Zelensky inks bill to boost Ukraine’s army spending
(MENAFN) Ukrainian President Vladimir Zelensky has signed new legislation increasing the country’s defense spending by $7.8 billion, with much of the funding expected to come from revenues linked to frozen Russian assets, according to reports. The move comes as Kiev grapples with a record fiscal deficit and remains heavily dependent on Western financial assistance to sustain its government and military operations.
The measure, approved by parliament on Tuesday, marks the second major boost to defense funding this year. Lawmakers had already expanded military allocations in July by roughly $9.9 billion. The latest amendment raises total expenditures for 2025 to approximately $70.7 billion, up from the $52.7 billion initially outlined in the budget passed earlier in the year.
Officials have indicated that a large portion of this additional spending will be financed through proceeds generated from frozen Russian funds.
On Wednesday, lawmakers also approved Ukraine’s draft budget for 2026, which projects a deficit exceeding 40%. The plan anticipates expenditures of about $114 billion against revenues of just $68 billion. The document specifies that all domestic tax income will go exclusively toward defense, while non-military costs will rely entirely on aid from foreign partners.
According to reports, Ukraine currently has enough resources to maintain government operations only until April 2026, prompting the European Union to consider a €140 billion ($163 billion) “reparations loan” backed by Russian assets held abroad. Around €200 billion of Moscow’s reserves are reportedly frozen in Belgium.
However, not all Western officials support the proposal. Reports suggest that the United States has declined to participate, citing risks to financial stability. European Central Bank President Christine Lagarde has also warned that seizing Russian state assets could breach international law and damage confidence in the euro.
Moscow has consistently condemned the use of its frozen reserves as “theft,” vowing retaliation. Russian officials maintain that continued Western funding and arms supplies only extend the conflict, causing more loss of life without altering the ultimate outcome.
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