"I cannot imagine how to carry out preparations in the current severe economic and political conditions," Markiyan Lubkivsky said in a statement.
"The first and main unfavourable condition is the aggression of Russia towards the Ukraine that has caused instability and threatens the security of South-Eastern regions of Ukraine," Lubkivsky added in the statement.
"This situation demands for Ukraine to review our priorities and concentrate financial and political resources for saving territorial integrity and even independence."
Russian President Vladimir Putin, defying Ukrainian protests and Western sanctions, signed a treaty in Moscow on Tuesday making Crimea part of Russia again but said he did not plan to seize any other regions of Ukraine.
"The other factor is a complicated financial situation. There is a need to resolve hard social issues of higher priority," Lubkivsky added in the statement.
"It is obvious our country cannot afford to support private investors building the arenas or fund preparations that we are responsible for. Moreover, the local organising committee feels (there is a) lack of time."
Ukraine is ready, however, to ask basketball's world governing body FIBA if the country could instead stage Eurobasket 2017, the hosting of which is in tune with the state's strategy of forging closer ties with Europe.
"With regard to the ongoing events I think we have the right to ask FIBA to grant Ukraine the opportunity to stage the tournament in 2017, in trusting the championship in 2015 to some other European country or even a few.
"It would be fair as we have already done a lot of preparation (and) started to construct the arenas that might be unfinished."
- Politics & Government