The Budget Committee of the Verkhovna Rada recommended bill No. 15224 for second reading and in full. The committee chair Roksolana Pidlasa confirmed: the document increases spending in the security and defense sector by 1.56 trillion hryvnias — primarily through the Ukraine Support Loan from the European Union.
Where the money comes from
The Ukraine Support Loan program is an EU credit of 90 billion euros for 2026–2027. This year Ukraine is expected to receive 45 billion euros: 31.8 billion for the security and defense sector, 13.2 billion for budget support for social and humanitarian needs. To enable these funds to be legally allocated, the Ministry of Finance initiated changes to the budget.
When presenting the bill on May 28, Finance Minister Serhiy Marchenko detailed the distribution: 1.371 trillion hryvnias for weapons development, 174 billion hryvnias for military personnel allowances. Regions will receive 40 billion hryvnias for "resilience plans," and the reserve fund will increase by another 40 billion hryvnias.
What the committee changed
During refinement, the committee proposed amendments to the government text: in particular, to distribute in advance more than 1.3 billion hryvnias from the Reserve Fund — between specific state institutions and programs. Pidlasa did not detail the distribution breakdown in public statements.
Conditions that remain on paper for now
A key feature of the Ukraine Support Loan is an atypical repayment structure for government loans. According to Interfax-Ukraine citing the Finance Ministry, European Commission documents do not contain a specific repayment timeline, and Ukraine will have no repayment obligations if Russia does not pay reparations. In the absence of reparations, the EU can use frozen Russian assets to repay the loan. Interest on the loan will be covered by the EU budget itself.
"The direction of the budget portion of funds will be linked to Ukraine's fulfillment of defined conditions, which may affect the size of individual payments."
Ministry of Finance of Ukraine, response to Interfax-Ukraine inquiry
In simple terms: money will arrive in tranches and not automatically — each tranche depends on whether Ukraine meets the list of reforms agreed with the EU.
Context: the budget is already in deficit
Even before these changes, state budget expenditures for 2026 amounted to 4.82 trillion hryvnias — 27.2% of GDP for defense and security. Associated Expert at CASE Ukraine Oleh Hetman characterizes the overall budget structure sharply: according to him, Ukraine has "critical dependence on tranches from international donors," and the absolute majority of its own tax revenues go to defense — with no reserve for reconstruction investments. Hetman warns that combining fiscal pressure on the real sector with inefficient fund allocation "creates significant risks for the financial system."
The IMF forecasts Ukraine's GDP growth in 2026 at only 2% — a survival mode, not recovery. According to the Finance Ministry, government debt has already reached 98.4% of projected GDP.
What's next
The bill goes to a vote in the Verkhovna Rada in second reading. Technically, its adoption is a formality: the committee recommended "in full." But if the first tranche of the Ukraine Support Loan is delayed or the EU deems reform implementation insufficient — 1.56 trillion hryvnias for defense in the budget will be written in without funding. Whether the government has a contingency scenario for this situation has not been publicly disclosed.
