February 8, 2026: At the end of 2025 European nations agreed to loan Ukraine $105 billion to help cover the Ukrainian non-military budget over the next two years. The Ukrainian government budget deficit for 2026 is $42 billion. The deficits are caused by the military costs, which could be as high as $120 billion in 2026. Ukraine has to balance its budget because the Ukrainian economy remains robust and growing despite the continued fighting in eastern Ukraine and Russian missile attacks on economic and military targets in the rest of Ukraine.

Ukraine builds nearly 80 percent of the weapons it needs. This includes long-range drones and missiles. What Ukraine does not produce is air defense systems and combat aircraft. Both of these are used to destroy incoming Russian missiles and large drones used to bombard cities and Ukrainian industrial facilities.

The current financial problems began in March 2025 when Ukrainian leader Volodymir Zelensky met with the American president. The president and vice president argued with Zelensky over peace negotiations. Zelensky wants to continue fighting until all Russian occupied territory is back under Ukrainian control. This means Crimea and eastern Ukrainian provinces that Russia still holds. The Americans wanted Ukraine to make peace even if that left some Ukrainian territory occupied by Russian troops. This dispute led the U.S. president to halt nearly all military and economic aid to Ukraine until the Ukrainians agreed to make peace without getting all their territory back.

The European NATO countries were aghast at the U.S. actions and told Ukraine that the European Union/EU would help out with most of the economic aid and some of the military. The EU had enough money for economic aid but did not manufacture all the types of weapons the United States provided. American defense firms were willing to sell the EU weapons that the Ukrainians needed and provided the EU with nearly all the American weapons that had previously been provided by the U.S. government. This includes air defense systems, but not enough to match the capabilities of American systems.

The Europeans recognize that the Russian attack on Ukraine is an attack on a neighbor of European NATO nations. These countries are not only supplying Ukraine with weapons but are also upgrading their own defense forces. EU nations believe that Russia will remain a threat, whether Russia conquers Ukraine or not. While the Americans are far away from all this, they cannot ignore the Russian threat to Europe, which is a major trading partner with the United States. The Americans were first introduced to this dependence during the 1914-18 World War I and entered the war in 1917 to end the conflict quickly and make sure the Germans did not win. World War II was a similar situation, although it was the Japanese sneak attack on Pearl Harbor that led Germany, a Japanese ally, to declare war on the United States. The current American withdrawal of aid to Ukraine mystifies the Europeans, who forget that most current Americans are descendants of Europeans who migrated to the U.S. to get away from all the wars in Europe.