Ukraine will need at least $120 billion next year if the war unleashed by Russia continues, in order to hold the front line and minimize the number of lives lost among its defenders, Ukrainian Defense Minister Denys Shmyhal reiterated his July assessment at the annual YES conference “How to End the War,” organized by the Pinchuk Foundation in Kyiv on September 12-13.
“If the war ends, we will need a slightly smaller amount to simply keep our army in good shape in case of secondary aggression from the Russian side,” Shmyhal said.
“The economics of war show that if we spend less money than Russia, then we start paying with our territories and, most importantly, with our lives. Therefore, we need to attract all the necessary resources, all the necessary money,” he stressed.
The defense minister acknowledged that after three and a half years, many taxpayers are exhausted from spending such a huge amount of money, so he spoke in favor of using frozen Russian assets until Russia compensates for all the expenses that Ukraine and all countries have incurred during this wartime.
In his opinion, such a solution can be found even without direct confiscation, because the legal complexity of this procedure is understandable.
“We need to have a stable source of funding to finance Ukraine’s defense and reconstruction. Therefore, the number one issue for all of us is to find a political and legal solution for the use of frozen Russian assets,” Shmygal said.
He highlighted three main priorities: supplying the Defense Forces with more FPV drones, more robotic systems, and artillery shells, including long-range ones; sky defense—both with Patriots against ballistic missiles and with interceptor drones against drones; long-range weapons—Ukrainian-made drones and missiles.
“If our Western partners provide us with more deep strike systems and equipment, we will be absolutely delighted. But we can produce our own deep strike weapons, and again, we need funding,” the defense minister said.
He explained that such long-range strikes put the most pressure on the Russian economy and society, as well as directly on Putin, because they allow for the destruction of their oil refineries and military production infrastructure.
“We need to produce more, we need to continue carpet bombing operations, when all the planes in the Moscow region are grounded day after day. This is very inconvenient for the Moscow elite, and they are directly telling Putin: let’s stop this war because we can’t fly,” Shmygal added.
According to him, he conveys these needs during meetings in the Rammstein format.
In addition, the defense minister announced the need to create a so-called Kill Zone, which is currently being formed on the front line, to prevent aggression from recurring in the future. “These are lines of drones covering 10, 15, or even 30 km of territory,” he explained.
According to estimates by Alexander Parashchiy, head of the analytical department at investment company Concorde Capital, defense and security spending in 2024 amounted to approximately $95 billion, while this year he predicted it would grow to approximately $100-105 billion. Approximately half of this amount comes from the budget, while the other half has been provided by partners until recently.
In addition, Ukraine attracts about $40 billion in external financial assistance annually for non-military purposes in order to be able to finance military needs from the budget. For next year, Finance Minister Serhiy Marchenko has estimated the need for external financing of the state budget deficit at $45 billion, of which EUR16 billion has not yet been secured.
CONFERENCE, SHMYHAL, WAR, ЄС
