Ukraine asks EU to release €6.6bn from peace fund for military aid

Ukraine has formally asked European Union governments to steer €6.6 billion ($7.5 billion) already available under the bloc's European Peace Facility into immediate military aid, arguing that a narrow opening on the battlefield will not stay open for long. The request is set out in a letter dated 26 June from Ukraine's Defence Minister, Mykhailo Fedorov, seen by Reuters and reported on 1 July.

Fedorov casts the money as a way to exploit what he calls a six-to-nine-month window of opportunity, pointing to slowed Russian advances, Ukrainian counterattacks and long-range strikes that have disrupted Moscow's logistics deep inside Russian territory. Because the Peace Facility is jointly financed by all 27 member states, the appeal reaches every EU capital — including Luxembourg — and reopens a familiar argument about how fast, and how far, the bloc will keep funding Kyiv's war.

A request measured against a €136 billion gap

The €6.6 billion is a fraction of what Ukraine says it needs. Fedorov put the country's total defence requirement this year at roughly €136 billion. Ukraine's own budget covers about €53 billion of that, and Kyiv is set to receive around €28.3 billion for defence in 2026 from a separate €90-billion EU loan. Even so, the minister wrote, substantial financing needs remain unmet — hence the push to unlock the off-budget peace fund on top of the loan.

The timing also reflects a practical problem: money already promised has proved hard to spend. Reuters reported that of a €5.9 billion tranche earmarked for drones, only €3.9 billion could be transferred by 30 June, because Ukraine had signed procurement contracts with the European defence industry covering only that amount. Fedorov's argument is that the Peace Facility billions must be aimed at where they will bite fastest.

The funds could become one of the most impactful European contributions to Ukraine's defence effort this year, but only if those resources are directed where they can generate the greatest and most immediate military effect.

That framing — from Fedorov's letter — is aimed squarely at the member states who together hold the purse strings.

How the Peace Facility works, and why it stalled

The European Peace Facility is an off-budget instrument: it does not draw on the ordinary EU budget but on separate contributions paid by each member state in proportion to its gross national income (GNI). Its central mechanism is reimbursement — governments that send weapons and ammunition to Ukraine from their own stocks can be compensated for a share of the value, reported to be around 40%, encouraging them to keep giving.

Its weakness is the same as its strength: disbursements require the unanimous backing of all 27 governments. That gave a single capital an effective veto. Under former prime minister Viktor Orbán, Hungary froze EPF reimbursements for more than two years, angering large donors such as Germany and the Netherlands and forcing the bloc to improvise alternative channels to keep arms flowing.

The politics shifted this spring. In early June, reporting by Kyiv Post and Euromaidan Press said the government of Péter Magyar had lifted the veto, unblocking €6.6 billion in frozen Peace Facility payments — a figure that matches the sum now at the centre of Kyiv's request. The overlap is striking, though the two should not be conflated: the European Commission said on 4 June that it could not confirm the reported unblocking, and officials indicated any freed backlog would be released only once governments agreed on disbursement criteria. What is clear is that consensus, not cash, is the binding constraint.

Luxembourg's small but steady stake

As one of the EU's founding members and a GNI-based contributor, the Grand Duchy helps fund the Peace Facility and therefore shares in every decision to spend from it. Luxembourg has consistently sat among the pro-Kyiv camp. Its total support for Ukraine now exceeds €550 million, including €259 million in military aid between 2022 and 2025, alongside €196 million for displaced persons and €96.2 million in humanitarian assistance.

The commitment has continued into 2026. Luxembourg's military support reached €155 million in 2025, and a €15 million payment to the NATO-coordinated Prioritised Ukraine Requirements List (PURL) lifted its contribution to that initiative to €30 million. Defence Minister Yuriko Backes has tied the spending to a plain principle.

Total aid to Ukraine: more than €550 million since 2022

Military aid (2022–2025): €259 million

2025 military support: €155 million, including €15 million to PURL

“Luxembourg remains in solidarity with Ukraine and will support the country for as long as necessary,” Backes said. Foreign Minister Xavier Bettel has struck a more conditional note on how the war ends, saying: “However, a ceasefire is what is really needed, and for this, trust is needed.”

What comes next

Fedorov's letter is one prong of a wider fundraising drive. At a 17 June news conference he also sought an additional $20 billion from the roughly 50-nation Ukraine Defence Contact Group — the 'Ramstein' coalition — on top of some $40 billion already committed. But the Peace Facility request is the one that lands directly on EU member states and, through the GNI key, on their taxpayers.

No date has been set for a decision, and the fund's unanimity rule means any single government can slow it. For Luxembourg and its 26 partners, the question Kyiv is posing is less about the size of the cheque than about speed: whether the bloc can move money before the battlefield window Fedorov describes has closed.