Every time I look at my bank card, I smile. Not because I have so much money, but because the bank is called PrivatBank.

A “private” bank. Except it’s not. Founded in 1992 by future oligarchs Ihor Kolomoyskyi, Hennadii Boholiubov, and Serhiy Tihipko, it was nationalized in 2016 after it emerged that just 5% of its loans had gone to stable, well-known companies. The rest went to offshores or hastily formed shell companies.

Since then, PrivatBank has stayed in state hands. So every time I make a payment, I’m making a small contribution to the state budget.

From market reform to wartime statism

Despite the fate of PrivatBank, before Russia’s full-scale invasion, Ukraine had been moving slowly but steadily toward a leaner government. Some of the old Soviet-style giants had been cut down to size. The farmland market had opened. Selling minority stakes in key state-owned firms was on the table.

By the third quarter of 2024, the National Bank of Ukraine reported that state-owned banks controlled 53% of all banking assets and held over 60% of all retail deposits.

Government spending has grown dramatically, too: Ukraine’s Finance Ministry announced the 2025 state budget allocates 26.3% of GDP to defense and security. The state now controls not only banking and defense production but also energy and much of the digital economy.

It’s easy to see why—survival trumps ideology—but without a clear plan for scaling back later, this state-heavy approach could become a problem in itself.

Geese that lay golden eggs

Ukraine’s banks have earned nearly UAH 255 billion (€6 billion) since the start of the full-scale war, Ukrainian Business News calculated.

In 2024 alone, Opendatabot found banks made a record UAH 104 billion (€2.5 billion) in net profits—20% more than in 2023—and paid UAH 83.7 billion (€2 billion) in taxes on those profits, almost twice as much as the year before.

Seven state-owned banks made UAH 67.2 billion (€1.6 billion), accounting for 65% of the sector’s total profits.

International funding advantage

Part of this success comes from access to cheap international loans. The country’s second-largest bank by assets after PrivatBank, Oschadbank, for instance, uses funds from the European Bank for Reconstruction and Development to finance solar and wind energy projects that help stabilize the grid—often at below-market rates. That gives state-owned banks a big advantage.

Even the IMF has taken notice. In its June 2025 report, the International Monetary Fund warned that expanding state control in banking should only happen when necessary for stability or national security—and only during martial law. It also advised Ukraine to reduce state ownership once the war ends.

Strategic sectors under state command

Banking isn’t the only sector under government control. In energy, the state-run company Ukrenergo keeps the grid running despite regular Russian attacks—allowing every other part of the economy, from heavy industry to small service providers, to continue operating.

Because of this, even private households can maintain a semblance of normality under wartime conditions. Ukrenergo does this with the help of low-interest loans from European donors.

Critical infrastructure rebuilding

Oschadbank, for instance, channels donor finance into 30-megawatt battery farms and hybrid solar-wind parks—critical infrastructure the country urgently needs more than ever.

Russian forces have destroyed 70% of Ukraine’s available generation capacity since the start of the full-scale war, and the key to keeping the lights on lies in decentralization: smaller, distributed energy sources are harder to hit and easier to repair than large centralized power plants.

In defense, the old Ukroboronprom group has been turned into a new company called Ukrainian Defense Industry. The Stockholm International Peace Research Institute reported its revenue rose 69% in 2023 to $2.2 billion (€2 billion).

Tech sector under special regime

Agriculture is still mostly private, but the World Bank documented how the state controls grain exports and fuel allocation across the country.

Even the IT sector works under a special government regime. The Diia City programme—a virtual free economic zone that offers a flat 9% profit tax—now includes more than 1,640 companies and nearly 100,000 tech professionals, according to Ukraine’s Ministry of Digital Transformation.

Controversial seizures

Not all government takeovers are popular. One high-profile case was the seizure of IDS Ukraine, which makes the beloved Morshynska mineral water. Interfax Ukraine reported that the entire company was confiscated because of minority Russian ownership.

Critics say that such moves, while understandable during wartime, create risks for private business—especially when a brand controls 40% of the market.

Moves like this can shake consumer confidence, but more critically, they deter potential investors. Who would risk their capital in a country where an entire company might be seized simply because another shareholder has a questionable ownership structure?

These actions also raise uncomfortable questions: are such practices compatible with democracy? Is Ukraine truly the democratic state it claims—or aspires—to be?

Missing exit strategy

All things considered, Ukraine’s wartime economy has so far held up pretty well. The Kyiv School of Economics forecast GDP growth around 3% this year, inflation dropped below 10% in early 2025, and the banking sector is stable and profitable.

