Trump's Ukraine plans will cost EU countries about $3 trillion, - Bloomberg
Date: 2025-02-13 Author: Кирило Загоруйко Categories: ECONOMY
US President Donald Trump has begun telling European Union leaders what they need to do to make peace in Ukraine. The demand has exposed Europe's biggest problem.
Bloomberg estimates that defending Ukraine and expanding its own armed forces could cost the continent's largest countries an extra $3.1 trillion over the next 10 years.
A senior European official says Russia has a significant advantage over Europe in manpower, and its military economy can produce shells and other military equipment at a rate that exceeds the needs of its army on the front lines in Ukraine.
EU members, meanwhile, are debating whether to limit purchases to European suppliers, who will not be ready to deliver some of the needed weapons for years, rather than partner with the British or buy from the Americans. Others believe the bloc should invest in roads, not artillery.
It is noted that rebuilding the Ukrainian Armed Forces could cost around $175 billion over 10 years, depending on the state of its forces when the ceasefire is reached and how much territory it would have to defend. A 40,000-strong peacekeeping force would cost around $30 billion over that period.
Most of the money would go toward strengthening the EU member states’ armed forces and increasing the overall defense budget to around 3.5% of GDP. The extra money would go toward artillery stockpiles, air defense systems, and missile systems. This would strengthen the EU’s eastern borders, prepare the bloc’s armed forces for rapid deployment, and spur massive growth in the European defense industry.
If financed through debt, NATO’s five largest European members would need another $2.7 trillion in borrowing over the next 10 years.
To mobilize resources on the scale required, European governments will have to radically overhaul their budgets, restructure their defense industries with their CEOs, and almost certainly agree to jointly issue debt. This will require the kind of political will, vision, and sacrifice that many EU members have so far failed to demonstrate.
Tough choices will have to be made about spending on health, education, and social security. And these decisions will be made against a backdrop of popular unrest that, at least on the periphery, is being fueled by the Kremlin.
The paper estimates that Ukraine will have to spend around $230 billion to rebuild buildings and infrastructure damaged in the war. If it receives funding for this and a lasting settlement is reached, Ukraine’s energy, industrial, and construction sectors are likely to boom. Over time, this will ease the burden on the EU. Kyiv has also managed to interest Trump with its fossil fuel reserves, such as uranium, lithium, and graphite.
But there is now a $130 billion gap between Ukraine’s recovery needs and promised funding. This threatens any economic recovery and could undermine the country’s long-term resilience.
