EU Holds Back Billions From Ukraine Until Kyiv Passes Stalled Reforms, Questions Zelensky's $27 Billion Gap Claim

The European Union is telling Ukraine the same thing it's told Kyiv for months: pass the reforms, then get the money.

On September 24, EU ministers approved a €3 billion ($3.4 billion) disbursement after ambassadors verified Ukraine had completed 10 reforms under the so-called Ukraine Plan, according to the Kyiv Independent and Ukrainska Pravda. The list is a grab bag: new rules for reviewing judges' integrity declarations, appointment of a new electricity market operator, a plan on the gender pay gap, and traffic safety legislation. Norway kicked in an additional €92 million ($104 million) contribution the same day, according to the Kyiv Independent.

That's the good news for Kyiv. The bad news is a second payment worth €3.9 billion remains stuck because Ukraine's parliament, the Verkhovna Rada, hasn't moved fast enough on the rest of the list, according to Euronews. Combined, roughly €20 billion in EU assistance is sitting behind unfinished paperwork in Kyiv.

The reform list Brussels wants finished

EU Commissioners Valdis Dombrovskis and Marta Kos sent a letter to Rada Speaker Ruslan Stefanchuk laying out exactly what's outstanding, Euronews reported. The annex includes 21 items: an anti-corruption strategy, VAT simplification for entrepreneurs, anti-money laundering rules, state aid legislation, and a new disciplinary system for prosecutors. Some, like SME insolvency and civil service reform, are already moving through the Rada. Others, including the state aid and anti-money laundering bills, haven't even been submitted yet.

"Timely adoption of the necessary legislation is essential to secure available EU financing, to sustain momentum on Ukraine's EU accession path and to strengthen Ukraine's economy and public finances," Dombrovskis and Kos wrote, according to Euronews.

The EU is handing out other countries' tax money and has every right to demand Ukraine deliver on anti-corruption and rule-of-law commitments before cutting bigger checks, especially given Ukraine's long history of graft problems.

The disputed $27 billion number

The bigger fight is over Ukraine's claimed budget shortfall. Zelensky has flagged a $27 billion gap in the Ministry of Defense for 2026, a figure that Euronews reported "caught EU officials off guard and raised serious questions about its origin." Ukraine separately says it faces a $32.6 billion hole in 2027.

Zelensky's proposed fix: front-load a chunk of the EU's €90 billion support loan, which is currently split evenly between 2026 and 2027, so more money arrives sooner. He's also floated tapping frozen Russian assets, an idea the EU already tried and failed to execute last year, according to Euronews.

Brussels isn't buying either idea outright. European Commission President Ursula von der Leyen and Zelensky met in New York on Tuesday, a session Bloomberg described, via a source familiar with the talks and reported by Ukrinform and Hromadske, as tense. EU officials pushed back on Ukraine's math and suggested bringing in other partners, including Canada, Norway, and Japan, to help cover the gap rather than accelerating the loan alone.

Von der Leyen's public message afterward was more conciliatory: "More defence support is coming. And as reforms in the Rada progress, more budget support too. We have €37 billion still available in this calendar year," she wrote on X, per Ukrinform. Zelensky said Ukrainian and EU teams would reconvene in seven to 10 days.

Kyiv's concern about a Russian escalation this winter and limited air defense to protect its cities is legitimate. That's an urgent operational problem that doesn't wait on legislative calendars.

But Kyiv also came into the meeting angry that the EU delisted Russian oligarchs Alisher Usmanov and Mikhail Fridman from its sanctions list as part of a deal to extend broader sanctions for three years, according to Ukrinform and Hromadske. Brussels lecturing Kyiv about compliance while quietly removing sanctioned Russians from its own list undercuts the EU's position here.

Money is still moving, just not all of it

None of this has actually cut off defense support. On September 18, the EU disbursed €3.3 billion ($3.78 billion) from the separate Ukraine Support Loan specifically for missiles and drones, according to the Epoch Times, with a total €28.3 billion ($32.47 billion) planned for the defense track in 2026. Germany's Boris Pistorius confirmed Berlin will send PAC-2 interceptors for Patriot systems from its own stocks, and Denmark said it would speed up roughly $276 million in air defense aid after a Russian frigate reportedly fired flares near a Danish military helicopter.

Zelensky, after meeting President Trump, said Ukraine would accept an energy truce with Russia if Moscow stops striking Ukrainian infrastructure, and asked Trump to relay that offer through Beijing, given Trump was hosting Chinese leader Xi Jinping in Washington that week, according to Ukrinform.

The unresolved question is whether the Rada can pass the outstanding 21 reforms fast enough to unlock the full €20 billion before year's end, and whether EU officials ever get a straight answer on where Zelensky's $27 billion defense number actually came from. Both sides say they'll talk again within the next two weeks.