Talk of privatization has gone quiet. The Ministry of Economy has mentioned the idea of selling small stakes in state companies after the war, but there’s no clear plan or timeline. And most foreign investors remain hesitant—especially those who aren’t prepared to take big risks.

At the same time, Ukraine’s international allies are growing impatient. The IMF warns that permanent state dominance is bad for competition.

Brussels, eyeing EU accession, wants governance standards that private capital can trust. Kyiv faces a tightrope: keeping scarce capital flowing while signaling that the state’s wartime reach is temporary.

Undoing the emergency state

There are ways forward. One idea is to introduce “sunset clauses”—laws that would require the government to reduce its ownership in major companies to less than 25% within five years of the end of martial law, unless parliament votes to delay.

Another idea is to issue war bonds that could later be converted into shares in state firms. That would help prepare these companies for privatization by spreading ownership more broadly.

The oligarch problem

Still, even that comes with challenges. Ukraine’s economy is still influenced by a small group of powerful oligarchs. The government has tried to reduce their power by limiting “vertical integration”—a polite way of saying monopolistic control—but progress is slow.

Above all, Ukraine needs a clear strategy. Without it, the strong wartime state could become a barrier to post-war recovery.

When even a “private” bank becomes a symbol of government control, it’s time to ask: where does wartime necessity end, and long-term dependency begin?

Whether the new government will chart a different course—or simply manage the status quo—remains an open question.

Explore further

“Just 16 people”: Ukraine’s new wartime cabinet is now smaller than many startups

Key financial figures

Russia moves to erase Ukrainian language from schools in occupied Ukrainian territories, the UK Ministry of Defense reported in its 18 July 2025 intelligence update. A draft order from Russia’s Education Ministry outlines plans to eliminate Ukrainian from school curricula starting September 2025. The Ministry justifies the move by citing an allegedly “changed geopolitical situation.”

Kremlin prepares to ban Ukrainian in Zaporizhzhia and Kherson schools

The draft order will primarily affect children in Russian-occupied areas of Zaporizhzhia and Kherson oblasts, where Ukrainian has remained a mandatory subject despite the occupation. Under the new plan, schools will no longer be allowed to teach Ukrainian as part of the core curriculum. The order also reportedly reduces the study of Ukrainian literature to a minimal level, further cutting off cultural education.

Long-term effort to eliminate Ukrainian identity

The UK Ministry of Defense reported:

“This follows reported long-term Russian efforts to reduce and eliminate the Ukrainian language in schools in other illegally occupied Ukrainian territories, including Crimea, whilst Russia’s President Putin has simultaneously repeatedly demanded protections for the Russian language within unoccupied territories of Ukraine.”

Cultural cleansing through education policy

The UK Ministry of Defense reports that the Russian Education Ministry’s plans mark “a further addition” to the Kremlin’s “long-standing Russification policy” in occupied Ukrainian territory — a campaign that seeks to “extirpate Ukrainian culture, identity, and statehood.”

Australia’s Abrams tanks have arrived in Ukraine, but reports differ on whether this is the first batch or the majority of the 49 pledged. Sky News and The Guardian describe the shipment as the first tranche, but then noted that “the majority” has been delivered. In contrast, Reuters reports that Ukraine has received most of the pledged Australian tanks, with the rest to follow.

Media differ over scale of Australian tank delivery to Ukraine

Australia’s retired Abrams tanks arrive in Ukraine as part of a 245 million AUD (about $160 million) military aid package promised last October. Reuters reports that Canberra has already handed over most of the previously pledged 49 M1A1 Abrams, with the rest due in the coming months. Sky News Australia, however, states this is the first arrival, noting a nine-month delay since the tanks were pledged. The Guardian, citing the Australian Associated Press, also calls it the “first tranche,” but then adds:

“A majority of the tanks have been delivered and a final tranche will arrive in the coming months, but actual numbers have not been released.“

Australia’s Defense Minister Richard Marles said the Abrams tanks “will make a significant contribution” to Ukraine’s effort to repel Russia’s invasion. He emphasized their role in boosting Ukrainian firepower alongside other Western-supplied equipment. The country’s Defense Industry Minister Pat Conroy added, “Australia stands shoulder-to-shoulder with Ukraine.”

Tank support part of larger Australian aid commitment

Australia’s Abrams tanks arrive in Ukraine alongside broader support totaling more than 1.5 billion AUD or $980 million since February 2022.

