EU prepares financial response to Ukraine's €70bn budget deficit

Seeking solutions for deficit financing

The European Commission is examining options to increase the volume of financial support for Ukraine next year. According to an internal document circulated to EU member states, the institution is attempting to agree on measures to cover a significant budget deficit by the end of the current year. This step was taken following a statement by President Volodymyr Zelensky regarding the need for €70bn to cover the deficit.

Emphasis on flexibility in support

The EC materials state that «швидко змінювані потреби на полі бою вимагають певної гнучкості у наданні майбутньої підтримки, щоб оперативно реагувати на них» (the rapidly changing needs on the battlefield require a certain flexibility in providing future support to respond to them promptly).

Preparation for the Brussels summit

European Council President António Costa has instructed the European Commission to prepare a “concrete proposal” regarding Kyiv's financial needs. Discussion of this issue is scheduled for a special summit to be held in Brussels on 26-27 November.

Financing scenarios and conditions

According to Brussels Signal, the plan involves covering two-thirds of the amount mentioned by Zelensky. Many officials and diplomats believe that the aid could be structured as a new EU loan, similar to the current one worth €90bn. However, they note that the €70bn deficit figure voiced by Zelensky is preliminary and may be adjusted.

Meanwhile, the document contains a call for Ukraine to “promptly carry out” reforms related to the current €90bn EU loan, of which only €20bn has been disbursed so far.