Brussels’s €90bn Ukraine loan will prolong the war — and wreck Europe

Failing to seize Russian assets Brussels has pushed member states into underwriting a massive loan to keep the war going: Ukrainians will continue to die while European taxpayers will foot the bill

I’ve written for UnHerd about how the Russian frozen assets heist was foiled for now, largely due to the brave resistance of the Belgian PM Bart De Wever, who put his country’s interests before those of the pro-war lobby — a rare stance in today’s Europe.

But there is little to celebrate: in its desperate push to keep the war going, the Commission and the pro-war lobby succeeded in pushing through a massive €90-billion loan to Ukraine, backed by the EU budget and underwritten by all member states except three (Hungary, Slovakia and the Czech Republic), which were granted opt-outs.

In effect, the political obstacle was bypassed not by changing strategy, but by shifting the financial risk directly onto European taxpayers. As von der Leyen made clear in advance of the summit, there was little room for dissent: “No one will leave the EU summit until the issue of Ukraine’s financing is resolved”.

Incredibly, the deal foresees that the loan will have to be repaid by Ukraine only if and when Russia agrees to pay war reparations — effectively transforming hypothetical future reparations into immediate financing. This idea is, at best, wishful thinking. It is highly unlikely that Russia would accept binding reparations even in the event of a peace deal, meaning that there is little chance Ukraine will ever repay the loan, leaving EU governments — and taxpayers — to foot the bill.

This episode illustrates how the EU operates: by manufacturing false binaries that foreclose genuine political choice. Member states were presented with a stark alternative — either agree to confiscate Russia’s frozen assets or be prepared to collectively underwrite a massive new loan. What was never seriously considered was a third option: to stop pouring money into a demonstrably failed strategy and instead work to bring the war to an end through negotiations.

Yet it’s easy to see why the EU can’t afford to confront the failure of its Ukraine strategy — one that has inflicted immense economic damage on Europe while delivering nothing on the battlefield, and that has left Ukraine in a worse position than at the start of the war. Acknowledging this reality would carry enormous political costs for EU elites, particularly those most invested in the victory-at-all-costs narrative — hence their determination to keep the war going at all costs.

This is why, even after failing to agree on confiscation, Brussels pushed through a massive, budget-backed loan as a substitute. The consequences will be dear: Ukrainians will continue to suffer and die in an unwinnable war, while Europe will remain entrenched in a permanent state of economic warfare and military-by-proxy confrontation with Russia, with a constant risk of escalation into direct conflict.

If there is a silver lining to this grim trajectory, it is that the recklessness of these choices will only exacerbate the contradictions of a project that is pushing the continent to the brink, ultimately forcing a reckoning — within member states and among Europe’s citizens alike. Indeed, the Commission may have succeeded in avoiding a catastrophic humiliation, but in doing so it exposed the increasingly authoritarian nature of the Union, willing to override national interests and discard legal constraints, democratic norms and basic economic rationality in pursuit of ideological crusades.

Meanwhile, the enormous financial burden imposed by the latest deal will only deepen internal fractures and push national budgets to the breaking point — especially when it becomes clear that it will entail yet more resources diverted from Europe’s own crumbling infrastructure, underfunded hospitals and overstretched schools.

As the contradictions within the EU continue to accumulate, it is increasingly difficult to see how Brussels can manage the backlash for much longer. The Union is beginning to resemble a crumbling empire, reliant not only on repression, censorship and electoral manipulation to maintain control, but also on ever more aggressive tactics directed even against pro-EU governments themselves. By forcing through ever more reckless commitments in the name of unity, it is simply setting the stage for an even more catastrophic implosion down the road.

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Thomas Fazi

Website: thomasfazi.net

Twitter: @battleforeurope

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