On June 30, the European Commission transferred β¬3.9 billion to Ukraine β the first purely defense tranche under the Ukraine Support Loan credit of β¬90 billion. This is not budgetary support: the funds went to a special fund of the State Budget and will be spent according to a separate register of defense purchases agreed with Brussels.
Why drones β and only drones
The first "product schedule" that Ukraine submitted to the European Commission involves drones of Ukrainian manufacture. As explained by Hlib Vyshlinsky, executive director of the Center for Economic Strategy, this means that the first payments will go exclusively to domestic purchases. Priority is given to suppliers from the EU, EFTA/EEA, and Ukraine; purchases of components from third countries will require separate approval from the European Commission.
According to Prime Minister Yulia Svyrydenko, the funds will be directed toward three areas: drone production, strengthening defense industry capabilities, and urgent supplies to the front. Subsequent tranches of the defense package will cover ammunition, missiles, and air defense systems.
"Ukraine's ingenuity lies at the heart of its success in resisting full-scale invasion. It is this ingenuity that we want to support."
β Ursula von der Leyen, President of the European Commission
Context: where the β¬90 billion comes from and who will pay for it
Ukraine Support Loan is an EU credit instrument for 2026β2027. Of the total amount, β¬60 billion is allocated for defense, with another β¬30 billion for budgetary support. In 2026, Ukraine has access to β¬45 billion: β¬28.3 billion for defense and β¬16.7 billion to cover the deficit. On June 25, the first budgetary tranche of β¬3.2 billion was already received. Together with the current β¬3.9 billion, the total amount of funds received reached β¬7 billion.
The loan is financed through joint EU borrowing on capital markets β without participation from Czechia, Hungary, and Slovakia. Debt servicing will be covered from the EU budget (approximately β¬1 billion in 2027 and β¬3 billion annually from 2028 onward). Repayment of the principal by Ukraine is linked to its receipt of reparations from Russia.
What this means for ordinary people
Without this credit, as economists warned, Ukraine could have exhausted its resources by June β which would have meant salary cuts for teachers, doctors, and pensioners. As Reuters noted, β¬17 billion per year from the overall package is reserved specifically for healthcare, education, and social benefits.
At the same time, analyst Yulia Markuts from the KSE Institute cautions that even with the credit, the defense budget may require revision β by up to β¬10 billion, depending on developments at the front. According to her, last year Ukraine already increased military spending beyond plan, covering the difference with government bonds and G7 credits.
New mechanism: real-time audit
The fact that the first tranche for drones was delayed β initially the money went to budgetary support β is related precisely to the development of control architecture. As reported by Euractiv, the EU needed time to create an audit mechanism that will track the targeted use of every euro spent on defense purchases. The Cabinet of Ministers has already approved the corresponding procedure: monitoring, control, audit, and reporting according to EU requirements. The European Commission will have access to information about each transaction.
CES analyst Maksym Samolyuk emphasizes a fundamental difference from previous aid: weapons purchased with the defense credit will have no restrictions on use β unlike, for example, HIMARS, whose use against Russia was initially blocked by the manufacturer.
In 2025, Ukraine produced 4.5 million FPV drones. For 2026, the National Security and Defense Council estimates annual production capacity for the FPV segment alone at over 8 million units β and it is this production line that now receives its first direct funding from the EU.
If the European Commission maintains the payment schedule and transfers the planned β¬28.3 billion in defense support by the end of 2026, Ukraine will for the first time have a predictable two-year financing horizon for the defense industry β but only on condition that production volumes do not run into a shortage of skilled personnel and components, rather than money.
