Ukraine's Finance Minister Serhiy Marchenko said the country's budget situation is the worst it has been since 2022, warning that Kyiv may be forced to cut non-military spending if it cannot secure financing from its European partners.
Speaking in an interview with Euronews, Marchenko said Ukraine's base annual need for external financing remains around $50 billion, while the country's uncovered financing gap for 2027 is estimated at $32.6 billion.
He said Ukraine had not faced a situation like this since 2022, when the country genuinely suffered from a lack of liquidity, and said it was now coming too close to that same scenario again.
Marchenko has served as Ukraine's finance minister since 2020 and has managed the country's public finances throughout Russia's full-scale invasion, which began in February 2022.
Echoes of the 2022 liquidity crisis
Russia's full-scale invasion in 2022 blew a huge hole in Ukraine's state budget, creating a deficit of about $5 billion a month. Part of that gap was covered by the National Bank of Ukraine, the country's central bank, through emission financing, effectively printing money to buy up government bonds.
Ukraine abandoned that tool from 2023 onward, after the central bank warned that prolonged budget financing through money creation would lead to hyperinflation. Since then, Kyiv has relied heavily on grants and loans from the United States, the European Union and other partners to plug its wartime budget deficit.
Marchenko said Ukraine was already seeing some liquidity problems and expected a certain deficit in its budget, meaning it might have to delay some payments unrelated to the war because of the lack of liquidity.
Plan to tap frozen Russian assets
Marchenko welcomed an initiative by a group of European Union countries to revive a plan to use 200 billion euros in frozen Russian assets for Ukraine's benefit. Most of those assets are held by Euroclear, a securities depository based in Belgium, which has raised concerns about the legal and financial risk of any move to seize or redirect them.
Marchenko said the Ukrainian government has its own proposal on the table: changing responsibility for the assets currently held in Belgium, for example by shifting custody of them from Belgian jurisdiction to the level of the European Union as a whole.
He explained that the plan would create new conditions under which the responsibility for legal disputes with Russia over the assets would no longer rest with Belgium alone, but would become the shared responsibility of all 27 EU member states.
A budget already stretched by war spending
Ukraine's parliament, the Verkhovna Rada, revised the state budget twice in 2025 to fund military spending, raising it by 412 billion hryvnias at the end of July and by a further 325 billion hryvnias in October.
Total cash expenditure from the general fund of the state budget for January to April 2026 reached 1.35 trillion hryvnias, up 13.8% on the same period a year earlier. Security and defense spending from the start of the year through May totaled 854.1 billion hryvnias, equal to 63.3% of all general fund expenditure.
In June, the Rada approved further changes to the 2026 state budget, increasing spending on monetary allowances for Ukraine's Defense Forces by 174 billion hryvnias.
2027 financing still not secured
At the end of June, Marchenko said Ukraine's state budget needs for 2026 were fully covered thanks to support from international partners, but that financing for 2027 had not yet been secured.
