What’s next for Ukraine? Over to EU, and Washington

With Russia’s war on Ukraine entering its third calendar year, Moscow is counting on time and weakening Western resolve, emboldened by seeing that the US and the EU are struggling to provide new funding for Kyiv despite having promised open-ended support. 

After a widely anticipated Ukrainian counteroffensive which started last June made less progress in recapturing Russian-occupied territory than Kyiv’s allies have hoped, the war has largely reached a stalemate.

The new year started with one of Russia’s most savage missile attacks on Ukraine for months, targeting infrastructure and cities, followed by Ukrainian missile barrages fired in return into Russian border towns.

‘Elephant in the room’

In recent months, Europe and the US have been increasingly worried that Kyiv’s growing shortage of financial means and ammunition could offer Russia an opportunity to push ahead.

They also believe that Ukraine will struggle to make significant territorial gains in the near term and are now focusing their efforts on enabling Kyiv’s forces to hold the line against Russia.

Ukrainian officials and most EU diplomats reject the narrative of ‘Ukraine fatigue’, pointing towards continued bilateral aid and or respective opinion polling across the bloc.

“By writing it, you’re creating it,” one Western EU diplomat in Brussels quipped when asked if they could see member states growing weary of a war that could drag on.

A second EU diplomat warned that “we have to be extremely careful we don’t fall into the trap and start repeating Russian talking points on this issue, which effectively have no other goal than leading to appeasement in the long term”.

Ukrainian President Volodymyr Zelenskyy is “in many ways right saying that by giving the Ukrainians what they need is supporting and securing ourselves – and Putin knows that, that’s why we see the push to make ‘fatigue’ a thing,” the diplomat added.

Since Russian tanks rolled into Ukraine in February 2022, the Kremlin has bet on Western military support eventually waning.

Putin will also eagerly watch for signs that later this year former, Donald Trump could return to the White House, not least because of his lobbying against congressional support for Ukraine.

The Kremlin has welcomed the Western funding gridlock and ramped up pressure on the battlefield, where the action has largely bogged down along heavily mined frontlines.

Who blinks first?

Ukraine’s Commander-in-chief Valerii Zaluzhnyi’s assessment that fighting had entered a “stalemate” was rejected by Zelenskyy amid rumours of a split between the country’s top figures and reports of a reshuffle in the new year.

Over the months leading up to winter, Russia had steadily built up a firepower advantage over Ukraine by expanding military production and striking weapons-supply deals to acquire significant amounts of North Korean shells and Iranian drones.

At the same time, both the EU’s plan on ammunition and weapons funding have run into problems.

“It is a strategic mistake made by Germany, but also by France, Italy, Spain – the classic big core of the European nations in NATO – they underestimated that this might be a long war and had the desire the war would end sooner,” Lange said.

“At the same time Putin, who has problems with Western sanctions and corruption, has been working to expand Russia’s [defence] industrial base,” he added.

Hesitation in the Western capitals has emboldened Putin, with his recent public statements demonstrating that, as far as he is concerned, Russia is in this for the long haul.

“From observing Putin for the last 25 years and from what we see we can say that Putin has no intention whatsoever to return to any form of normalcy – he will go on with the war and if necessary even until 2030 because it is a matter of survival for him,” Lange added.

In a rare comment about the situation on the Russian side, Putin told a televised event that 617,000 troops were on the battlefields in Ukraine and the goals of “the special military operation” remain unchanged. In December, he approved spending that will see the military take up around 30% of Russia’s total budget in 2024.

Defence Minister Sergey Shoigu told military officials Tuesday (9 January) that Russia’s armed forces “maintain the strategic initiative along the entire line of combat contact” and that Moscow will achieve the goals of what it calls its “special military operation” in 2024..

Funding battles ahead

But at a moment when Ukraine is desperate for long-term financial and military commitments, its two most important backers – the EU and the US – have been found wanting, raising doubts over the West’s long-term resolve.

Zelenskyy last month urged both Brussels and Washington to unlock the funds, warning that Moscow was counting on Western unity to “collapse” and of a “dire need” for weapons.

A lack of additional funding from both, aside from hardware military capabilities, would mean that Kyiv would face difficulties in paying its civil servants to ensure its government can continue to function amid continued Russian missile attacks.

In Brussels, EU leaders will hold a tough emergency summit on 1 February to have another go at agreeing on the bloc’s budget and a €50 billion financial aid package to Ukraine, intended to fund Ukraine’s government over the next four years, after Hungary vetoed the aid package in December.

Should Budapest again raise obstacles to a February deal, EU officials have been preparing a back-up plan worth up to €20 billion, using a debt structure that sidesteps the objections of Hungary’s Prime Minister Viktor Orbán about funding the war-torn country.

While the preference is still to agree on the unaltered aid package, several backup options are on the table, according to people briefed on the discussions, including participating member states issuing guarantees to the EU budget, enabling the European Commission to borrow up to €20 billion on capital markets for Ukraine over this year.

Hungary, meanwhile, has proposed splitting the €50 billion package into tranches that would be voted on annually. 

Hungary might lift its Ukraine aid package veto, but with strings attached

EU member states agreed on Wednesday (10 January) on a partial negotiation mandate to start talks with the European Parliament on a €50 billion aid package for Ukraine, but the threat of Hungary raising obstacles along the way has not faded.

Regardless of the final modalities, the EU has promised Kyiv it will provide funding by March at the latest, the EU insiders added.

European countries are also bilaterally trying to narrow the funding gap.

Germany aims to double Berlin’s military aid for Kyiv this year to more than $8 billion, making it Ukraine’s second-largest military supporter behind the US. Other member states such as France (equipment), the Netherlands (ammunition), Estonia and Belgium (proceeds from frozen assets) have also pledged fresh commitments.

Across the Atlantic, Washington is confronting two decisive deadlines — the first on 19 January, the second on 2 February — to fund the federal government or risk a shutdown at the start of a presidential election year.

Key US lawmakers have yet to outline spending figures for each federal agency, a necessary step before the broader bills funding the government can even be written.

The US sent a $250 million weapons package to Ukraine late last month, which officials say was likely the last package because of the lack of funding.

“Yes, Kyiv might have a little time from other donors to make sure they can keep their war footing, keep the civil service, but what happens in the (EU), in other NATO allies, if the US pulls out their support?” Shalanda Young, the director of the US Office of Management and Budget, was quoted as saying by Associated Press last week.

“I’m very concerned that it’s not just the United States’ resources that are necessary for Kyiv to stop Putin. It is: What message does that send to the rest of the world? And what will their decisions be if they see the United States not step up to the plate?” she added.

[Edited by Zoran Radosavljevic]

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