Economy
3.05.2022

Are Europeans Ready to Pay the Price for Ukraine’s Sovereignty?

Are Europeans Ready to Pay the Price for Ukraine’s Sovereignty?

With energy prices rising, EU solidarity with Ukraine may start to wane. Sharing the war’s economic burden will be crucial for keeping the public on board.

JAN C. BEHRENDSPROFESSOR OF HISTORY AT VIADRINA UNIVERSITY

I would argue that Europeans are certainly divided about the consequences of the war in Ukraine. Those who live in the new frontline states, what Germans now dub the Ostflanke (Eastern flank), have long understood the Russian threat and are willing to pay a hefty price to counter it. In Germany, however, only the expert community and a minority of the political class have fully grasped the dire situation we are facing.Old habits die hard: German politicians argue that an embargo against Russian oil and would plunge the country into recession. This would be unacceptable. Thus, economic arguments and the material wellbeing of our nation still beat security and military issues. This is the quiet continuity of Merkelism despite Chancellor Olaf Scholz’s Zeitenwende.Here in Germany, it is still widely believed that we can somehow muddle through this war without major sacrifices. That’s simply not going to happen. But this dangerous state of denial persists. Instead of putting the economy first, we need to understand that it is in Europe’s best interest to first and foremost support Ukraine in any way possible. Berlin needs to think in terms of the American Lend-Lease Act of 1941 that supplied the UK with much-needed weapons.Instead of more failed Merkelism, Berlin needs a strong dose of Rooseveltian determination.

CARME COLOMINARESEARCH FELLOW AT THE BARCELONA CENTRE FOR INTERNATIONAL AFFAIRS (CIDOB)

The longer the war in Ukraine drags on, the more fragile European unity will be. Differences over a boycott of Russian hydrocarbon imports have been the first fracture line. There will be others.When EU countries were confronted with this war scenario, they were already exhausted by the economic, social, and political costs of the pandemic. A fragile EU will have to cope with an increase in defense spending, while reducing energy dependency and dealing with high inflation.The question is how the burden of the costs of the war will be shared. Once again, the price to pay will be unequal. Not all member states have the same debt capacity, nor do all EU citizens feel equally vulnerable to the costs of the ongoing transitions.Spain is less exposed to energy dependence on Russia but fears the consequences of supply shortage, especially of cereals, and rising prices in North Africa. Inflationary tensions and the struggle for the recovery of purchasing power is already stressing the Spanish economy.Not only European unity, but also the stability of some European governments, will depend on the balance between sacrifices and costs.

CAROLINE DE GRUYTEREUROPEAN AFFAIRS CORRESPONDENT FOR NRC HANDELSBLAD

Many are. Thousands and thousands of citizens in Poland, of all places, are mobilizing to welcome and integrate Ukrainians fleeing the war. We see that elsewhere as well. You often hear Ukrainian and Russian spoken on the streets of Brussels. Many citizens are ready to devote time, money, and a spare room when needed and when it can be done directly and without intermediaries. Help is forthcoming when its impact is immediately visible.Europeans will be ready to pay a price for the sovereignty of Ukraine—and of Europe—if and when they know what their contributions actually buy. A lot of it will have to be decided at the European level and fairly implemented across the EU and like-minded countries.Like in most federal systems, the center looks remote to many citizens. So, elected politicians must clearly explain why certain measures are necessary and how they are part of the bigger narrative. This is vital—already before the war, populists were preparing rallies against rising energy prices.Many people are reducing the temperature in their homes and offices by one degree, or asking their energy providers about the share of Russian gas in the mix they offer. These small initiatives can help a lot by creating a sense of empowerment: “What I do can make a difference.” That will be key.

