TheChek News Flow

EU pushes to fill Ukraine’s $19bn budget gap next year

Brussels explores options including frontloading G7 loans to ease fiscal strains in Kyiv

Brussels is urgently exploring ways to cover a shortfall of up to $19bn in Ukraine’s budget next year, as Kyiv grapples with diminishing US support and receding prospects for a ceasefire with Russia.

The European Commission is discussing options with EU member countries, including channelling military support to Ukraine as off-budget grants, frontloading loans from an existing $50bn G7 support scheme for Kyiv, and further leveraging Russian state assets immobilised in the EU, according to multiple people familiar with the discussions.

Ukraine’s projected budget gap next year is not yet covered by external financing.

“There’s growing concern about next year and many stakeholders that were banking on a ceasefire deal this year [to ease Ukraine’s fiscal strains] are having to recalculate their outlays and realising that there’s a [financing] hole whichever way they to try to slice it,” said a senior EU official involved in discussions with Kyiv.

The commission has already had to adjust outlays from Ukraine-related funding streams during 2025, officials told the Financial Times, in response to the extended conflict and lack of confidence in an imminent ceasefire with Moscow.

The urgency in Brussels to rustle up fresh funding comes ahead of a summit focused on funding Ukraine’s reconstruction needs in Rome later this week, which European Commission president Ursula von der Leyen will attend.

The IMF estimates that Ukraine’s financing needs for next year are covered, but that is premised on the war ending this year or in the middle of 2026 — a scenario which Ukraine and the EU do not share.

IMF managing director Kristalina Georgieva said last month that the Fund “will assess whether this financing gap is going to increase and will require further financing on the external aid”.

The goal is to ensure that Kyiv’s needs are covered well in advance of the winter, especially given the uncertain prospects for further US military support, said one EU diplomat.

One proposal, shared by Kyiv with G7 countries and under consideration by the European Commission, is to channel military support to Ukraine as bilateral grants that would be accounted for separately as an “off-budget external transfer”, while at the same time counting towards national defence spending targets.

This would serve the double goal of contributing to Nato pledges to increase national defence spending to 5 per cent of GDP while providing support to Ukraine. “Instead of duplicating capabilities, European allies could co-finance Ukrainian forces — treating it as a service Ukraine provides to enhance continental security,” Kyiv wrote in a paper shared with G7 allies and seen by the Financial Times.

The commission was set to discuss this and other options with EU finance ministers on Monday evening, two people familiar with the matter said.

“Clearly the military support for Ukraine that member states are giving are not only funds for the defence of Ukraine but for the defence of Europe, and some of that of course will count as defence spending,” said one senior EU diplomat.

Another option is to anticipate disbursements from an existing $50bn G7 scheme that issues loans to Kyiv on the back of profits from Russian state assets immobilised in the West.

Without a ceasefire to boost Ukraine’s domestic economy, Kyiv expects a shortfall of at least $8bn for 2026 even if some of the pledged amounts can be brought forward, from partners including the EU, Japan and US. If that does not happen, then the financing gap could reach $19bn.

A further option could be to extract more value from the Russian immobilised assets, by reinvesting them in riskier asset classes — while devising a way to share responsibility for potentially greater financial losses that would not make Belgium, where most of the assets are held, solely liable for them.

“We are exploring those options including the possibility to further leverage the use of Russia’s immobilised assets,” EU economy commissioner Valdis Dombrovskis said last month.

One year on from Labour lifting a de facto ban, few large applications have been made

A surge in onshore wind turbines in England has yet to materialise one year on from Labour’s lifting of a de facto ban on new projects. 

Planning authorities have not received any applications for new large scale projects since restrictions were eased last July, according to Financial Times analysis of government data. 

The fourteen applications submitted between the lifting of the ban and April this year are all for small projects involving one turbine, amounting to a total combined capacity of around nine megawatts — enough for around 9,000 homes. 

Twelve projects totalling 600MW are at an earlier stage of development in England and have yet to submit planning applications, according to data from industry group Renewable UK.

That compares with the government’s aim to almost double Britain’s onshore wind capacity by 2030, from around 16 gigawatts to around 27-29 gigawatts, suggesting the bulk of that will need to come from Scotland and Wales.

Developers need to go through lengthy processes before they can apply for planning permission, such as identifying sites and gathering environmental data.

