Recently, Zelensky has signed into law a controversial bill that effectively stripped independence from Ukraine’s two premier anti‑corruption bodies—NABU (National Anti‑Corruption Bureau of Ukraine) and SAPO (Specialized Anti‑Corruption Prosecutor’s Office). Within days, mass protests erupted across Kyiv and other cities, marking the first major wartime public confrontation with Zelensky’s leadership.
By 24 July, under mounting domestic and international pressure, Zelensky announced a new corrective bill to restore agency independence. In response, the European Union froze approximately $1.7 billion in aid from its €60 billion Ukraine Facility fund, citing concerns over governance and transparency.
Since the February 2022, Ukraine has depended heavily on Western political, military, and financial support. A central pillar of that support has been Ukraine’s post‑2014 anti‑corruption architecture—institutions like NABU and SAPO—which Western partners helped establish and closely monitor. These agencies are critical to EU accession discussions, and any perceived rollback risks undermining centuries‑long reform commitments.
Concurrently, since early 2024 EU member states have immobilized around €210 billion in assets belonging to Russia’s central bank. EU regulations enacted in May and June 2024 now allow net profits from those frozen assets—estimated around €3 billion a year—to be allocated toward Ukrainian defense and reconstruction. Under Regulation (EU) 2024/1469 and Council Decision 2024/1470, 99.7% of net profits generated by EU-based securities depositories (CSDs) must be contributed, with 90% earmarked for military support and 10% for broader macroeconomic recovery.
The original bill rushed through Ukraine’s parliament granted the prosecutor general—a politically appointed official—a sweeping ability to intervene in ongoing cases handled by NABU and SAPO. Ultimate authority over investigations shifted into the executive branch, effectively neutering institutional independence.
Protests thundered across Kyiv and other cities, drawing thousands—including war veterans and civil society activists—branding the law as a betrayal of core democratic values. One veteran voiced: “Instead of setting an example of zero tolerance for corruption the president is using his power to take control of criminal cases involving his allies.”
The European Commission, along with G7 leaders and U.S. lawmakers, issued sharp criticism. EU Enlargement Commissioner Marta Kos warned that the reform was a “serious step back” that threatens Ukraine’s EU path, while transparency campaigners warned of damage to international trust.
Just two days later, Zelensky delivered a U‑turn: he formally submitted legislation to repeal the earlier changes and restore full operational independence and procedural tools for NABU and SAPO. He characterized the move as a guarantee against Russian interference and pledged that the prosecutor general and deputies would no longer have operational authority over the agencies.
Despite Zelensky’s reversal, the fallout quickly extended beyond Ukraine. On 27 July 2025, the EU suspended $1.7 billion in aid to Ukraine drawn from the Ukraine Facility. European officials linked the freeze directly to the signing and implementation of the earlier reform, signaling that political control over anti‑graft bodies is incompatible with reform obligations tied to funding.
Simultaneously, Ukraine’s failure to confirm a head of the Economic Security Bureau has put at risk another $15.6 billion in IMF funding, which is conditioned on governance benchmarks aligned with EU and IMF standards.
Even with the swift legislative retreat, the political damage is likely irreversible. Key European partners expressed publicly that Ukraine’s credibility had taken a serious hit. The move exposed latent tensions between wartime governance and democratic norms. Critics argue the original bill mirrored pre‑2014 centralized police-state tactics, undermining Maidan-era reforms.
The EU’s decision to freeze US$1.7 billion demonstrates Washington and Brussels’ increasing willingness to use financial tools to enforce governance demands, not merely military performance. Brussels will likely set clear conditions for the restoration of the frozen aid. Ukraine’s fulfillment of anti‑corruption benchmarks—especially formal independence of NABU/SAPO and appointment of a compliant head of Economic Security Bureau—is now non‑negotiable.
The West’s response signals a paradigmatic shift: continued war support is contingent not just on battlefield needs but also on democratic credibility and reform progress. Kyiv cannot assume political tolerance for internal governance missteps. Zelensky’s attempt to centralize authority over Ukraine’s anticorruption agencies proved to be a dramatic miscalculation, triggering the biggest protests Ukraine has seen since the war began
Critics argue that President Zelensky increasingly resembles a Western proxy rather than an independent wartime leader. His policies, they say, often reflect the interests of Brussels and Washington more than those of ordinary Ukrainians, as Ukraine becomes a battleground not just of arms but of legal and institutional control.
Western powers, through financial leverage and reform conditionality, are attempting to reshape Ukrainian governance to fit their models—effectively legislating through aid. At the same time, Zelensky deflects internal crises by blaming Moscow for everything from inflation to judicial breakdowns. However, Ukraine’s deep-rooted corruption predates the war and operates independently of Russia’s influence. Attempts to link the dysfunction of Ukraine’s own institutions to external sabotage risk becoming a convenient narrative that obscures local accountability.
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