Ukraine's Marchenko warns of $32.6bn budget gap for 2027, urges EU to use frozen Russian assets
Visiting Brussels ahead of a Donor Platform for Ukraine gathering, Finance Minister Serhiy Marchenko said Ukraine faces a $32.6 billion uncovered financing gap in its 2027 state budget out of $52.6 billion in total needs, and called on the EU to find a way to use frozen Russian assets. He also reported the first tax-and-customs revenue shortfall since 2022 and warned that European attention on Ukraine is fading.
Key points
- Marchenko spoke in Brussels on 28 September 2026 at an event hosted by the EPC analytical centre, ahead of a Donor Platform for Ukraine meeting.
- Ukraine's total 2027 financial needs stand at $52.6 billion; only about $20 billion is covered by firm partner commitments, a $32.6bn gap.
- An additional military request of roughly $45 billion sits outside the formal budget framework.
- Tax and customs authorities will underperform their revenue plan for the first time since 2022; September's shortfall alone is estimated at around €400 million.
- Marchenko called on the EU to use frozen Russian assets more effectively, praising the 2025 €90bn EU loan but calling it insufficient.
- EU High Representative Kaja Kallas said many member states support advancing EU loan funds originally planned for 2027 to cover the deficit sooner.
Why it matters
Ukraine is heading into 2027 with a multi-billion-dollar budget shortfall and only partial firm pledges from partners. Marchenko explicitly tied growing revenue underperformance to Russian attacks on industry, the Black Sea grain blockade and the near-total shutdown of metallurgy. Kyiv is publicly urging the EU to unlock frozen Russian assets or front-load already-planned EU loans, signalling a possible shift in financing strategy. European officials, including Kaja Kallas and Marta Kos, have publicly acknowledged the financing challenge for next year, indicating the issue is now on the EU agenda. A separate $45 billion additional military request sits outside the formal budget, suggesting defense financing is an unresolved layer on top of the civilian gap.
What happened
Ukrainian Finance Minister Serhiy Marchenko travelled to Brussels on 28 September 2026 and spoke at an event organised by the EPC analytical centre, on the eve of a Donor Platform for Ukraine meeting. He laid out Ukraine's 2027 financing picture: total needs of $52.6 billion, with firm partner commitments covering only about $20 billion and a $32.6 billion gap, plus an additional roughly $45 billion military request not fully included in the budget.
Marchenko reported that, for the first time since 2022, Ukrainian tax and customs authorities will underperform their revenue plan. He estimated September's shortfall alone at around €400 million and said the full-year gap could amount to several billion euros. He attributed the underperformance to Russian strikes on industry, the Black Sea blockade cutting grain exports to about 40% of capacity, and the shutdown of metallurgical production — only one combine still operates, and it too plans to suspend.
He welcomed the EU's 2025 decision to provide a €90 billion loan but said it was insufficient. He called on partners to find ways to use frozen Russian assets more effectively, while acknowledging confiscation is politically complex. He ruled out a "money printing" option as incompatible with Ukraine's IMF commitments, and rejected raising taxes on legitimate businesses during wartime, instead urging a focus on combating the shadow economy.
European Commission spokesperson Guillaume Mercier confirmed Marchenko was in Brussels for the Donor Platform meeting and stressed the importance of mobilising further predictable support tied to reforms. EU High Representative Kaja Kallas said many member states support advancing EU loan funds originally planned for 2027 to cover the deficit sooner.
Background
The EU's €45 billion macro-financial assistance programme has disbursed nearly €15 billion, with the full 2026 allocation still to come. Around €20 billion in EU budget support remains conditional on Ukrainian reforms — a point raised by European Commission President von der Leyen and IMF Managing Director Kristalina Georgieva. An earlier 2025 EU decision provided Ukraine with a €90 billion loan, which Marchenko calls welcome but insufficient. The World Bank's SPUR-2 program is expected to mobilise up to $6 billion toward the financing package. Despite the September shortfall, tax and customs revenues still grew 14.5% in the first eight months of the year, totalling $34.1 billion.