“It can easily be 2-5 years before you are in a position to submit [an application for] planning consent, where it will show up on the database,” said Lisa Christie, director of public and regulatory affairs in the UK for Swedish developer Vattenfall and a member of the UK’s onshore wind task force.

“We certainly see [England] as an exciting market and we are looking at quite a lot of sites, including in the south of England.”

However, the slow progress so far highlights the scale of the challenge as the government tries to develop turbines in England to boost overall clean power supplies and balance out the distribution of turbines across Britain.

Development in recent years has mostly been in Scotland, after David Cameron’s Conservative government put in place highly restrictive planning rules in England in 2015 following opposition from rural communities.

In 2023, Michael Gove, then communities secretary, eased these rules but legal experts said at the time it did not go far enough to encourage developers’ interest. 

Planning applications for Scotland, Wales and Northern Ireland show 68 were submitted since Labour took power last July, with an additional 600 filed during England’s de facto ban.

In total there are 528 onshore wind schemes in the pipeline in Scotland, Wales and Northern Ireland — either under construction or awaiting a planning decision — with a total planned capacity of 17.6GW.

Labour went much further days after it won the general election last July, removing rules which meant any local opposition was enough to block a project. 

It has since taken further steps to improve the chances of onshore wind projects getting through the planning process in England, and last week set out plans to try to tackle problems such as relationships with local communities and concerns about interference with military and aviation radar. 

Responding to the planning application figures, a spokesperson for the Department of Energy said it had laid “strong foundations to reverse a near decade of decline in the industry” but it would “take time for these changes to filter through the planning system”.

RenewableUK’s head of onshore wind delivery James Robottom said: “The de facto ban on onshore wind was in place for nine years, so naturally it takes time to develop new projects from a standing start.”

From satellite navigation to spy probes, anti-sat weapons and reusable space planes, Chinese technology is advancing at a fast pace

The new space race is heating up, with the United States warning that its major rival China is narrowing the gap as it makes rapid technology gains.

While China says its ambitious plans remain peaceful and that it rejects the weaponisation of space, some of the technologies it has developed in recent years also have military uses. Here are some of them.

The Chinese navigation satellite system provides positioning, navigation and timing services worldwide.

Its network of 60 satellites has been in full global operation since 2020, with the final backup satellites launched in 2024.

BeiDou – a symbol of China’s growing tech self-sufficiency – aims to challenge the dominance of GPS, the global positioning system run by the US military, especially in Belt and Road Initiative countries.

Besides its civilian applications, BeiDou provides navigation and positioning services to all branches of the Chinese military with even higher precision in the Asia-Pacific than GPS offers the US military.

That enables independent guidance for Chinese missiles, bombs and other precision munitions, with high accuracy. The People’s Liberation Army can also use BeiDou’s short messaging function to communicate.

Besides its civilian applications, BeiDou provides navigation and positioning services to all branches of the Chinese military with even higher precision in the Asia-Pacific than GPS offers the US military.

That enables independent guidance for Chinese missiles, bombs and other precision munitions, with high accuracy. The People’s Liberation Army can also use BeiDou’s short messaging function to communicate.

At least two low-Earth orbit communication satellite mega-constellations are currently in development in China as alternatives to SpaceX’s Starlink.

The Qianfan, or Thousand Sails, constellation – which is also known as the G60 Starlink – is a 14,000-satellite broadband network being developed by Shanghai Spacecom Satellite Technology. About 90 satellites have been launched since last year and the target date for completion is 2030.

Meanwhile the Guowang, or National Network, being developed by China Satellite Network Group aims to have two sub-constellations with a total of 13,000 satellites. It began at the end of 2024 and as of June, 34 satellites had been launched into low-Earth orbit.

Just as Starlink has provided Ukrainian forces with a satellite internet service during the war with Russia, these Chinese networks could give China’s military resilient connectivity during a conflict.

Their high-bandwidth and low-latency connections could enhance command and control, situational awareness and joint all-domain operations – especially when it comes to supporting unmanned equipment in the era of drone warfare.

China has developed a number of satellites with what is known as ISR – or intelligence, surveillance and reconnaissance – capabilities.

They include the remote-sensing Yaogan satellites that have optical reconnaissance, synthetic-aperture radar and electronic intelligence sensors and are said to be primarily for military reconnaissance use.

Nasa describes the experimental communication technology network Tongxin Jishu Shiyan, or TJS – which is in geostationary orbit – as military satellites that provide early warning and signals intelligence for the PLA.

