On May 21, Ukraine’s Minister of Finance Serhiy Marchenko joined a meeting of finance ministers, central bank governors of G7 countries, leadership of the IMF and World Bank, the European Commission, and the OECD in Banff, Canada.
Among the key topics for discussion was financial support for Ukraine in 2026, including ensuring the Ukrainian army’s supply through its integration into the European security system.
During his speech, the Minister thanked the G7 countries for their steadfast political, financial, and defense support of Ukraine, which has lasted for more than three years since the full-scale aggression by Russia began.
Serhiy Marchenko emphasized the need for further decisive actions from international partners, particularly regarding strengthening Ukraine’s military potential. This, in turn, is a guarantee of macrofinancial stability in the country and security for the entire European continent.
Key points from the speech:
In 2021, the state budget deficit was 3.8% of GDP. After the start of the full-scale war, the economy shrank by almost 30%, and the deficit increased to 20% of GDP due to a sharp rise in military expenditures—from 5% to 30% of GDP.
Excluding war-related expenditures and wartime factors, the budget deficit has the potential to gradually decrease: from 6.8% of GDP in 2022 to 4.2% in 2023, 0.6% in 2024, and 0.2% in 2025. Thus, the war is the main cause of economic and financial losses. Economic recovery is possible only through strengthening Ukraine’s defense capability.
The conditions of wartime mean that military expenditures and needs for military equipment remain at the 2022 level. Therefore, maintaining international support is crucial to preserving macrofinancial stability.
We must create a systemic solution that will allow us to maintain economic resilience and protect Europe from the Russian threat.
One such solution could be the integration of Ukraine’s military potential into the European security system. This strategy can solve two problems at once: enhance security in Europe and enable Ukraine to maintain macrofinancial stability.
Today, the Ukrainian army provides protection not only for Ukraine but for all of Europe. Even when lasting peace is achieved, the key risk to European security from Russia will remain. Ukrainian servicemen have experience that many armies in the world do not possess, participating in a high-tech war against a powerful enemy.
The costs of maintaining the Ukrainian armed forces to ensure Europe’s security represent a small portion of the EU’s GDP. These costs can be shared among countries willing to join the initiative and counted toward defense spending in accordance with NATO commitments.
Given military risks, Europe is already seeking ways to strengthen defense, including increasing army sizes. But building such capacity will take years and significant resources. Integration of Ukraine’s military potential is a practical solution.
Supporting Ukraine is an investment in Europe’s stability. Strengthening defense capability is not a political choice but an urgent necessity. Action must be taken today to be strong in 2026 and beyond.
