Mired in a shameful corruption scandal while his nation is at war, president Volodymyr Zelenskiy invites little sympathy these days. But have some pity on a man who is choosing between being hanged or drowned. His quest to secure funding for Ukraine without committing political suicide is looking increasingly impossible.

At the end of August, Zelenskiy announced that Ukraine’s defence ministry was running a $27bn (€23.5bn) deficit in the second part of the year. This announcement came as a surprise for Ukraine’s main current donor, the European Union. As the New York Times describes it, European officials who arrived for Ukraine’s Independence Day were “unsettled” by this sudden request.

Meeting with EU Commission president Ursula van der Leyen on Friday, Zelenskiy described Ukraine’s current budget deficit as “sky-high”, but asserted - somewhat optimistically - that there were ways out of this conundrum. What he likely means is resuming pressure on Belgium to make it release just under €200bn in immobilised Russian assets in order to fund Ukraine’s war. There are no signs at the moment that Belgium is going to budge.

The EU emerged as Ukraine’s main donor after President Donald Trump decided that funding Ukraine is none of America’s business. Brussels issued a loan of €90bn that was supposed to cover Kyiv’s expenses during this year and next. But now Zelenskiy says he needs about a quarter of that sum on top of what has already been pledged.

Western media tends to describe this shortfall as something mysterious, although its origin is quite obvious.

Since spring, Ukraine has been waging a campaign of deep drone and missiles strikes which targets Russia’s oil refineries as well as port terminals handling oil and liquefied gas exports. Simultaneously, Ukrainian air forces attempted to isolate the occupied Crimea with systematic midrange strikes that strove to disrupt supplies to the occupied peninsula.

The costly military campaign was accompanied a major PR onslaught by Western governments and mainstream media, claiming that “the tide is turning” in Ukraine’s favour. The very same governments are now rolling their eyes in faked bewilderment: Where has the money gone?

At the end of June, Zelenskiy announced a 40-day “influence operation against the aggressor state aimed at compelling it to end the war”. But forty days later, the Kremlin felt less compelled to end the war on Ukraine’s conditions than ever.

As Ukraine switched back into the negotiations mode, reactivating Kushner-Witkoff mission, Zelenskiy’s hopes that his “influence campaign” could coerce the Kremlin into softening its demands look dashed. Meanwhile Ukraine is bracing for what its officials describe as the harshest winter since the start of Russia’s all-out invasion. Kyiv is back to square one where it was before the “tide is turning” campaign, only with a huge budget deficit.

Budget woes

The amounts Kyiv is invoicing to the EU will only continue to grow. Finance minister Serhiy Marchenko told Euronews at the beginning of the month that Ukraine is facing a €32.6bn shortfall in 2027.

A week later, he said that the cabinet had begun suspending the funding of what it considers non-essential expenses in the coming months. Rada’s budget committee chairwoman Roksolana Pidlasa listed the construction of hospitals and bomb shelters, as well as preparations for the winter, among the expenses affected by suspended funding. Business owners in spheres as road construction are now confirming suspensions, but even more worryingly the military on the frontline are complaining about wage arrears.

Yet, in addition to the $27bn shortfall, Ukraine may not be even getting the money that is already envisaged by the EU. The reasons for that are political. Despite massive pressure from European donors, the parliamentary majority controlled by Zelenskiy has been refusing to adopt a package of reforms aimed at countering corruption, known as Kachka-Kos laws (after a 2025 memorandum signed by former Ukrainian eurointegration minister Taras Kachka and EU commissioner for enlargement Marta Kos), upon which the EU funding hinges.

In a letter sent to the Rada chairman Ruslan Stefanchuk on September 14, Kos and another EU commissioner, Valdis Dombrovskis, warned that the disbursement of the remaining €20bn is “subject to the fulfilment of the reforms in line with the EU requirements”.

The reason for Zelenskiy to resist these laws is that they dismantle the power vertical which has built over years. Without it, he will turn into a lame duck president who could be impeached and scapegoated for the outcome of war that will be far worse than the conditions of Minsk agreements that Kyiv threw out of the window in 2022, hoping to get a better deal (it got Russia’s all-out invasion instead).

