Ukraine has proposed a 2027 defense budget of 97 billion euros, representing a 12% increase from the 2026 budget. This rise comes as the ongoing war with Russia continues to demand more resources. The overall 2027 budget proposal totals 142 billion euros, with defense spending making up about two-thirds of the total. However, Ukraine’s estimated revenue for the year is only 109 billion euros, leaving a gap that will require international financial support. Finance Minister Serhiy Martchenko has said Ukraine will need over 45 billion euros in foreign aid next year. So far, the government has secured commitments for about 17 billion euros and is working to finalize the rest. One potential source of funding could be the frozen Russian assets held by Ukraine’s European allies. These assets, which are currently blocked due to Russia’s invasion, could help cover the budget deficit. However, Ukraine is already facing a significant shortfall in its current defense spending, with an unfunded deficit of 23 billion euros for 2024. The daily cost of the war has also risen sharply, reaching 165 million euros per day in 2024, compared to 101 million euros in 2022. Since the war began in February 2022, Ukraine has received approximately 172 billion euros in financial aid, mostly from the European Union. The Ukrainian Parliament has until October 1st to review the proposed 2027 budget and submit their own amendments. The budget must be adopted in three readings by December 1st. The financial situation has grown more challenging this year as Russia has intensified attacks on Ukrainian infrastructure and businesses. In response, Ukraine is working to increase soldiers' salaries and boost its arms production. In the early years of the war, Ukraine covered its defense costs with its own revenues and used foreign aid for social and humanitarian needs. To secure continued financial support from partners like the International Monetary Fund and the EU, Ukraine must implement tax and governance reforms. Recently, the Parliament passed a bill in its first reading that would tax foreign-sourced packages, meeting one of the key conditions for receiving funding. The Parliament has also advanced two critical tax and customs reforms aimed at aligning Ukraine’s e-commerce regulations with EU standards. These changes are expected to strengthen Ukraine’s budgetary stability and open the door to approximately four billion euros in macro-financial support from the European Union.