Ukraine Is Defending Itself With Money Europe Doesn't Have https://t.co/RMzvs6Hk9m
— zerohedge (@zerohedge) January 21, 2026
he ugly truth is that an end of the Ukraine war may have as devastating economic and political consequences for Europe as its continuance…
Ukraine already faces a $63 billion U.S. dollar funding shortfall in 2026 and I would be surprised if this figure doesn’t increase if the war continues. Ukraine’s massive fiscal splurge is driven by two factors
The enormous cost of maintaining a standing army of almost one million people;
The vast expense of importing weapons from the west to fight the war.
Weapon purchases are not sources of productive investment as they are literally burned in the heat of battle.
The same, of course, is true for Russia.
Both countries saw reducing economic growth in 2025, with Ukraine’s at 2.1% and 1.5%.
And, western pundits would point to this as evidence that Ukraine’s economy is performing better.
But the opposite is true.
Russia’s economy is around twelve times larger than Ukraine’s nominally and just over ten times larger when you look at GDP using purchasing power parity.
You can see this in the defence spending numbers.
Russia spent a record $143 billion on defence in 2025 compared to around $60 billion for Ukraine, so around 2.3 times higher. Yet, Russian defence spending amounted to just 6.3% of its GDP whereas for Ukraine it was 31.7%. So, massive spending on defence is a much less pivotal issue for Russia in terms of its economic fortunes.
Defence spending represents a far smaller proportion of total economic activity than it does for Ukraine. And Russia can afford to pay for its defence needs with its own finances, while Ukraine is entirely dependent on money from western donors to keep the war going.
Despite the massive cost of war, Russia ran a fiscal deficit of just 1.7% of GDP in 2025.
https://www.zerohedge.com/geopolitical/ukraine-defending-itself-money-europe-doesnt-have