(Bloomberg) — Ukraine faces sweeping cuts to its war-ravaged budget unless lawmakers adopt unpopular measures needed to access billions in western aid ahead of winter, according to its new prime minister.

A months-long deadlock in parliament has already delayed about $4 billion in European Union assistance that was due to arrive in the third quarter, Sergii Koretskyi told Bloomberg News. He described the situation of Ukraine’s public finances as “close to critical” in separate remarks on Telegram on Monday.

The risk of a funding crunch has emerged as the first key test for Koretskyi, a former energy-sector executive, who was picked by President Volodymyr Zelenskyy two months ago to prepare Ukraine for what’s likely to be the most difficult winter since the start of Russia’s full-scale invasion.

Lawmakers’ resistance to backing reforms demanded by the EU and the International Monetary Fund, Ukraine’s two biggest donors, follows Kyiv’s admission that it was facing an additional $27 billion defense budget shortfall for this year due to rising costs of war.

“I see this as a lack of awareness of the scale of the problem,” Koretskyi, 48, said in Kyiv in his first interview with international media since taking office. “This budget is not elastic. So I want to tell you in advance: no. You need to vote. You need to move forward.”

At the same time, Koretskyi urged international partners to reduce funding uncertainty by making medium- and long-term financial commitments for Ukraine. Zelenskyy has separately called on the EU to accelerate some payments from the bloc’s €90 billion ($104 billion) loan earmarked for next year due to growing budget difficulties, prompting questions from western allies.

Koretskyi said that Ukraine now often has to use costly missiles to shoot down more advanced Russian Shahed drones. That’s one of the reasons why the bill for the war, currently in its fifth year, continues to climb, he said.

“If an interceptor costs tens of thousands, now it costs hundreds of thousands, perhaps as much as a million,” he said.

Kyiv’s foreign donors have demanded measures be undertaken to reduce the size of Ukraine’s shadow economy, bolster tax revenues, and align the nation’s laws with the EU.

The most contentious requirement concerns a value-added tax on cheap foreign parcels, which are currently exempt from such duties. Critics argue it would do little to boost tax revenue while increasing the burden on Ukrainians, many of whom rely on such parcels.

Koretskyi has defended the proposal, saying that the current arrangement gives foreign producers an unfair advantage. The government has resubmitted the parcel bill, urging lawmakers to pass it as soon as possible.

“What is the alternative?” he said. “Cutting spending to the bare minimum.”

‘To Endure’

Koretskyi is a political novice who spent most of his career in the private oil industry. He replaced Yuliia Svyrydenko as premier in July after leading state-run energy company JSC Ukrnafta and NJSC Naftogaz Ukrainy.

Ukraine is now bracing for what Koretskyi warns could be the worst winter since it gained independence in 1991, with air defenses becoming less effective against increasingly sophisticated Russian drones that have added a new layer of terror to daily life.

At the same time, Ukraine is also desperately short of interceptors needed to counter ballistic missiles, and asks daily for more help from allies.

In the past week alone, Russia launched nearly 1,200 drones, most of them jet-powered and difficult to intercept, Zelenskyy said on Sunday. Among the latest targets were a passenger train locomotive and a gas station just miles from the Polish border in the Volyn region, where Koretskyi was born.

The strikes underscored a shift in Russia’s tactics, now increasingly focused on civilian and commercial targets.

“This is pure terror,” he said. “Russia cannot achieve any significant success on the battlefield, and therefore it has resorted — and continues to resort — to extreme forms of terror, striking businesses and civilian infrastructure, striking people.”

While Koretskyi said Ukraine is better prepared for the coming winter thanks to fortified physical protection and government efforts, he urged households to do their part, including by making greater use of government support programs offering relatively cheap loans.

For many Ukrainians memories are still raw of last winter, when abnormally low temperatures compounded the impact of relentless Russian airstrikes that knocked out electricity, heating and water to millions for days or weeks at a time.

Koretskyi’s government plans to significantly ramp up the number of “points of invincibility” — mobile assistance centers — and repair crews across the country. The plan also calls for bringing in foreign emergency specialists to help repair damaged infrastructure.

“Each of our partners could send specialized machinery, equipment and personnel here to help restore and restart damaged facilities as quickly as possible, or respond to these attacks,” Koretskyi said.

The winter will be a litmus test for both the rookie prime minister and his team. Asked about the government’s main objective, he replied: “To endure.”

—With assistance from Ros Krasny.

Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our daily newsletter, Posted, here.