Paper Bridge: Western allies have the ambition but lack the resolve to provide sustainable and effective aid to Ukraine

From summit to summit

At the G7 meeting that started yesterday in Italy, leaders will finally sign an agreement to provide Ukraine with a $50 billion loan backed by revenues from frozen Russian assets. This is primarily because, without such an agreement, the summit would be seen as an epic failure. However, disagreements regarding the financing scheme and loan repayment guarantees have not yet been resolved (→ Re:Russia: Trump Insurance). The depth of these disagreements is evidenced by a panicked article by Politico, which announced the collapse of the deal just hours before the summit began.

But the fate of even a signed agreement will not be easy. The leaders who are signing it are under intense domestic political pressure from upcoming and recent elections, making their positions unstable. Another Politico article about the summit is titled ‘Six lame ducks and George Meloni: Meet the class of G7 2024’. While the issue of supporting Ukraine was previously a topic of divisive political debates in the US, after the European Parliament elections, it threatens to become the same in Europe. In this situation, leaders on both sides of the Atlantic are wary of taking on excessive financial commitments that could be used as a tool for criticism by their opponents.

Despite all this, the agreement represents an important step in institutionalising support for Ukraine at the international level rather than the national level, creating prerequisites for funding aid next year. However, within a month, at the anniversary NATO summit in Washington, alliance leaders will need to take the next step in this direction – this time in the military sphere. On one hand, there can be no steps towards accepting Ukraine into the alliance, as reiterated by Joe Biden in a recent interview with Time magazine, as this would create the conditions for a direct conflict between NATO and Russia. On the other hand, an alternative must be proposed, developing the broad outlines of what experts, high-ranking American officials, and even President Biden are calling a ‘bridge to Ukraine's NATO membership’. But what does this entail?

Designing a paper bridge

According to Neil Melvin, an expert at the Royal United Services Institute for Defence Studies (RUSI), who has attempted to conceptualise this 'bridge', it should be founded on bilateral commitments from NATO countries to support Ukraine. This was agreed upon on the margins of the alliance’s summit in Vilnius in 2023. The G7's security framework commitments envision the conclusion of more than 30 bilateral agreements with Ukraine. The UK, Germany, France, Italy, and some other countries have already signed these agreements. Yesterday, a similar agreement was signed between Ukraine and the United States in Italy.

These documents do not provide full security guarantees equivalent to NATO's Article 5 but lay the foundation for extensive military support. This includes commitments regarding arms supplies, expanded training programs, intelligence sharing, cybersecurity cooperation, and the protection of critical national infrastructure. They also provide assistance in developing Ukrainian armed forces according to NATO standards, economic support for the country, energy security, humanitarian cooperation, help with reforms, post-war economic recovery, and coordination of sanctions against Russia.

However, in their current form, these documents do not appear to offer reliable protection, Neil Melvin admits. The allies' commitment to bilateral obligations could be solidified through their ratification in national parliaments (so far, such a vote has only taken place in France). Additionally, a unified mechanism for coordinating bilateral agreements should be created, either based on the NATO-Ukraine Council or within the G7 framework.It is particularly important to clearly outline the steps NATO countries will take within the 'escalation ladder' in response to Russian aggression. Nevertheless, such guarantees (Article 4 and a half), as Melvin notes, should not be an alternative to Ukraine's eventual NATO membership but should serve as the 'bridge' to future membership.

The construction of a 'bridge' does not look too convincing and has the same flaw: the alliance countries are not ready to expose themselves to the risk of a direct conflict with Russia. In the event of a further advance of Russian troops or a new attack on Ukraine, the agreements only oblige the parties to hold consultations to determine joint steps. The Kremlin understands this perfectly well and does not attach much significance to the signed documents, which do not strategically alter the security situation in Ukraine.

The agreement signed yesterday by Biden and Zelensky reproduces all the shortcomings Neil Melvin points out. It does not foresee ratification in Congress and, as a result, is not binding in all its provisions. It can be easily revoked by the next president. But even if that does not happen, it will require special decisions for practical implementation. An unratified agreement is not a commitment; it is rather a declaration of intent.

Money under the bridge

Even the already adopted and confirmed commitments to support Ukraine are proceeding with difficulty. Meetings of the US-lled Ukraine Defense Contact Group (which allies also want to bring under NATO's aegis) and NATO defence ministers are taking place in Brussels this week. There is still no coordinated programme for arming the Ukrainian army, and the various aid packages adopted in a ‘help as we can’ mode are poorly coordinated with each other. In turn, the lack of a unified programme is linked to high uncertainty regarding its financing. Such a programme requires clarity on the longer-term financial horizon over several years and a clear understanding of the actual amounts of available funds.

According to the latest update from the Kiel Institute for the World Economy database, the US military aid package of $61 billion, allocated in April, actually involves transferring only $31.5 billion to Kyiv. The remaining amount will fund the Pentagon's internal expenses. Institute experts underscore that in December 2022, Washington allocated $39.5 billion to Kyiv, meaning the current package is effectively a quarter less than that allocated in the first year of the war. Moreover, the new package was approved with a six-month delay, and the adoption of the next one looks not just problematic but unlikely.

NATO Secretary General Jens Stoltenberg's plan to create a $100 billion fund for military aid to Kyiv over five years was supposed to solve the problem of sustainable funding that would allow for the implementation of a coordinated programme. However, Stoltenberg had to withdraw this proposal due to resistance from alliance members, Bloomberg reported. Stoltenberg is now talking about the need to guarantee annual funding for Ukraine from all NATO countries at least at the level of $43 billion, which would correspond to the average annual spending of the allies on support for Kyiv since the beginning of the Russian invasion in 2022. However, these plans also face resistance from Hungary and Turkey, according to the agency.

Ukraine needs additional funding of €100 billion, insists Jakob Funk Kirkegaard, an expert from the Peterson Institute for World Economics. Since the prospects for further aid from the United States are in question, and the idea of confiscating Russia's frozen assets faces strong opposition from European monetary authorities, European countries need to develop their own financial assistance programme for Kyiv. The foundation of this programme could be the plan proposed by Estonian Prime Minister Kaja Kallas and French President Emmanuel Macron for issuing eurobonds to strengthen the European defence industry. These funds would be used to provide military assistance to Ukraine, as well as to bolster air defence systems and deploy defence production in European countries. 

Issuing eurobonds for these purposes is more preferable than financing support for Ukraine from national budgets. Currently, the willingness of EU countries to help Kyiv directly depends on their geographical proximity to Russia's borders: while the Baltic countries, according to the Kiel Institute, provide Ukraine with aid amounting to more than 1% of their GDP, Portugal, for example, contributes just 0.07%. The costs of issuing and servicing defence bonds would be distributed more fairly – proportionally to the level of GDP and national income, as was the case with the issuance of eurobonds during the coronavirus pandemic. Jakob Funk Kirkegaard calls for this idea to be approved at the European Council meeting on 28-29 June – this will maximise the liquidity of the bonds for international investors.

In any case, if the Western alliance is going to achieve what it claims at its summits, there are no cheap scenarios. This is at the very least determined by the amount of resources Vladimir Putin is willing to deploy in the war in Ukraine on the Russian side. And it is time to recognise this. Otherwise, the summits will only continue to produce unfulfilled promises and ‘paper bridges’, undermining global trust in the Western alliance.