Ukraine aid row: EU withholds $1.7 billion; Zelenskyy's new bill faces internal and external pressure

The European Union has frozen $1.7 billion in aid earmarked for Ukraine after President Volodymyr Zelenskyy signed a bill that weakens the independence of the country’s top anti-corruption agencies.

The withheld amount represents over a third of the funding set aside by the Union under its Ukraine Facility fund, which was launched last year to support Kyiv’s war recovery and its path to EU membership.

The move follows what EU officials described as a troubling shift in Ukraine’s governance standards.

The legislation in question hands greater authority to the politically appointed Prosecutor General over the National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO), two key institutions created in the wake of Ukraine’s 2014 Revolution of Dignity to fight high-level corruption.

The decision sparked the first wartime protests against Zelenskyy’s administration, with thousands taking to the streets to demand that the NABU and SAPO remain free from political interference. Under public pressure, Zelenskyy swiftly introduced measures aimed at safeguarding the agencies' independence, but concerns continue to grow.

Marta Kos, the EU’s Commissioner for Expansion, warned that Ukraine’s efforts to exert political control over its top anti-corruption bodies had raised “serious concerns” within the bloc, New York Post reported.
Although the EU’s freeze on funds is not yet final, Brussels has made it clear that the money will only be released once Ukraine realigns with the bloc’s anti-corruption benchmarks.

Zelenskyy has previously pledged to continue Ukraine’s anti-corruption campaign but has grown increasingly critical of the agencies, especially after they began targeting individuals close to his inner circle. Among them is former deputy PM Oleksiy Chernyshov, who was investigated by SAPO.

The president initially defended the bill by arguing it was necessary to rid the agencies of “Russian influence” and to address a backlog of unresolved cases. However, that explanation has done little to ease tensions either within Ukraine or among its allies.

British prime minister Keir Starmer also reportedly urged Zelenskyy to reconsider the bill and take concrete steps to address governance concerns, as per the New York Post.

Further pressure is mounting from the International Monetary Fund, which has tied its $15.6 billion aid package, to be distributed over four years, to Ukraine’s progress on anti-corruption reforms. Kyiv now faces a Thursday deadline to appoint a new head of its Economic Security Bureau in order to maintain eligibility for the IMF programme.

Zelenskyy has so far refused to appoint Oleksandr Tsyvinskyi, the official who led the case against Chernyshov, despite a recommendation from an independent commission. The post remains vacant, with no update yet on who might be chosen.

As Ukraine continues to fend off Russia’s invasion, the controversy over anti-corruption efforts threatens to undermine both foreign confidence and much-needed financial support.