How Ukraine Is Fulfilling the Ukraine Facility Program: €50 Billion from the EU and an Institutional Test of European Integration

The European Union is providing €50 billion in non-military aid through the Ukraine Facility program, which runs until 2028. The initiative is designed to support recovery from the war’s devastation across all sectors of the economy and to assist in implementing reforms that will further Ukraine’s European integration. How effectively is Ukraine meeting its commitments under the program and how does this influence the financial support we receive?

Architecture of financial support

The Ukraine Facility spans 2024–2027 and is based on the reform-for-funding principle, meaning that disbursements may be suspended if the Ukraine Plan 2024–2027 is not implemented. The assistance consists of non-repayable grants and guarantees (€17 billion) and loans (€33 billion), which Ukraine will begin repaying between 2034 and 2059-2061. The loans are interest-free for Ukraine, with the EU covering the interest payments. The lending terms, therefore, provide time for recovery and preparation for debt repayment.

The assistance is divided into three “baskets”. The first (€38.27 billion) is direct budget support linked to the implementation of the reform plan. The funds will be directed toward social payments, salaries for public-sector employees, maintaining education and healthcare, rebuilding infrastructure, and similar purposes. The second basket (€9.3 billion) covers investments in small and medium-sized enterprises as well as large companies, along with guarantees for international banks that will extend loans to Ukrainian firms. The third (€2.43 billion) is technical assistance, including spending on consulting and expert support for developing the reforms outlined in the plan.

How much funding has Ukraine received?

Last year, the state budget received more than €16 billion in assistance. Under the Ukraine Plan, the 2025 budget is slated to receive another €12.5 billion; however, the most recent tranche, in August, was €1.4 billion smaller than planned, as Ukraine fulfilled only 13 of 16 reform benchmarks. The country has yet to complete the selection of judges for the High Anti-Corruption Court, reform the Asset Recovery and Management Agency (ARMA), and restructure the executive branch’s territorial organization, including the delineation of powers between local self-government bodies and local executive authorities. By the end of July this year, six additional indicators must be met, which would allow Ukraine to receive €2.11 billion.

The swift adoption of a law curbing the independence of the National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO) has put at risk not only the Ukraine Facility but also Ukraine’s European integration as a whole.

“For Ukraine’s accession to the EU, it is necessary to have a strong ability to fight corruption and ensure institutional resilience. The EU will continue to monitor the situation and support Ukraine in upholding the rule of law“, the European Commission spokesperson said in response. However, after the adoption of a law that partially reinstated the repealed provisions, the government still has an opportunity to receive all the planned funds, provided it adopts the above-mentioned reforms within the year. Under the Ukraine Facility, €7.2 billion is planned for 2026 and €2.52 billion for 2027.

In addition to the payments mentioned above, Ukraine can expect direct investments of €1.5 billion over four years under the Ukraine Facility, which is less than 1% of last year’s GDP. Beyond direct investments, however, the program also provides banks with loan guarantees totaling €7.8 billion, which partially offset security risks and enable Ukraine to borrow at lower interest rates. These guarantees are expected to help attract up to €40 billion in investment. 

The reforms Ukraine has committed to implementing under the Ukraine Facility are designed to attract private capital. According to surveys, 80% of foreign investors who are members of Global Business for Ukraine and the European Business Association are interested in investing in Ukraine, and half are already doing so. In their view, the main obstacles beyond security concerns (cited by 68%) are corruption and political instability (each named by 47% of respondents). Clear and predictable “rules of the game” therefore remain the key precondition for attracting investment. Establishing them requires, first, judicial reform to ensure the rule of law and, second, effective anti-corruption efforts. This section takes a closer look at the Ukraine Facility reforms that can advance progress in these areas.

Combating corruption

Within this area, three key reforms must be implemented: improving the legal framework for combating corruption; strengthening the capacity of the anti-corruption infrastructure (including expanding the powers of anti-corruption institutions and reforming ARMA); and enhancing measures to prevent money laundering (see Table 1).

Why was the ARMA reform law delayed?

In June 2023, MPs submitted Bill No. 10069 on reforming ARMA. However, it received negative feedback for granting the agency excessive powers and duplicating the functions of the State Property Fund; for instance, under the draft, ARMA would have been authorized to manage assets confiscated by court decisions under the Law of Ukraine “On Sanctions”, a function belonging to the State Property Fund.

On January 2, 2025, the government submitted Bill No. 12374 on ARMA reform to the Verkhovna Rada. Later, MPs introduced alternative drafts (Bill No. 12374-1) and a separate bill No. 12389 concerning ARMA’s property title. Experts criticized these drafts for failing to align with the reforms outlined in the Ukraine Plan.