Canberra also plans to send a Wedgetail surveillance aircraft to Europe in August. The aircraft will help safeguard aid corridors delivering supplies into Ukraine. At the same time, Australia maintains export bans on alumina and aluminum ores to Russia. About 1,000 Russian individuals and entities remain under Australian sanctions.

Alongside military support, Australia is negotiating a non-binding security pact with Ukraine. More than two dozen nations have signed similar agreements with Kyiv. These arrangements focus on political and military cooperation but do not include formal defense guarantees.

A second bilateral deal aims to eliminate double taxation between the two countries. Officials expect it to encourage foreign investment in Ukraine’s postwar reconstruction.

They set out believing Russian aggression didn’t exist. Then they saw missiles and mass graves. Three Czech conspiracy theorists who had publicly questioned the scale and even the existence of Russia’s war traveled to Ukraine as part of a documentary project, according to Gromada.cz. 

What began as a skeptical “fact-finding mission” became a confrontation with a reality they could no longer deny. The resulting film, Velký vlastenecký výlet or The Great ‘Patriotic’ Trip, will premiere on 21 August.

The participants, two men and one woman, had openly supported the Kremlin’s position, calling the invasion a “special operation,” spreading disinformation about a media conspiracy, disputing casualty numbers, and blaming everything from President Volodymyr Zelenskyy to liberals and even the EU’s Green Deal.

They responded to an open call by Czech director Robin Kvapil themselves, who used social media to invite skeptics to witness the war firsthand. The film crew accompanied them from Prague to Kharkiv and Donbas, capturing their raw reactions as they came under missile fire, met wounded civilians, visited mass graves, and descended into underground schools in metro stations where children study amid constant danger.

Kvapil said one of the defining moments came when they arrived at the site of a children’s oncology hospital in Kyiv just hours after a Russian missile had struck it. This scene further solidified his intent to confront denial with unfiltered truth.

The team also included security analyst Petr Pojman, psychiatrist Petr Piot, and interpreter Lucie Řehořiková, former head of the Czech Centre in Kyiv, to ensure security and mental support. The production was coordinated with the Czech Interior Ministry and Ukraine’s Security Service.

Exclusive

“A completely new kind of war lies ahead” so Ukraine must outhink Russia by 2027, says Zaluzhnyi. Ukraine’s survival depends on revolutionary strategy, not traditional firepower, Valerii Zaluzhnyi writes

Ukraine’s MaxxPro trucks drop troops in 20 seconds—because drones don’t need more. Just reaching the front in Ukraine is now as deadly as holding it—thanks to drones that strike in seconds. Ground robots could be part of the answer.

“Just 16 people”: Ukraine’s new wartime cabinet is now smaller than many startups. Parliament approved a downsized government lineup on Wednesday, streamlining wartime leadership without altering the political balance of power.

Military

Russia’s “human safari” drone smashes into rabbi’s vehicle — family in car survives direct hit

. A Russian FPV attack failed to kill its target, as Kherson’s Jewish leader escapes harm.

Russia kills Ukrainian railway worker with Shahed drone in scaled-down attack. From 400 drones on 16 July to just 35 launched last night—but impacts across three oblasts still hurt civilians and caused damage.

As of 18 July 2025, the approximate losses of weapons and military equipment of the Russian Armed Forces from the beginning of the invasion to the present day:

• Personnel: 1039830 (+1180)
• Tanks: 11032 (+3)
• APV: 23005 (+9)
• Artillery systems: 30485 (+47)
• MLRS: 1441 (+1)
• Anti-aircraft systems: 1197
• Aircraft: 421
• Helicopters: 340
• UAV: 46549 (+135)
• Cruise missiles: 3491
• Warships/boats: 28
• Submarines: 1
• Vehicles and fuel tanks: 55494 (+111)

Intelligence and technology

New Ukrainian PM Svyrydenko: Kyiv, Washington to launch joint drone deal under Trump-Zelenskyy mega pact. The deal aims to pair American weapons deliveries with Ukrainian UAV exports.

Digital occupation: Russia deploys AI army of bots on Telegram for promoting Kremlin’s propaganda narratives

. They sound human and post nonstop.

Russia’s drones now target civilians with napalm firebombs that burn through sand and cannot be extinguished. Modified drones are designed for maximum civilian terror and violate all rules of urban warfare, says a Ukrainian military expert.

Romania wants to build drones with Ukraine—but can’t fund it before 2026. The country’s defense ministry confirms talks, but the production start hinges entirely on next year’s military budget.

France to train more Ukrainian pilots on Mirage fighter jets, capable of carrying missiles that destroy Russian command posts. Armed with 2,900-pound SCALP-EGs, Ukraine aims to shatter Russia’s coordination hubs deep behind the frontlines, due to expanded Franco-Ukrainian air cooperation.

