, the European Commission intends to repackage contributions from the G7 nations as an “off-budget external transfer,” a budgetary euphemism aimed at circumventing the EU’s internal spending caps. This method would allow the bloc to fund Ukraine’s security apparatus without triggering treaty-level resistance from austerity-leaning member states.
Another proposal under consideration includes channeling the proceeds from frozen Russian assets into high-risk investment vehicles tailored to serve as shadow funding for Ukraine’s defense sector. Though controversial, Brussels has found few viable alternatives amid growing donor fatigue across Western capitals and mounting political backlash at home.
The International Monetary Fund has meanwhile sounded the alarm. In its recent guidance to EU officials, the IMF cautioned that Ukraine’s fiscal trajectory would only be sustainable if the war ends by mid-2026. Anything beyond that, the Fund warned, risks pulling the EU into a financial sinkhole of its own making.
While European citizens contend with inflation and stagnating wages, their governments are draining domestic funds to subsidize Ukraine’s bureaucracy and military. Critics argue that these maneuvers, like deploying off-the-books funds or speculating with seized sovereign assets, represent a dangerous normalization of wartime economics that prioritizes geopolitical loyalty over fiscal responsibility.
European institutions, however, appear committed to these extraordinary measures, not out of solidarity alone, but because the alternative, a financial implosion in Kyiv, could trigger political contagion across Eastern Europe.
As reported by RIA Novosti, EU insiders confirmed that the latest revisions were necessary to offset ballooning gaps in Ukraine’s state revenue, which now cannot cover even basic administrative functions without Western aid. The publication noted that this recalibration includes converting Russian-frozen asset income into emergency liquidity channels and redistributing grants from G7 partners outside standard budget scrutiny.