The Kachka-Kos memorandum specifically requires a change in the procedure for the appointment of the prosecutor-general, which severely limits the president’s ability to nominate a personal loyalist. It also demands an overhaul of the State Bureau of Investigations and the removal of numerous clauses in the Criminal Code that impedes the work of detectives, particularly in corruption cases.

Finally, it envisages the appointment of “internationally vetted” Constitutional Court judges, which gives Ukraine’s donors a tool of direct influence over the country’s political course for years to come.

Scapegoat’s battle

A loyal prosecutor-general is a particularly crucial element of the system Zelenskiy built over years, as the events of the previous weeks showed. Earlier this month, Ukraine’s EU-backed anti-corruption agencies, NABU and SAPO, charged several senior officials of the prosecutor-general’s office with covering up a network of call centres engaged in telephone scam business. This attack forced prosecutor-general Ruslan Kravchenko to resign and flee the country.

Critics say Kravchenko wouldn’t have been able to cross the border without Zelenskiy’s permission. In his last act as an acting prosecutor-general, Kravchenko brought corruption charges against the chiefs of NABU and SAPO on the basis of investigations conducted by Ukraine’s Security Service (SBU), which remains staunchly loyal to Zelenskiy.

The president proceeded to nominate a replacement for Kravchenko. Ukrainska Pravda, a news outlet that supports NABU and SAPO in their offensive of Zelenskiy’s power system, described his nominee, Anton Kovalsky, as yet another potential loyalist, with links to influential regional figures inside Zelenskiy’s party.

But if the Kachka-Kos laws pertaining to the appointment of the prosecutor-general are adopted, Zelenskiy chances of having a loyal prosecutor-general will be drastically reduced. That leaves him extremely exposed to the threat of anti-corruption investigations by NABU and SAPO that have been closing in on Ukraine’s leader since the agencies first charged members of his inner circle a year ago.

The president himself is immune from criminal charges thanks to constitutional arrangement. He can only be indicted by the parliament, through the procedure of impeachment. But it is expected that NABU and SAPO will embark on breaking up pro-Zelenskiy majority in the parliament by charging members of his faction. One of NABU officials has told the FT recently that the agency was currently investigating over 60 Rada deputies.

Ukrainian media circulate pervasive rumours that most likely next senior target of anti-corruption investigations is David Arakhamia, an omnipotent whip of the pro-Zelenskiy parliamentary majority who is also considered to be the leader of Ukraine’s doves keen on reaching compromise with Russia and ending the war. His perceived ally, Zelenskiy’s chief of staff Kyrylo Budanov, is also being named among potential indictees.

What’s at stake in the battle between Zelenskiy’s administration and EU-backed anti-corruption agencies is hardly Ukraine’s corruption-free future. The chiefs of NABU and SAPO belong to the same mafia state elite that has ruled Ukraine for decades, as exemplified by the fact that fraud charges brought by the ousted prosecutor-general Kravchenko against NABU chief Semen Kryvonos were partially corroborated years ago by Skhemy, a Radio Liberty investigative outfit.

Besides, the ousted defence minister Mykhailo Fedorov whom the anti-Zelenskiy and pro-NABU/SAPO coalition is promoting as a potential replacement for Zelenskiy is exactly the person who is responsible for the $27bn deficit in the defence ministry budget this year.

The real battle is about who is going to have the final say at the critical moment in the Russo-Ukrainian war. That is when when one needs to answer the question whether Ukrainian leadership should take the bitter pill and agree to peace, largely on Moscow’s conditions, or it should keep fighting a devastating battle in the hope of finding a magic wand that would finally defeat Russia in some distant future.

Ukraine’s European donors seem to be currently favouring the second option because they promised a very different outcome to their constituencies - Russia’s strategic defeat or, as EU foreign policy chief Kaya Kallas mused before getting her post, the dismemberment of Russia.

But if the war ends soon because of the combination of factors like acute funding deficit and Russian strikes making major Ukrainian cities unliveable this winter, Zelenskiy will serve as the most convenient scapegoat for the debacle: A president whose inner circle made a fortune on their countrymen’s misery at the time of what they peddled as an existential and unavoidable war.