The European Union has transferred a further €4.36 billion to Ukraine as part of the Ukraine Support Loan programme. Of this amount, €3.7 billion constitutes macro-financial assistance to cover budgetary expenditure, whilst €660 million is earmarked for defence needs. The transfer of funds was made possible after Ukraine fulfilled a package of 12 conditions, which included tax changes relating to international parcels valued at up to €150.
- Ukraine has received 4.36 billion euros from the EU under the Ukraine Support Loan programme.
- Of this amount, 3.7 billion euros has been earmarked for budgetary support.
- A further 660 million euros will be allocated to Ukraine’s priority defence needs.
- The funding conditions included changes to the taxation of parcels worth up to 150 euros.
- Ukraine expects to receive a further European tranche by the end of the year.
What will Ukraine spend the 4.36 billion euros on?
The new tranche consists of two parts, each serving a different purpose.
The bulk of the funds — 3.7 billion euros — was provided as macro-financial assistance. It is intended to finance priority expenditure under the state budget and to maintain the country’s financial stability during the war.
A further 660 million euros has been earmarked for the priority needs of the Ukrainian Defence Forces.
According to Koretsky’s, European funding is particularly important given the ongoing Russian attacks on Ukrainian cities and critical infrastructure.
The government is continuing negotiations with the European Commission regarding the receipt of the remaining funds allocated under the programme for 2026.
Ukraine has met the 12 EU requirements for receiving the tranche
This latest payment marks the second tranche of budgetary assistance under Ukraine Support Loan in 2026.
In order to receive funding, Ukraine had to fulfil 12 conditions agreed with the European Union relating to tax policy, public administration and economic reforms.
As early as September, progress on these commitments was behind schedule. By the end of September, the government had implemented only five of the twelve necessary measures.
Issues that remained unresolved included amendments to tax legislation, the modernisation of the property valuation system, the appointment of experts for the competitive selection of members of the Audit Office, and the harmonisation of customs regulations with EU standards.
Taxation was a key part of the negotiations international parcels costing up to 150 euros.
Previously, goods falling within this threshold were exempt from import VAT under the conditions laid down by law. European partners insisted on a review of the taxation mechanism, viewing it as a source of additional budget revenue.
Legislative changes relating to such shipments became one of the conditions for the release of macro-financial assistance.
What does the Ukraine Support Loan scheme involve?
Ukraine Support Loan — a large-scale European Union lending facility covering the period 2026–2027.
Its total volume amounts to up to 90 billion euros. Of this amount, 60 billion euros is earmarked for Ukraine’s defence needs, and a further 30 billion for economic and budgetary support.
Funds are raised through EU borrowing on international capital markets, backed by guarantees from the EU budget.
The programme provides for a special loan repayment mechanism linked to future reparations from Russia for the damage caused to Ukraine by the war.
At the same time, the disbursements are not automatic. In order to receive the budgetary component of the funding, Ukraine must implement reforms agreed with the EU, particularly in the areas of the rule of law, the fight against corruption, tax policy and public administration.
Earlier, Prime Minister Serhiy Koretskyi, during talks with European Commissioner Valdis Dombrovskis, discussed funding for Ukraine and the necessary legislative measures to enable further payments.
Ukraine may receive a further tranche by the end of the year
The European Union has provided for the possibility of continued budgetary funding for Ukraine until the end of 2026.
For the next payment, the government and the Verkhovna Rada must continue to fulfil their new obligations. According to preliminary information, there are a further 13 conditions.
Further disbursements will depend on the implementation of the relevant reforms and their assessment by the European side.
Ukraine’s need for international budgetary support remains significant. Owing to high military expenditure, the state requires external financial resources to maintain macroeconomic stability and fund other priority commitments.
At the end of October, Koretsky reported that the government had fulfilled a number of necessary legislative obligations and expected to raise at least €4 billion as early as November. The new tranche from the EU actually exceeded this target.