THOMAS DE WAALSENIOR FELLOW AT CARNEGIE EUROPE

Vladimir Putin has achieved the near-impossible, uniting Europeans in opposition to his invasion of Ukraine. In the end, Europe is a continent of small nations, most of whom have fairly recent historical memories of aggression from a larger neighbor. Even the outliers like Hungary and Poland see now that Moscow poses an incomparably bigger threat to them than Brussels.The outpouring of solidarity by fellow Europeans has also been astonishing.Will this change? The war will likely drag on for months, just as food and fuel prices begin to rise sharply, pushing millions of Europeans into poverty (and, lest we forget, heralding far worse for countries like Afghanistan, Ethiopia, and Yemen).If Russia continues on its current brutal path, European solidarity will surely hold. The hard part will come, I suspect, if Putin’s operation goes from bad to worse and he tries to do a deal. He might offer, for example, to leave Ukraine’s sovereignty more or less intact—perhaps minus Crimea and Donbas—and ask for sanctions relief in return.That might split the EU. But relations with Russia will never be the same again. Of all the actions the EU has taken the pledge made at Versailles “to make Europe independent from Russian fossil fuels” is surely the most important.

MARIA DOMAŃSKASENIOR FELLOW AT THE CENTRE FOR EASTERN STUDIES (OSW), WARSAW

They should be. We have a war in the center of Europe—the biggest one since 1945. How would we react if Russia attacked Sweden or Finland, also non-NATO states?Some still believe they would never fall victim to Russia’s aggression. They are wrong. Russia has used chemical weapons on European territory and threatens to attack those who help Ukraine. Russian airstrikes or cyberattacks would wreak havoc on European cities. Moscow strives to destroy NATO. If the alliance splits, no one will be able to defend Europeans’ high living standards and human rights.The very existence of democratic Europe is at stake. Corruption, political killings, violence, poverty. This is what Russia brings wherever it goes.Russia’s invasion may lead to a worldwide food crisis and has already led to the biggest refugee crisis since World War II.We need to deter Russia. Failing to withstand the aggression invites more of it. We need a sovereign and secure Ukraine to protect our own homes. Growing food or energy prices is the lowest price we can pay. This war has started because we did not want to pay the price in 2014.

LINAS KOJALADIRECTOR OF THE EASTERN EUROPE STUDIES CENTRE, VILNIUS

The Western countries have taken many crucial steps—sanctions are of historical depth and bite the Russian economy, while the EU’s plans to reduce dependence on Russian oil and gas are undoubtedly ambitious. It was hardly imaginable just a few weeks ago.However, the most crucial shift has to be a mental one: not seeing Russia as a reliable strategic partner no matter how things evolve on the ground in Ukraine.For that, path dependence is needed to make the structural changes irreversible. For instance, I am unsure whether there is a strong consensus on how the economic sections might be reconsidered. It is essential to start this discussion early as sanction fatigue will surely kick in and such talks might get complicated even among the EU leaders.Moreover, the argument about the macroeconomic struggles related to the possible sanctions on Russian gas and oil seem inadequate in the face of tragedy in Mariupol and other parts of Ukraine.Decisionmakers should show more leadership, as the window of opportunity is indeed open—but not for long. People in Western countries will bear the costs if the leaders clearly show the urgency to make costly steps.

ALENA KUDZKOVICE PRESIDENT OF THE GLOBSEC POLICY INSTITUTE, BRATISLAVA

In the short run, yes. Even the Europeans what previously sympathized with Russian President Vladimir Putin now hold no illusions about the Kremlin and the severe cost of inaction.While only a third of Slovaks in January said that Moscow was to blame for Russia-Ukraine tensions, that figure had doubled just two days into the war.Across Central Europe, there is acute awareness that the region could be next, with societies willing to pay more for energy and food if it means that Gdańsk or Košice do not become the next Mariupol or Kharkiv.But these attitudes could quickly change once the costs sink in. Already now, only a third of Slovaks say they would support sanctions against Russia if it leads to a decline in the standard of living in Slovakia.Central Europeans indeed disproportionately spend their incomes on basic necessities prone to inflation. The reliance on Russian energy imports only compounds the problem.Policy efforts need to be made to ensure that the economic burden of war is shared fairly. This includes financial transfers to the countries hosting the greatest numbers of refugees.People will also grumble if they observe freeriding. A Slovak who notices Prime Minister Viktor Orbán securing cheaper Russian gas for Hungary will undoubtedly ask questions concerning whether their own government is the fool.Europe has the upper hand in any war of economic attrition with Russia. But people will need to see that Europe is winning and that a long-term strategy is in place to both effectively respond to Russia and strengthen the economy at home.

