Ukraine is preparing to pour almost another €30 billion into its war effort this year, a sweeping pledge announced on Thursday that will push the country’s defence spending for 2026 beyond €80bn — the highest annual outlay since Russia launched its full-scale invasion.
Roughly a third of the defence budget this year is earmarked for salaries, and President Volodymyr Zelensky on Wednesday said pay for service members will rise. The increases will be tied to performance: the more combat missions a soldier participates in, the higher the wage.
Even with personnel costs rising, the biggest slice of the budget — about €45bn — is set to go toward military equipment.
The scale of the bill makes the gradual roll-out of a new €90bn EU loan particularly significant for Kyiv, which has been searching for predictable financial lifelines as the war drags on.
For the first three years of the conflict, Mr Zelensky and other senior officials repeatedly pressed the United States — under both the Biden and Trump administrations — to supply long-range missiles capable of striking targets inside Russia.
Those appeals have largely quieted this year as Ukraine expanded its own deep-strike drone programme, using it to hit oil refineries far inside Russia on a regular basis.
Ukraine’s military budget in 2026 was larger than its civilian budget by about €13bn
But the intensifying drone campaign carries a heavy price tag — for Ukraine, and for Russia as well.
One Ukrainian long-range drone model, the FP-1, costs almost €50,000 to build.
That figure is effectively the low end for deep-strike technology.
At the more expensive end is the Liutyi, a longer-range drone that costs about €170,000 to manufacture.
Ukraine plans to produce about seven million drones this year.
Most will be smaller, less costly FPV drones used along the frontline, some of which can be produced for as little as a few hundred euro.
The spending imbalance is stark: Ukraine’s military budget for 2026 exceeded its civilian budget by about €13bn — and that was before this week’s announcement of additional defence funding.
With the EU’s Support Loan of €90bn now agreed, Ukraine should be able to avoid a repeat of the acute fiscal alarm seen last September, when the finance ministry’s draft budget exposed an €18bn black hole.
At minimum, the new arrangement allows Kyiv to push the risk of bankruptcy back until the end of 2027, when another funding crunch could emerge.
Two-thirds of the new EU loan is designated for Ukraine’s defence budget.
The remaining one-third — €30bn — is intended to shore up the civilian budget for 2026 and 2027, helping the government continue public services and pension payments.
Brussels has already played a central role through its existing €50bn Ukraine Facility, created in 2024, which has helped keep state functions operating.
“If we were talking about Ukraine without any sort of EU funding, there would not be a Ukraine,” Alex Fynn, an editor at research unit Kyiv Independent Insights, told RTÉ News.
“Looking at the civilian side of the ledger, so we’re not even talking about military aid, which is keeping Ukraine in the fight, quite literally, about half of the budget for the civilian side comes directly from the EU at this point,” he said.
Ukraine’s parliament needs to continue introducing anti-corruption reforms to meet EU standards
Unlike EU money used to sustain Ukraine’s civilian budget — which is tightly linked to reform benchmarks — Kyiv has greater discretion over how it spends funds related to defence and security.
Ukrainian defence companies are focused on speed and scaling production, and EU officials want to help accelerate those efforts rather than slow them with burdensome conditions.
EU leaders also recognise that allowing Ukraine to fail would carry profound moral and security consequences. With the United States having effectively ended its financial aid, it is considered highly unlikely the EU would cut off support for Ukraine’s defence budget.
The single condition attached to the new defence funding is procedural: Ukraine must open a bank account at the Bundesbank, Germany’s central bank.
The requirement reflects a practical constraint — the European Central Bank does not hold bank accounts — and gives the EU a mechanism to monitor Kyiv’s spending.
Funding that underwrites Ukraine’s civilian budget, however, may not always be guaranteed.
Ukraine’s parliament, the Rada, must keep advancing rule-of-law and anti-corruption legislation to meet EU standards, yet the chamber does not always move quickly.
Competing factions in the Rada pursue their own domestic agendas, and many MPs elected in 2019 did not expect to serve as long-term legislators during a full-scale war.
“The Rada itself is in both a long-term sort of chronic crisis caused by the structural issues of not being able to replace deputies in the full-scale invasion and the second issue is a larger wave of political crises, which have engulfed the country in the last year,” said Mr Fynn, referring to a series of corruption investigations involving high-ranking officials.
Even so, earlier this week the EU released €2.8bn to Ukraine — the first tranche from the €90bn loan.
Marta Kos, the EU’s commissioner for enlargement, said Ukraine had “merited” the payment because of the “speed and commitment to delivering meaningful reforms”.
