EU leaders failed to agree the bloc's 2028-2034 budget at their Brussels summit and pushed the fight to an extraordinary meeting on November 26, as Kyiv told the G7 that €40bn of its defence needs for next year is unfunded.
The leaders lined up behind Ukraine after US President Donald Trump's turn towards Moscow, but made little headway on how to pay for Kyiv's war. Some have been suggesting that the EU confiscate the $300bn of frozen reserves, but most of EU’s leaders remain opposed to the idea, which would open up a torrent of Russian legal suits that would be hard to defend against as well as undermining trust in the euro, argue others.
German Chancellor Friedrich Merz said the bloc would have to find more money as Kyiv warns of a large budget hole next year. "We will have to increase the funds again here in order to really assist Ukraine on a lasting basis," he said as he arrived, AFP reported.
He also slapped down a US proposal to move part of Russia's immobilised central bank reserves into a vehicle overseen by Washington, which envoys Steve Witkoff and Jared Kushner put to European delegates in Miami. "These are assets that are frozen in Europe, and they should remain frozen in Europe. This is our business, and we will decide on it," Merz said.
Still short of money
Europe is united in rejecting Washington's approach but divided over its own wallet. The EU's €90bn ($101bn) loan, which follows the €50bn ($56bn) Ukraine Facility for 2024-2027 and was agreed in December 2025 after leaders failed to agree on using the roughly €210bn ($235bn) of frozen Russian money, is split into €45bn for each of 2026 and 2027, and recent estimates put Kyiv's remaining financing gap at about €23bn ($26bn), EUobserver reported.
President Volodymyr Zelenskiy has asked Brussels to bring forward part of the loan to cover a shortfall at the defence ministry. Using the frozen assets themselves still runs into opposition from Belgium, where most of them are held at Euroclear.
There is a still a big hole in Ukraine’s funding needs and that shortfall will only grow larger next year. Ukraine's defence requirements for 2027 are estimated at €70bn ($78bn), of which €40bn ($45bn) is not yet funded, Finance Minister Serhiy Marchenko told G7 finance ministers and central bank governors on the sidelines of the IMF and World Bank annual meetings in Bangkok, the finance ministry said on October 16.
He asked for financing that is "debt-neutral", avoiding any increase in debt servicing costs, including mechanisms backed by revenues from the frozen Russian assets, and said Ukraine expects to receive another $25bn of international budget financing by the end of this year.
"Russia is preparing for a long war. Ukraine's financial and military response, together with its partners, must therefore be equally long-term, predictable and sustainable," the ministry said, summarising his remarks. Kyiv's draft 2027 budget already assumes $53bn of external support, and so far this year Ukraine has received a third of the budget aid it expected.
The leaders rejected the European Commission's €1.76 trillion ($1.97 trillion) proposal for the seven-year budget late on October 15, and the Irish presidency's compromise, which would have cut it by about €140bn ($157bn) to roughly €1.62 trillion ($1.82 trillion), also failed to win enough support, a European diplomat told reporters, TASS reported.
The six net contributors, led by Germany that threatened a veto unless hundreds of billions were cut, say the compromise does not go far enough, while Hungary's Prime Minister Peter Magyar called the draft unacceptable in its current form.
European Parliament President Roberta Metsola spoke of "unprecedented divisions" between net contributors and net recipients. "We are, therefore, facing very, very difficult negotiations," Merz said as the summit opened. Latvian Prime Minister Andris Kulbergs put the cost of supporting Ukraine at "one beer less for one European a year. We can afford that. But Ukraine needs it now.”
EU rallies around Zelenskiy against Trump
Swedish Prime Minister Ulf Kristersson said Europe "very much" regretted Trump's diesel deal with Russian President Vladimir Putin, Portugal's Luis Montenegro called it incoherent, and the EU's foreign policy chief Kaja Kallas said Europe and the US "definitely have different approaches to this war".
"We have to pressure the aggressor to stop the war, not the victim to surrender," Kallas said.
Danish Prime Minister Mette Frederiksen called the unannounced throttling of Starlink "deeply problematic", and Poland's Donald Tusk told Zelenskiy that Ukraine was "not alone".
Zelenskiy has made the quarrel with Washington personal. He told the Financial Times that Trump admires Putin and has a natural affinity for strongmen, dismissed Trump's call for him to step down as "rhetoric" and said "we didn't destroy any relationship".
A day earlier he called the US moves a betrayal and said "this is not the right side of history". The fight comes as Zelenskiy, already sounding increasingly desperate over air defence, heads into a winter of escalating Russian strikes on the grid.
EU leaders meeting Zelenskiy in Brussels on October 16 will urge him to soften his rhetoric, as Ukraine remains critically dependent on US support, the Financial Times reported. "Perhaps it is true, but that doesn't mean it should always be said out loud," one European official told the paper.
In Kyiv, MP Oleksiy Honcharenko called the clash with Washington "madness", according to remarks carried by the Military Summary channel. "We are at war with Russia, and yet we want to pick a fight with the United States, too. Where are your brains, for heaven's sake?" he said, adding that Ukraine has no means of its own to intercept Russian ballistic missiles and depends on US intelligence for warnings of incoming strikes - the gap left as its interceptor missiles run dry.
Starlink back up
Service on Starshield, the military version of Starlink, was fully restored on October 15, a source at Ukraine's defence ministry told Ukrinform, Meduza reported. Senior US officials told Radio Free Europe/Radio Liberty that weapons deliveries through Nato's Prioritized Ukraine Requirements List (PURL), under which allies pay for US arms for Kyiv, continue uninterrupted, after the Financial Times reported on October 11 that Washington was threatening to halt them.
The UK is sending Ukraine more Storm Shadow cruise missiles to hit Russian sites involved in attacks on civilian infrastructure before winter, Bloomberg reported, citing people familiar with the matter. The resupply was discussed when Prime Minister Andy Burnham hosted Zelenskiy in London on October 14, and London does not believe Kyiv should halt its strikes on Russia while Moscow keeps hitting Ukraine, the people said.
In Germany, Alice Weidel, co-leader of the Alternative for Germany party, which leads German opinion polls, told The Economist that Ukraine has "already lost" and that Germany should end its support. "If we give up our support for Ukraine, this will have an enormous impact on the entire political order of this continent," Merz told the Financial Times, adding that Kyiv would not lose the war "if we are doing the right things".
Ukraine is the first item on the summit's second day on October 16, with Zelenskiy attending in person. Leaders are expected to "regret" the Trump-Putin diesel deal in their conclusions and to discuss Kyiv's needs for 2027, but no decision on new funding or on the frozen assets is planned. Talks on energy prices on the first day ended without conclusions. "We are all on this side of history and we know very well who is on the other side," Lithuanian President Gitanas Nauseda said.