A €250 Million Signature: Ukraine’s President Is Holding Up EU Funding

Update: Later that evening, after the article was published, President Zelenskyy signed the decrees appointing the new anti-corruption court judges.

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President Zelenskyy has four weeks left to meet one of the Ukraine Facility indicators – originally due in the first quarter of 2025 – and avoid losing the funding attached to it. The amount at stake is €250–300 million. Ukraine has already nearly fulfilled the conditions, having successfully completed the selection process for new judges of the High Anti-Corruption Court (HACC).

The only remaining step is for the president to appoint them to the HACC. Under the law, this is essentially a formality, as the president is required to make the appointments. The only question is whether he will do so in time to secure the European Commission’s funding or miss the deadline and see a substantial amount of money lost.

The choice would seem straightforward.

Yet the president had been delaying the decision for more than a month, leaving uncertainty over whether the final deadline would be met.

The case of the HACC judges, whose appointment is linked to substantial EU funding, is telling but, unfortunately, far from the only problem when it comes to meeting the conditions of European financing programmes. Monitoring of the Ukraine Plan by the RRR4U consortium shows that, over time, Ukraine has been missing the deadlines for an increasing number of indicators.

Each of these indicators comes with a specific amount of EU support attached to it.

Until now, the issue was “merely” that Ukraine was receiving funding late and postponing the fulfilment of requirements. But we have now reached an important threshold.

After a certain point, funding reserved for Ukraine expires.

The money remains in the EU budget and is removed from plans for support to Ukraine.

Ukraine’s reform commitments do not disappear, as they are also set out in other documents, such as the benchmarks under the EU accession process. The difference is that these are not tied to specific EU funding.

The problems and challenges are likely to accumulate further. This year, the Ukraine Plan was expanded with new indicators and more than €8 billion in funding tied to reforms. This funding can also be lost if reforms are delayed for too long – more than 14 months. Delays themselves have negative consequences, as a lack of funding leaves fewer resources available to finance social and other budget expenditures.

This article explains the situation and why it matters.

What Is the Ukraine Facility?

During the full-scale war, international assistance flowing into Ukraine’s state budget has been and remains one of the key pillars of the country’s resilience.

Initially, our partners financed civilian expenditures – education, healthcare, culture, social spending and other needs – while tax revenues were used to fund defence and security. Last year, following the halt of US defence support, this arrangement changed. The EU shifted towards co-financing defence needs as tax revenues were no longer sufficient to cover them.

The focus here is the EU’s budget support instrument known as the Ukraine Facility. It was launched in 2024, initially as a four-year programme with a total envelope of €50 billion. Of this, €38 billion is budget support provided against the fulfilment of reform indicators under a programme called the “Ukraine Plan”. Each indicator represents a specific reform or change with a clearly defined deadline. Each also has a financial value attached to it – for example, legislation adopted by parliament carries a higher value than a decision taken at the ministerial level.

Every quarter, the Ministry of Economy submits a report to the European Commission on the fulfilment of the indicators. This report determines the amount of each Ukraine Facility tranche.

The deadlines for most of the original indicators have now passed. However, in 2026, the EU added funding from a broader €90 billion support package to the Facility, with €8.3 billion allocated to Ukraine Facility support for the current year. In return, Ukraine agreed to take on additional commitments, while some elements of the original plan were also revised.

The updated Ukraine Plan contains 27 new indicators – that is, additional reforms and changes – ten of which require the adoption of legislation.

However, the overall timeframe of the programme remains unchanged: all reforms must be completed by the third quarter of 2027 at the latest. This is because the EU will enter a new seven-year budget period in 2028, when new arrangements for financing Ukraine will need to be agreed.

The basic formula also remains the same as from the outset: more reforms mean more money for the state budget.

As part of the Facility’s updated financing, the EU also agreed to adjust some of the original indicators, including slightly changing their deadlines. What the update did not – and could not – resolve, however, was the substantial backlog of earlier indicators whose deadlines have already passed.

Does Ukraine Really Not Need the Money?

One indicator stands out in particular: it is the longest-overdue among those that remain unfulfilled.

