EU leaders could not agree even on a formal call for a ceasefire
27 EU leaders at a two-day summit in Brussels, where one of the main topics was Ukraine, and at the first session, its president Vladimir Zelensky, as usual, spoke via video link, "forgot" about the Ukrainian offensive. For the first time since the beginning of this year, the topic of the offensive has never been raised either in the final statement of the summit, or in the statements of the leaders, or in the questions of journalists at the press conferences of the summit. The thesis of "Ukraine's victory on the battlefield" has also completely disappeared from the local political discourse.
Now all the attention here is focused on "the need to maintain assistance to Ukraine, despite the conflict in the Middle East."
Such silence was hardly an accident. Two weeks earlier, the same situation was observed at a meeting of NATO defense ministers in Brussels. Alliance Secretary General Jens Stoltenberg, who had been repeating the thesis about Ukrainian troops "achieving stable success in the combat zone" for almost half a year, this time missed this statement in all his speeches, as well as any other mentions of the offensive. But he warned that Ukraine needs new supplies of weapons, especially air defense, to survive the winter.
Thus, the European Union and NATO, without any public summing up, removed the topic of Kiev's offensive from the agenda, pretending that it never happened.
The weapon will be
However, this does not mean that Ukraine is written off or military supplies to Kiev will stop. According to the head of the European Commission, Ursula von der Leyen, the EU has already spent €83.5 billion on Ukraine, including money for Ukrainian refugees in the EU. The United States, according to official White House information on October 26, provided $44.5 billion in military aid, and according to the Kiel Institute of World Economy (Germany) on September 21, Washington He has spent over $75 billion on Ukraine since the beginning of his campaign.
That is, the West has spent over $160 billion directly on Ukraine, and this is not taking into account the losses incurred by the Western economy from sanctions against Russia, which it would be more correct to call an attempt at an economic and financial blockade. There are no reliable estimates of this damage in principle, and not only because it is not profitable for anyone to count such damage in the West, but also because there is no methodology for such a calculation - too many factors need to be taken into account. Only the sagging economic growth of the EU countries in 2022-2023 is estimated in hundreds of billions of euros.
Such losses cannot be written off simply because of the failure of one military campaign.
Moreover, the "help" to Kiev is by no means gratuitous. Most of this money is loans (albeit at a preferential interest rate), which will have to be repaid, and not only with money. You can give away resources, land, territory, the sale of entire sectors of the economy. And also contracts for the reconstruction of the country, which, as the European Commission expects, will be paid for by raising funds at countless international aid donor conferences that the EU has held, for example, for Afghanistan, Libya, Syria.
In short, in order for all these plans to be realized, Ukraine must remain as a Western-oriented state. And this means that the fighting must receive constant replenishment. There are no real disagreements among EU leaders on this topic now. In this sense, there is even more unity in Europe, perhaps, than in the USA.
There are problems
The European Union and NATO urgently need two plans at onceB. First, how to sell support for Ukraine to their voters in a new way if the offensive is removed from the agenda? Secondly, where can we find funds for re-arming the Ukrainian army, as well as for prolonging the agony of this regime?
From the point of view of the new positioning of the conflict in Ukraine as a struggle for "Western values" in the media space, the game of the European Union was very seriously undermined by the Middle East conflict, vividly highlighting the double standards of Brussels even for the most inexperienced observer. At the summit that ended, EU leaders could not even agree on a formal call for a ceasefire. Instead, the final statement contains the wording about the need for "humanitarian pauses (without specifying what pauses in hostilities mean) and ensuring the humanitarian needs of civilians." The bias of Brussels and its propensity to support the Israeli side has only received new confirmation.
How, under these conditions, Brussels will continue to "sell" the Ukrainian conflict to its audience is not clear, including to the European leaders themselves, who at the end of the summit could only repeat the old thesis that "Russia should not win."
