Monitoring the Implementation of the IMF Program and EU Assistance №17

The IMF remains “lenient” towards Ukraine. The eighth review of the Extended Fund Facility (EFF) programme was positive, with deadlines for several structural benchmarks postponed. Ukraine received its ninth tranche of nearly USD 500 million.

At the same time, new structural benchmarks have been added to the programme, including some that are quite “challenging” for Ukraine. Another review is due this year, with nearly USD 1.5 billion at stake.

The EU has applied “negative conditionality” for the first time. Failure to meet three Ukraine Plan indicators for the first quarter of 2025 resulted in EUR 1.4 billion in foregone assistance. Performance in the second quarter of 2025 was even weaker: four indicators remain unmet, putting a further EUR 1.27 billion in assistance at risk.

The slower pace of fulfilment under both programmes raises the question of reviewing and updating them while maintaining the ambition of the reform agenda. In particular, discussions are under way on a new IMF programme and amendments to the Ukraine Plan.

The logic of Ukraine’s key partners is “money in exchange for reforms” – to encourage changes that are critically important for Ukraine itself. And this logic is likely to become even stronger.

The IMF programme and the Ukraine Plan are signals of confidence for other external partners. They remain important for coordinating and securing additional international support.

Losing momentum on reforms threatens not only progress towards EU membership, but also the country’s survival more broadly. The issue of covering the budget deficit is already acute this year. Priority expenditures depend on external financing.

A loss of fiscal resilience is a real risk for a country fighting a war of attrition. Delaying reforms or even signalling a rollback – for example, an attempt to undermine the independence of anti-corruption institutions – could have fatal consequences.

Change is possible if reforms are brought back onto the political agenda and pursued not so much “for partners” as for Ukraine itself.