Ukraine, EU reconstruction funds are not enough: European Parliament sounds the alarm
The European Union is preparing to support the reconstruction of Ukraine in the next budget cycle (2028-2034), but the math does not add up. A briefing prepared by experts Dmytro Boyarchuk and Marek Dabrowski, at the request of the European Parliament’s Committee on Budgets, paints a worrying picture: the planned funds are insufficient, the financing structure is flawed, and political conditions risk further complicating the situation.
The document estimates the public requirement for ten years of post-war reconstruction at €196.5 billion, approximately €19.7 billion per year. However, the Multiannual Financial Framework proposed by the Commission offers just €88.9 billion for the entire 2028-2034 period, or €13.5 billion per year. The authors define this as a structural gap, destined to widen further if the war continues beyond 2027.
An already low estimate
The most significant point is that the €196.5 billion figure is already a conservative estimate: it is based only on territories under Ukrainian control as of April 2026, excludes more ambitious reconstruction goals, and assumes that the private sector will cover half of the investments in the energy, transport, and housing sectors. This is a far from guaranteed bet for a country at war.
Direct damages estimated by the latest Rapid Damage and Needs Assessment from the World Bank, covering the 2022-2025 period, already amount to €172.8 billion in Kyiv-controlled areas alone. Total recovery and reconstruction needs for the decade following the end of the conflict are estimated at €405 billion, with energy, transport, housing, and social protection accounting for the lion’s share.
Brussels bets on loans, but Kyiv is already deeply indebted
The second structural problem concerns the form of the funding. The Commission’s proposal envisages that the dominant component of aid will consist of loans, rather than non-repayable grants. The authors of the briefing openly criticize this choice: Ukrainian sovereign debt already exceeded 108.7% of GDP at the end of 2025, according to International Monetary Fund data. Burdening Kyiv with further debt at this stage risks compromising the country’s financial sustainability at the very moment it needs to get back on its feet.
The experts’ recommendation is clear: non-repayable subsidies must play a dominant role in reconstruction financing. Loans, at most, should serve as guarantees to attract private investors by reducing their perception of geopolitical risk.
The worst-case scenario: war beyond 2028
The briefing frankly addresses a hypothesis many prefer not to consider: the war might not end before 2028, when the new financial framework would take effect. In this case, large-scale reconstruction would not make sense, and Ukraine would need military aid and public budget support to continue functioning as a state, rather than funds to rebuild cities.
The flexibility of the legislative proposal is deemed adequate on this front. However, the financial allocation remains insufficient even in the most pessimistic scenario: the planned €13.5 billion annually is lower than the aid already provided in the 2022-2025 period and that announced for the 2026-2027 biennium. This does not even account for the vacuum left by the drastic reduction in American aid under the second Trump administration.
Fighting corruption in Kyiv is not enough
The document also addresses the conditions attached to European aid. The current system, centered on anti-corruption commitments, fiscal consolidation, and formal progress toward the acquis communautaire, is judged to be incomplete.
The real problem in Ukraine, the authors write, is not just corruption itself, but a system where administrative discretion, selective enforcement of rules, and the gap between formal regulations and actual practice make the economic environment unpredictable and costly for investors. If the goal is to attract private capital to fund reconstruction, Kyiv must deeply reform its public administration, law enforcement agencies, and the judiciary, rather than just adopting anti-corruption laws to satisfy donor benchmarks.
Political obstacles: the veto as a weapon
The briefing also dedicates space to the institutional obstacles that risk blocking or reducing funds for Ukraine. The main hurdle is the unanimity rule for decisions on the Multiannual Financial Framework in the Council: as demonstrated between 2024 and 2026, even a single Member State can use the right of veto to obstruct or delay aid to Kyiv, turning European solidarity into a hostage of domestic politics in Warsaw, Budapest, or any other capital.
Structural solutions, such as Treaty changes or the activation of “passerelle clauses” to extend qualified majority voting, are considered politically unfeasible in the short term. What remains, the document concludes, is “the patient and skillful diplomacy of Ukraine’s supporters.”
More grants, more resources, before it’s too late
The experts’ concluding message is clear: it is better to plan realistically now than to find ourselves patching up the MFF budget halfway through, as has repeatedly happened in the current financial cycle. Increasing the allocation for the Ukraine Reserve, prioritizing subsidies over loans, and expanding conditionality beyond anti-corruption are the three priorities indicated to the European Parliament ahead of negotiations on the next budget.
Photo Daina Le Lardic Copyright: @ European Union 2023 – Source : EP
