At the Ukraine summit in Paris, Europe's leading politicians reaffirmed their support for Volodymyr Zelensky. However, no one is asking the crucial question: who will finance Ukraine's budget after 2026? Even if the war ends immediately, the country faces bankruptcy.

Europe’s pro-war political leaders demonstrated unity: sanctions against Russia will remain in place, and Ukraine must be militarily strengthened—even if it means doing so without the United States if necessary. „Only a strong Ukrainian army can guarantee peace,” emphasized Emmanuel Macron in his usual pompous style. The ‘coalition of the willing’ around France and the United Kingdom is even planning to deploy peacekeeping forces on Ukrainian soil—while leaving one key issue unanswered.

It’s unclear how the Ukrainian state budget will be financed next year, warns former British diplomat Ian Proud. For him, the Europeans’ behaviour is particularly „worrying—not least because the summit seemed to be designed to prolong the war rather than end it.”

In his analysis for the American foreign policy outlet Responsible Statecraft, Proud sounded the alarm: even if the war ends tomorrow, Ukraine could go bankrupt by 2026. There is currently no plan for how Ukraine’s budget will be financed after 2025. „It’s not clear that European elites have fully understood the political costs, however much longer the war continues,” he emphasized.

„There’s a gaping hole in Kyiv’s finances that no amount of tax increases or Western donations will be able to fill,” unless one risks a political earthquake that would strengthen forces on the fringes of the Right and the Left that have long been calling for an end to the war,”

he added. He argued that it is naive to believe that Kyiv can quickly reduce its military expenditures. The size of the armed forces has tripled, reaching 900,000 soldiers—not counting the hundreds of thousands of wounded and fallen. Defence spending has increased tenfold since 2021.

The structural deficit is devouring the state: since 2022, Ukraine has run an average budget deficit of over 22 per cent of GDP. Ukraine’s budget shortfall in 2025 is expected to amount to around 41.5 billion US dollars, even with falling military expenditures. If the war continues, the budget will have to be revised upwards again. To finance defence spending, Kyiv has drastically increased taxes and tariffs. Tax revenues have increased by more than 100 per cent since the beginning of the war, and income taxes have even risen by more than 200 per cent – ​​in a country where, according to the Wilson Center, 50 per cent of the population lives at basic subsistence level. Last year, the cost of the defence effort accounted for 64 per cent of the total budget expenditure, almost completely depleting government revenues.

According to the International Monetary Fund, Ukraine will remain cut off from capital markets until at least the end of 2026 – making it entirely dependent on Western aid. Without donations, neither the salaries of state officials, nor electricity bills can be paid. Initially, the US and the EU jointly provided more than 100 billion dollars in direct financial support. However, since 2024, there has been a shift towards loans, and willingness to provide unconditional aid is declining. The G7’s 20 billion dollar special loan will sustain this year’s budget—provided through the World Bank by the US, but only for specific projects such as energy infrastructure. But for 2026, there is no plan. The risk of collapse is imminent, even with an immediate end to the war.