What Europe Can do in a Worst-Case Scenario
Helping Ukraine under a Trump Plan
Hi All,
A piece today on why what happens in the Ukraine war might very well come down to what European states are willing to do (or not). I regularly write about Europe and European states for this very reason—which I know makes some people a little confused. However, unless Trump proposes something very different when he becomes president, European states will be in the very uncomfortable position of having to support a US plan that many know is not in their interest (or Ukraine’s).
The Trump Plan(s) Have No Security Guarantees for Ukraine
Its amazing how stories which are obvious and have been for months tend to explode on the scenes and people seem shocked. That was the case yesterday about the different Trump peace plans. There was a Reuters piece that broke down three of the Trump plans to end the Russo-Ukraine War. These were those given by JD Vance, Keith Kellogg and Richard Grennell. Now I’m personally not sold on the Grennell plan being that important. He has not yet been given a job by Trump, and in the last administration he was ambassador to Germany—not exactly a job at the heart of the decision-making process.
As for the other two—as regular readers of this substack, you would have had breakdowns on the Vance and Kellogg plans months ago, as well as analyses of what Trump himself had said repeatedly. Vance and Kellogg will have important roles in the new administration and they can at least make their cases directly to Trump (even if in the end Trump will do what he wants). So I dont waste time re-writing what they said—here are links to some earlier pieces which have lots of quotes from their plans.
Here is one on Vance and his positions on Russia and Ukraine written in July.
Then there was this piece in September when Vance was more specific on what he wanted for Ukraine.
As for Kellogg, here was the piece in June written about the peace plan he wrote with Fred Fleitz.
Why I’m linking to these, is because its so odd that people seem to be discovering now what has been made crystal clear during all of 2024. The contours of Donald Trump’s peace plans have been obvious —and don’t just look at what Vance and Kellogg have been saying, they have been clear if you look at what Trump has been saying repeatedly—as was outlined in July.
Going back to this piece, a Trump “peace” plan is based on the following points that he is committing to, and those he is clearly not.
So, the contours of a Trump plan seem pretty straightforward, if Trump does what he says he will do and if Vance and Kellogg have some influence over him. Not to be repetitive but putting them all together—this is the plan.
Ceasefire along the present front line
Russian control of Ukrainian territories to be acknowledged and allowed
Ukraine is not to be allowed into NATO (as long as Trump is president).
The undecided elements are also pretty clear.
Will Ukraine continue to get US aid? (Kellogg says yes—Vance says no—Trump unclear)
Will Ukraine be denied EU accession (Vance implies yes, Trump and Kellogg don’t say)
Will Russia be given legal title to the land they have seized (Vance implies yes, Kellogg and Trump don’t say).
And it must always be recognized that there remains the fly in the ointment of the land Ukraine occupies (and is holding against strong Russian assault) in Kursk Oblast. All three plans did not seem to expect this, and none have addressed it. However, it does give Ukraine some cards to play.
However, this combined Trump plan gives Ukraine no credible security guarantees—indeed they all rule out the one thing the Ukrainians crave more than anything else, and that is NATO membership.
It would be great to think that European states would stand up for Ukraine, but I have my doubts. As such, here are some ideas on what European states could do for Ukraine, if they were minded to go along with Trump.
The Realistic Way Europe Could Help Ukraine
European states have, as I mentioned last week, basically outsourced their strategic thinking for almost 80 years. That means that there will be an enormous amount of push by many European states to simply go along with whatever Trump proposes. That, btw, is already the default position of many European states. Chancellor Scholz, though he might not ever say it publicly, probably endorses almost all elements of the Trump plan(s). He doesn’t want Ukraine in NATO either for instance. Hungary and Slovakia will also do whatever Trump/Putin want, and many other states are simply too terrified about a break with the USA to even imagine following a different policy.
Indeed, Trump could basically screw Ukraine over if he tried to enforce his plan and at the same time reaffirmed his commitment to NATO. European states will do anything to keep the US in NATO, and (sadly) too many would accept a peace deal that leaves Ukraine hanging to preserve the status quo.
That being said there are three ways this could break where European influence will matter, if Europe could get its act together.
European states, if they didn’t want to offend Trump, would have to step up with security guarantees in a few ways. These will be poor imitations of NATO, but they might be the best that can be provided to Ukraine with NATO out of bounds.
First, would be accelerated Ukrainian membership of the EU (which has a security component). Though Vance would clearly like to do Putin’s bidding and keep Ukraine out of the EU, European states could make the case that this is their choice with the NATO option of the table. Europe can only be so supine. If they grovel and deny NATO to Ukraine, they can argue that EU membership is a European question and the US should accept it.