Another example is the Gaofen, or High Resolution, satellites that use optical, multispectral, radar and radio frequency for Earth observation. Officially they are for agricultural, disaster, resource and environmental monitoring, but given their capabilities they are also believed to have military uses too.

The US Space Force has claimed that, by the end of last year, more than 510 of the 1,060 Chinese satellites in orbit were capable of ISR and could be used by the PLA to monitor US and allied forces in the Pacific region.

China is also developing an unmanned reusable spacecraft – similar to the American X-37B Orbital Test Vehicle – that can orbit the Earth for hundreds of days then return. The name of this secretive space plane is still classified but many believe it could be the Shenlong, or Divine Dragon – a project listed under the country’s hi-tech development plan since the 1980s.

The reusable experimental spacecraft has already had three known missions. It made its maiden flight in 2020, when it was delivered into orbit by a launch vehicle, flew for two days and landed in western Xinjiang province.

It spent nine months in orbit during a second mission in 2022, then more than eight months in orbit on a third mission from 2023. Each time, unidentified objects were released before its re-entry.

The spacecraft could be used as an experimental platform for space technologies, including power systems and the durable materials needed for hypersonics, and it could also be suitable for surveillance.

It could also have other military uses. Since it would be able to deploy payloads, it could be used to launch small satellites or release destructive weapons targeted at other satellites or even the ground. And if it can retrieve payloads like the X-37B, it could also be used to capture adversarial space assets.

China is developing another reusable space plane called the Tengyun, or Cloud Rider, designed to separate in two at an altitude of 30-40km (18-24 miles), with the first stage returning to the ground while the second stage continues its ascent to low-Earth orbit. Its first flight is planned for 2030.

China’s Shijian and TJS satellites have been observed performing “unusual, large and rapid” orbital manoeuvres that US officials have described as “stalking” – closely approaching, tracking and monitoring American satellites apparently to collect intelligence or potentially disrupt operations.

Among those targeted were US Geosynchronous Space Situational Awareness Programme satellites and Silent Barker observation satellites, according to the US Space Force.

It said earlier this year that three Shiyan-24C and two Shijian-6 05A/B satellites had carried out synchronised controlled moves in low-Earth orbit in what one Space Force official called “dogfighting in space”.

These manoeuvres – rendezvous and proximity operations, docking and capture – are needed for peaceful missions such as removing orbital debris, but they could also be used in attacks against high-value military satellites.

Dealing with space debris – from monitoring to early warning and emergency response – has been listed as a key task by Beijing. The China National Space Administration has sent several satellites, mainly Shijian, to experiment with orbital maintenance and cleaning up space debris.

Several methods have been tested to clear space junk, including scooping it up with robotic arms and nets, and obliterating it with lasers.

But these technologies could also be used for anti-satellite warfare, to take down probes that are critical for positioning, navigation and timing, for command, control and communications, as well as missile early warning and other vital military functions.

The US Space Force raised concern over the Shijian-17 satellite launched in 2016, which it said had made some “unusual manoeuvres” in geostationary orbit and varied its position in relation to other satellites. The Space Force also noted that its robotic arm could be used “for grappling other satellites”.

Advertisement

These concerns escalated when the Shijian-21, launched in 2021, towed a defunct BeiDou navigation satellite from geostationary orbit to a higher “graveyard” orbit in 2022.

The Shijian-21 used up much of its propellant during that operation, and China now appears to be about to attempt the first satellite-to-satellite refuelling and servicing mission in high orbit – closely watched by the US.

This year, the Shijian-25 satellite was launched for the mission, which would mark major technological progress and the potential to significantly extend the operational lifespan of space assets.

Anti-satellite weapons

China conducted its first successful direct ascent anti-satellite missile test in 2007. A land-based ballistic missile directly intercepted and destroyed a defunct Fengyun-1C weather satellite in low-Earth orbit, generating a large amount of debris and drawing international criticism.

In a 2013 test, a ballistic object was launched to an altitude of 30,000km, suggesting it could be capable of shooting down satellites in geostationary orbit (35,786km).

Ground-based laser weapons and powerful orbital- and ground-based jamming are among other anti-satellite capabilities the PLA is pursuing.

When Hewlett Packard Enterprise got government approval to close its acquisition of Juniper Networks this past weekend, the stock soared. More often an acquirer’s stock falls on deal news. But the age of artificial intelligence is changing the equation.

