The most surprising element in the new KSE Institute report is not the figure of $67.4 billion itself, but the fact that it emerges precisely due to the expiration of already agreed financing mechanisms. The problem is not that partners are refusing to pay, but that what has already been agreed upon has a time limit — and it expires before the war ends.
Two unsynchronized clocks
KSE analysts shifted the baseline scenario: combat operations are now projected to last at least until the second half of 2027, not earlier as expected. This means that military spending cuts will not begin in 2027, but only from 2028 onwards. In 2027 alone, defense spending will exceed the previous forecast by $43 billion.
Meanwhile, the ERA mechanism — attracting revenue from frozen Russian assets — and the EU's Ukraine Facility funds have a clear end date: payments under them will be fully completed by the end of 2027. This creates a time gap: money runs out according to a schedule drawn up for the older, shorter war scenario, while the war itself continues according to the new, longer one.
Why 90 billion euros don't save the situation
It seemed that in July, the Verkhovna Rada had already responded to the new credit resource — the Ukraine Support Loan of 90 billion euros, approved by the EU for 2026–2027, which allowed budget revenues to increase by 2.3 trillion hryvnias and expenditures by 1.6 trillion hryvnias. However, according to KSE calculations, this program covers needs only within its operational period and does not bridge the gap emerging in 2028–2029 — precisely when ERA and the Ukraine Facility are already exhausted and defense spending has not yet begun to decline.
If an additional $67.4 billion cannot be attracted, Ukraine's ability to defend itself against Russian aggression will be at risk — the government will be forced to resort to emission, which will deplete macroeconomic buffers and leave post-war reconstruction critically underfunded, warns KSE Institute.
Betting on the MFF 2028–2034
This is why Ukraine asked the EU back in 2025 to take long-term support into account in the next seven-year budget — the MFF for 2028–2034. The logic is simple: if the financing cycle is synchronized with the real schedule of war's end rather than the desired one, the gap can be avoided. However, negotiations over the MFF are a multi-year process involving 27 national interests, and quick decisions are rare here.
The question for the coming months is not rhetorical: will EU institutions manage to include a specific amount for the Ukrainian gap in the MFF 2028–2034 before the ERA and Ukraine Facility mechanisms formally conclude their operation at the end of 2027?
