US President shifts cost of Ukraine peace deal to EU and US network reports - European officials 'stranged by phone call' between Trump and Putin
$3.1 trillion is the astronomical sum estimated to be needed to reach a peace agreement in Ukraine over the next decade. Bloomberg Economics reports that Donald Trump seeks to shift most of this economic burden to European countries, pushing the European Union to its limits.
The former American president has already begun sending clear messages to European leaders about the obligations they must assume if they want to ensure peace in Ukraine.
Following his communication with Russian President Vladimir Putin and the start of peace talks, US Secretary of Defense Pete Hegseth explained to European allies that the primary responsibility for financing the agreement should fall on them.
Surprise for Europeans
European officials were surprised by Trump's phone call with Putin, a major diplomatic move that key allies had received no notice of, two officials said.
A European supporter of Ukraine spoke of a sellout, saying the US was giving in to Putin’s basic demands before talks even began. The dramatic developments have highlighted the scale of the challenge facing Europeans, and it is one for which they are currently largely unprepared.
Account analysis
Bloomberg Economics examined the costs of supporting Ukraine through future negotiations, rebuilding the war-torn country and defending it, and bolstering the military power of European countries as a deterrent to Russian aggression.
Rebuilding Ukraine's military could cost about $175 billion over 10 years, depending on the state of its forces when a peace deal is reached and what area it will need to defend.
A peacekeeping force of 40,000 men would cost about $30 billion over the same period of time, although Zelensky says it would require many more troops.
Most of the money would go towards strengthening the military of EU countries and increasing their total defense budget to approximately 3.5% of GDP, according to recent discussions held at NATO headquarters in Brussels.
The additional funding would cover artillery, air defense, and missile systems. This would strengthen the EU's eastern borders, prepare EU armies for rapid deployment, and lead to a massive boost in the European defense industry.
If these huge expenditures were financed by issuing debt, they would increase the borrowing needs of the five largest European NATO members by an additional $2.7 trillion over the next decade, according to Bloomberg Economics.
Major changes in the budget
To mobilize resources on such a large scale, European governments will need to fundamentally rethink how they set and prioritize their budgets, work with experts to redesign their defense industries, and agree on joint debt issuance.
This will require a level of political will, long-term thinking, and sacrifice that many EU members have so far failed to demonstrate, especially in Western Europe, where some still see war as a distant problem.
Berlin, Rome and Paris have also reacted to efforts to seize some $300 billion in frozen assets of the Russian Central Bank and use the money to help Ukraine. This means that difficult choices will have to be made about spending on health, education and social welfare. And these decisions will be made in an environment of popular unrest.
But with an authoritarian state threatening its eastern borders and realizing they can no longer rely on the White House, the cost of inaction could be much higher for European countries.
Some leaders and many security officials warn that if the Europeans fail to create a convincing deterrent, then Putin will step up his efforts to weaken and ultimately even dismantle the EU and the NATO alliance. (A2 Televizion)
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