European Commission President Ursula von der Leyen delivers a statement on plans to strengthen the European defence industry and the EU's military capabilities, in Brussels, on March 4.Yves Herman/Reuters
Donald Trump’s suspension of weapons delivery to Ukraine has sent the European Union rushing to find ways to bolster Kyiv’s military capabilities, and their own, as the Ukrainian President tried to make amends with its key ally the United States.
Ursula von der Leyen, president of the European Commission, on Tuesday proposed a defence procurement loan to member states worth €150-billion. At the same time, she said the EC could change the EU fiscal rules to allow the states to boost defence spending without incurring sanctions for exceeding set debt levels. The procurement loans, plus the fiscal leeway, could boost military spending by €800-billion, she said.
“A new era is upon us,” she told EU leaders. “Europe faces a clear and present danger on a scale that none of us has seen in our adult lifetime. … We are living in the most momentous and dangerous of times.”
The announcement came as Ukraine’s President Volodymyr Zelensky attempted to restore American support. U.S. President Donald Trump suspended military aid to Ukraine following a combative meeting with Mr. Zelensky at the White House on Friday, when Mr. Trump accused him of not being serious about striking a peace agreement with Russia.
“I would like to reiterate Ukraine’s commitment to peace,” Mr. Zelenksy wrote in a statement on X on Tuesday. “None of us wants an endless war. Ukraine is ready to come to the negotiating table as soon as possible to bring lasting peace closer.”
During the White House event, Mr. Trump and Vice-President JD Vance accused Mr. Zelensky of being ungrateful for the tens of billions of dollars in U.S. aid supplied to Kyiv since the start of Russia’s full-scale invasion more than three years ago. Mr. Trump accused Mr. Zelensky of “gambling with World War III” by not immediately opening peace negotiations with Moscow.
In his statement on Tuesday, Mr. Zelensky said the meeting “did not go the way it was supposed to be. It is regrettable that it happened this way. It is time to make things right.” He added that he was ready to end the war with Russia. The opening stages could include “the release of prisoners and truce in the sky – ban on missiles, long-ranged drones, bombs on energy and other civilian infrastructure – and truce in the sea immediately, if Russia will do the same. Then we want to move very fast through all next stages and to work with the U.S. to agree a strong final deal.”
While the EU’s defence procurement loans would not be specifically aimed at delivering weapons to Ukraine, Ms. von der Leyen said they would give EU countries the option of doing so. “With this equipment, member states can massively step up their support to Ukraine,” she said.
Germany’s central bank, the Bundesbank, said the country should loosen constitutional borrowing limits to allow more than €200-billion of extra spending through 2030 to boost military and infrastructure projects. France is considering an extra tax on the wealthy to fund its own defence spending. The upcoming surge in spending for weapons triggered a rally in European defence stocks, which have gained about 20 per cent since Monday.
Over the weekend, Mr. Zelensky and British Prime Minister Keir Starmer signed a £2.26-billion loan to bolster Ukrainian military supplies. The loan would be financed from the profits from frozen Russian assets.
The fallout between Ukraine and the U.S. sent EU leaders scrambling to support Kyiv in the belief that U.S. aid for Ukraine might never return as Mr. Trump forms an apparent alliance with Russian President Vladimir Putin, to the point that Mr. Trump has accused Ukraine of starting the war.
The Kremlin praised Mr. Trump’s decision to pause the weapons flow to Ukraine, suggesting the move would lure Kyiv to the negotiating table and open the door to lifting of U.S. economic sanctions on Russia. “This would probably be the best contribution to the cause of peace,” said Kremlin spokesman Dmitry Peskov, according to RIA Novosti, Russia’s state-owned news agency.
Geopolitical analysts and government and military officials were divided on Ukraine’s ability to hold the front lines as new U.S. weapons and spare parts for existing equipment such as Patriot surface-to-air missiles went missing. Some believed that Ukraine could hold out for only a few months before Kyiv fell; others thought the country could endure much longer if the EU were to offer a fresh aid package and Ukraine’s ability to pump out ever more deadly drones remained intact.
“Our military and the government have the capabilities, the tools, let’s say, to maintain the situation on the front line,” Ukrainian Prime Minister Denys Shmyhal told Reuters. “They are obviously not subject to disclosure. We will continue to work with the U.S. through all available channels in a calm manner.”
Mr. Shmyhal added that Ukraine is still willing to sign a deal with Mr. Trump that would give the United States access to Ukraine’s minerals in exchange for military aid and security guarantees.
The Financial Times of London reported this week that some EU leaders have proposed a plan that would see the EU seize frozen Russian financial assets if Moscow were to violate any ceasefire deal. The G7 countries froze some €300-billion of assets held outside of Russia shortly after the war started. About €190-billion of that amount sit in Euroclear, Belgium’s central security depository.
At the moment, the income on those assets is being used to repay the G7 countries, including Canada, for the roughly US$50-billion in loans they extended to Kyiv. So far, the underlying assets themselves have been left intact.