Second, there would be the deployment of European forces in Ukraine to deter Russia from attacking until EU membership is secured. European forces would have to be everywhere from the front-line in places, to air defense, to training. Again, this could be a sell in the Trump plan, as it would be done independently of NATO and require no US forces. Interestingly, the one thing Ive heard from people closer to Trump is that he did like the idea of Ukrainian forces replacing US forces in Europe. The Europeans could make the case to Trump that they need to have European forces in Ukraine to start the process of integrating Ukraine into European defense (which can allow Trump to pull out even more from Europe).
Third, there is the diplomatic pressure that European states could place that any territory that Russia occupies is not legally recognized as transferred, but becomes territory of negotiation. This allows the time factor to kick in—which cant be underestimated. Trump wont be president forever (his victory was one of the less impressive in US electoral history) and there is no guarantee that Vance becomes president in 2028. Moreover, we don’t know for how long Putin will live. As long as the occupied territory is not legally ceded to Russia, it actually becomes partly a millstone around Russian necks. If the Russians want to eventually improve relations with the EU (and one assumes they will) they will have the problem of militarily occupying part of an EU state.
These steps are hardly ideal. It would be nice to think that European states would have the sense and self-confidence to help Ukraine on their own without US blessing, but I have serious doubts that could happen. Trump might accelerate that process by pulling the US out of NATO, but as long as there is a prospect of keeping the US in, European states seem poised to accept US diktat over Ukraine.
As such, these steps might be the best Europe can do.
Watch the Russian economy.
The current Central Bank policy -- unlikely to change because Elvira is pursuing a theory she has -- is to jack interest rates up to the sky in a futile attempt to stop inflation. This will destroy private industry (it already is).
The current Finance Ministry policies include:
1 - to borrow rubles on worse and worse terms (now with variable interest rates designed to keep up with and exceed the skyrocketing inflation rate). Even with these terms they're having trouble placing bonds
2 - to sell all the gold and yuan in the National Wealth Fund. People will buy that, but it runs out by August of 2025 at the latest just based on current government expenditure rates (and quite possibly earlier since the depletion is getting accelerated)
3 - to cut salaries, wages, and bonus payments, exacerbating the flight of people from government jobs (including the military)
4 - skyrocketing taxes on everything
5 - to nationalize companies without compensation, but (a) they've already done so much of this there's not much left to do, and (b) they've bankrupted all the companies with the high interest rates and taxes, so there isn't any money in the companies anyway
Right. So what's left to pay the soldiers with? What's left to pay North Korea for weapons? What's left to pay the civilian workers, such as the railway workers (already a shortage) or the agricultural workers (already a shortage, and it's documented that farms are choosing not to plant because of the lack of profitability, and there's already a massive drop in crop production)? Obviously foreign investment isn't a possibility because nobody wants to invest in a country where you get nationalized without compensation next week.
Here are their remaining options when the gold runs out:
1 - hyperinflation
2 - not paying anyone and resorting to slavery -- already documented to be happening on a small scale -- but among the jobs which are underpaid and understaffed are police and "security" forces, so who's gonna do the enslaving?
Russia also has two major trade problems:
1 - they can't really export profitably any more. This is due to the redirection of all productive activity to the war they're losing. They're not making enough stuff to export. Even without the sanctions, nobody really wants their stuff and they're being outcompeted on every market. They are managing a few deals by selling at rock-bottom prices
2 - they can't really import significantly any more. This is due to payments. Even without the sanctions, nobody wants rubles, everyone demands hard currency. Due to substantial records of nonpayment, everyone wants the hard currency in advance before delivery.
The ruble has apparently switched to black-market trading against foreign currencies: "legit" trading has largely been suspended, as the central bank sets official rates which are unrelated to reality. The goverment is already preventing companies and individuals from converting rubles legally to hard currency in the volumes they want to, and actually forcing companies to convert their hard currency into worthless rubles at disadvantageous central bank rates, for years now (this is another method of bankrupting the companies).
Now Ukraine is definitely having problems but problems they do *not* have, problems which Russia has, include oncoming hyperinflation, the bankruptcy of all private businesses, inability to export, inability to import, brain drain, and logistical dependency on a single railroad stretching to the Pacific.
Faced with this situation, Putin is apparently trying to run an amphibious attack across the Dnipro River. (This is documented!) Turkey shoot for Ukraine.
There is no way in hell Putin comes out of this alive. It is unlikely Russia comes out of this in one piece (and good riddance, it was a colonialist empire, it should break up -- Free Tatarstan!)
Don't overestimate the relevance of the US. Or even the rest of Europe.
Europe (or most of it) does not have to follow USA in throwing Ukraine under the bus.
Poland, The Baltic States, the Scandinavians, Netherlands, UK and France together have more than enough military, economic and political power to stand up to Putin and it is in their national interest to do so. It is up to our politicians to have the courage to do the right thing. Not supporting Ukraine would be a disaster, with profound implications and costs, that dwarf the cost of helping Ukraine prevail.