Sergii Marchenko: Integrating the Ukrainian army into the European security system will shield the EU from the russian threat and preserve Ukraine’s financial stability

On May 21, Minister of Finance of Ukraine Sergii Marchenko participated in a meeting of G7 finance ministers and central bank governors, along with leadership from the IMF, World Bank, European Commission, and OECD in Banff, Canada.

One of the key topics discussed was financial support for Ukraine in 2026, including the provision of support to the Ukrainian army through its integration into the European security system.

In his address, the Minister expressed gratitude to G7 countries for their consistent political, financial, and defense support for Ukraine, which has continued for over three years since the start of russia’s full-scale aggression.

Sergii Marchenko emphasized the need for further decisive actions from international partners, particularly in strengthening Ukraine’s military capabilities. This, he stated, is a prerequisite for macro-financial stability in Ukraine and for the security of the entire European continent.

Key points from the Minister’s address:

In 2021, the State Budget deficit was 3.8% of GDP. After the full-scale war began, the economy contracted by almost 30%, and the deficit rose to 20% of GDP due to a sharp increase in defense spending – from 5% to 30% of GDP.

Excluding military expenditures and wartime factors, the deficit would have gradually declined: from 6.8% of GDP in 2022 to 4.2% in 2023, 0.6% in 2024, and 0.2% in 2025. Therefore, war is the main driver of economic and financial losses. Economic recovery is only possible through strengthened defense capabilities.

Wartime conditions require that military spending and equipment needs remain at 2022 levels. Continued international support remains crucial.

A systemic solution is needed to preserve macro-financial stability 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 would address two critical issues: increasing European security and enabling Ukraine to maintain macro-financial stability.

Today, the Ukrainian army is defending not only Ukraine but all of Europe. Even after lasting peace is achieved, the russian threat to European security will persist. Ukrainian soldiers possess battlefield experience in a high-tech war against a powerful adversary – experience few other armies can match.

The cost of maintaining Ukraine’s armed forces to help ensure European security represents a small share of EU GDP. This cost could be distributed among participating countries and considered within the framework of NATO defense spending obligations.

Given current military risks, Europe is already exploring ways to bolster its defense, including expanding army sizes. However, building such capacity will take years and require vast resources. Integrating Ukraine’s military capability is a practical, immediate solution.

Supporting Ukraine is an investment in Europe’s stability. Strengthening defense is not a political option – it is an urgent necessity. Action must be taken today to ensure strength in 2026 and beyond.