Europe could make up the Ukraine funding shortfall if the U.S. withdraws, analysts say

After the election of Donald Trump and a Republican sweep of each chambers of Congress, the danger of the United States chopping its funding for Ukraine is an actual chance, stoking issues amongst leaders in Europe on what it means for the continuing battle.

Trump has beforehand expressed he would end the war in Ukraine within 24 hours and has been vocally vital of funding the war-torn nation alongside hardline Republican congressmen, who almost blocked a critical aid package in April of this year. On Sunday, Trump told NBC’s “Meet the Press” that Ukraine will “presumably” obtain much less navy assist as soon as he takes workplace.

But based on consultants that spoke to CNBC, there may be motive to imagine Europe, which is Ukraine’s largest donor, could make up the shortfall if the U.S. withdraws or tightens that funding.

According to the Kiel Institute of Economy’s Ukraine Support Tracker, which has been monitoring funding to Ukraine since January 2022 up till October 2024, Europe has dedicated 241 billion euros ($255 billion) in assist and the U.S. has dedicated 119 billion euros. Out of this, Europe has truly allotted 125 billion euros and the U.S. 88 billion euros, up to now.

Both Europe and the U.S. have supplied “a comparable quantity of navy assist,” Pietro Bomprezzi, the venture lead of the Ukraine Support Tracker, advised CNBC.

As Ukraine’s largest donor and neighbor, Europe would face the brunt of prices if U.S. assist runs out and is not renewed underneath Trump. In the tracker’s newest press replace launched final week, Christoph Trebesch, the top of the Ukraine Support Tracker, acknowledged: “With the present funding attributable to finish, all eyes are actually on the incoming U.S. administration and its willingness to help Ukraine.”

Hungary’s Prime Minister Viktor Orbán, who has repeatedly blocked EU funding to Ukraine, provided a unique tone final month, stating that Europe would not be able to fill in the gap financially if the U.S. withdraws aid.

But based on analysts who spoke to CNBC, Europe can fill the gaps, and has a number of methods to take action.

In its latest update on Dec. 5, the Ukraine Support Tracker acknowledged that using income from frozen Russian property, that are “primarily accessible to European donors,” “may assist them compensate for the lack of U.S. funds sooner or later.”

Jacob Funk Kirkegaard, a senior fellow on the Brussels-based Bruegel assume tank, advised CNBC that “making up for U.S. monetary help for Ukraine could be very straightforward for the EU,” through the use of devices akin to new widespread debt, bilateral donations, and seizing the 250 billion euro in frozen Russian property and distributing them to Ukraine.

Nigel Gould-Davies, a senior fellow for Russia and Eurasia at The International Institute for Strategic Studies, acknowledged that seizing and distributing frozen Russian property could be a “recreation changer.” While the G7’s $50 billion loan using interest payments from Russian assets is a small step on this route, the EU can do extra because it has full management over these property.

“At a stroke, if [the G7] had the need to take action, it may present an enormous slice of the aggressor’s cash and put it to defend Ukraine,” Gould-Davies mentioned. The essential motive this hasn’t been accomplished is because of a concern amongst sure EU members on the monetary penalties, he added.

There are additionally different methods Europe can fill within the gaps. Kirkegaard talked about the Danish mannequin of financing Ukraine: Instead of sending over Western-made weapons, that are dearer to provide, international locations may immediately finance Ukraine’s navy industrial complicated.

Even within the case of withdrawal of vital U.S. weaponry, Kirkegaard factors out that they will nonetheless be bought: European international locations may conform to a commerce deal, like China did in 2018, and conform to buy American-made merchandise, on this case weapons to produce to Ukraine in alternate for a reduction on tariffs.

It is “a completely political alternative” how a lot Europe devotes to defend itself and Ukraine, mentioned Gould-Davies.

He frames it as a steadiness of assets versus a steadiness of resolve — the steadiness of assets is in Europe’s favor, however the steadiness of resolve is in Russia’s: If Europe has the political will to utilize its benefit in assets, Ukraine’s protection can significantly be bolstered.