In the original plan, Ukraine committed to appointing around two dozen new judges to the High Anti-Corruption Court (HACC) and completing their appointment by the end of the first quarter of 2025. In return, the state budget was to receive €300 million, according to sources cited by European Pravda (the initial figure reported was €280 million; this is the revised amount). But the deadline for receiving the funds was pushed back, and then pushed back again…

Now there is a risk that we could lose this funding permanently.

The Ukraine Facility provides that if the initial deadline is missed, Ukraine receives an additional year to fulfil the commitment, followed by roughly two more months. If we continue to miss the deadline, again and again, the money is “burned”.

An interesting detail: we did not use the word “roughly” when referring to the deadlines by accident. The EU is doing everything it can to prevent Ukraine from losing the funding. To this end, our partners in Brussels have been using various bureaucratic mechanisms – for example, this summer, the Ukrainian report was left pending for an extended period so as not to start the final countdown. But this cannot go on indefinitely.

So the “clock” is now running.

According to sources, Ukraine has less than a month left – approximately until September 17.

And if the deadline is missed, the funding will be lost.

But what is most shocking is that we are “stuck” at a stage where fulfilling the indicator should not have caused any problems at all. The competition to select HACC judges, which fell through last year (and, it should be stressed, through no fault of the government but because the criteria were too stringent), has finally been completed. The High Qualification Commission of Judges (HQCJ) has submitted nominations to the president for the appointment of 17 judges; procedures for two more are still under way.

Formally, the indicator requires 20 judges, but under the Facility rules, the 17 nominations already submitted should be enough for the indicator to be counted as fulfilled – if the president signed the relevant decrees. And although the EU retains the right to proportionally reduce the funding for partial fulfilment of the indicator, the amount at stake would still be more than €250 million – a very substantial sum that matters for the state budget.

Moreover, there is a chance that the EU could agree not to apply the reduction and instead pay the full €300 million. But for this to happen, Ukraine needs to demonstrate that it is genuinely committed to strengthening the HACC’s capacity. Delaying the decrees does not help.

What is preventing President Zelenskyy from signing at least these appointment decrees?

The question remains unanswered. But the experience of implementing a number of previous indicators suggests that this is not the first time. The president does not always sign decisions promptly, even when funding from Ukraine’s international partners is tied to his signature.

The Problems Will Only Grow

What stands out is that Ukraine’s “backlog” of promised but unimplemented reforms is growing rapidly.

According to RRR4U monitoring, at the end of 2025, eight Ukraine Plan commitments remained unfulfilled, with €1.93 billion in Facility funding linked to them. In addition to the HACC issue mentioned above, these included measures under the civil service reform, corporate governance, elements of judicial reform, and more.

For some of these commitments, Ukraine eventually received the green light from the EU, although there were questions about the quality of the reform. But some reforms remain outstanding to this day.

In 2026, however, new problems accumulated much faster than Kyiv was able to “clear its backlog”. In the first quarter, Ukraine failed to fulfil another four indicators, with around €2.30 billion in funding linked to them. These concerned simplifying insolvency procedures for micro, small and medium-sized enterprises, introducing a transparent selection process for prosecutors appointed to senior positions, as well as approving a circular economy strategy and an action plan for its implementation. One more indicator was subsequently fulfilled – the launch of an information system for human resources management in the civil service. Experts expect the European Commission to count it as fulfilled, as many elements of the system have already been launched.

But that was only the first quarter of the year.

The second quarter of 2026 added another seven unfulfilled indicators to the list, with an estimated “value” of €3.12 billion. These included a human rights protection strategy, the formation of supervisory boards for state-owned enterprises with a majority of independent members, technical specifications for the external audit of the National Energy and Utilities Regulatory Commission (NEURC), and more.

There are also questions surrounding the Ukraine Facility’s investment indicators.

The plan envisaged at least €300 million in investment in education, €200 million in healthcare, and €200 million in housing for veterans with disabilities, families of deceased veterans, and internally displaced persons. Another commitment required at least 5% of grant support to be allocated to community reconstruction needs. However, the publicly available information is not yet sufficient to fully confirm that these investment targets have been met, as it remains unclear exactly which expenditure items will be counted towards their fulfilment.