For HPE, the fit is particularly good. Juniper, a networking equipment firm, puts it in a much better spot to compete against Cisco Systems and Nvidia in the market for the high-speed networking equipment that is required in AI data centers.

HPE shares rose 12.6% on Monday, making it the top performing stock in the S&P 500 on the day. The deal officially closed on Wednesday.

Success breeds imitation, and there may be other legacy tech companies looking to the merger market to improve their AI position. I’m not an investment banker, but here are some deals I wouldn’t be surprised to see—and that could get a good reception from the market.

Oracle and C3.ai: Oracle is a prime candidate to add AI to its software through an acquisition.

Oracle has already begun transforming itself for the AI age. With perfect timing in 2020, Oracle began running the Microsoft playbook: Transform from a legacy software maker into a cloud company. It has been moving customers to cloud-based versions of its software with annual subscriptions, while at the same time building large data centers to rent out cloud servers for AI and traditional workloads. In fiscal 2025, revenue from the cloud was up 24%, while the rest of Oracle was flat on the year.

Ironically for a software company, Oracle’s AI play to date has largely been in hardware: AI cloud servers. It could use an AI software merger that, grafted on to existing Oracle offerings, would leverage the mountains of proprietary data customers have in Oracle databases.

Enter C3.ai. C3’s offerings would fit nicely on top of Oracle’s software. C3 has 130 ready-made AI applications tailored for different industries, solving problems and helping to predict outcomes. Today, its customers are clustered in energy, manufacturing, government, and the military.

C3’s revenue grew by 25% to $389 million in fiscal 2025, but it posted a $289 million loss. The culprits were sky-high expenses, 183% of revenue. But in a merger, sales and administrative expenses, which together represented 86% of revenue, would be trimmed heavily once integrated into Oracle’s large sales force and bureaucracy.

After a sharp selloff this year, C3 has a $4.2 billion market capitalization. Oracle could use its $11 billion in cash, or its stock, which trades at a premium to its historical price/earnings ratio for the next 12 months. Paying with cash could hamper Oracle’s plans for data center investment, coming in at $21.2 billion last year, tripled from the year before, and future plans may require more debt, now at $109 billion. In the end, competing capital requirements may be the largest hurdle for this merger.

An Oracle/ C3.ai merger would face one obstacle right off the bat. The company’s founders have a history. C3 CEO Tom Siebel was among Oracle’s early employees, and became a top salesperson. In the early 1990s, Larry Ellison, Oracle’s chairman, rejected Siebel’s idea for a new product. Siebel left Oracle and took his idea to form Siebel Systems, which became successful.

As Siebel’s software got traction, a long war of words emerged between the two. In the end, Ellison and Siebel made up enough to agree to an acquisition, with Oracle paying $5.85 billion for Siebel Systems in 2005. Another deal would make sense.

Check Point Software and SentinelOne. Check Point Software Technologies is a pioneer in cybersecurity. Its software builds a wall around corporate networks, but increasingly, workers are doing things outside those walls, like working from home or using cloud applications. Check Point also has a cloud-security product that is mature and integrated with its network security.

SentinelOne’s strength is AI-driven “endpoint security,” proactively protecting employee devices no matter what network they are connected to. Check Point has its own endpoint solution, but SentinelOne’s is a more popular product.

Check Point grew revenue by 6% last year, a much slower pace than 20 years ago, but it also generates a lot of free cash flow, which has largely gone to share repurchases. Check Point has reduced its share count by 55% since 2005, becoming a classic “value” play. Now it could turn back to growth.

SentinelOne is a much younger company, growing smartly. Revenue rose by 32% last fiscal year, but, like C3.ai, it took a huge loss, with total expenses at 140% of revenue. Some 82% of its revenue went to sales and administrative costs, the kind of expenses that would be greatly reduced after a merger, also thanks to Check Point’s larger scale and existing sales force.

SentinelOne has a market capitalization of $6.8 billion, and the stock is down 12% over the past year, versus a gain of 12.5% for S&P 500.

The bet here is that a combined offering covering network, cloud, and endpoint security would allow Check Point to upsell its existing base of over 100,000 customers. Check Point had just $1.5 billion in cash and short-term investments at the end of March. The deal could be all-stock, or Check Point, which has no debt, could borrow to finance the purchase.

As with any deal, integration is expensive, so shareholders would need to be patient. It could be worth the wait.