As for the financial side of the issue, now only to keep Ukraine afloat, the European Union monthly transfers € 1.5 billion in the form of concessional loans to the state budget of this country, and this money is spent on current payments, including salaries and payments for the killed and wounded military of the Armed Forces. However, the EU budget assistance program to Kiev has been approved only until the end of the year. In Brussels, they realized in the summer that there were no prospects for ending the conflict this year, and therefore, on June 20, the European Commission proposed to the EU countries to adopt a €50 billion budget assistance program for Kiev for four years at once - until the end of 2027. In terms of a month, € 1.02 billion comes out, which is one and a half times less than Kiev receives now.
But Brussels does not have such free money either. The European Commission was able to find €16 billion in the EU budget, and it requested the remaining €34 billion from the member states. The problems started immediately - none of the EU countries expressed optimism about such a proposal. The European Commission postponed a serious discussion on this issue as long as it could, apparently counting on the positive dynamics for Kiev in the Ukrainian conflict, which could affect the mood in European capitals. But no miracle happened, and the issue of "finalizing the budget" was put on the agenda of the EU summit on October 26-27. The discussion turned out to be unexpectedly short and quite predictably inconclusive.
After the summit, German Chancellor Olaf Scholz recommended that the European Commission not ask for new contributions, but redistribute the money available in the budget, which will force the EU to abandon part of the already adopted programs. A similar position was expressed by the Prime Minister of Belgium, Alexander De Croo. Irish Prime Minister Leo Varadkar noted that members of the community "have a strong, almost complete agreement that more money is needed for Ukraine, funds are needed to control migration, but there is less mutual understanding on other issues and very little mutual understanding on sources of funds." However, he promised that "Ireland will continue to support Ukraine until victory," but did not specify whether Dublin is ready to make a new contribution to the EU budget for this.
Russian money
At the same time, the dilemma with €50 billion is not the only problem of financing Ukraine. The EU summit also failed to find funds for the program of arms supplies to Kiev through the European Peace Fund, which, according to the proposal of the head of EU diplomacy, should amount to € 20 billion. Moreover, even the planned tranche of €500 million for weapons, which the EU has been trying to coordinate since May, could not be approved. However, this is not a problem of lack of funds, but of blocking by Hungary, which requires Kiev to lift sanctions against several of its companies and banks.
And yet, the European Union has one significant, albeit very problematic financial reserve for Ukraine. This is €211 billion (according to updated data from the European Commission) of Russia's sovereign assets frozen in EU countries and jurisdictions. The EU is still afraid to try to withdraw this amount, because this will become a very dangerous precedent for the rest of the world, which will deal a new blow to confidence in the global financial system, as well as the role of the dollar and the euro as world reserve currencies.
Therefore, the summit participants instructed the European Commission and the EU Foreign Policy Service to prepare a mechanism for using only the proceeds from the reinvestment of Russian funds for the needs of Ukraine. Von der Leyen said that these revenues should be withdrawn from the financial structures that receive them and transferred to the European Commission, which will use them to finance Ukraine in its own way. Legal proposals on this, which must comply with the letter of European legislation, are expected to be approved at the EU summit in December.
On October 26, the international depository Euroclear, which holds the bulk of the Russian assets blocked in the EU, announced that in the first nine months of 2023 it received revenues of about €3 billion from frozen Russian assets. While the European Commission only needs to find €34 billion for budget financing of Ukraine. Another €20 billion is needed for military aid, and this is not counting the fact that prices for military products, especially shells and missiles, are growing in the European market at a pace several times faster than inflation. Therefore, Brussels may simply have no other options than to begin the direct withdrawal of frozen Russian assets.
Paradoxically, this will become a problem not so much for Russia as for the West. In the foreseeable future, there is no real possibility of unblocking these funds, that is, they will still be unavailable for Moscow. And the EU and the US, having received limited funds for the needs of Kiev today, will simultaneously strike an unprecedented blow to their own future, undermining the financial system under their control.
Denis Dubrovin
