According to the latest Ukraine Support Tracker by the Kiel Institute for the World Economy, Europe has overtaken the United States in total military aid provided via industry contracts since the start of the war. The G7 has also recently allocated around EUR 6.3 billion in financial aid, largely due to the ERA loan mechanism.
For the first time since the beginning of the Trump administration, the United States approved major arms exports to Ukraine in May, but these came as sales Kyiv must finance itself rather than as aid. In contrast, Germany allocated a EUR 5 billion military aid package, followed by Norway with EUR 1.5 billion and Belgium with EUR 1.2 billion, while the Netherlands, the United Kingdom and Denmark each pledged between EUR 500–600 million.
Of the EUR 10.5 billion in European military aid allocated in May and June, at least EUR 4.6 billion is tied to procurement contracts with defence companies. These contracts, mainly awarded to firms in Europe and Ukraine, highlight the growing role of defence manufacturing in sustaining Ukraine’s war effort.
From the beginning of the war through June 2025, Europe has allocated at least EUR 35.1 billion in military aid via defence procurement—EUR 4.4 billion more than the United States. “Military aid to Ukraine is increasingly determined by the capacity of the defense industry,” says Taro Nishikawa, project lead of the Ukraine Support Tracker. “Europe has now procured more through new defense contracts than the United States—marking a clear shift away from drawing on arsenals toward industrial production. To ensure timely and effective delivery of the promised aid, Europe therefore needs a strong and resilient defense industry.”
Financial support for Ukraine is now largely underpinned by the ERA loan mechanism (Extraordinary Revenue Acceleration), launched by the G7 and the European Commission. This scheme provides EUR 45 billion in loans, financed through proceeds from frozen Russian assets.
In May and June, the EU disbursed EUR 2 billion, Canada EUR 1.5 billion, and Japan around EUR 2.8 billion under the programme. “The ERA loan mechanism is a key tool for ensuring Ukraine’s financial stability amid rising reconstruction costs and economic strain caused by the ongoing war,” says Nishikawa. “However, as the assistance pledged in October 2024 is gradually disbursed and the available funds diminish, it remains uncertain whether donors can sustain this level of support in the long run.”
Source: Kiel Institute for the World Economy.
