Ukraine receives €4.36 billion from the EU for its budget and military equipment

The payment comprises €3.7 billion in macro-financial assistance, released after 12 reform conditions were met, and €658 million for defense. The money comes from the European support loan for Ukraine, whose ceiling is €90 billion for 2026–2027.

On November 5, the European Commission transferred €4.36 billion to Ukraine to finance public services and the purchase of military equipment, in a new payment under the European support loan for 2026–2027. The largest part, €3.7 billion, represents macro-financial assistance unlocked after, according to the Commission, Kyiv fulfilled all 12 reform conditions applicable to the tranche. Another €658 million is earmarked for defense.

1. The payment has been made, and the Ukrainian government confirmed receipt of the money. The €3.7 billion supports the state’s finances; the €658 million will support purchases of drones, missiles, radars, electronic warfare systems, and ammunition for air defense.

2. The conditions for the macro-financial component include taxing income earned through digital platforms, removing the VAT exemption for low-value commercial imports in parcels, and changes in budget planning, public investment, customs, and external auditing. Their fulfillment is the Commission’s assessment.

3. The loan has a ceiling of €90 billion for 2026–2027. For 2026, up to €45 billion has been made available, of which €16.7 billion is for budget support and €28.3 billion for defense industrial capabilities. These ceilings do not represent amounts already paid in full.

4. The Commission indicates that another €25.2 billion remains available in European support for the rest of the year, through the support loan and the Ukraine Facility. Their disbursement remains conditional on the requirements of each instrument.

5. The money is provided as a loan, not a grant. Repayment is linked to reparations or compensation received from Russia, but the regulation also provides clauses for violations of fundamental conditions, fraud, or corruption.

The government in Kyiv confirmed receipt of the money the same day. Prime Minister Sergii Koretskyi announced that the funding would cover priority budget expenditures and the urgent needs of the defense forces. The two components have distinct purposes: macro-financial support helps cover the state’s financing deficit, while the military component finances purchases.

The €658 million for defense represents the seventh payment under this component of the loan. According to the Commission, the total transferred for defense through the instrument has thus reached €16.4 billion. The new funding will support the purchase of drones, missiles, radars, electronic warfare systems, and ammunition for air defense, and most of the money from this payment is expected to finance equipment purchased from Ukrainian companies. The payment finances purchases; it does not mean that the equipment has already been delivered.

The operation is part of the support loan for Ukraine, established by Regulation 2026/467, with a ceiling of €90 billion for two years. The implementing decision adopted by the Council in April set support of up to €45 billion for 2026. Of the €16.7 billion budget component, half, up to €8.35 billion, is provided through a macro-financial assistance operation, while the other half is provided through loans implemented under the Ukraine Facility, the European instrument for supporting Ukraine. The two channels have their own conditions and payment procedures.

The €3.7 billion macro-financial tranche is the second of the three provided for under this operation. The first, €3.2 billion, was paid on June 25. The memorandum of understanding between the EU and Ukraine provides for a third tranche with an indicative value of €1.45 billion. The next payment remains conditional: before each payment, the Ukrainian authorities must submit supporting documents, and the Commission verifies compliance with the agreed measures and may withhold the tranche if the assessment is negative.

The 12 conditions for the current payment primarily seek to increase domestic revenues. The memorandum requires the adoption of legislation to tax income earned through digital platforms and the removal of the tax exemption for imported parcels, with an exception for goods intended for security and defense. The Commission’s communication describes this second measure as the removal of the VAT exemption for low-value commercial imports. A legal framework for property valuation, a roadmap for VAT compliance, and a plan to improve tax compliance are also provided for. For alignment with European rules on limiting interest deductibility, the condition is the submission of legislative proposals to parliament, not the adoption of the entire European framework against tax avoidance.

Another group of measures concerns how the government prepares its budget and selects investments. The 2027–2029 budget statement must distinguish the evolution of revenues and expenditures in the absence of new policies from the effects of the measures the executive intends to introduce and must include an annex on public investment. The memorandum also requires clarification of the investments covered by the public investment management system and the adoption of a concept, accompanied by an action plan, for integrating the relevant information systems. The latter condition concerns the framework and timetable for integration, not the existence of an already fully operational information system.

On the control and administration side, the list includes updating the customs digital development plan through 2030 and adding three experts to the selection committee for the leadership of the Accounting Chamber of Ukraine. This is the body that participates in selecting the leadership of the external audit institution, not the direct appointment of three members of that leadership. The list of conditions also includes a government decision on evaluations of budget expenditure in areas such as housing, regional policy, and support for veterans, with comparisons of options for using the money.

The Commission states that all 12 conditions have been fulfilled. This finding allows the tranche to be paid, but the requested measures have different stages: some involve adopting laws, while others involve submitting proposals or approving implementation plans. The memorandum separately maintains requirements concerning the functioning of democratic mechanisms, the rule of law, respect for human rights, and the absence of backsliding in the anti-corruption measures undertaken in the EU or IMF support programs.

The support is provided in the form of a loan, not a grant. The Commission borrows the funds on the capital markets, while Ukraine’s repayment is linked to receiving war reparations or compensation from Russia, in accordance with the limited-recourse mechanism provided for by the regulation. There are also separate clauses: violation of the fundamental condition concerning democracy, the rule of law, and human rights may trigger repayment of the entire outstanding amount, while fraud, corruption, or other illegal activities harming the EU’s financial interests may trigger repayment of the affected amounts. Failure to comply with the repayment conditions may also make the outstanding amount due in full or in part.

In the balance sheet published on November 5 for the remainder of 2026, the Commission indicates that another €25.2 billion remains available in European financial support for Ukraine. Of this amount, approximately €20.9 billion is provided through the support loan: €11.9 billion for defense and €9 billion for the budget. Separately, nearly €4.4 billion remains available through the Ukraine Facility, excluding the supplement financed by the support loan. The component amounts are communicated in rounded figures. Access to these funds depends on fulfillment of the conditions in the respective legal bases; for the next macro-financial tranche, the memorandum establishes a new list of reform measures.

https://2eu.brussels/ro/news/ucraina-primeste-4-36-miliarde-de-euro-de-la-ue-pentru-buget-si-echipamente-militare