As Europe wakes up to Russia’s danger, it faces tough spending trade-offs

Facing a new sense of urgency, EU leaders are set to meet in Brussels on Thursday (21 March) to discuss making military support to Ukraine more sustainable while ramping up their own defences.

Over the past weeks, EU member states have voiced increasing alarm over the state of the war in Ukraine, more often describing it as an “existential threat”.

Two years since Russia’s full-scale invasion, meanwhile, Ukraine’s military is struggling with significantly reduced weapons supplies from the West, leading to difficulties in repelling Russian troops.

“Into the third year of Russia’s war of aggression against Ukraine, we face a pivotal moment,” European Council President Charles Michel wrote in his invitation letter for the summit, adding: “Urgency, intensity and unwavering determination are imperative.”

Adding to the foreboding, in the lead-up to Thursday’s summit, several EU diplomats described the reality on the ground as ‘dire’.

‘Winning the war’

EU leaders are expected to hold a strategic discussion with guiding questions: Are we winning this war? And are we delivering enough support for Ukraine to win?

“There is a growing sense that Russia will not stop at Ukraine,” EU’s chief diplomat Josep Borrell told a group of reporters, including Euractiv, in Brussels this week.

“Keep in mind that for Russia, it’s enough not to lose, (…) Russia believes the time is on [its] side,” Borrell said.

With Ukraine’s President Volodymyr Zelenskyy having warned Russia would attempt a new offensive by May, Borrell said he expected “this summer to be critical,”

“I don’t see Russia ready to stop the war, at least not by the end of the year,” he added.

With the shift in perception, the language of EU leaders has also started to change.

“After years of denial about the Russian threat, Europeans are forced to realise that they stand, unprepared, near the precipice of war,” one EU senior diplomat said.

“Given the urgency of the situation”, EU leaders are “determined to continue providing Ukraine and its people with all the necessary political, financial, economic, humanitarian, military and diplomatic support for as long as it takes and as intensely as needed”, according to the latest draft summit conclusions.

“Russia must not prevail,” they are expected to say.

The phrase, described by another senior EU official as a ‘beautiful’ term, is part of a carefully crafted linguistic exercise EU leaders have performed in the past two years, balancing how far they can go without stating clearly they believe Russia should lose the war.

But EU diplomats believe the bigger takeaway from this week’s EU summit will be whether the sense of unity can hold, not what will be written on the paper at the end.

Attention will also be on Hungary’s Prime Minister Viktor Orbán, who maintains closer ties to Russia than other counterparts and opposes sending arms to Ukraine.

“Orbán has never said Russia should win the war, but in some way, this summit’s strategic summit discussion on Ukraine and the way Europe approaches the war has been one he has been calling for for a while now,” one EU diplomat said.

“It’s unclear yet what Hungary’s objective in the talks will be, so far we’ve not heard much from Budapest ahead of this summit,”  they added.

Franco-German disaccord

The discussions in Brussels come amid discord between France and Germany over their respective Ukraine strategies.

French President Emmanuel Macron’s increasingly hawkish rhetoric, including his call for Western troops on the ground in Ukraine, has irritated Berlin, especially with Paris urging Europe not to act as “cowards” in the face of a Russian threat.

Macron’s ‘conversion’ from dove to hawk on Russia’s invasion of Ukraine has been welcomed by Eastern Europeans, who long asked for the change, increasingly concerned by what a Russian advance this spring could bring.

However, some EU diplomats have questioned how much of Macron’s new-found alarmism and positioning is purely politics and how much is actual commitment.

If the declared strategic goal is that ‘Russia must not win’, then to achieve that, options to react must be wider and nothing ‘taken off the table’, something an increasing number of EU diplomats believe.

Meanwhile, German Chancellor Olaf Scholz has faced criticism for refusing to send domestic Taurus missiles to Ukraine.

“The problem with the two of them is that you have a very French president and a very German chancellor,” one EU senior official said when asked how the Franco-German spat could play out at the summit.

They added that the two have “clear differences” in their strategic approaches to Russia and the war, with France wanting unpredictability towards Putin while Germany remains more cautious.

“But they have the same objective, the difference is how to reach it,” they added.

Attempts to reconcile the positions between Paris and Berlin, including in the ‘Weimar Triangle’ format and by European Council President Michel, seemed to have approximated the positions at least minimally.

“If the Russian president believes that he only has to wait out this war and that we will weaken in our support, then he has miscalculated,” Scholz told the German Bundestag on Wednesday (20 March).

“Russia is not as strong as people now think,” Scholz said, visibly stepping up his rhetoric.

‘War economy’ mode

“Europe needs to be defence-ready and shift to a ‘war economy’ mode”, Michel urged in an op-ed earlier this week.

The EU “is committed to increasing its overall defence readiness and capabilities to match its needs and ambition,” according to a draft summit statement.

As EU leaders will address boosting European defence and industry, talks will include how the bloc should finance defence spending in the long term.

“We have to rearrange the social contract,” Lithuania’s Foreign Minister Gabrielius Landsbergis said this week in Brussels, and referenced what he called the ‘Pearl Harbor’- effect.

“We still have not been shocked into action because words are not enough, the trauma of Ukrainians, unfortunately, is not enough. we are getting used to it,” he said.

“Unfortunately, history tells us that usually one way or another we will be shocked into action it could be very late it could be extremely expensive on the livelihoods of our people and European societies,” he added.

So far, not all EU member states agree with this view and fear it threatens Europe’s post-Cold War social model.

Achieving the defence spending necessary would force European countries to start reversing the social spending of the last decades

The EU recently agreed on an additional €5 billion for the European Peace Facility (EPF), the bloc’s mechanism to reimburse weapons delivered to Kyiv for new arms shipments to Ukraine.

In addition, the European Commission this week proposed taking profits from Russian assets frozen in Europe after Russia’s invasion and transferring some 90% to the EU’s intergovernmental fund and its newly created Ukraine Assistance Fund (UAF), which would be used to finance arms for Kyiv.

According to EU diplomats, the idea of using the proceeds to benefit Ukraine has broad support among member states.

But using the money to buy weapons is more problematic for some, such as Hungary and Slovakia, who fear handing more weapons to Ukraine will contribute to a military escalation, while Austria, Malta and Ireland cannot purchase lethal weapons for foreign countries due to decades-old neutrality policies.

EU leaders will say they “reviewed progress” on using the revenues “for the benefit of Ukraine, including possibly for funding military support” and ask EU bodies to “take work forward” but are unlikely to make a decision this week.

They are also expected to invite officials to scrutinise a European Commission plan to boost Europe’s arms industry by incentivising EU member states to buy European arms and collaborate on joint projects.

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