Ukraine to get Patriot missiles “very shortly,” Merz says. The Chancellor confirms Germany’s air-defense transfer will happen within weeks as NATO works out logistics.

International

London also slashes price cap on Russian oil to $47.60 per barrel after EU’s sanctions adoption

. Western allies have escalated economic pressure on Russia by dropping the crude oil price cap.

UK forms second “NATO” inside Alliance amid fears of 2027 global conflict with Russia and China. In just one week, Britain has sealed two landmark defense deals with France and Germany, forming a new trilateral military bloc.

From adrenaline seekers to war veterans: New book of British journalist shows diverse faces of Ukraine’s International Legion. Volunteers worldwide joined the fight against Russian aggression, risking everything to defend Ukraine. Some have never returned home.

International Fencing Federation seeks to reinstate Russian thletes — even those who support killing of Ukrainians. The organization says move promotes “unity,” but critics call it a whitewash for Putin’s military machine.

EU agrees on new Russia sanctions package targeting energy and finance. Ambassadors greenlight the 18th sanctions round ahead of formal Council approval: Malta and Slovakia dropped their vetoes after receiving key guarantees.

Political and legal developments

UK hits Russian intel unit involved in killings of 600 Ukrainian civilians in Mariupol, with historic sanctions

. Many of them were children.

Kremlin’s mouthpiece calls Europeans “imbeciles,” says strikes on Kyiv will intesify after EU imposed new sanctions against Putin’s war machine. Former Russian President Dmitry Medvedev unleashed a grotesque tirade against Ursula von der Leyen, the president of the European Commission, mocking her medical background.

Zelenskyy installs ex-defense minister Umierov to run Security Council. The man once in charge of defense now oversees war tech, arms deals, and talks.

ISW: Russia is “burning the candle at both ends”—bankers quietly brace for bailouts. Russia’s top financial execs reportedly fear a growing debt crisis despite Central Bank claims of stability.

Read our earlier daily review here.

London and Brussels jointly cut the Kremlin’s oil revenues. The UK government decided to lower the price cap on Russian oil from $60 to $47.60 per barrel after the EU adopted the 18th EU sanctions package on 18 July.

According to Western analysts, Moscow’s oil profits have already dropped by 35% compared to last year. The new lower price cap will further restrict the Kremlin’s financial resources used to fund its aggression against Ukraine.

“The UK and its EU allies are turning the screw on the Kremlin’s war chest by stemming the most valuable funding stream of its illegal war in Ukraine even further,” said UK Chancellor of the Exchequer Rachel Reeves.

The official added that this decisive step to lower the crude oil price cap will target Russia’s oil revenues and intensify pressure on Russian President Vladimir Putin by exploiting his greatest vulnerability.

London emphasized that the sanctions are intended to punish the aggressor and preserve the stability of the global energy market.

The US plans to invest in the production of Ukrainian drones. New Prime Minister Yuliia Svyrydenko has announced that Ukraine intends to sign a drone agreement with American partners, Reuters reports.

“We plan to sign a ‘drone deal’ with the United States. We are discussing investments in the expansion of production of Ukrainian drones by the US,” says Svyrydenko.

The official has clarified that the deal involves the purchase of a large batch of Ukrainian unmanned aerial vehicles.

Svyrydenko added that Ukrainian President Volodymyr Zelenskyy and US President Donald Trump made the political decision on the agreement earlier, and officials are now discussing its details.

Earlier, Euromaidan Press reported that both leaders were considering what’s being called a “mega deal.” Under the proposed agreement, Kyiv would sell its combat-hardened drone systems to Washington. In return, it would sell Ukraine a significant array of American weapons.

Zelenskyy emphasized that Ukraine is ready to share its knowledge gained from over three years of fighting against Russia’s full-scale invasion.

The UK is forming a new military alliance that mirrors NATO’s Article 5. Within a single week, London signed two defense agreements with key players, Germany and France, reports Defense Express.

Experts are already calling this the emergence of a trilateral military bloc that could either supplement NATO or act as its insurance policy.

The UK-Germany agreement outlines deep mutual defense commitments, including military assistance in case of an attack. Meanwhile, the declaration with France explicitly states that while the nuclear forces of both countries remain independent, they can be coordinated in case of an extraordinary threat.

“It’s clear that the UK is effectively creating an additional trilateral defense arrangement centered around itself,” notes Defense Express.

