European Commission proposes EUR 45 billion for Ukraine in 2027

The European Commission proposed on 30 October that the Council approve the remaining EUR 45 billion of the Ukraine Support Loan for 2027, with EUR 31.7 billion for Ukraine's defence industry and up to EUR 13.3 billion in budget support, the Commission said.

The proposal follows the Commission's positive assessment of the Ukrainian Financing Strategy for 2027, the document in which Ukraine sets out its financing needs and sources for the year. Member states now decide the allocation, and the Commission said it would take the steps needed for disbursements to begin in early 2027 once the Council adopts the decision.

How the 2027 money is split

The draft Council implementing decision, COM(2026) 606, amends Implementing Decision (EU) 2026/919, which approved the 2026 tranche on 23 April. It records that Ukraine submitted its 2027 strategy on 27 October. The budget support is split equally: up to EUR 6.65 billion as loans under the Ukraine Facility and up to EUR 6.65 billion as macro-financial assistance under Regulation (EU) 2026/467, the regulation that created the loan. The macro-financial assistance is to come in at most three instalments, indicatively EUR 2 billion, EUR 3 billion and EUR 1.65 billion, amounts the draft says may be refined in the memorandum of understanding with Ukraine.

The EUR 45 billion for 2027, added to the EUR 45 billion made available for 2026, stays within the maximum the regulation allows, the draft says. The loan is financed by Commission borrowing on behalf of the Union, and the amount was set from Ukraine's expected external financing gap for 2027 after taking account of other donors' contributions.

For 2026 the Council allocated up to EUR 45 billion, including EUR 16.7 billion in budget support and EUR 28.3 billion for defence industrial capacity. Of that, EUR 19.8 billion has been disbursed, the Commission said: EUR 3.2 billion of macro-financial assistance, EUR 15.8 billion for defence procurement and EUR 800 million through the Ukraine Facility after reforms were completed.

The conditions on the budget money

The budget support is tied to conditions on the rule of law, the fight against corruption, economic resilience and sustainability, the Commission said, with safeguards to protect the Union's financial interests. The annex to the draft assesses a precondition in Article 5(1) of the regulation: that Ukraine continues to uphold effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and to guarantee respect for human rights. "Upholding and respecting the rule of law includes the fight against corruption," the annex says. The Commission found the precondition met.

Ukraine Facility money is paid against completed reforms. In a release posted on 26 October, the Rada's press service said parliament had fulfilled two more Facility indicators by passing, with 247 votes, a law restoring competitive selection for civil service and local government posts (Draft Reg. No. 13478-1). The law sets mandatory integrity criteria for candidates and resets the membership of the Commission on Senior Public Service.

The gap the loan does not cover

The 2027 strategy assumes the war continues into 2027 and an exchange rate of EUR 1 to UAH 54.6, the annex says. Even with the loan, it outlines a residual gap in 2027 of around EUR 27 billion for budget support under the baseline scenario and EUR 40.9 billion for defence. Delays to or a reduction in external financing could take the budget gap to EUR 30 billion. The strategy's responses include expenditure prioritisation, reserve funds, better tax administration and a broader tax base, and Ukraine would seek further external support where these fall short.

The Commission consulted the IMF on Ukraine's projected financing needs in September and October and found the strategy consistent with IMF data, the draft says. The tax measures behind the IMF's benchmarks are set out in the explainer on the programme's benchmarks, and one of them, the end of the VAT exemption on low-value parcels, in the report on the Rada's 15 October vote.

The package dates from January, when the Commission proposed the EUR 90 billion loan for 2026 and 2027, about two thirds for military needs and one third for the budget, financed through common EU borrowing. Since the start of the war, EU and member state support to Ukraine totals EUR 231.6 billion, including EUR 3.8 billion from the proceeds of immobilised Russian assets, the Commission said.