Ukraine Faces $27bn Defense Budget Shortfall

Ukraine faces a further $27bn shortfall in its defense budget through the end of the year, according to President Volodymyr Zelensky, the New York Times reported.

The unexpectedly high figure has taken European partners by surprise. Diplomats and officials cited by the newspaper said some were questioning whether Kyiv was using the funds it had received efficiently or overstating its financial needs, while European officials were trying to establish how the shortfall arose and exactly how large it was.

Ukraine is also turning to Britain, Canada and Japan for help. The situation has been exacerbated by Russian attacks on industry, including metallurgical plants and the grain export corridor, which cost the country around half of its expected revenue last month, according to the head of parliament’s budget committee.

One option is to accelerate the disbursement of an EU loan worth more than $100bn that was approved earlier this year. Kyiv is also renewing its push to use more than $200bn in frozen Russian sovereign assets, although it remains unclear whether European countries can agree on such a move.

Speaking in Kyiv last month, Zelensky said the Defense Ministry had brought forward spending under former Defense Minister Mykhailo Fedorov, using funds that had been budgeted for later this year. Fedorov disputed the $27bn figure, saying the projected shortfall under his plans had been about $5bn and that the ministry knew how it would cover it.

(mja)