Ukrainian President Volodymyr Zelensky signed an agreement for a long-term security commitment with the European Union as Western allies pledged to maintain military and political support for Kyiv.
Germany pushed European Union leaders to drop language on joint defence spending, a stance that triggered resistance from other member states that believe extra resources are needed to ramp up the bloc’s capabilities.
Germany, Poland and the Czech Republic asked the European Union for financial support to help cover the cost of hosting Ukrainian refugees since the three countries have taken in the lion’s share since Russia’s invasion.
Ukraine signs EU security deal as Zelensky joins summit
Ukrainian President Volodymyr Zelensky signed an agreement for a long-term security commitment with the European Union as Western allies pledged to maintain military and political support for Kyiv.
The documents will formalise a raft of EU initiatives to support the war-torn nation, including arms deliveries, training Ukrainian troops, demining as well as cooperation in tackling cyber and hybrid threats. No new pledges are expected from the 27-member bloc.
“This is, yet again, another sign of how the EU countries are united in supporting Ukraine in its fight against a brutal attack by Russia,” Finnish Prime Minister Petteri Orpo told reporters in Brussels on Thursday. “We will support with whatever means possible.”
More than a dozen countries, including EU member states, have forged similar bilateral deals as Kyiv seeks to repel Russia’s invasion, now in its third year. Earlier this month, the US became the latest nation to enter into a security agreement with Ukraine as President Joe Biden pledged that Western allies were not “backing down” from their support.
Zelensky on Thursday also signed bilateral security agreements with Lithuania and Estonia. The two countries will contribute at least 0.25% of their economic output to Ukraine’s security and reconstruction over the long term.
Zelensky’s visit to Brussels came as a summit meeting brought together the 27 EU leaders to discuss aid to Ukraine, as well as the situation in the Middle East and the bloc’s defence strategy. The leaders were expected to sign off on key appointments to top EU jobs.
The EU on Tuesday formally opened negotiations with Ukraine over its membership in the bloc, an important symbolic step in a process that will take years to play out.
Hungary had been blocking the move, citing concerns including the protection of Hungarian minorities in Ukraine, a longstanding demand that Brussels and Kyiv insist has been addressed.
Budapest has repeatedly tried to slow-walk EU decisions to provide support to Ukraine or impose new sanctions on Russia before eventually falling in line with the rest of the bloc.
Germany irks EU leaders by resisting joint defence funding
Germany pushed European Union leaders to drop language on joint defence spending, a stance that triggered resistance from other member states that believe extra resources are needed to ramp up the bloc’s capabilities.
EU leaders were poised to agree at a summit in Brussels on a strategic agenda for the next five years, which includes the goals of strengthening security and defence. But Chancellor Olaf Scholz is standing by Germany’s reservations over more joint spending to cover the bloc’s capability gaps at a time when its domestic budget is strained.
At the EU summit that started on Thursday, leaders were taken aback that, amid the ongoing war Ukraine, Germany and the Netherlands were baulking over a call to make headway on financing options to boost spending instead of discussing how to scale up and hasten a defence buildup. according to a person familiar with the discussions.
During a heated discussion, some leaders including from Denmark and Poland pointed out that it was a good thing that neither Russia nor Zelensky were in the room to hear them debate whether the EU should finance more defence spending, said people with knowledge of the talks, who were granted anonymity to describe private discussions.
Scholz can count on support from the Netherlands’s outgoing prime minister, Mark Rutte, in a push to block any progress on financing. Both have been fighting against additional European resources, including joint debt, before other options are exhausted.
The stance by Rutte, who will become the next Nato secretary-general, to delay progress on financing was shocking, given his next job, according to one EU diplomat. The Hague, however, wants a clear assessment of needs, an improvement in the internal market for defence, better procurement and to facilitate access to private capital before using European funds.
Germany’s opposition won’t put an end to discussions about how to boost the bloc’s defence readiness and capabilities in the face of Russia’s invasion of Ukraine and rising geopolitical risks, according to EU diplomats.
Following the leaders’ exchange on Thursday, the leaders were set to agree on asking the bloc’s executive arm to present options for public and private funding to strengthen the defence industry and address critical gaps.
“We need to spend more and coordinate on defence initiatives within the EU and with Nato, which remains the foundation of collective defence, combining our capabilities to protect, deter and defend our people and our territory,” the prime ministers of Estonia, Latvia, Lithuania and Poland wrote in a letter to European Council President Charles Michel and European Commission President Ursula von der Leyen before the summit.
France and Italy are among the EU nations that have called for some kind of joint borrowing.
Resolving the financing issue will be one of the biggest challenges the EU will face during the next commission’s tenure. Von der Leyen, who is expected to be nominated for a second term, had already given up on her plan to present a report this week on financing options to strengthen the bloc’s defence capabilities and instead is set to present an oral update on what projects they could jointly cover.
Von der Leyen told leaders on Thursday that the bloc would need to spend around an additional €500-billion on defence and security in the coming decade to address the current and projected threats, the people said. She mentioned joint borrowing as a possible option to fill the gap.
