Kathrine Frich
Unless reforms are restored, the remaining funds may never arrive.
Unless reforms are restored, the remaining funds may never arrive.
EU Freezes Aid Over Zelensky’s Anti-Corruption Overhaul
The European Union has suspended key financial aid to Ukraine after President Volodymyr Zelensky signed legislation curbing the independence of the country’s anti-corruption agencies.
The controversial move has triggered serious concerns in Brussels about Ukraine’s commitment to reform, a condition tied directly to billions in EU assistance.
Controversial Bill Sparks Backlash
On July 23, Zelensky signed Bill No. 12414, placing the National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO) under the control of the Prosecutor General.
This effectively strips these institutions of their autonomy, raising fears of political interference and undermining Ukraine’s anti-corruption framework.
EU Suspends Billions in Funding
As a result, the EU froze disbursements under major aid programs, including the Ukraine Facility and the Revenue Acceleration Loan (ERA), partially funded by profits from frozen Russian assets.
Also impacted is financing from the European Investment Bank and the European Bank for Reconstruction and Development, halting a significant stream of Ukraine’s international support.
Funding at Risk: €18 Billion on Hold
Ukraine had expected €18 billion from the Ukraine Facility and ERA programs combined.
So far, only €3.7 billion of the planned €12.5 billion has been received through the Facility, while €8 billion has been disbursed under ERA, well short of the total commitments.
Unless reforms are restored, the remaining funds may never arrive.
“Money for Reforms”: EU’s Results-Based Model
The Ukraine Facility operates on a “money for reforms” principle.
Rather than unconditional grants, the EU ties payments to specific benchmarks, including maintaining independent anti-corruption bodies.
Ukraine had previously met all benchmarks by 2025, but missed several in early 2025, placing €1.5 billion in jeopardy even before the latest developments.
Brussels Pushes for Reinstatement of Anti-Corruption Powers
According to sources cited by Ekonomichna Pravda, the EU made it clear: aid will remain suspended until NABU and SAPO regain full independence from political control.
The message has been delivered both diplomatically and publicly, with top EU officials warning of further consequences if reforms aren’t reversed quickly.
Zelensky Moves to Reverse Course
In response to growing pressure, Zelensky has registered draft legislation with Ukraine’s parliament to restore the independence of NABU and SAPO.
The bill is expected to be passed and fully approved by July 31, potentially unlocking frozen EU funds. provided all reform benchmarks are also met.
Mixed Signals from EU Representatives
While EU spokesperson Nicolò Gasparini acknowledged that €1.5 billion in aid was withheld due to missed reform targets, he denied a direct link between the latest aid suspension and the July 23 anti-corruption bill.
However, no official denied the existence of a warning letter sent to Ukrainian Prime Minister Yulia Svirydenko regarding the funding freeze.
Financial Gaps Widen as War Continues
Ukraine’s projected financing needs for 2025 stand at roughly $30 billion, with an even larger budget deficit of $46.3 billion anticipated for 2026.
The aid freeze and Ukraine’s missed reform deadlines now place these financial targets at serious risk, potentially undermining the country’s economic stability as the war with Russia grinds on.
