Europe's Efforts to Bridge the Funding Gap for Ukraine

European officials have been wondering if Europe can step in to fill the gap left by the United States in Ukraine. They are concerned about funds being blocked and the possible return of Donald Trump, as they look across the Atlantic.

The European Union is currently working on finding solutions to raise funds for Ukraine. During a recent European Council summit, the bloc discussed the possibility of exploring new methods, such as raising debt on financial markets and using profits from frozen Russian assets. Belgian Prime Minister Alexander De Croo expressed openness to new funding approaches, emphasizing the importance of Europe taking initiative without waiting for decisions from the US.

Leaders have not yet committed to providing additional funding for weapons, which could pose a problem.

Ukrainian President Volodymyr Zelensky has emphasized the pressing need for weapons in Ukraine. He has informed Western allies that the country's main challenge currently is a shortage of weapons, enabling Russia to exploit the situation.

It wouldn't be fair to say that the EU hasn't been doing its part in supporting Ukraine. Even though there have been public disagreements among the 27 member states regarding issues like sending tanks and the source of funding, the EU as a whole has provided more financial assistance to Kyiv than the US, as reported by the Kiel Institute’s Ukraine Support Tracker.

However, the same tracker reveals that out of the EU's total aid of $85bn, only $5.6bn has been specifically designated for military support. In comparison, $2.2bn has been allocated for humanitarian aid, and a significant $77.1bn has been directed towards financial assistance.

Ukraine's forces are increasingly finding themselves outgunned on the front line.

Ukraine's forces are increasingly finding themselves outgunned on the front line.

With $60 billion of US military aid to Ukraine currently held up in Congress, it is uncertain who could step in to fill that funding gap. Serhii Nuzhnenko from Radio Free Europe/Radio Liberty/Reuters reported on this issue.

It becomes challenging to answer the core question of whether Europe can truly replace the US.

Certain European officials tend to view this as solely an economic issue. According to the latest figures from the World Bank, Russia's GDP stands at $2.24 trillion, while the EU's is $16.75 trillion.

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On paper, Europe has the potential to outlast Russia in an economic war. This means that Europe does have the financial resources to fill in the gap left by the United States.

The challenge lies in the political aspect. The European Union consists of 27 independent countries, each with its own foreign policy. Some are part of NATO, while others remain officially neutral. There are differences in willingness to purchase US weapons and use them against Russian forces in Ukraine. Additionally, some countries are close to Russia and fear the escalation of conflict, while others have a distance from Moscow and have maintained positive economic relations with Russia for years.

During the war, European thinking has changed. Initially, Brussels was mainly seen as providing financial aid for maintaining basic state functions and supporting refugees, while the US handled weapons.

The EU's focus on defense has increased significantly. Recently, a plan was introduced to develop a European defense industry that could potentially compete with the US in the future. However, this long-term plan raises challenging questions for member states. Should EU funds be used outside the bloc? Where should factories be located? How should procurement plans align with existing NATO initiatives?

That’s all for the long-term. In the short-term, Ukraine urgently requires weapons. According to a recent report by CNN, Russia is currently producing three times more artillery shells than the US and Europe combined, intended for use in Ukraine.

Officials survey the damage to an apartment block in a Russian missile strike in Zaporizhzhia, Ukraine, on March 22, 2024.

Officials survey the damage to an apartment block in a Russian missile strike in Zaporizhzhia, Ukraine, on March 22, 2024.

Reuters

An initiative led by the Czech Republic, with support from 17 other EU member states, has been organized outside of the EU's official structures. The goal is to purchase ammunition from international markets and send it to Ukraine.

Because this initiative is not an official EU plan, it can operate more quickly without concerns about other member states, particularly Hungary. Hungary has a closer relationship with Russia than the rest of the EU, which could lead to vetoing or diluting the plans if they were part of the official EU framework.

The Czech initiative has purchased 300,000 artillery rounds, expected to arrive in Ukraine in June. The Ukrainians are happy about this, but they know it won't fill the gap left by the blocked US aid.

Ukraine's Foreign Minister recently commented on the Czech initiative, saying it is a positive step but not enough. He mentioned that if two more initiatives are carried out this year, it will create more challenges for Russian troops in Ukraine. Some see this as a nod to the stalled US aid package.

So, can Europe fill the funding void in Ukraine left by Washington DC?

The answer is yes, Europe has the means. Whether it has the will is the bigger unknown.

Officials from Eastern European countries emphasize the need to show their counterparts that Ukrainian security is synonymous with European security. Despite being viewed as aggressive by some in Western Europe, these former Soviet states make a valid point that in the event of a Russian invasion of NATO territory, they would be the ones most impacted, not cities like Athens or Rome.

However, the impact would extend to all European countries, particularly those in NATO. Countries sharing borders with Russia generally agree that the best way to prevent further aggression from Russia is to strengthen NATO to the point where an attack would be unthinkable, even for President Vladimir Putin.

Making the case for significant increases in defense spending is challenging, especially in the midst of a war on European borders. Last month, NATO’s secretary general, Jens Stoltenberg, expressed his satisfaction with the news that 18 allies had committed to spending 2% of their GDP on defense. This marked a significant improvement from a decade ago, when only three NATO countries met this minimum threshold. However, it is concerning that during a crisis like the one in Ukraine, over a third of allies are still not meeting this target.

As the war continues, there is a growing risk of fatigue setting in among nations. Moreover, with increasing pressures on domestic budgets for essential services like public welfare and pensions, it becomes increasingly challenging to justify providing financial support to another country for the purpose of warfare.

And this is the moment when European thinking faces a crucial decision: support Ukraine against Russia for the greater good of the continent or question its relevance to us. Europe has the opportunity to step in where the US has stepped back, and some efforts are already being made in that direction. However, the outcome ultimately hinges on whether Ukraine's key allies in Europe can continue to make a compelling case for support.

Editor's P/S:

The article highlights the complex challenges facing Europe as it grapples with the question of whether it can fill the funding void left by the United States in Ukraine. While the EU has the financial means to do so, the political will and coordination among its member states remain uncertain. The article emphasizes the need for Europe to recognize its own security interests and the potential consequences of a Russian victory in Ukraine. It also underscores the importance of balancing domestic budget constraints with the urgent need for military support to Ukraine.

The article raises important questions about the future of European security and the role of the EU in a post-Cold War world. It suggests that the war in Ukraine has prompted a shift in European thinking, with a growing recognition of the need for a more robust defense industry and a willingness to take on a greater share of the burden in supporting Ukraine. However, it also acknowledges the challenges of coordinating defense policies among 27 independent countries and the potential for fatigue and domestic budget constraints to hinder long-term support. Ultimately, the article leaves readers with the question of whether Europe has the political will and determination to step up and play a leading role in ensuring Ukraine's security and the stability of the continent.