New €1.2 Billion EU Defense Package Arrives as Ukraine Faces Funding Uncertainty

Ukraine received another €1.2 billion ($1.3 billion) from the EU for defense, Prime Minister Serhii Koretsky wrote on Telegram, even as a stalled parliament threatens reforms needed to unlock the rest of the country’s 2026 funding.The money will go toward Ukraine’s most urgent defense needs, Koretsky said. With this latest tranche, Ukraine has received almost €13 billion ($14.6 billion) in defense financing under the program.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official.The transfer follows €2.9 billion ($3.2 billion) received under the Ukraine Facility on Oct. 2, bringing the two payments to a combined €4.1 billion ($4.6 billion). Koretsky said Ukraine unlocked the Ukraine Facility funds by meeting 10 reform indicators covering banking, energy, agricultural policy, transport, and other sectors, with three of those targets achieved ahead of schedule.“Given the difficult financial situation, these funds are critically important for the resilience of the state,” the post quoted Koretsky as saying. The need for additional financing, he added, remains “critical.”Further EU payments hinge on conditions Kyiv has yet to meet, and several of them require votes in parliament, where the government’s bills tied to the aid have stalled since November 2025.In a joint statement on Thursday, the European Commission and Ukraine said they had found the means to cover Ukraine’s 2026 budget and defense needs, though they did not disclose the amount involved. Nevertheless, both sides “reconfirmed the steps needed to ensure their timely release,” according to the statement. Other Topics of Interest Russia's September Jet Drones Use Spike to Nearly 3,500, Air Force Says The summer of 2026 has seen an exponential spike in Russia’s use of jet-powered drones, rising from just 350 in June to 2,850 in August. On Sept. 15, the government submitted a draft 2027 budget totaling about $162 billion. At the same time, Finance Minister Serhii Marchenko warned that Ukraine could face a funding shortfall before the end of 2026 without additional financial support.The government has already adopted a decision that allows the Treasury to limit the opening of appropriations for non-priority expenditures starting in October if the Single Treasury Account does not have enough resources to make all planned payments.The government has already approved a measure allowing the Treasury to limit funding for non-priority expenditures starting in October if the Single Treasury Account lacks sufficient resources to cover all planned payments.Seven related reform bills have already passed their first reading in parliament, Finance Minister Serhiy Marchenko said in a LinkedIn post, expressing hope that the Verkhovna Rada would approve them at second reading as well.Marchenko’s comments come as Ukraine works to secure additional international financing. According to a Bloomberg report, the EU has declined to accelerate the disbursement schedule for its €90 billion ($100.8 billion) loan program.Looking ahead to 2027, Marchenko said Ukraine will require $52.6 billion in external budget support. Of that amount, approximately $20 billion has already been committed, leaving a financing gap of about $32.6 billion that Kyiv still needs to close. Olena Hrazhdan is the Business Reporter at Kyiv Post, covering Ukraine’s markets, business, and economic policy. While she reports broadly on economic issues, her core focus is banking, finance, monetary and fiscal policy. Olena previously wrote for leading Ukrainian business media and became a Fellow of the International Monetary Fund’s Journalism Fellowship in 2024.