KYIV, Ukraine — Ukraine has managed in recent weeks to steady parts of the front after months of pressure, with reporting from the Zaporizhzhia sector pointing to localized Ukrainian gains and a broader effort to blunt Russia’s expected spring offensive.
But the military picture remains fragile, diplomacy is stalled, and Kyiv is now confronting a second test that could prove nearly as consequential as events at the front: a funding squeeze that threatens its ability to sustain the war.
Ukraine’s 2026 budget was built around the assumption that large-scale outside support would continue.
Parliament approved spending of roughly $111 billion against expected revenues of $67 billion, leaving a deficit equal to 18.5% of GDP. Nearly 60% of all spending is set to go to defense, while defense and security outlays alone are projected at 27.2% of GDP.
Finance Minister Serhiy Marchenko has said Kyiv needs more than $45 billion in external financing this year, and the IMF has put the 2026 external gap even higher, at about $52 billion.
Ukraine’s model depends on foreign support to cover pensions, public-sector wages and other nonmilitary expenditures while domestic revenues are directed largely to the armed forces.
That model is now under strain from two directions at once, as delayed foreign money and political friction at home threaten Kyiv’s financial sustainability.
Hungary’s election changes one part of the picture
One of the biggest external chokepoints had been Hungary’s blockade of a proposed 90 billion-euro EU loan package — equal to about $106 billion — that Kyiv had counted on as a central pillar of its 2026 financing plan.
Prospects for that loan improved dramatically on Sunday with Hungarian voters’ rejection of Prime Minister Viktor Orban, long one of Kyiv’s most consistent opponents inside the European Union. Mr. Orban was voted out after 16 years in power. Peter Magyar’s center-right Tisza party won a sweeping victory, taking about 53% of the vote and securing a two-thirds parliamentary majority.
The changes in Budapest were felt immediately in Kyiv.
On Tuesday, Foreign Minister Andrii Sybiha said in a call with EU Foreign Policy Chief Kaja Kallas that unblocking the 90 billion-euro loan was urgent and that the two had discussed the Hungarian election and its implications for European unity.
For Ivanna Klympush-Tsintsadze, an opposition lawmaker and former deputy prime minister for European and Euro-Atlantic integration, Hungary’s blockade had been the single most critical outside obstacle.
“Well, I’m sure that the most critical part of the financial issues is realized with the blocking of the 90 billion euros credit,” she told The Washington Times.
The package, she said, was intended to help cover direct budget support, social spending and some military-related needs.
Mr. Magyar is likely to be less confrontational toward Ukraine than Mr. Orban. European officials and analysts expect Budapest to stop obstructing aid packages and Russia-related sanctions. But the change is unlikely to be a blank check.
Mr. Magyar has taken a harder line than Brussels on fast-tracking Ukraine’s EU accession and has also linked better bilateral ties to minority-rights issues. In other words, Hungary’s election results may remove the most visible veto point, but it does not solve Kyiv’s broader financing problem by itself.
If the Hungarian veto was the most obvious external obstacle, Ukraine’s internal bottlenecks may now matter even more as Kyiv’s cash crunch is exacerbated by domestic political friction.
Ukrainian lawmakers accuse the government of President Volodymyr Zelenskyy of trying to push painful International Monetary Fund- and EU-linked measures through without first building needed support in parliament.
That marks a change from earlier wartime assessments of Ukraine’s reform capacity.
In 2023, European Commission President Ursula von der Leyen praised Kyiv for working “tirelessly and intensively” on reforms despite the invasion. Now, Ukrainian reform monitors and European officials say that momentum has slowed.
Ukraine has missed deadlines on 14 EU-set benchmarks that put $3.9 billion at risk, while parliament’s failure to pass four laws also blocked access to another $3.35 billion from the World Bank.
A March 30 letter from EU Enlargement Commissioner Marta Kos to parliament speaker Ruslan Stefanchuk listed 11 overdue reform bills that could help unlock up to 4 billion euros more.
That route is less exposed to a Hungarian veto because it does not require unanimity among EU member states. But it still depends on Kyiv delivering the legislation. Reform delays have become serious enough that they are now affecting funding flows, not only Western confidence.
Halyna Yanchenko, a Ukrainian lawmaker, said the way the government handled the latest round of difficult measures had become part of the problem.
“There should be a dialogue within the country first and then any kind of negotiations with foreign donors, creditors,” she told The Washington Times. “And point two, there should be a team play and shared responsibility.”
Her complaint is that lawmakers are being asked to absorb the political cost of decisions they did not shape.
“When we are talking about raising the taxation,” Ms. Yanchenko said, “the minister of finance came up with some decision, promised something to IMF and then put the parliament in front of the decision that is taken. It doesn’t work.”
Ms. Klympush-Tsintsadze offered a similar critique, saying the government should have tested how realistic certain steps were before presenting them as faits accomplis.
But even if the hurdles inside the Ukrainian parliament are cleared, Kyiv faces ongoing funding shortfalls and growing donor fatigue.
Please read our comment policy before commenting.