E.U. cuts aid to Ukraine over corruption concerns

Zelensky with Ursula von der Leyen. The love is over now…
Photo: AFP

The $1.7 billion reduction capped a tough week for Volodymyr Zelensky as he deals with Ukraine’s governance issues, ‘The New York Times’ writes.

Zelensky’s anticorruption policies have already provoked Ukraine’s first antigovernment protests since 2022. Now, it seems, they may cost the country a portion of its foreign aid from the European Union, in a clear rebuke from the bloc, once a staunch ally.

The European Union said on Friday that it would withhold 1.5 billion euros, or $1.7 billion, from an overall fund of 4.5 billion euros whose disbursement is dependent on achieving good governance standards and that can’t be used for military purchases. The decision is not final, however, and the funding can be restored if Ukraine meets certain benchmarks.

Mr. Zelensky had no public comment on the aid cut, which nevertheless was a setback for Ukraine’s leader, who is depending on European financial support to fill gaps left by the Trump administration’s refusal to underwrite Ukraine’s war effort.

While holding back Western aid to spur reform was common, Friday’s decision seemed to signal a new willingness by the bloc to admonish Mr. Zelensky’s government on domestic policy during the war. It also raised questions about whether the glow around Mr. Zelensky might be beginning to dim among Ukraine’s Western allies.

James Wasserstrom, an American anticorruption expert, said in an interview that “the luster is definitely coming off” Mr. Zelensky’s wartime leadership among governments providing financial assistance. He added, “There is exasperation at Zelensky in the donor community.”

The E.U.’s decision capped a tumultuous week for Mr. Zelensky, who first pushed a measure through Parliament that stripped the independence of two anticorruption agencies, raising protests from foreign leaders as well as the Ukrainian people.

He then reversed course, submitting a new bill to Parliament to restore the agencies’ independence. That calmed the street protests, but could not head off the E.U.’s aid cut, which had already been decided on the basis of longstanding guidelines.

The two agencies — the National Anticorruption Bureau of Ukraine and the Specialized Anticorruption Prosecutor’s Office — had been investigating top ministers in the Zelensky government. The president’s decision to kneecap them, though reversed, prompted accusations of cronyism that jeopardized backing from civil society groups at home and Western nations bankrolling the war.

The European Union established this aid mechanism, the Ukraine Facility, last year and promised 50 billion euros over three years for repairing war damage and preparing the country for E.U. accession. The European Commission spokesman, Guillaume Mercier, told journalists in Brussels on Friday that Ukraine had requested a disbursement in June despite falling short on three of 16 benchmarks, including failing to make appointments to a specialized anticorruption court.

That court tries cases brought by the two agencies whose independence Mr. Zelensky threatened this week.

Critics in Ukraine have complained about the Zelensky government’s steady accretion of power under martial law, with investigations targeting journalists, activists and opposition politicians.

Foreign allies are divided on those steps, with some saying they are needed to keep a firm hand on the country in wartime while others dismiss them as a raw power grab.

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