On November 27, at the Civic Analytics Center "Vezha," economist Illya Neshchodovsky discussed Ukraine's funding prospects, the issue of frozen Russian assets, and the ongoing political crisis around the 2026 state budget.
European institutions are considering issuing bonds secured by frozen Russian assets to mobilize funds for Ukraine in the coming half-year. EU countries are reluctant to fully confiscate the assets due to concerns over internal stability and eurozone currency risks, as any such decision requires unanimity among all members. It has been agreed that the allocated funds could potentially be repaid through future reparation-based loans. In parallel, similar legal mechanisms for asset use exist in the US and Canada, but have been applied individually, indicating the European issue lies in consensus and responsibility-sharing.
Neshchodovsky notes that Ukraine currently only has guaranteed funding until the end of the first quarter of 2026. There is a preliminary memorandum for $136 billion over four years, with the bulk allocated for the first two years. The 2026 budget remains unresolved due to a lack of funds for the military and the unstable state of the ruling coalition: there are not enough parliamentary votes to approve it, and the ongoing domestic political crisis hinders consensus.
The discussion also touched on the low likelihood of forming a national unity government or a broad coalition in parliament. The expert sees this as unlikely, primarily because parties do not wish to share responsibility for unpopular reforms and financial challenges. More realistic would be an informal majority assembled for specific votes.
Main issues include: the difficulty of directly using frozen Russian assets, lack of EU unanimity, political instability, and Ukraine's chronic budget deficit for coming years.
