EU denies Ukraine early access to 2027 loan money, demands reforms
Photo: European Commissioner for Enlargement Marta Kos (Getty Images)
The European Union has refused to provide Ukraine with early access to funds from the 90 billion euro loan that was planned for 2027. Instead, Brussels is demanding that Kyiv fulfill the promised reforms, reports the Financial Times.
Ukraine estimated its additional defense needs for this year at 27 billion euros. To close this gap, Kyiv asked the European Commission to transfer in advance part of the funds from the 90 billion euro loan agreed at the end of last year.
The loan was intended to cover most of Ukraine's financial needs in 2026-2027: up to 45 billion euros per year, subject to the implementation of reforms. However, this year Ukraine received only 15.7 billion euros, partly due to delays with reforms.
The EU refused to transfer funds from 2027. Instead, Brussels is insisting that Kyiv fulfill the conditions that would unlock access to about 34 billion euros this year.
According to the FT, the decision was made against the backdrop of increasingly frequent Russian strikes on civilian infrastructure, while the Verkhovna Rada (parliament) has been unable to pass the reforms demanded by the EU and other donors.
These include abolishing the VAT exemption for small parcels and introducing new rules for taxing income earned through digital platforms. The Rada passed both laws, but with a controversial amendment that weakens oversight of politically exposed persons (PEPs). The EU had specifically demanded stronger oversight of PEPs as part of the fight against corruption.
If the amendment takes effect, Ukraine risks failing to meet the conditions for receiving aid.
European Commissioners Valdis Dombrovskis and Marta Kos sent a letter to the speaker of the Verkhovna Rada. They stressed that Ukraine can still count on additional assistance in 2026 if it carries out the necessary reforms.
It is extremely important not to allow the weakening of the existing control mechanisms in Ukraine regarding politically exposed persons, the letter says.
The law on taxing income through digital platforms, dubbed the OLX tax, was passed by the Rada on June 9 after several failed votes. It concerns income earned through OLX, Uklon, Glovo, Bolt, Booking, Airbnb, and other services. The biggest controversy was caused by the PEP amendment: it limits banks' ability to conduct enhanced checks of former senior officials one year after they leave office.
On September 16, parliament in the first reading supported abolishing the exemption for parcels. The new rules for taxing international shipments may take effect no earlier than July 2027. Ahead of the vote, Finance Minister Serhii Marchenko stressed that there could be no delay with the bill, as Ukraine's fulfillment of its international obligations depends on it.
