Opinion: Amid US fallout, time for the EU to step up assistance to Ukraine

Recent U.S. announcements on Ukraine have made it utterly clear: The Trump administration’s approach to the war in Ukraine is a radically different one from the Biden administration’s. As evidenced by the Paris meeting of European leaders on Feb. 17 and the U.S.-Russia talks in Riyadh, this shift increases pressure on European governments to step up their own efforts. This includes U.S. calls for Europeans to bear a large share of responsibility in providing security guarantees for Ukraine in case of a ceasefire agreement, which may ultimately result in European troops deployed to implement such a deal. The Paris meeting demonstrates the urgency felt among European leaders in forming a common European position on that issue amid fears of becoming sidelined in any future peace talks. As the EU’s High Representative for Foreign and Security Policy, Kaja Kallas, pointed out earlier this week in an interview with German media: “It cannot be that Russia gets Ukrainian territories, the USA gets natural resources and Europe pays the bill for peacekeeping. That doesn’t work.” The predominant focus by the EU on security guarantees and military support to Ukraine is reasonable given U.S. plans to start negotiations on a peace deal soon, of which security guarantees will be an important element. However, it would be short-sighted if Europeans now only focus on this aspect, as the implications of the changed U.S. policy on Ukraine are equally far-reaching for financial and development assistance to the country. Impacts of USAID freeze on Ukraine The effects of the shutdown of USAID are already felt in Ukraine, as various programs and initiatives — from repairs of critical infrastructure to support for Ukrainian farmers and small- and medium-sized enterprises to anticorruption initiatives — have come to a temporary halt or are severely affected in their operations. Since 2022, Ukraine has been by far the biggest recipient of USAID funds, with a total amount of $37.6 billion. This includes $2.6 billion for humanitarian aid and $35 billion for development assistance, of which more than $30 billion was direct budget support. Remarkably, U.S. financial and development assistance was provided solely in grants, which is a stark difference from European financial assistance that comes mostly in loans and adds to Ukraine’s debt burden. In the medium term, the suspension of U.S. budget support to the Ukrainian government could have the most devastating effects. This type of assistance is key, as it allows the Ukrainian state to maintain public services and meet the basic needs of the population. Only through the financial support of international partners, the Ukrainian government is able to close the annual budget deficit. Whilst the projected gap of $39.3 billion for 2025 seems to be covered, the outlook for 2026 is uncertain. The EU has done a lot, but it is not enough As the Heritage Foundation’s Project 2025 report indicates, the U.S. administration will likely leave it completely to Europeans “to address Ukraine’s economic needs.” In other words, there is a real risk that the U.S. will withdraw permanently from financial and development assistance to Ukraine, dealing a blow to international efforts to support Ukraine’s recovery and reconstruction and having serious economic and fiscal consequences for the country. The EU needs to prepare for such a scenario. Indeed, the EU has already been the top provider of nonmilitary support to Ukraine since 2022, with more than €67.3 billion ($70.6 billion) in financial, economic and humanitarian assistance. Through the Ukraine Facility established in March 2024, the EU provides €50 billion of predictable funding to Ukraine until 2027 to support the country’s recovery and reconstruction on its path toward EU accession, of which €19.6 billion have already been disbursed. In October 2024, the European Council agreed upon an additional macrofinancial assistance loan of up to €35 billion and also established a mechanism to use revenues from the immobilization of Russian assets to help Ukraine repay the loans. Although the figures are impressive, the current level of EU support will not be sufficient to compensate for a complete withdrawal of U.S. financial support for Ukraine. And even if the Trump administration succeeds in brokering a ceasefire and eventual peace deal between Ukraine and Russia this year, Ukraine’s needs for external financial support and humanitarian and development aid are not likely to decrease significantly post-conflict. The effects of the war on the Ukrainian economy will be felt for several years, including in terms of a considerable share of the labor force currently living outside the country potentially remaining abroad. Moreover, large-scale reconstruction efforts will only then be able to take off, requiring significant external investments. How the EU needs to step up EU institutions and member states should closely coordinate on how they can at least in the short-term compensate for humanitarian assistance and development aid projects affected by the shutdown of USAID. A key focus should be on stepping up support for the rehabilitation of critical infrastructure, as the suspension of U.S. funding also affects projects that help Ukraine rebuild its energy grid, which has been severely damaged by Russian attacks. In the medium term, EU member states will need to provide more and long-term money for supporting Ukraine’s recovery and reconstruction — both through the EU budget and bilaterally. The Commission’s proposal for the next Multiannual Financial Framework post-2027 expected in September this year should include a significant envelope for Ukraine — one that includes a strong grant component and that ensures that the country receives strong support both for its reconstruction and its path toward EU accession. Likewise, EU member states should further step up their bilateral financial and development assistance to Ukraine, which has been modest across the board, as figures provided by the Kiel Institute for Economic’s Ukraine Support Tracker show. Germany, €4,65 billion; the Netherlands, €2,28 billion; France, €1,4 billion; and Poland, €1,39 billion, are the only EU member states having committed over €1 billion in financial and humanitarian assistance. Ultimately, efforts to step up EU nonmilitary support for Ukraine need to happen alongside current negotiations on possible security guarantees the EU can provide. The latter can only contribute to a stable and peaceful Ukraine if the country can also build on reliable and strong European support for its economic recovery and reconstruction. And the more the EU signals willingness to step up assistance to Ukraine in all dimensions, the more credibly it can insist on having a seat at any future negotiation table.