Zelensky says Ukraine will close its budget deficit by year-end despite €27 billion defence gap

Why it matters

Ukraine's ability to fund its defence depends on closing a gap that officials have put at €27 billion, including prepayments for drones to be delivered in January and February 2027. How the gap is framed in Kyiv and in Brussels directly affects how much additional external financing Ukraine can secure from the EU and other partners. Warnings of delayed non-military payments and possible shortfalls in winter drone procurement point to pressure on both civilian budgets and frontline capabilities. The public split between Ukrainian officials and the European Commission over whether a 2026 deficit exists is an unusually visible financing dispute between Kyiv and Brussels.

What happened

President Volodymyr Zelensky told Reuters that Ukraine will close its current budget deficit by the end of 2026, sharing fragments of the interview on his social media. He framed closing the deficit as a success for Ukraine, his team and the EU, and said part of a loan designated for next year would be drawn down closer to January to pay for drone orders covering January and February 2027. Zelensky said his team had returned from Brussels and reported that "everything is working well," while acknowledging that some issues still need to be resolved.

The statement came against the backdrop of a declared €27 billion defence budget shortfall. Prime Minister Serhiy Koretsky attributed the gap to the rising technological cost of the war, to the Ministry of Defence having financed first-half 2026 expenditures out of second-half funds, and to Ukraine's failure to meet all of its obligations to partners. Finance Minister Serhiy Marchenko said some non-military payments could be delayed and warned that the situation resembles 2022, when Russia's full-scale invasion began. According to Marchenko, €7 billion of the €27 billion gap was identified through state savings and roughly €12 billion more was to be found through joint efforts; Ukraine also expects to receive an additional €17 billion this year under the Ukraine Support Loan for defence needs, and needs €29.5 billion from partners by year-end for general state-budget needs.

On 2 October Ukraine received €2.9 billion from the EU under the Ukraine Facility. The same day, European Commission spokesperson Paula Pinho said the Commission believes Ukraine has no 2026 budget deficit. Marchenko responded on Facebook that the EC cannot cover the €27 billion defence deficit this year because it lacks the appropriate instruments, and stressed that the shortfall concerns an additional military need rather than general state-budget needs.

How Ukrainian sources describe it

All five supplied sources are Ukrainian-language outlets and centre Zelensky's claim that the deficit will be closed by year-end and that next-year loan funds will be pulled forward for January–February 2027 drone orders. They treat the €27 billion defence gap and the need for additional partner support as established facts and give prominence to Koretsky's three-part explanation of the deficit and to Marchenko's warnings that non-military payments may be delayed. Coverage stresses Kyiv's framing of the situation as a shared problem being solved with the EU rather than as a dispute with Brussels.

How international sources describe it

The supplied source set contains only Ukrainian media outlets, so international framing is conveyed only through what those outlets relay about EU and European Commission statements. Ukrainian sources report the EC's counter-position, via spokesperson Paula Pinho, that Ukraine does not have a 2026 budget deficit, and relay media accounts of European interlocutors who were surprised by the size of the gap and questioned the efficiency of spending or possible inflation of needs. No independent international outlets are present in the input to characterise this framing further.

Where reporting differs

Ukrainian officials and the European Commission publicly disagree on whether Ukraine has a 2026 budget deficit. Zelensky, Koretsky and Marchenko describe a €27 billion defence budget shortfall; EC spokesperson Paula Pinho said on 2 October that the Commission believes Ukraine has no deficit for 2026, and Marchenko wrote that the EC cannot cover the defence deficit this year because it lacks appropriate instruments. Media reports cited in the sources also describe European partners as not expecting such a large gap, with some interlocutors questioning the efficiency of Ukrainian spending or the possible inflation of needs — a framing not echoed by Ukrainian officials, who present the deficit as fact.

Background

On 24 August Zelensky put the defence budget deficit at €27 billion; on 29 August Defence Minister Yevhenii Khmara cited the same figure and said the ministry had options to resolve the issue; on 1 September Koretsky announced a strict economy regime for non-defence budget funds; and on 4 September Marchenko said Ukraine had not faced a comparable strain since the start of the full-scale invasion in 2022. On 14 September Koretsky warned that public finances were nearing a critical point and that delays in adopting required bills could jeopardise €29.5 billion in international assistance. On 15 September Suspilne reported that EU Commissioners Valdis Dombrovskis and Marta Kos had written to Ukrainian MPs listing laws needed to unlock already-agreed EU financing. On 25 September Koretsky said he had met the Defence Ministry about closing the €27 billion gap, including prepayments for Q1 2027 deliveries; on 30 September he reported that the Cabinet had completed 17 of 42 planned decisions needed to unlock partner funds; and on 1 October EU and Ukrainian representatives at a joint meeting concluded that Kyiv does not currently need additional international financing in 2026.