Ukraine risks losing out on billions in aid from the EU, and the IMF will decide on a new tranche in the coming weeks.

Ukraine may not receive up to €1.5B in aid from the EU due to its failure to achieve reforms envisaged in the Ukraine Facility program, say CES experts. The government has not fulfilled three structural milestones required by the program for the first quarter of 2025. Among them are an increase in the staff of the High Anti-Corruption Court, the reform of the ARMA, and the reform of the territorial organization of the executive branch. In total, only three of the 11 milestones that were to be fulfilled by the end of the second quarter have been implemented.

In 2025, Ukraine plans to increase state budget expenditures by ₴400B, a significant part of which will be financed by placing expensive government bonds at 16%+ per annum. Unlike European financing, all IMF requirements related to the integration of public investment into the budget process have been fulfilled on time, allowing Ukraine to receive another tranche of $490M in the coming weeks. However, the overall situation with reforms within the program remains difficult – particularly regarding customs, and the government has previously agreed to postpone the relevant milestone until the end of the year.