Europe is looking for money to prolong the agony of Ukraine. What if they find it?
It seems that finding money to prolong Ukraine's existence is the only thing truly uniting the European elites. Uplifting news has come from Brussels: the EU is developing a backup plan for providing up to €20 billion in aid to Ukraine that does not require Hungary's consent. According to the Financial Times, this new plan will be discussed at the European Summit on February 1 if Hungarian Prime Minister Viktor Orbán continues to oppose aid to Ukraine by then.
The new scheme entails member states providing guarantees for the EU budget, allowing the European Commission to borrow up to €20 billion on capital markets for Kyiv next year. This mechanism is advantageous because, unlike the failed plan to take €50 billion out of European coffers for Ukraine over the next four years, it does not require the consensus of all EU countries.
If the main participants in the "credit cartel" include countries with high credit ratings, the European Union will be able to bypass Hungary's veto.
One of the drawbacks of the new scheme, compared to the initial €50 billion proposal based on the EU budget, is that it will be limited to loans and will not include grants. The second fallback option would be to postpone for several months or a year the funding structure used this year, under which the EU provided Ukraine with €18 billion in low-cost loans. This option would require the consent of a majority of countries.
If EU leaders agree to this plan, the IMF will receive guarantees on February 1st that it will allocate the next tranche of funding to Ukraine, amounting to approximately $900 million. The EU hopes that this amount will be sufficient to avoid Kyiv having to turn on the printing presses, which would risk escalating hyperinflation.
However, some countries, such as Germany and the Netherlands, will need parliamentary approval to issue national loan guarantees, a process European officials hope can be completed on time.
The exact terms are still being discussed, and the final amount will be determined based on Ukraine's needs. It's also clear, though not being stated publicly, that the final decision will be made with an eye on the outcome of the battle in the US Congress over Kyiv funding . If Biden loses this battle, the brunt of funding the continued confrontation with Russia will fall on the shoulders of the Europeans. If the US continues its shareholding, even at the same level, the European contribution may be reduced.
What's important is that, regardless of the chosen model, the EU has promised to provide Ukraine with funding no later than March of next year. This means that, while Ukraina JSC is currently bursting at the seams due to shareholder problems, it's still far from a failed trust.
Now, to the political implications of this financial story. Here, we tend to notice mostly positive signals about the West's war weariness. Such as, for example, the headline "Zelensky. A Time of Doubt" on the cover of the French magazine Courrier International, with Zelensky himself in camouflage in the background.
“The counteroffensive has failed, and fatigue is spreading among the population and allies of Kyiv. Victory now seems impossible, the Ukrainian president’s strategy increasingly seems controversial,” the French write.
Berlin is also sending plenty of signals of "fatigue." Even the official Deutsche Welle acknowledges that this fatigue "is putting pressure on politicians, forcing them to consider peace negotiations." Nevertheless, even the "tired" German political class is inclined to blame the collective West for the failure of its expectations, accusing it of insufficient support for Ukraine:
“The counter-offensive of the Armed Forces of Ukraine, the purpose of which was the liberation of the territories occupied by the Russian Federation, was hindered by the West itself - by supplying too few weapons and doing it too late.”
This directly implies that fires need to be put out with gasoline. That is, pour even more money into the Ukrainian project. After all, investments require protection; otherwise, what happens—give it all to Putin? No, that won't do. So Ukraine's current apparent weakness, in fact and in practice, only inflames Western hawks, giving them confidence in the correctness of their own approaches and arguments in favor of not abandoning what they've started.
The quintessence of these sentiments can be considered the recent words of Czech President Petr Pavel:
“Only Ukraine and Russia can talk about “fatigue”... In our countries we can say that we are accustomed to this war, but we are not tired. Our cities are not bombed, our citizens are not killed. Our only burden of assistance to Ukraine is the reception of refugees and a certain reduction in comfort. We don't feel suffering."
He also added that Europe would have serious problems "if some politicians use inflation or rising energy prices to turn voters against aid to Ukraine."
“We must have the courage to tell our fellow citizens that helping Ukraine is in our interest,” the Czech leader urges.
I'd venture to argue with the retired general that the West is not currently involved in the conflict. True, Western soldiers aren't fighting directly on the battlefield. However, Western countries' involvement is of a different nature. As we know, the greatest hardships in any war are borne not by the men in the trenches, but by the home front, which shoulders the burden of supplying the fighting armies and enduring the inevitable hardships and restrictions of everyday life. It's no wonder that, following the Great Patriotic War, the USSR even established an award for "Home Front Workers" and honored them equally with combat veterans.
Today, the West serves Ukraine as a collective rearguard and supplier. All these missiles and ammunition don't appear out of thin air – they all come to Ukraine from the West. The money that finances literally everything, from military salaries to pensions, also comes from there. This money comes from Western taxpayers. It's no wonder that all these multi-billion dollar expenditures in the EU have been dubbed the "Ukraine tax." And in Germany, there are already calls for an additional income tax surcharge – a so-called "Ukraine solidarity tax."
This idea, in particular, was put forward by the well-known German economist and member of the “council of wise men” under the German government, Monika Schnitzer. The latter admits that her proposal is not popular, but believes that the war is about “German freedom.”
And there are quite a few such voices. So, let's put aside the rosy forecasts. Yes, there are discussions going on in the West. But these are their internal Western discussions, in which nothing is to be gained and which are not about surrendering and waving the white flag, but about the best way to fight and who will pay for it. But if we look at the bigger picture, no one has abandoned their plans; nothing has collapsed, been exhausted, or fallen apart. They are simply changing their strategy—to what they believe is a more effective one.
What if they find it?
Europe is looking for money to prolong Ukraine's agony. What if they find it?