EU suspends $1.7B in aid to Ukraine after Zelensky curbs watchdog agencies

The European Union is freezing $1.7 billion in aid to Ukraine because President Volodymyr Zelensky approved a bill curbing the war-torn nation’s top anti-corruption agencies.

The EU said it is withholding more than a third of its funding meant to reward Ukraine for good governance standards after Zelensky signed the controversial bill last week, according to the New York Times on Saturday.

The new law gives a politically appointed Ukrainian prosecutor general more power over Kyiv’s National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO).

While Zelensky quickly also put measures into place to ensure the agencies’ independence after national outcry — the first wartime protests against his administration — concerns remain over his commitment to route out the corruption that has plagued Ukraine for decades.

The EU established its Ukraine Facility fund last year to reward Kyiv, pledging nearly $60 million over three years to help its war recovery efforts and prepare the country to enter the bloc.

But Kyiv has fallen short of meeting the EU’s standards, with European officials slamming last Wednesday’s rush legislation.

The EU’s decision to withhold some of the funds from Ukraine is not final and that the money pledge can be restored as long as Ukraine meets its requirements, officials said.

Marta Kos, the EU’s commissioner for expansion, said the bloc was “seriously concerned” over Ukraine’s move to inject political influence into the two agencies tasked with prosecuting corruption at the highest level.

The NABU and SAPO were established after Ukraine’s “Revolution of Dignity” in 2014, when leaders promised the public to weed out decades of corruption in Kyiv after ousting pro-Russian President Viktor Yanukovych.

Zelensky had vowed to keep the anti-corruption efforts going through his administration, but his criticism over the agencies grew louder when they began investigating and charging people inside his inner circle, including former Deputy Prime Minister Oleksiy Chernyshov.

The president initially claimed that a tighter leash was needed against the NABU and SAPO to rid the two agencies of “Russian influence” and to address why some cases have been stalled for years.

But thousands of Ukrainians then took to the streets to demand the NABU and SAPO remain independent, claiming that the rampant corruption in Kyiv is hurting the nation’s ability to defend itself against the ongoing Russian invasion.

British Prime Minister Keir Starmer was among the world leaders who called Zelensky to roll back the bill and ensure the corruption issues are addressed.

Kyiv also has until Thursday to appoint a head of its Economic Security Bureau to continue receiving assistance from the International Monetary Fund (IMF).

The IMF had vowed to provide Ukraine with $15.6 billion in aid to be distributed over four years as long as Kyiv moves forward with its anti-corruption campaign.

Zelensky had previously refused to appoint Oleksandr Tsyvinskyi, the man who led the case against Chernyshov, as the head of the bureau despite a nomination from an independent commission.

The position remains open, with no word yet on who would fill it.