EU rejects request for early disbursement of part of loan · BNN

The European Union (EU) has rejected Ukraine’s request for an early disbursement of part of a 90 billion euro loan to cover this year’s military financing shortfall, Bloomberg reports.The decision came after Kyiv unexpectedly acknowledged this summer that rising military spending had left it facing an additional financing gap of 27 billion euros, according to Bloomberg.According to the agency’s sources, Brussels believes that accelerating the disbursement of funds now would merely postpone the problem until 2027 rather than resolve it.At the same time, European officials have approached Ukraine’s other partners, including Canada, Norway and Japan, with a proposal that they provide such assistance. The European Union loan is expected to cover two-thirds of Ukraine’s needs, while the remainder would be covered by countries outside the EU.Bloomberg reports that 45 billion euros from the loan earmarked for 2027 will be made available promptly, but no earlier than the beginning of next year.At the same time, the EU and Ukraine plan to begin work to determine additional budgetary and defence needs.In September, European Commission (EC) President Ursula von der Leyen said during a meeting with Ukrainian President Volodymyr Zelenskyy on the sidelines of the UN General Assembly in New York that the EU still had 37 billion euros available for budgetary support in 2026.However, she directly linked the disbursement of these funds to reforms implemented by Kyiv aimed at combating corruption and the shadow economy, increasing tax revenues and aligning Ukrainian legislation with European Union standards.Meanwhile, International Monetary Fund (IMF) spokesperson Julie Kozack said the Fund is discussing with Kyiv and its partners the potential size of the country’s budget deficit.The IMF is also working with Ukraine to combine the second and third reviews of its 8.1 billion dollar financing programme and plans to submit them to its Executive Board by December 2026.According to Kozack, further financing for Ukraine depends on receiving sufficient and credible assurances that the funding gap will be covered.At the end of September, the IMF estimated Ukraine’s future financing gap at 30–35 billion dollars in 2027, 17 billion dollars in 2028 and two billion dollars in 2029, Bloomberg reports.