This is happening despite all three nations already being bound by obligations within NATO. Analysts believe such an initiative signals a “need to reaffirm mutual commitments.”

The core of the signed documents essentially duplicates NATO’s famous Article 5, a collective response to aggression. Across Europe, there is growing concern that relying solely on NATO in the event of a large-scale crisis may no longer be sufficient.

The UK hits a Russian military intelligence unit behind the destruction of the Mariupol Drama Theater with the largest-ever sanctions package in history. It is also responsible for prolonged malicious hybrid operations worldwide. 

“In 2022, Unit 26165, sanctioned today, conducted online reconnaissance to help target missile strikes against Mariupol, including the strike that destroyed the Mariupol Theatre, where hundreds of civilians, including children, were murdered,” says the UK government. 

The restrictions hit three units of Russia’s military intelligence (GRU) and its 18 officers accountable for conducting a sustained campaign of cyberattacks over many years, including attacks inside the UK. 

“The GRU routinely uses cyber and information operations to sow chaos, division and disorder in Ukraine and across the world with devastating real-world consequences,” the UK government said.

Sanctions also target GRU officers responsible for hacking a device of Yulia Skripal, a daughter of former Russian military officer Sergei Skripal, using the malicious software known as X-Agent. This happened five years prior to the failed attempt by GRU officers to assassinate them with the deadly nerve agent “Novichok” in Salisbury.

Russian operatives have also attempted to disrupt UK media outlets, telecom providers, political and democratic institutions, as well as critical energy infrastructure.

Russia has begun using artificial intelligence-based bots for spreading propaganda on social media, especially on Telegram, according to a joint investigation by OpenMinds and the Digital Forensic Research Lab (DFRLab).

Researchers have uncovered over 3,600 bots that posted more than 316,000 AI-generated comments in Telegram channels linked to Ukraine’s temporarily occupied territories. Another three million messages were spread in broader Ukrainian and Russian Telegram groups. These bots used human-like language, adapting replies to the context of each conversation to promote pro-Kremlin narratives and undermine Ukraine.

Unlike traditional bots that spam identical messages, these accounts simulate real users. They reply directly to other users, shift tone and content, and tailor messages to appear authentic. On average, a bot posts 84 comments per day, with some exceeding 1,000 daily.

The goal is not just to spread fake news, but to create the illusion of widespread public support for the occupation regime, filling comment sections with praise for Russia and attacks on Ukraine. In an environment of information isolation, this becomes a potent tool of mass manipulation.

AI-generated bots often give themselves away through:

• absurd usernames,
• unnatural or AI-generated profile pictures,
• overly formal or awkward phrasing,
• and highly diverse language: one in three comments is uniquely generated by AI.

Even when bot accounts are deleted, their influence lingers. Locals repeatedly exposed to these comments may perceive Kremlin propaganda as the majority opinion, especially in regions where Ukrainian news is inaccessible.

Russian Shaheds now carry napalm and break through Ukrainian electronic warfare systems. Moscow continues to upgrade its Shahed attack drones, enhancing their warheads, engines, and protection, says Serhii “Flash” Beskrestnov, a military expert, in an interview with Radio Free Europe/Radio Liberty.

“Recently, we discovered a fluid in a Shahed’s warhead that resembled napalm. It not only spreads but keeps burning even in sand. This is terrorism, when drones attack residential areas with incendiary mixtures that cannot be extinguished,” explains Beskrestnov.

According to him, such weapons are absolutely inappropriate for warfare in large cities. Russia is also using at least 4–5 different types of warheads on Shahed drones, expanding their operational roles, from striking industrial targets to deliberate terror against civilians.

Flash reports that Russian engineers have upgraded Shahed engines, allowing them to reach speeds of up to 220 km/h in favorable weather conditions. However, the expert notes that this speed increase is not a decisive advantage: “Globally, whether it’s 180 or 200 km/h. It doesn’t change much.”

The most serious threat now comes from the improved Shahed defense systems against Ukrainian electronic warfare.

“We are increasingly seeing the same target being hit repeatedly. This indicates electronic warfare’s failure to disrupt navigation,” says Beskrestnov.

According to him, Chinese reinforced antennas have been found among the drone wreckage, successfully breaking through Ukrainian electronic warfare defenses.

“Our electronic warfare systems simply aren’t designed to handle such a number of elements. That’s why urgent modernization is needed,” the expert emphasizes.

Beskrestnov separately emphasized that electronic warfare systems do not physically destroy drones but only help protect targets and give air defense systems time to strike them.

Key measures include a lower oil price cap, Nord Stream transaction ban and a full ban on Russian bank deals