Zelensky, EU warn new parliament blockage has put 3.7 billion euros for Ukraine at risk

Key facts

• Ukraine's parliament failed to pass a law on postal packages on September 1.
• This legislation was a condition for receiving 3.7 billion euros in EU financial assistance.
• The bill aimed to eliminate tax exemptions on small packages to boost Ukraine's revenue.
• President Zelensky criticized lawmakers for blocking reforms essential for EU integration and financial support.
• The EU plans to disburse the funds in the fall, provided all 12 conditions are met.

The European Commission confirmed on September 2 that Ukraine's parliament's failure to pass a law on postal packages the previous day has put 3.7 billion euros ($4.3 billion) of EU support at risk.

The parliament was expected to advance new laws to improve Ukraine's tax base, specifically to eliminate tax exemptions on small packages, but fell 30 votes short of the required majority to advance the legislation.

The EU intends to provide Ukraine with 3.7 billion euros under its Macro-Financial Assistance program in the fall, but this disbursement is contingent on meeting 12 conditions, including the passage of this law. European Commission spokesperson Balazs Ujvari emphasized the law's importance for mobilizing revenue for the Ukrainian budget and stated that continued reform implementation is crucial for planned disbursements.

President Volodymyr Zelensky criticized lawmakers more forcefully in his evening address on September 1 for failing to advance several reforms that day. He described the decisions as difficult, unpleasant, and unpopular but necessary for Ukraine to navigate the war. Zelensky also criticized the parliament for blocking EU integration rules, calling it dishonest and detrimental to the Ukrainian state.

The parliament is scheduled to consider additional bills on September 2 and 3, many of which are required by the EU and the International Monetary Fund (IMF) for Kyiv to unlock financial support. Zelensky indicated that the government has set a target date of November 1 to implement 44 such reforms.