MIKHAIL MINAKOVPRINCIPAL INVESTIGATOR FOR UKRAINE AT THE WILSON CENTER’S KENNAN INSTITUTE

Yes, the EU nations—both power elites and populations—have demonstrated their readiness for radical sanctions that not only force Russia to pay for its war on Ukraine but also damage their economic interests. Moscow’s escalating aggressive foreign policy is an existential threat not only to Ukraine, but also to the EU and its member states. This common threat since February 24, 2022, has translated into an unprecedented level of Western solidarity with Ukraine. So, the Europeans’ readiness to pay for Ukraine’s sovereignty has already been demonstrated.The question is: how long will this solidarity last? With time, rising prices and broken ties with the East of the continent may influence public opinion in Western Europe.But what I know from my talks to German, Italian, and Swiss politicians is the fact that the European political class’s deep and comprehensive understanding is that Europe’s and Ukraine’s destinies are inseparable.This recognition of common fate creates a basis for the longer-term solidarity that will most probably not be impacted by the changes in popular moods and the effect of fatigue. I am sure that Ukraine has stable support for its sovereignty from a united Europe.

KRISTI RAIKDIRECTOR OF THE ESTONIAN FOREIGN POLICY INSTITUTE

It’s impressive what Europeans are doing to help Ukraine, it really is, but I need to use my 200 words for a different message:The grim truth is that many in the West would be ready to accept compromises over Ukraine’s sovereignty in order to stop the war. In countries neighboring Russia, there is a strong understanding that such compromises would seriously weaken our security, hence they are ready to pay a high price to avoid them.However, among Western experts and policymakers, assessments of the balance between different interests seem to vary. The thinking that some degree of accommodation of Russia’s interests might be needed to reach stability has not disappeared. This is a dangerous and misguided logic.Vladimir Putin’s Russia will not give up its imperial goals or its efforts to weaken Europe and the West, and we don’t know if his successor will be much different. If we allow him any gains, he will try to move further.As the war prolongs, the costs for Europeans are bound to increase and maintaining the strong levels of support to Ukraine will get more difficult. We should keep in mind that the less ready we are to pay for Ukraine’s sovereignty today and tomorrow, the more we will have to pay for our own security in the next years and decades.

EUGENIUSZ SMOLARSENIOR FELLOW AND MEMBER OF THE BOARD AT THE CENTRE FOR INTERNATIONAL RELATIONS, WARSAW

For Poland, the future of Ukraine was and is of paramount importance. For the United States and Western European countries, it is decidedly secondary. The American and Western European elites have ignored Putin’s warnings since 2007, reassuring themselves that they were acting for domestic political purposes and that Putin should not be annoyed or provoked. And they ignored the warnings of Poland and other Central European countries.Even after Russia’s annexation of Crimea and the start of the war with Ukraine in 2014, more thought was given to how to convince Putin to cool down rather how to strengthen Ukraine’s defense in its right to determine its future.Christoph Heusgen revealed: “[Merkel] always kept in mind what was tolerable for Russia.”Ukrainians are ready to fight and die in defense of the country and its European future. The Europeans (and Americans) will not want to pay too high a price, because, they will argue, people are dying and children are suffering.It is no coincidence that in Washington it has been repeated ad nauseum that Ukraine is not a member of NATO and the threat of an expansion of the conflict or the use of tactical nuclear weapons makes one look for ways to end the fighting as soon as possible.Ukrainian President Volodymyr Zelensky will be put under enormous pressure to agree to a compromise. He will hear that Putin will not get everything so he is furious and must save face.Such a compromise, however, will mean Kyiv recognizing its limited sovereignty, forgetting about Euro-Atlantic integration, and facing Russia’s successive territorial conquests.

