How Will Europeans Respond to the Trump-Russia Ukraine Plan?
Europe is the pivotal actor as Ukraine is faced with a bad Trump deal
Plans to end the Russo-Ukraine War come from Donald Trump’s administration like Jurassic Park sequels -- they keep coming back, but worse. The latest is a 28-point deal, negotiated between the Trump Administration and Russian officials without Ukrainian or European involvement. Like past plans, the deal requires Ukraine to give up the heavily-defended part of Donetsk Oblast that it controls, which Russia is not close to conquering militarily. It requires Ukraine, a sovereign country, to cut its armed forces. It grants amnesty for all parties for actions committed during the war, meaning that prosecutions for Russian war crimes would end.
The U.S. doesn’t have very much leverage in Ukraine: under Trump, the U.S. has stopped funding Kyiv’s weapons buys. The pivotal actor in any potential peace deal is Europe: Europeans have become Ukraine’s primary security backer. They have released an initial statement of support for Ukraine, but their actions in the coming weeks will determine the future of Ukraine.
Europeans, to borrow an expression from Trump, have the cards. They have provided 4.4 billion Euros more in military aid than the U.S. In 2025, the EU has almost entirely covered Ukraine’s budget deficit, amounting to 30 billion Euros. Financial support from Europe matters to Ukraine as Kyiv allocates all of its diminished tax revenue to the war, while teachers and state employees still need to be paid. All of this has been for a minimal cost to the average European taxpayer -- about 95 Euros per year.
A senior White House official told Politico that the administration doesn’t “really care about the Europeans.” The EU is feeding into the Trump Administration’s view of them as feckless and divided by vacillating on whether or not to offer Ukraine a €140 billion loan on Russian frozen assets held in Belgium. Kyiv has been counting on that money to fill a €70 billion budget deficit that it will face starting next spring. The EU has put off a decision on this loan until its end-of-year summit, which is happening December 18-19.
Before launching its full-scale invasion of Ukraine in February 2022, Russian central bankers didn’t withdraw some €185 billion from Euroclear, a central securities depository in Brussels, and €25 billion in other EU commercial banks. (The Russian bankers presumably weren’t told about the invasion.) This money has been frozen, and the interest payments have been sent to Ukraine. European Commission President Ursula von der Leyen has proposed using this money as collateral for a €140 billion interest-free loan, to be paid back by Ukraine only after Russia gives Kyiv postwar reparations. (Few think Russia will actually pay reparations.) Belgian authorities are terrified of being sued by the Russians over the loan. It could also lead to knock-on effects for countries like China to question whether they should hold their Euros at EU banks. The EU has proposed risk-sharing among its member states for the loan, meaning Belgium alone wouldn’t be on the hook for any legal action.
This plan seems risky, but it is better than the alternatives. EU members giving cash grants to Ukraine to cover its budget deficit is difficult considering that many countries, like France, already have high budget deficits themselves. Populists would also seize on this effort as evidence that centrist parties don’t care about their own publics. Raising debt would entail high interest rates in crowded capital markets. Letting Ukraine go bankrupt would be catastrophic.
All of this comes as the news from Ukraine is grim. Russia killed 31 people earlier this week in a strike in the Western city of Ternopil, which had been considered relatively safe. This winter, Russia has had more success hitting the country’s electricity grid, leading to long power outages in Kyiv and other cities. A kickback scandal at Energoatom, which runs the country’s three nuclear power plants that provide about half the electricity, is appalling: Ukrainians need power and light, and improperly funneling money from an agency that provides this is unconscionable. Ukraine seems poised to lose the battered Eastern city of Pokrovsk, marking Russia’s first gain of a city in two-and-a-half years.
The Europeans are in a position to give Ukraine a lifeline by finally granting Ukraine the reparations loan. European officials like von der Leyen have repeatedly committed to support Ukraine “for as long as it takes” and have said that “Ukraine’s future is in Europe.” The hour is nigh, and they have to put their money where their mouth is.
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