Ukraine - Trump is missing a trick

Trump and JD Vance have made a lot of the fact that the U.S., is disproportionately bearing the cost of the war in Ukraine. 

That’s not really the reality but neither seem to think that a good election pitch should be held back on account of actual facts. 

The best source of Ukraine financing data is the Kiel Institute of World Economy. 

https://www.ifw-kiel.de/publications/ukraine-support-tracker-data-20758/

It reveals that since the full scale invasion until the end of August 2024, the U.S. had been outspent by Europe on a ratio 42:58.

The one angle though that Trump and Vance seem to have totally missed is that while U.S. taxpayers have spent close to $95 billion over this period - to Europe’s $130 billion - EU governments have been protecting the assets of the Russian tax payer like their own lives depend on it. This refers to the $330 billion of CBR assets in Western jurisdictions. The bulk of these assets - over $250 billion are in the EU. Last year the U.S., UK and Canada agreed to allocate these to Ukraine to enable it to fund its own defence and reconstruction. Unfortunately these plans were blocked by the EU, and in particular the governments of Germany, Italy and Belgium - Belgium sits on more than half these assets thru Euroclear. Now either their own selfish business interests or Russian appeasement explains this foot dragging.

A classic EU fudge was then constructed by the creation of a $50 billion ERA facility funded from the interest on the underlying assets but not the assets themselves. Now $50 billion sounds like a lot of cash but it only amounts to 3-4 months of Ukraine’s funding needs. But the focus on the ERA - which has taken a year to progress - has taken the wind out of the sails of efforts to get the underlying assets allocated to Ukraine. The only way Ukraine can win the war is if it gets access to the full nine yards, or $330 billion at least - in CBR assets. The ERA sells Ukraine short.

And the problem with the ERA is that if the underlying assets are ever given back to Russia - which might be demanded by Russia as the price for a peace deal - then the G7 taxpayers will again be on the hook for another $50 billion of Ukraine funding. Meanwhile, the Russian tax payer gets away to pay no price for its genocide against Ukraine.

If I were Trump/Vance I would pressurise the EU - to the point of sanctioning Euroclear - to release the full $330 billion in assets to Ukraine. Ukraine could then fund its own defence and recovery perhaps creating a fund in honour of Trump and even commit to spend half the funds buying defence equipment in the U.S. A sum of $150 billion spent in the U.S. over ten years say would be the biggest foreign defence purchase in the U.S.’ history. It would save the U.S. taxpayer writing cheques for Ukraine, secure thousands of defence industry jobs in the U.S., help win Ukraine the war and build up its own defence against future Russian attack, and all funded by the aggressor - Russia. MAGA - Making Russia Pay.

Note above that the added vulnerability for Belgium on the frozen Russian assets issue is that it is one of the worst offenders in terms of being miles away from meeting the NATO commitment to spend 2% of GDP on defence. Remarkably it is also sitting on over €4 billion in profits on immobilised Russian assets for the period 2022-23. That’s pretty disgraceful and smacks of having your (others) cake and eating it.