MONIKA SUSFELLOW AT THE HERTIE SCHOOL’S CENTER FOR INTERNATIONAL SECURITY, BERLIN

After the initial shock caused by Russia’s aggression against Ukraine and the expressions of solidarity from everywhere, major differences began to emerge in the attitude of European countries to the war and, by extension, to Ukraine’s sovereignty.Countries that have lived through the experience of totalitarianism—especially some of the former Warsaw Pact countries—consider a sovereign Ukraine as an expression of self-determination for the Ukrainian people and see no room for compromise on this issue. But some other European countries seem to have a different opinion on this matter.Judging by the lack of a clear declaration on giving Ukraine the status of an EU candidate country (which at this stage would primarily have a symbolic meaning, but which cannot be underestimated) and by the still undecided policy of, for example, Berlin on stopping gas and oil imports from Russia, one can doubt the Europeans are determined to support Ukraine’s sovereignty at all costs. There are still some echoes of the narrative that was present until very recently that we should not antagonize Putin.Moreover, part of the Western establishment still seems to see the war as a local conflict and fails to see that Putin has declared war not only on Ukraine, but on the entire Western security order. This is why the determination to defend it at all costs it is not (yet) there.At the same time, we don’t really know what the price of Ukrainian sovereignty will be. So far Putin has managed to surprise Europe—and the West—a couple of times, so it is safe to assume that the price will be higher than we want to believe.

TESSA SZYSZKOWITZAUSTRIAN JOURNALIST AND SENIOR ASSOCIATE FELLOW AT THE ROYAL UNITED SERVICES INSTITUTE, LONDON

Europeans are not only concerned about Ukraine’s sovereignty, but also the fact that war is back in Europe. That is why the European response in terms of economic sanctions has been strong. Germany being the most interesting case with the biggest shift in policy—in economic as well as military terms.The North Stream 2 pipeline, long controversial, has been stopped. But to cut the energy supply from Russia completely is still a difficult step for Germany, which gets about 50 percent of its gas supply from there. (Little Austria is in even deeper trouble, as it gets 80 percent of its gas from Russia). Not only households, but also industry depend on it.But the longer the war lasts, the further Germany may have to go. Germany pays Russia €217 million ($238 million) every day—out of the EU’s total of €800 million ($879 million)—for the energy supply. This could be seen as contributing to Russia’s war effort.Germany also took a courageous step by doubling its military budget to €100 billion ($110 billion) for 2022. This is the beginning of a new European era. As the discussion in Brussels this week shows, NATO, but also EU members, are stepping up their common defense efforts with plans for a European task force—the first steps to forming a European army.

PAUL TAYLORCONTRIBUTING EDITOR AT POLITICO EUROPE

The question assumes we know what that price is, which we don’t.We don’t know, for example, whether giving Ukraine Polish MiG-29s would trigger a Russian strike on Poland, raising the price massively to all Europeans. Nor do we know whether a total embargo on Russian oil and gas imports would preserve Ukrainian sovereignty.European governments have shown they are prepared to accept a calculated degree of economic pain for their citizens and treasuries from sanctions imposed on Moscow so far. Public opinion has been supportive initially, but there will inevitably be protests by farmers, truckers, the poor and the car-dependent unless they are compensated for soaring fuel, fees, and food prices. Sharing the pain out fairly in our own societies will be key to keeping voters on board.There’s no point taking measures that hurt ourselves more than Russia, just to stake out the moral high ground. It makes sense to prepare for an oil and gas cut-off by filling our reserves, diversifying suppliers, and hastening alternative energy sources. But let’s not rush into this blindly.Indignation is a legitimate response to Putin’s atrocities in Ukraine, but it’s not a policy. Beware of something-must-be-done-ism.


Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.


Original: https://carnegieeurope.eu/strategiceurope/86722

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