Zelenskiy urges lawmakers to act as Ukraine funding hangs in balance

• Summary

• Kyiv risks losing billions in aid due to missed reform deadlines

• Hungary blocks key EU loan, worsening Kyiv’s budget shortfall

• Economists warn funds may run out by May if parliament delays

KYIV, April 3 (Reuters) - President Volodymyr Zelenskiy called ​on lawmakers to pass key legislation next week to avert a funding crisis, help Ukraine fight ‌the war against Russia, and enact key reforms required for European Union accession.

Due to lagging reforms and slow legislative progress in late 2025 and early 2026, Ukraine missed deadlines to unlock billions from its key lenders, economists said.

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With the need for external financing standing at $52 ​billion this year - equivalent to around a quarter of annual economic output - the budget situation is ​desperate.

“I have a list of key draft laws that are critical for securing funding,” Zelenskiy ⁠said in remarks released on Friday.

They range from strengthening the court system to reforming energy sector procedures.

“I believe ​that members of parliament from all parties must understand the importance of these bills for Ukraine’s budget,” said Zelenskiy, who ​has a majority in parliament but relations have soured.

David Arakhamia, head of the ruling Servant of the People faction, said lawmakers planned to meet on Monday to discuss the legislation with the key ministers. Voting is planned for April 7 and 8.

Ukraine depends ​on Western financial support as it fights a bigger and better-equipped enemy. Since the 2022 invasion, Kyiv has received ​about $174 billion in economic aid.

But this year, key funding has been stalled after Hungary’s Prime Minister Viktor Orban, who maintains close ‌ties with ⁠Moscow, blocked a 90 billion euro loan to Ukraine.

By contrast, Russia will benefit from the surge in global oil prices due to the war in Iran.

KYIV IS CRITICALLY LATE

Economists from several Ukrainian think tanks said the country was critically late with meeting obligations under the EU’s Ukraine Facility programme, failing deadlines on 14 indicators and risking more than $3.9 ​billion in financing.

In a March ​30 letter to the ⁠speaker, seen by Reuters, EU Enlargement Commissioner Marta Kos said progress on the legislation would send a signal about Kyiv’s commitment to reforms.

The parliament also failed to pass ​four laws enabling $3.35 billion from the World Bank, said the RRR4U consortium of four ​economic think tanks.

“If ⁠the commitments are met, the shortfall will be fully covered,” the consortium said.

“If not, the financial chain will break: the deficit exceeds $30 billion, and funds will only last until May. Or in the best-case scenario, if parliamentarians finally start voting ⁠on the ​Ukraine Facility legislation, they will last until mid-summer.”

With the war in ​its fifth year, fatigue and corruption scandals have mounted, and relations between Zelenskiy’s government and parliament have soured.

Some lawmakers complain about the lack of ​communication on key issues, while opposition parties want more representation in the government.

Reporting by Olena Harmash; Editing by Andrew Cawthorne

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