Ukraine battles on an invisible economic front in its war with Russia, where steady finances are key not just to surviving today but to securing the EU-aligned future its people have fought for over four years.
Finance Minister Sergii Marchenko captures this drive, saying, “We don’t want to be just a poor neighbour [to the EU].” He adds that Ukraine aims to “provide for Europe, something which they lack,” drawing on the hard-earned military insights gained since Russia’s February 2022 invasion—a “very painful” expertise that could strengthen the continent’s defences.
EU membership remains Kyiv’s top goal, bolstered by crucial bloc funding that edges Ukraine ahead of Moscow. A newly approved €90 billion loan will fill budget shortfalls through 2027, forming the bulk of a $136.5 billion global aid package vital for endurance.
“Our strong army depends on our strong economy, because all of our resources, which we mobilize internally, we channel, to defend our nation,” Marchenko explains. “We are grateful for the support of other nations to help us, but definitely Ukraine’s taxpayers are doing the best help for our army.”
December 2024 brought the war’s first tax hikes, boosting projected 2026 revenues to $67.5 billion—a 15% jump—yet $112 billion in spending, with 60% for defence, leaves a $45 billion gap. Urgent new levies tied to an $8.1 billion IMF loan aim to bridge it, as IMF chief Gavin Grey warns Ukraine must curb evasion and mobilise more domestic funds amid high outlays.
Complications include Hungary’s Viktor Orban blocking aid over oil disputes, while critics like the Ukrainian Institute of the Future fear tax rises court collapse. Inflation has dipped to 7.4%, but blackouts and worker shortages strain businesses, as pensioner Tetiana and youth Mykyta attest in Kyiv’s streets.
Rebuilding costs $588 billion, per recent assessments, yet optimism flickers. Chamber head Gennadiy Chyzhykov sees foreign investors betting on victory, and EBRD’s Odile Renaud-Basso pledges long-term backing.
Marchenko concludes, “We need support, military support, and budgetary support,” but resilience prevails: “The Ukrainian people and our government and economy are resilient and determined to fight this war, because we defend ourselves and we will.”