And meeting these indicators also has a “value” in terms of EU funding.

Problems “Spread” Across Those Responsible

According to RRR4U estimates, more than €7 billion is currently linked to unfulfilled indicators.

This money has not been lost – for each of these indicators, Ukraine has slightly more than a year to fulfil the overdue commitment. But the fact that the problems are growing rapidly, while fulfilment of the indicators sometimes gets held up by seemingly minor formalities, is a serious cause for concern.

If the government does not change its approach as soon as possible, we may soon find ourselves in a situation where the irreversible loss of funding becomes a tangible prospect. And not for just one indicator, as is the case now, but for many at the same time.

Another problem is that Ukraine does not receive the funding it has been counting on when it needs it, as reflected in the state budget prepared by the government. Civilian expenditures have to be financed every month. When reform deadlines are missed, however, the funding schedule becomes unpredictable – even when Ukraine ultimately fulfils its commitments.

For example, the Ministry of Economy submitted its report for the fourth quarter of 2025 later than planned because it was waiting for the finalisation of certain steps and for the European Commission to update its methodology for disbursing tranches. As a result, €2.75 billion reached Ukraine only in June rather than in March, when the funds were urgently needed. The government cannot be blamed for the delay in this case – it was precisely the change to a more flexible methodology that allowed Ukraine to receive this amount. The European Commission agreed to provide funding for indicators whose deadlines fall in future quarters. This will also help in September, when a tranche is expected based on the report for the first quarter, but the calculation will include indicators from “future” quarters.

However, the challenges associated with “late” tranches do not disappear as a result.

So who is responsible for the delays?

Importantly, the failure to fulfil indicators is not limited to a single ministry or a single area. Overdue indicators concern public administration, anti-corruption and judicial reform, corporate governance, energy, the financial sector, human rights protection, and the development of the business environment.

This points to a systemic problem with planning, coordination and political responsibility for implementing the Ukraine Plan.

Although, formally, the reasons vary: in some cases, the government submitted draft laws too late and parliament failed to consider them in time; in others, parliament lacks the will to pass the necessary legislation; elsewhere, decisions by the president are holding things up – as in the case of the HACC judges. The change of government has also added to the problems, as a number of draft laws were automatically withdrawn from parliament.

But a much more demanding reform timetable lies ahead.

In 2026, new indicators have already been added. A significant number of complex legislative and institutional steps are scheduled for the second half of this year, particularly the fourth quarter. Ukraine is approaching them with a substantial accumulated backlog. And postponing deadlines does not solve the problem; it simply concentrates even more tasks in 2027, when all reforms are supposed to be completed because the programme is coming to an end.

This is happening even though parliament will have plenty of other tasks in 2027. Ukraine faces a major EU integration agenda, with the National Programme for the Adoption of Acquis identifying hundreds of regulatory and legislative acts that need to be aligned with EU law. The flow of urgent draft laws will therefore only increase.

On top of that, Ukraine’s inability to fulfil its commitments on time is undermining negotiations over a possible expansion of assistance in the years ahead. Above all, this concerns 2027, when Ukraine faces a sizeable uncovered fiscal gap. But negotiations with the EU on the need for additional support instruments will naturally run into the question of why Ukraine has still not used all the funding already available to it.

What once looked like delays in fulfilling individual indicators of an EU programme – a matter that concerned mostly specialists – is increasingly turning into a systemic risk to state budget financing.

A problem that will affect Ukraine as a whole.

Authors:

Oleksandra Betliy, Lead Expert, Institute for Economic Research and Policy Consulting

Serhii Sydorenko, Editor, European Pravda

The article uses data from RRR4U monitoring, conducted by a consortium of four Ukrainian organisations: the Institute for Economic Research and Policy Consulting, the Centre for Economic Strategy, the Institute of Analytics and Advocacy, and DiXi Group, with financial support from the International Renaissance Foundation.