UN Faces "Financial Collapse" as US Withholds Dues

The United Nations could run out of cash as early as July, Secretary-General António Guterres warned, as mounting unpaid contributions, primarily from the United States, push the organization toward what he described as an “imminent financial collapse.”

In a letter dated January 28 and seen by Bloomberg, Guterres cautioned member states that if current funding trends persist, the UN’s regular budget would be depleted within six months. 

The warning underscores the growing financial strain on the world body amid escalating geopolitical tensions and Washington’s increasingly confrontational stance toward multilateral institutions.

The United States, traditionally the UN’s largest financial contributor, is responsible for 22% of the organization’s core budget. According to senior UN officials, Washington currently owes approximately $2.1 billion, including $1.4 billion in arrears from previous years and $767 million due for the current fiscal year. In 2025 alone, the U.S. failed to pay any portion of its assessed $826 million contribution.

While the UN has long struggled with liquidity shortages, officials say the current crisis is unprecedented. Guterres noted that budget rules requiring the return of unspent funds to member states at the end of each budget cycle have severely constrained the organization’s ability to build financial buffers.

“The more we save, the more we are penalized,” Guterres wrote, highlighting what he described as a structurally flawed funding model that leaves the UN perpetually vulnerable to late or withheld payments.

Daniel Forti, head of UN affairs at the International Crisis Group, said the organization is facing a “chronic financial emergency,” warning that even partial payments by the United States would provide only temporary relief.

“Unless Washington commits to settling multiple years of outstanding dues, the overall financial outlook remains deeply precarious,” Forti said.

Financial pressure on the UN has intensified since the start of President Donald Trump’s second term. The administration has openly criticized international organizations, framing them as inefficient and misaligned with U.S. interests, while adopting a selective approach to funding.

The White House has promoted an alternative initiative dubbed the “Peace Council,” originally envisioned as a mechanism to help manage post-war governance in Gaza, positioning it as a substitute for UN-led efforts. Trump has repeatedly accused the UN of failing to fulfill its mandate, arguing that it no longer justifies the scale of U.S. financial support it receives.

In an effort to preserve liquidity, the UN has implemented a series of austerity measures since 2024. These include a 7% reduction in the 2026 budget, internal restructuring initiatives, and symbolic cost-cutting steps, such as eliminating paper towels in restrooms at UN headquarters in New York, a move expected to save roughly $100,000 annually.

Despite these efforts, officials concede that internal reforms alone cannot resolve what has become a systemic funding gap. The UN had previously warned that funds could run dry by September last year, a deadline it managed to delay through emergency measures. This time, however, conditions are worse.

“Compared to last year, the situation has deteriorated significantly,” Forti said.

The looming cash crisis raises broader questions about the future of multilateral governance at a time of rising global instability. Without predictable funding from its largest contributor, the UN’s ability to sustain peacekeeping missions, humanitarian operations, and diplomatic initiatives could be severely compromised.

Guterres has urged member states to act swiftly, warning that failure to stabilize the organization’s finances risks undermining the UN’s core functions at a critical moment for global security and humanitarian response.

As July approaches, the financial standoff between Washington and the United Nations is shaping up to be more than a budget dispute, it may become a defining test of the international system itself.