The European Union has finalized a €90bn loan for Ukraine for 2026–2027. This is an important decision. But it should be read correctly.

This is not money for Ukraine’s reconstruction.

This is money for the war.

More precisely, it is money to keep the Ukrainian state functioning under wartime conditions: the budget, critical expenditures, the defence-industrial sector and macro-financial stability. Economically, this is bridge financing — a financial bridge through the next two years of war. It is not reconstruction. It is not a new growth model. It is not the restoration of destroyed capital.

That is why, after the €90bn decision, the main question should be framed differently. Not as if Europe helping Ukraine enough. But rather: if Ukraine needs €90bn merely to get through two years of war, how much will post-war reconstruction cost?

The answer already exists. The latest joint assessment by the Government of Ukraine, the World Bank, the European Commission and the United Nations estimates Ukraine’s recovery and reconstruction needs at almost $588bn over the next decade. Direct damage already exceeds $195bn. The worst-hit sectors are housing, transport, energy, industry and social infrastructure. It is the rebuilding of a significant part of Ukraine’s national capital, and this is not the final number.

Every day of war increases the bill. A destroyed power plant is not only the cost of repair. It means lost industrial production, energy imports, pressure on the balance of payments, additional budgetary expenditure and lower potential growth. Destroyed housing is not only square metres. It means people who do not return. It means labour leaving the economy. It means a weaker tax base and higher social spending. Destroyed logistics are not only bridges and roads. They mean more expensive exports, more expensive imports and lower competitiveness.

That is why €90bn and almost $588bn are not two figures from the same discussion. They are two different economic realities. €90bn is the price of wartime resilience. $588bn is the preliminary price of reconstruction.

The first allows the state to function. The second should restore the economy’s capacity to grow. The scale becomes clearer when Ukraine is compared with other post-war economies.

Croatia after the war of the 1990s faced war damage estimated by the Croatian National Bank at around €31bn, or approximately 150% of Croatia’s 1990 GDP. The World Bank separately indicated that reconstruction needs could reach up to 75% of GDP, while the government had to focus on a narrower priority reconstruction programme of about 20% of GDP. This distinction is crucial. Full damage assessment and a realistically implementable reconstruction programme are never the same thing. The constraint is not only money. It is fiscal space, institutional capacity, project quality, contractors and the economy’s ability to absorb large volumes of capital.

Bosnia and Herzegovina after the Dayton Agreement received a major donor-backed reconstruction programme. The World Bank, the European Union and the EBRD estimated the required reconstruction assistance at around $5.1bn for 1996–1999. International assistance during that period averaged about 26% of GDP per year. Even by post-conflict standards, this was an enormous external impulse. But even there, reconstruction was a gradual process focused first on basic infrastructure: housing, schools, roads, energy, water supply and essential public services. Donor money was necessary, but it was not sufficient by itself to create a long-term growth model.

Ukraine is a larger and more complex case. Ukraine is already beyond both cases in relative scale: almost $588bn in reconstruction needs, or around 260% of annual GDP. This is far above a sectoral reconstruction challenge. It is about reconstructing a large part of the country’s economic base: energy, housing, transport, industry, export logistics, social infrastructure, human capital and the investment platform for future growth.

This is where we arrive at what I call “Donornomics.”

Donornomics

For readers encountering this term for the first time: Donornomics is not simply an economy that receives international aid. Many countries receive aid, loans, grants or IMF-supported programmes. Donornomics begins when external financing ceases to be an additional resource and becomes the load-bearing structure of the entire macro-financial model.

In a normal economy, resilience is determined primarily by domestic production, the tax base, exports, investment, productivity, the financial system and the confidence of private capital.

In Donornomics, more and more depends on something else: when donor money arrives, in what volume, on what terms, with what delays, and subject to what political decisions in partner countries.

Ukraine is already living in this model. External assistance covers the budget gap. It supports the balance of payments. It finances critical expenditures. It reduces the risk of macro-financial destabilisation. This is necessary. Without it, Ukraine’s wartime economy would not withstand such pressure.

But the model has a structural risk: it can prevent collapse without creating a path back to self-sustaining growth. Aid can become a bridge to reconstruction. Or it can become a permanent form of economic existence.

That is why criticism of Donornomics cannot stop at describing dependency. It should also offer a way out. Ukraine needs a transition from emergency financing to reconstruction financing.

Reconstruction financing

Emergency financing closes the deficit, reconstruction financing restores capital, emergency financing holds the budget together, and reconstruction financing restores the economy’s ability to produce, export, invest and create jobs. These are different tasks. They require different instruments.

Ukraine does not simply need the next aid package. It needs a financial architecture for reconstruction: a multi-year reconstruction fund, insurance against war and political risks, guarantees for private capital, project financing, protection of property rights, transparent selection of priority projects and a clear model for using frozen Russian assets.

It also needs strict prioritisation. Reconstruction cannot be a catalogue of everything desirable. It should start with what produces the highest macroeconomic return: energy, logistics, housing for the return of people, export infrastructure, critical industry, human capital and municipal infrastructure in economically viable regions. Otherwise, large sums of money will not become growth. They will become import demand, inflationary pressure, inefficient projects and renewed dependence on donors.

The lesson from Croatia and Bosnia is straightforward. In post-war economies, the reconstruction bill is always larger than the first financing package, and the real bottleneck is not only the volume of money. It is the ability to convert external financing into productive capital.

Croatia shows the gap between total damage, reconstruction needs and a realistic priority programme: 150% of GDP in estimated damage, up to 75% of GDP in reconstruction needs, and about 20% of GDP in a focused priority programme.

Bosnia and Herzegovina shows the intensity of donor dependence in the first post-war years: a $5.1bn reconstruction programme and external assistance averaging around 26% of GDP annually.

Ukraine is already beyond both cases in relative scale: almost $588bn in reconstruction needs, or around 260% of annual GDP. That is why the €90bn decision does not close the economic discussion. It opens it.

If two years of wartime resilience require €90bn, how much will the transition from war to peace cost? And, more importantly, who will finance that transition — and through what mechanism?

The answer cannot be reduced to another donor conference. Ukraine needs a model in which external assistance becomes a bridge to reconstruction, not a permanent form of state maintenance.

This is the central choice. Either Ukraine remains stuck in Donornomics — an economy whose resilience depends on the regularity of external financing. Or external assistance is used as a transition mechanism: from war to reconstruction, from budgetary survival to investment, from donor dependency to a new growth model.

€90bn helps Ukraine get through the next stage of the war. But the real economic task begins after that. It is not only to secure money. It is to avoid turning Ukraine into a chronic economy of external support.

Kyrylo Shevchenko is the former Head of the National Bank of Ukraine and a member of the National Security and Defence Council.