Military Debt Crisis: How the Government Plans to Plug the Budget Black Hole

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The government has officially confirmed a looming financial collapse in the defense sector: by November, the army could face unpaid salaries and delayed compensation to families of the fallen — a scenario unprecedented since the start of the full-scale war.

The Verkhovna Rada has amended the 2025 state budget for the fourth time this year, increasing spending on the security and defense sector by ₴325 billion to urgently cover financial shortfalls. The decision was supported by 297 MPs, including only 196 from the ruling Servant of the People faction.

Bill No. 14103 on additional funding for the security and defense sector was promptly signed by the Speaker and marked as urgent.

The amendments increase state budget revenues by ₴20 billion (to ₴2.5 trillion) and expenditures by ₴317.3 billion (to ₴4.65 trillion). The maximum state debt ceiling rises from ₴8.4 trillion to ₴8.7 trillion.

To partially offset the increase, expenditures are being reduced for several agencies:

• NABU – ₴320 million;

• Accounting Chamber – ₴253.5 million;

• High Anti-Corruption Court (HACC) – ₴50 million;

• Prosecutor General’s Office – ₴55 million;

• Bureau of Economic Security – ₴49 million;

• Ministry of Social Policy – ₴204 million;

• Ministry of Economy – ₴11 million;

• Ministry of Youth and Sports – ₴14 million;

• National Security and Defense Council – ₴10 million;

• Luhansk Regional Military Administration – ₴0.7 million;

• Odesa Regional Military Administration – ₴0.3 million.

The reallocation is aimed at ensuring uninterrupted payments to the military and maintaining operational capacity across the defense sector amid growing fiscal pressure.

Expenditures are increasing as follows:

• Ministry of Defense – by ₴310.94 billion. Two-thirds of this increase (₴210.92 billion) will support the Armed Forces of Ukraine, including personnel and troop training, medical care for service members, veterans, and their families. An additional ₴85 billion is allocated for the development, procurement, modernization, and repair of weapons, military equipment, and related systems.

• Ministry of Internal Affairs – by ₴8.22 billion, including ₴83 million for the State Border Guard Service and ₴8.14 billion for the National Guard.

• State Service of Special Communications and Information Protection – by ₴4.28 billion.

• Security Service of Ukraine (SBU) – by ₴1.28 billion.

• Main Intelligence Directorate of the Ministry of Defense (GUR MO) – by ₴29 million.

• Foreign Intelligence Service – by ₴8 million.

These increases are aimed at strengthening Ukraine’s defense and security infrastructure amid ongoing military challenges.

As a reminder, the Verkhovna Rada Committee on Budget supported the updated version of the state budget for 2025, which provides for a significant increase in spending on the security and defense sector, by 325 billion hryvnias. In addition, on October 21, the parliament supported the draft resolution with conclusions and proposals for the State Budget for 2026 as a basis. 239 deputies voted for this decision during the plenary session.

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