The Beginning of The Fifth Lap: Ukraine’s position at the start of the new year of war looks more resilient than a year ago

Against the backdrop of stalled peace negotiations with Moscow, Ukraine is preparing for a war of attrition lasting several more years. Sources told Wall Street Journal correspondent Bojan Panczevski that Volodymyr Zelensky has ordered the development of a three-year military plan (although the President’s office immediately denied this information so as to avoid further complicating relations with Donald Trump). At the same time, the commander of the Ukrainian National Guard, Olexandr Pivnenko, speaking as a representative for the radical wing of the military, said in an interview with the BBC that the Ukrainian armed forces are capable of fighting for several more years and will not voluntarily cede territory to Russia. Surveys continue to show high public readiness to resist: more than half of respondents oppose transferring northern Donbas territories to Russia even in exchange for security guarantees, and 65% are prepared to endure the war for as long as necessary (→ Re:Russia: Between The Inevitable and The Unreliable). Ukraine's European allies openly describe ongoing US-mediated negotiations as a political theatre staged by Trump and are also preparing to continue supporting Ukraine in military confrontation.

The money is there

Ukraine will have the funds to continue its resistance against Russian aggression in 2026. In 2025, Europe replaced American support for Ukraine, which had all but ceased with the arrival of Donald Trump in the White House. In 2024, the Biden administration provided Ukraine with €46.4 billion, but in 2025 the American contribution fell by a factor of 100, to €480 million, according to the Ukraine Support Tracker project of the Kiel Institute. Meanwhile, European support increased from €43.5 billion to €73 billion. Formally, the total financial, humanitarian, and military aid provided to Ukraine by Western allies fell by 18% in 2025 compared with 2024. In practice, however, the picture is more nuanced. In 2022, allies provided Ukraine with €78.4 billion overall, rising to €87.5 billion in 2023. In 2024, anticipating a shortfall under Trump, Washington increased its aid to €46 billion (up from €28 billion in 2023), bringing total support to €96.7 billion. Although total aid in 2025 amounted to only €79.5 billion, the average over the past two years remains roughly €88 billion per year.

Contrary to popular belief, the volume of military aid has not decreased. In 2025 it totalled €36 billion, lower than in previous years (€47 billion in 2023 and €41 billion in 2024). However, this reduction reflects Ukraine's ongoing expansion of its domestic arms production, which is financed by its European allies. In other words, part of the military aid has simply been transferred to financial support.

Financial, humanitarian, and military aid to Ukraine, 2022–2025, billion euros

In 2025, the main instruments of support for Ukraine's budget expenditures were aid through long-term EU mechanisms, including the Ukraine Facility (€34.5 billion by the end of 2025), and loans secured by income from frozen Russian assets (ERA). To finance Ukraine in 2026, EU countries intended to use the frozen assets themselves, but this plan failed as a result of resistance from their holder, Belgium, and pressure from the Trump administration (→ Re: Russia: The battle for assets). Nevertheless, at the very end of the year, the EU agreed on a new €90 billion loan for Ukraine (the Ukraine Support Loan).

Although Hungary supported this initiative in exchange for non-participation in the financial mechanism, in February Prime Minister Viktor Orbán blocked the release of the loan until Ukraine restored Russian oil transit via the Druzhba pipeline. Nevertheless, during a visit to Kyiv on the anniversary of the invasion on 24 February, European Commission President Ursula von der Leyen confidently stated that Ukraine would receive the funds promised by the EU ‘one way or another’.

Unlike financial aid, which is provided through EU structures, military aid to Ukraine is allocated by national governments of European countries. As noted previously, the burden falls largely on a relatively narrow group of North and Central European states – the real coalition of support (→ Re:Russia: The Second Front of The War of Attrition). This group accounts for around 95% of all military aid. The share of this group of countries (Canada, Germany, Britain, the Netherlands, Belgium, Poland, as well as the Scandinavian and Baltic countries) has increased 2.5 times over the course of the war. In 2022, it amounted to 36% of total military aid (€13.5 billion of €37.7 billion), around 43–45% in 2023–2024, and almost 90% in 2025 (more than €31.5 billion of €36 billion).

The largest donors are Germany (€9 billion) and the United Kingdom (€5.4 billion). Berlin became the absolute leader in 2025, increasing its aid 2.3 times compared with the average annual figure for 2022–2024. This included around €600 million through the NATO PURL mechanism for the purchase of American weapons from US stockpiles, as well as at least €5.4 billion invested in the Ukrainian defence industry, including a joint venture for satellite communications systems and the production of long-range Flamingo missiles and Lyutyi drones. The United Kingdom increased its military aid by 66% in 2025 compared with the average annual level of the previous three years.

