With just a mere matter of weeks now before the U.S. presidential election some experts are wondering if Joe Biden is preparing, at the last minute, to wriggle free of the Ukrainian curse and tell voters that in the next term, if he were to be President, Ukraine funding will be reduced dramatically. This would, after all, be a cunning move to outfox Trump who has told reporters on numerous occasions that he would end the war once in office simply through cutting U.S. financial support.
Either scenario places EU countries – and the EU itself in Brussels – in a quandary as their worst nightmare is coming true: America wants to hand over the responsibility of Ukraine to the Europeans and shed responsibility for the mess that it has created. One could even argue that relations now between the U.S. and EU countries are on a collision course given one recent offer Washington made to the EU in the form of a loan which the EU would guarantee but U.S. companies would benefit from.
As Hungary prepares to take the helm of the EU’s six month rotating presidency on July 1st, western elites are fretting over whether this time Budapest will veto outright the sanctions which are in place, which need to be signed off every six months. America in particular wants a quick fix solution but is indicating that it wants to hand over all the risk to Europe. It argues that those who hold Russian assets should be the ones to offer the guarantees against default – through interest on Russian cash held by them – and that U.S. Congress anyway is unlikely to sign off another batch of military aid, even in the form of a loan, at such short notice.
Following a massive body blow from European elections, French President Emmanuel Macron and German Chancellor Olaf Scholz will tell President Joe Biden they reject the American proposal for Europe to act as sole guarantors for the loan, according to conversations with six senior diplomats and officials.
The offer was structured in such a way that EU countries would pay the interest, accept the risk and allow most of what was a 50bn dollar loan to benefit U.S. companies. Remarkable sting for the EU governments when it shows that the relationship between them and the Biden administration just sinks lower and lower each week.
Of course, there is a great deal of anger from the EU side as many EU leaders feel as though the U.S. has cleaned up quite nicely from the whole business of war which has profited the U.S. on so many levels but has drained EU economies, explaining why Poland recently held a pole which claimed that a majority of those asked wanted funding for the Ukraine war to end. Europe has really been left holding the baby over the Ukraine war and the palpable resentment against the U.S. is certainly growing. The deal the U.S. pushed of course was never going to be a runner but more likely a new European Commission in September will borrow a new 50bn euro tranche from its seven year 1.2 trillion euro budget for Ukraine. Even in this scenario, the EU is scraping the barrel and reaching new lows in throwing cash into the fire just as an ephemeral last-ditch effort to stay warm.
But both the U.S. and EU realise that time is running out for whoever wants to pour more money into the black hole of Ukraine. Time is running out because while Ukraine desperately needs the money, there’s no certainty that a Donald Trump presidency would back any loan initiatives. A final agreement will now be delayed until at least in autumn with just a matter of few weeks before November 5 election. Relations between the U.S. and EU have never been so tipped in Washington’s favour. And that’s before Trump even gets into the White House.
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