Ukraine's government plans to pay for its army, pensions, and public-sector wages first, and freeze the parks, fountains, and repaving. Prime Minister Serhii Koretskyi says his Cabinet reordered its spending priorities because part of the international aid it counted on has not arrived.

The war is costing the country at least $155 billion this year, Koretskyi stated earlier.

Defense and people come first

"We continue to take tough anti-crisis measures to ensure the most important thing, the needs of defense and our people," Koretskyi says.

The state will continue to pay for the army, pensions, social benefits, and the salaries of teachers, doctors, and other public-sector workers. Everything deemed non-critical is on hold: new construction, reconstruction, capital repairs, and tidying-up projects, among them parks, squares, fountains, and repaving.

"It is worth finally ceasing to spend money on non-priority things," he continues, promising the state will return to them later.

The aid runs late

On 27 September, Ukraine's prime minister stated that the shortfall in the defense budget's needs stands at $27 billion.

"The president, the government, and all branches of authority are working with partners to find mechanisms and sources to cover the remaining $20 billion," he stressed.

These funds are critically needed to supply the Defense Forces with drones, missiles, equipment, and other resources ahead of winter.

"The government, for its part, guarantees that by 15 October, all government decisions required to receive the international financial assistance promised by partners will be implemented," he stated.

Local budgets get the same call

Koretskyi extended the order downward, urging local councils to review their own budgets and cut spending that is not a priority now. The message across government is the same: pool what is available for the army and citizens, and leave the fountains and the rest for after the war.

Estonia's defense minister resigned on 2 September over a failed €70 million ammunition deal for Ukraine, ERR reported. The state procurement agency paid EU funds to companies that had never sold artillery shells. Estonian taxpayers may now have to cover the losses.

The Baltic states have poured billions into defense since Russia's full-scale invasion of Ukraine. Estonia alone redirected €500 million toward air defense and drones. It pledged 0.25% of GDP in annual aid for Kyiv. Defense budgets have grown faster than the procurement systems managing them.

Minister walks over "socks and ammunition"

Hanno Pevkur has held the post since 2022. Amid the scandal, he told Estonian public broadcaster ETV he would step down.

"The minister does not count socks and ammunition," Pevkur said.

RKIK's former chief countered that no major decisions were made without the ministry's approval.

Three opposition parties called for his resignation before he announced it. Prime Minister Kristen Michal said Pevkur was not personally at fault but acknowledged political responsibility applied. The resignation followed a National Audit Office report released on 28 August. Estonia's Prosecutor's Office has also opened a criminal investigation into the procurement.

The deal that fell apart

In 2024, Estonia's Center for Defense Investments (RKIK) signed four contracts with Datasel S.R.L., an Italian-registered firm. Eesti Ekspress reported that the Indian company Neco Defense Munitions owned it. Neither had ever sold a single artillery shell. RKIK paid roughly $81 million in advance using the EU's European Peace Facility. The first delivery was due in November 2024. Ammunition that arrived failed to meet quality standards. Estonia canceled the deals and filed a case at the European Court of Arbitration in Strasbourg.

Pevkur is the second Baltic defense minister to resign in four months. Latvia's Andris Sprūds stepped down in May after drone incursions from Russia's war destabilized the country's government.