Judging by the results of the February meeting of the Ramstein Contact Group on Ukraine's defence,this pattern is expected to continue in 2026. At the meeting, allies agreed on $38 billion in assistance (around €30 billion). More than a quarter of this amount comes from Germany (€11.5 billion), which includes financing for air-defence ‘domes’ over Ukrainian cities and at least €1 billion for drone procurement. Norway is providing $7 billion, of which $1.4 billion will go to drones and $700 million to air defence. Significant packages are also being provided by Sweden (€3.7 billion), the United Kingdom (£3 billion, including £500 million for air defence), and the Netherlands (at least 0.25% of GDP, exceeding €3 billion).

According to the Kiel Institute's calculations, the total agreed but not yet delivered financial and military assistance to Ukraine amounts to €197 billion. This includes various long-term programmes, meaning that not all of these funds will reach Ukraine in 2026. However, contrary to concerns, a collapse of European support will certainly not occur this year.

Economy

Economists are also revising economic scenarios for Ukraine on the assumption that military operations will continue in 2026. This is reflected, in particular, in the updated forecast published by the European Bank for Reconstruction and Development at the end of February. The previous forecast assumed a cessation of hostilities and a sharp acceleration of GDP growth to 5% due to the start of post-war reconstruction programmes. In general, the profile of Ukraine’s economic dynamics under wartime conditions is very similar to Russia’s. In 2023, GDP grew by 5.3%, and in 2024 by 2.9%. Rising inflation led the National Bank of Ukraine to tighten monetary policy in 2025, and economic growth slowed to 2.2%, according to preliminary data from the Ukrainian Ministry of Economy. Thus, the war economy recovered slightly more than a third of the 2022 losses (–29% of GDP). Ukrainian authorities, however, are assuming a higher level of inflation of around 7–8%.

The most pressing issue this year will be the consequences of Russia’s deliberate destruction of Ukraine’s energy infrastructure through missile attacks. While Moscow’s unprecedented assault on civilian infrastructure has not achieved its main political objectives, its economic impact will be significant. According to estimates by Focus magazine, by February 2026, Russian strikes had destroyed half of Ukraine’s thermal power plant capacity (Kyiv TPP-5 and TPP-6, as well as Kremenchuk) and thermal stations (Burshtyn and Ladyzhyn), and 80% of hydroelectric capacity (Kaniv, Kyiv, and Dnipro). The shelling of Ukraine's energy sector led to an increase in the electricity deficit in the fourth quarter of last year to 7%,and the deficit is expected to reach 6% in 2026, nearly double the previous forecasts of the National Bank. This led to a 0.2 percentage point reduction in GDP in 2025, according to the regulator, with projected losses of 0.4 percentage points in 2026. The National Bank forecasts economic growth of 1.8%, noting that it would have been 2.2% without the energy disruptions. The Kyiv School of Economics forecasts even higher losses of 1–2% of GDP if businesses manage to adapt, and up to 3% if the recovery of the system is delayed. In conditions of electricity shortages, Ukrainian companies, especially small businesses, are forced to use portable generators, which increases production costs by 15–20% and reduces profitability by up to 50%, according to Ukrainian entrepreneurs cited by The Independent.

An additional challenge remains the conflict with Hungary and Slovakia. Both countries have threatened to stop exporting electricity in response to Ukraine’s refusal to allow Russian oil transit via the Druzhba pipeline. In December, Slovakia ranked second in electricity exports to Ukraine (21%), and Hungary first (41%), according to ExPro Electricity monitoring. Total electricity imports to Ukraine rose by 53% in December compared with November, reaching almost 640,000 MWh, and increased by a further 40% in January to nearly 900,000 MWh. Slovakia and Hungary also suspended diesel exports to Ukraine in February; together they accounted for 11% of Ukraine’s diesel imports in January 2026, according to the Ukrainian portal Naftorink. The portal’s experts note that this is unlikely to cause a significant rise in prices, given the possibility of substituting diesel from other sources.

Thus, the effect of the destruction of Ukraine's energy infrastructure will be noticeable, but far from terminal.

Frontline problems: people, drones and missiles

In military terms, in the fifth year of the conflict, Ukraine faces four main challenges: shortages of personnel, critical shortages of means to strike Russian rear positions, insufficient air-defence capabilities, and the loss of advantage in drone warfare.

Insufficient troop numbers are the most acute problem, according to analysts Jakob Hedenskog and Andreas Umland of the Stockholm Centre for Eastern European Studies. Their data indicates that frontline units often operate at only around 30% of planned strength. At the beginning of 2025, Kyiv needed to recruit about 300,000 new personnel but managed only around 200,000. The problem of desertion is also intensifying: in 2024, over 51,000 soldiers left their units without authorisation, twice the 2023 level.

Mykhailo Fedorov, appointed Minister of Defence of Ukraine in early January, said that the total number of draft dodgers is 2 million (more than twice the size of the Armed Forces of Ukraine), and another 200,000 are listed as having left their units without permission. The head of the Ukrainian president's office, Kirill Budanov, also acknowledged that corruption in the mobilisation system and cases of desertion undermine the country’s defence capacity.

