Funding these endeavours will still prove challenging. One avenue available to Europe remains seizing billions in frozen Russian assets, not just using the interest they generate.
In Germany, where talks on forming a new government coalition are underway following the country’s Feb 23 elections, there is talk of a €400 billion (US$421 billion) defence fund. Other options include a European rearmament bank and a common European defence fund, both built around the “coalition of the willing” and thus likely able to circumvent traditionally cumbersome EU decision-making.
Some of these efforts could also be kick-started by re-directing the €93 billion left in the EU’s COVID-19 recovery fund. The surge in the share prices of major European defence contractors, including BAE Systems, Rolls-Royce and Rheinmetall, indicates that there is confidence in the private sector that European states will procure more military equipment.
This, in turn, is likely to lead to more corporate investment in Europe’s defence industrial base in anticipation of higher sales and profits.
But time is running out for both Ukraine and Europe. Any Trump deal with Mr Putin might lift American sanctions against Russia, permanently cut Ukraine off US support, and limit – perhaps completely revoke – the US security guarantee to Europe through NATO and with it any effective deterrence against further Russian aggression.
It may not come to this, at least not yet. But in light of how the Trump administration is treating all of its once-close allies and partners, such an outcome cannot be dismissed as a far-flung, improbable scenario.