Transparency International, in its assessment of Bill No. 12374, noted positive changes in the procedure for the competitive selection of the agency’s head, but pointed out the lack of progress in ensuring transparency in asset management.

The Institute of Legislative Ideas observed that the alternative Bill No. 12374-1 meets the Ukraine Facility’s requirements only partially and does not specify the main mechanisms for asset management.

The Ukrainian National Bar Association pointed out that Bill No. 12389 effectively shifts most responsibilities from the asset manager (ARMA or its designated agents) to the owner of the seized property. According to the association, this transfer of responsibility from the manager to the owner places a disproportionate burden on the latter.

Ultimately, on June 18, 2025, the Verkhovna Rada adopted Bill No. 12374-d in its second reading, following four months of parliamentary deliberation. MPs, representatives of anti-corruption agencies, civil society organizations, and independent experts actively participated in the public discussions of the bill and jointly prepared a document containing consolidated comments and proposals.

Why haven’t the staff and judicial ranks of the High Anti-Corruption Court been expanded?

The competition for vacant positions at the HACC began in November 2023 but stalled after the term of the Public Council of International Experts (PCIE) expired. A new composition of the PCIE was appointed only in April 2024, leaving the body with limited time for substantive work. Second, after several stages of selection (exams, dossier reviews, and interviews with both the PCIE and the High Qualification Commission of Judges (HQCJ)), only two of the seven candidates were deemed to meet the integrity and professionalism criteria and were appointed on March 19, 2025. At that time, 25 positions at HACC (about 40% of the total) remained vacant, including 10 in the Appeals Chamber. The High Council of Justice approved an increase in HACC’s administrative staff from 326 to 414 employees – an expansion of 27% rather than the 40% stipulated in the plan.

On June 3, 2025, the HQCJ announced a competition for 23 vacant judicial positions at HACC (13 for the first-instance court and 10 for the Appeals Chamber). On September 16, the commission began admitting candidates to the competition.

Judicial system

The main areas of reform in this field are enhancing the accountability, integrity, and professionalism of the judiciary (including through judicial education and selection) advancing the digitalization of the justice system, and improving the enforcement of court decisions in line with European standards (see Table 2).

Why is the Ukraine Facility beneficial for the EU?

Earlier, we reviewed the types of support Ukraine receives under the program: implementing reforms (including technical assistance), financing, and attracting private investment. Europe has repeatedly emphasized that supporting Ukraine is a matter of security and of safeguarding the continent, its values, and democracy worldwide. Thus, the Ukraine Facility is far more than an act of solidarity; it is a long-term investment in Europe’s stability, economic growth, and geopolitical influence.

First, investing in security is cheaper than war. Financing Ukraine today helps avert far greater costs in the future. If Ukraine were to lose the battle against Russia, Europe could be next, triggering much deeper economic shocks, including a refugee crisis. Today, Ukraine is effectively shielding NATO from a direct war with Russia – one that would demand vastly greater military, human, and financial resources from Europe.

Second, Europe’s presence in Ukraine today will yield significant economic benefits in the future. Ukraine’s reconstruction will be the largest infrastructure project in Europe since World War II. Thanks to the guarantees provided under the Ukraine Facility, European banks will be able to participate in rebuilding without fear of losing their investments in the future. Moreover, Ukraine possesses critical raw materials, including lithium, titanium, and uranium, among others, and the joint development of these resources will help the EU reduce its dependence on China, thereby also strengthening NATO. Cooperation with the United States in this area will accelerate the sector’s development and deepen Ukraine’s economic partnership with the Alliance. 

Third, supporting Ukraine’s economy will encourage the return of refugees, most likely older individuals. While part of the workforce will assimilate in EU countries and may not return (though much will depend on EU policy toward Ukrainians, particularly work permits), economic recovery will help prevent a further deterioration of Ukraine’s demographic situation. We are likely to be more motivated to attract immigrants than countries facing significant pressure from large numbers of foreign refugees and may become a “magnet” for workers from developing countries.

Finally, Europe is also interested in gaining access to Ukrainian technologies. Ukraine’s defense-industrial sector is a source of innovation in unmanned systems, cybersecurity, and military technology. With European countries having access to solutions tested in real combat conditions, the defense capabilities of the entire continent are strengthened. Integrating Ukraine’s defense industry into the European Defense Technological and Industrial Base (EDTIB) will be mutually beneficial, enhancing the continent’s security and advancing its technological capabilities. Thus, the Ukraine Facility is not an act of charity but a mechanism for addressing Ukraine’s internal economic challenges and promoting joint development of the defense sector.