Hedenskog and Umland believe that Ukraine needs to improve the quality of military training and step up the fight against corruption and inefficient management. Military analyst Oleksandr Kovalenko also writes that mass desertions stem from systemic issues in replenishing the armed forces: low-quality commanders, restrictions on transfers between units, and combat fatigue without rotation. He suggests that a move to voluntary recruitment supported by significant financial incentives would address the problem. In addition, Ukraine might partially replicate aspects of the Russian approach: a prolonged war of attrition requires mobilisation incentives to maintain troop motivation (→ Re:Russia: Weak Link).

One tool that has helped compensate for personnel shortages is Ukraine’s drone advantage, which has largely ensured the stability of the Ukrainian front over the past two years. Now, experts and military observers are increasingly noting that the former superiority in this area has been largely lost. Former commander of the Ukrainian Armed Forces' foreign volunteer unit, Ryan O'Leary also observes that Ukrainian drone capabilities are mostly used to target infantry, whereas the Russian military uses drones for ‘depth control’ – disrupting movement, logistics, and drone operations, targeting UAV operators, destroying equipment, and striking logistics and reconnaissance nodes. As a result, he argues, Ukraine ‘wins the tactical exchange but loses operationally’, while Russia ‘loses soldiers but gains freedom of movement’. According to O’Leary, Ukraine still possesses innovation, production capacity, and talent, but lacks clarity of mission at operational and strategic levels, and adequate forward-looking command.

Another key problem for Kyiv in its confrontation with Russia is the continuing imbalance in offensive capabilities: the Ukrainian armed forces do not have ballistic or cruise missiles capable of inflicting symmetric damage on Russian energy infrastructure. Kyiv has not yet managed to obtain the necessary weapons from its allies (→ Re:Russia: Positional Deadlock). Germany has repeatedly refused to provide Taurus missiles due to escalation concerns, while shipments of SCALP (France) and Storm Shadow (United Kingdom) missiles remain extremely limited. Restrictions on using these weapons against targets inside Russia were lifted only at the end of 2024, and only for the Kursk region. Supplies of US ATACMS and British Storm Shadow missiles are limited, and deliveries of American ERAM/JASSM cruise missiles are expected only this year.

At the end of February, the Ukrainian armed forces attacked Russian territory with several heavy FP-5 Flamingo missiles of domestic design, striking the Votkinsk Rocket Plant, located approximately 1,400 km from the front line, which is used for the final assembly and production of solid-fuel ballistic missile components. Missile analyst Fabian Hoffmann notes that even minor damage to the Votkinsk plant can slow multiple assembly lines simultaneously. Open-source data suggest that workshop 19, responsible for fuselage sections, fasteners, and possibly electronic component casings, was affected by the attack.

While Hoffmann emphasises that fully disabling a facility like Votkinsk would require dozens or even hundreds of hits, the successful strike demonstrates that Ukraine can threaten important industrial targets deep within Russian territory. However, there is no data on Flamingo missile stocks or production capacity, and experts question Kyiv’s ability to scale up production during wartime. The largest Ukrainian military Telegram channel, Nikolaevsky Vanek, reports that Ukraine has accumulated a significant number of strike systems, and that Russia will ‘answer for everything it did in the winter’ throughout spring and summer.

In the absence of sufficient strike capability on Ukraine’s side, expanded air-defence supplies could partially mitigate the impact of Russian attacks. During four major attacks in January (9, 13, 20, and 24 January), the Russian military used 148 missiles of various types and modifications, of which 69 were intercepted. This is less than 50% of the total number, according to calculations by OBOZ.UA and the Information Resistance group. This low figure is explained by the fact that in January, Russia used a record number (91) of Iskander-M ballistic missiles and their analogues, which require scarce Patriot and SAMP/T systems for interception. A dual strategy of expanding air-defence capacity while increasing the number of heavy missiles could help correct this key imbalance in military capabilities.

Overall, it can be said that, in an inertial scenario, given the current balance of forces, the battlefield balance is unlikely to change decisively this year. Many analysts and think tanks currently lean towards this conclusion (see an overview of their forecasts from the Factually project). One of the key conclusions drawn by Re:Russia from the Ukrainian defence campaign in 2025 is that, even with reduced troop numbers at the front, no collapse occurs on the Ukrainian side, or it is highly limited. At the same time, high battlefield losses prevent Russian command from forming a strategic reserve capable of achieving a breakthrough. Some analysts argue that the rate of recruiting contract soldiers likely no longer offsets Russian losses. Communication issues, following SpaceX restrictions on unregistered Starlink terminals, have also significantly disrupted Russian forces.

The result of the fourth year of the war was that Ukraine, with the help of its European allies, adapted to the lack of American aid and the existing disparity in manpower and weapons. Future developments may adjust the fundamental balance of power in the ongoing war of attrition, but as of today, the likelihood of Ukrainian defence failing in 2026 appears lower than at the start of the previous year.