Ukraine fights for money, reform to survive war

Ever since mid-2024, residents and Ukrainian officials have been stripping everything of value from the frontline town of Pokrovsk: library books, hospital beds, industrial equipment, everything that once supported a bustling settlement of more than 60,000 people at the heart of Ukraine's eastern, mainly Russian-speaking Donbas region.

- Peter Apps

This week, with thick fog apparently frustrating Ukraine's efforts to use unmanned drones to slow the advance of Russian forces, pro-Kremlin social media feeds showed what appeared to be several hundred-strong Kremlin forces entering the town, many on motorcycles and in battered trucks.

For President Volodymyr Zelensky’s government, the likely fall of the first major Ukrainian city since nearby Bakhmut in 2023 comes at a challenging time, as winter looms and Russian missiles and drones once again target Ukraine's energy infrastructure.

It is not all bad news for Kyiv. This year has seen Ukraine’s economy exceed its pre-invasion size despite its loss of territory.

For now, though, with Russia advancing — albeit very slowly, and with enormous casualties — few see much prospect of a peace deal before the fourth anniversary of Vladimir Putin’s full-scale invasion comes round in February 2026. If anything, both sides seem to be attempting to prepare their citizens and economies for perhaps years more of “forever war".

Mr Zelensky’s government is also facing rising domestic political headwinds, including a still growing corruption crisis, an ongoing backlash over mass conscription, and — perhaps most significant of all — a massive budget shortfall of tens of billions of dollars over the next few years.

Against that backdrop, Ukraine is hoping to retool its military to allow some of those who have spent the war so far in combat to reenter the mainstream economy, while expanding its weapons manufacturing not only to defend itself for the duration of the conflict but to become a major player in the rearmament of Europe when the war finally ends.

Whether European governments would truly welcome that competition is another question.