---
title: "Treasury blocks payments to communities: expert cites budget gap causes and business risks"
description: "The State Treasury has suspended some payments to communities due to a temporary cash deficit. A CES expert links the budget gap to delays in international aid tied to EU integration reforms and risks for business."
date: 2026-11-05T10:40:35.995Z
lang: en
url: https://xab.info/en/posts/treasury-blocks-payments-communities-budget-gap
tags: [ukraine-budget, state-treasury, local-governments, eu-aid, eurointegration-reforms, ukraine-facility]
author: "Darya Fomina, Andrey Kosynko"
publisher: "XAB.info"
---

# Treasury blocks payments to communities: expert cites budget gap causes and business risks

![Serhii Koretskyi and other officials standing in the Verkhovna Rada of Ukraine next to flags.](https://xab.info/media/2026/11/05/kaznacheystvo-blokirovet-platezhi-gromadam-byudzhetnyy-razvorot/kaznacheystvo-blokirovet-platezhi-gromadam-byudzhetnyy-razvorot-1.webp)

## Key Points

- The Treasury suspended some payments to communities due to a temporary cash shortage; priority is given to the army, salaries, and social payments
- A significant portion of capital expenditures for the first nine months of 2026 has been moved to December, risking non-completion of projects
- Delays in international aid (Ukraine Facility — 50 billion euros for 2024–2027) are linked to the failure to pass several reforms, including the 2026–2030 Anti-Corruption Strategy
- The Ministry of Finance estimates that Ukraine will need 52.5 billion dollars in external financing for 2027; as of October 2026, 32.6 billion dollars remained unsecured

The State Treasury has suspended some payments to local communities amid a temporary cash deficit in its accounts. As explained by Bohdan Slutskyi, an expert at the Centre for Economic Strategy (CES), in an article for RBC-Ukraine, these delays can no longer be classified as a mere technical pause, though the situation does not yet indicate a full-scale public finance crisis. He describes it as an acute but temporary liquidity shortage: having expenses planned in the budget does not mean that the necessary funds are physically present in the account at any given moment.

### Payment priority: who comes first and who waits

According to Cabinet of Ministers Resolution No. 590, the Treasury processes payments in strict order. The needs of the army, salary payments, and social obligations are funded first. Capital repairs, construction, and infrastructure projects are at the end of the line. As a result, communities with a significant volume of accumulated infrastructure projects are under the greatest pressure: a significant portion of capital expenditures planned for the first nine months of 2026 has been postponed to December. This creates a risk that a number of works will not be completed by the end of the year, and contractors working for communities may wait weeks for payment for work already completed.

### International aid and "unpopular" reforms

The expert identifies the delay in receiving international financial aid as one of the key reasons for the budget gap. Part of the funding from international partners is tied to Ukraine fulfilling specific obligations, particularly the implementation of EU integration reforms. Slutskyi emphasizes that not all reforms linked to payments receive timely support in parliament, as some of them are complex and unpopular. He cites the unadopted Anti-Corruption Strategy for 2026–2030 (bill No. 15230-d), which is one of the conditions for activating the Ukraine Facility program, as an example. This program provides for long-term financial support for Ukraine from the European Union in the amount of 50 billion euros for the 2024–2027 period. Failure to meet the conditions leads to a delay in receipts, and the government is forced to postpone planned expenditures and restrict payments.

### Impact on business and risks for next year

Treasury payment delays affect not only local budgets but also businesses working for communities. Contractors are forced to wait weeks for payment, even though they need to pay employees' salaries and finance current operating expenses. For small businesses, this means a reduction in working capital; in the long run, companies begin to factor the risk of delays into the cost of services, which makes repairs and other work for public institutions more expensive. The delays are already being felt in certain business support and housing loan programs. Budget risks for 2027 require special attention: according to the Ministry of Finance, Ukraine will need 52.5 billion dollars in external financing, and as of October 2026, 32.6 billion dollars of this amount remained unsecured. If the financial gap cannot be closed, local expenditures, repairs, and construction will again be under pressure.

### Government reaction and possible solutions

On October 20, 2026, Prime Minister Serhii Koretskyi announced the unblocking of some expenditures, primarily for resilience plans, stating that the government had fulfilled all obligations and parliament had passed some of the necessary laws. Nevertheless, according to the CES expert, a sustainable reduction in pressure on the budget is possible only with the timely attraction of international aid through the fulfillment of obligations on which relevant payments depend. "That is, there is no avoiding difficult decisions. They are either made on time and the associated funding is received, or they are postponed, and then money is sought for already planned expenses," Slutskyi summarized. An alternative path is the reallocation of less priority civilian expenditures, but the possibilities for such a maneuver, according to him, are not limitless.

## Fact-Check & Sources

- [Почему правительство задерживает платежи громадам: эксперт назвал три причины](https://www.rbc.ua/ukr/news/chomu-uryad-zatrimue-platezhi-gromadam-ekspert-1793873225.html) - Primary source. Contains quotes from CES expert Bohdan Slutskyi, details on CM Resolution 590, Ukraine Facility parameters, and MoF estimates for 2027.

## FAQ

### Why did the Treasury suspend payments to communities?

According to CES expert Bohdan Slutskyi, the reason is an acute temporary cash shortage in Treasury accounts. Under CM Resolution No. 590, priority is given to the army, salaries, and social payments, while capital repairs and construction are deferred.

### How are payment delays linked to international aid?

Some international funding, such as the Ukraine Facility, is tied to EU integration reforms. Failure to pass necessary laws, like the 2026–2030 Anti-Corruption Strategy (bill No. 15230-d), delays funds and forces the government to restrict payments.

### What are the business risks due to Treasury payment delays?

Contractors waiting weeks for payment face working capital shortages. Long-term, companies will factor these risks into service costs, making public works more expensive.

### How much external financing will Ukraine need in 2027?

The Ministry of Finance estimates a need for 52.5 billion dollars in external financing for 2027. As of October 2026, 32.6 billion dollars remained unsecured.