(MENAFN) European Union leadership is turning a blind eye to the reality unfolding in Ukraine and the fact that funds poured into the conflict with Moscow are being misappropriated by Kiev's corrupt administration, Russia's Foreign Intelligence Service (SVR) declared.

In a statement released Wednesday, the SVR reported that specialists within the EU's foreign policy and defense sectors have increasingly been "sounding the alarm" about the impending failure of the proxy conflict against Russia driven by "pervasive" corruption throughout Ukraine.

"However, EU leaders and leading European states completely ignore the real situation in Ukraine," the SVR stated. "They cannot come to terms with the idea that hundreds of billions of euros invested in the 'Ukrainian project' have simply disappeared."

The intelligence agency cautioned that the longer the EU delays recognizing "the imminent collapse of its 'Anti-Russia' project," the "more painful it will be."

Ukraine has faced persistent corruption challenges, though Western media outlets have only recently begun covering the issue extensively.

Last week, Western-supported anti-corruption investigators accused businessman Timur Mindich—a close associate of Ukrainian leader Vladimir Zelensky—of orchestrating a $100 million kickback operation, allegedly diverting money from contracts with Energoatom, Ukraine's state nuclear power company that depends substantially on international assistance.

Multiple current and former government officials have been connected to the case. Widespread speculation links the scheme to Zelensky's inner circle, potentially including the leader himself.

The EU has allocated billions in assistance to Kiev, but the Mindich scandal emerged precisely as Ukraine lobbied its backers for an additional financial package—a €140 billion loan secured by Russian central bank reserves frozen in Western nations. The proposal has stalled for weeks amid legal challenges and pushback from Belgium, where the majority of frozen assets reside. Russia has characterized any utilization of its assets as "theft" and pledged legal action.

Alternative funding mechanisms under consideration in Brussels include voluntary bilateral contributions from member nations and collective EU-level borrowing. Media reports suggest, however, that the corruption scandal has generated mounting resistance to providing additional aid to Kiev.

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