Germany doesn’t want to see any new statements on defence and funding beyond what was agreed at the previous EU leaders’ summit in March, arguing there aren’t any new developments that would merit a change for the time being, according to another person familiar with the issue.
Germany, Poland ask EU to help pay for hosting Ukraine refugees
Germany, Poland and the Czech Republic asked the European Union for financial support to help cover the cost of hosting Ukrainian refugees since the three countries have taken in the lion’s share since Russia’s invasion.
The leaders of the three central European nations made the request for funding in a joint letter to Von der Leyen.
They told the head of the bloc’s executive arm that their countries’ capacities were strained. “More than 50% of Ukrainian refugees who have entered the European Union live in Germany, Poland and the Czech Republic. The uneven challenges for Member States within the EU are also evident in relation to the respective size of the population,” they wrote in the letter.
The trio said that this situation wasn’t compatible with the common objective of sharing the burden of taking in refugees from Ukraine and the consequences for national budgets.
“An additional and — in relation to actual expenses — substantial financial support from the existing funds of the current Multiannual Financial Framework 2021-2027 is needed for those member states particularly affected in order to adequately reflect the expenses of taking in, housing and providing for refugees from Ukraine,” the leaders said.
Speaking to reporters ahead of an EU leaders’ summit in Brussels, Scholz said the question of how much each EU member state contributed to taking in Ukrainian refugees “is not clearly distributed” and noted that Germany, Poland and the Czech Republic had absorbed the bulk of those fleeing the conflict.
The EU should compensate those three nations for things like living costs, vocational training and language courses, Scholz told reporters, adding that this would be part of the discussions at the meeting in Brussels.
Germany has taken in more than one million refugees from Ukraine since Russia attacked its smaller neighbour in February 2022. Berlin has spent more than €20-billion on accommodation and integration of those war refugees.
Since the outbreak of the war, more than 18 million Ukrainians crossed into Poland, the country’s border guard said in a report.
Slightly under one million decided to stay, with many finding jobs or establishing their own companies. According to a report from the UN Refugee Agency, known as UNHCR, and Deloitte from March 2024, Ukrainians accounted for between 0.7%-1.1% of GDP in 2023.
The Czech Republic officially hosts 340,000 Ukrainian refugees, who in the first quarter paid almost twice as much in taxes as they received in welfare benefits, according to Labour Ministry data. Among those of working age, 72% are employed, although many have less qualified jobs than they used to hold in Ukraine.
The influx of Ukrainian refugees has helped improve the Czech Republic’s unfavourable demographic trends and ease a shortage of workers in a country that has had more vacancies than those unemployed for most of the past six years, driving rapid wage growth and fanning inflation.
China miscalculated with Europe in backing Russia, says US envoy
Beijing misjudged the impact on its relationship with Europe when it provided support for Russia’s war in Ukraine, the US’s top diplomat in China said, as ties fray between the world’s No 2 economy and Western democracies over the conflict.
“I think the Chinese have miscalculated,” Ambassador Nicholas Burns told Bloomberg Television on Thursday. “I actually think the Chinese did not understand the core value that we place in our current world on peace and unity in Europe itself.”
The European Union was now acting in “outright opposition” to China’s support for Moscow, added Burns, who took up his post in the Asian nation days after the invasion. The EU and the North Atlantic Treaty Organisation had both called China a systemic rival “in part because of this”, he said.
President Xi Jinping’s government offered diplomatic and economic support to Russia after it invaded Ukraine in 2022, triggering one of the worst security crises in Europe since World War 2. The Chinese leader has since faced repeated calls from the US and Europe to use his “no limits” friendship with President Vladimir Putin to help end the conflict.
“China is not exhibiting the behaviour of a neutral country,” Burns said, referring to Beijing’s previous comments on its position. The US had complained to Beijing “at great length, at very senior levels” over concerns that Chinese companies were providing Russia with dual-use technology that was being used in the war, he said.
Leaders in Washington and Europe have warned in recent months that Chinese banks could be hit with sanctions for bolstering the Kremlin’s war machine, as they ramp up pressure on China to act. German Vice-Chancellor Robert Habeck earlier this month called on China to stop diverting exports of European goods to Russia that could be used in the war on Ukraine.
Chinese Foreign Ministry spokesman Lin Jian earlier this month denied his nation provided weapons to “parties to the conflict”, saying Beijing “strictly controls the export of dual-use articles”.
Ukraine has struggled to win support from Beijing and other Global South nations in the wake of Russia’s invasion. Top leaders from China and Brazil were both absent from a Swiss-sponsored peace summit earlier this month. Communist Party officials have touted an alternative proposal for ending the war, which includes an international conference recognised by both Russia and Ukraine.
“This is an existential war,” Burns said. “One of the great, great achievements of the end of the Cold War was a free, democratic and united Europe with no divisions in it whatsoever.”
After oil, Russia may now be building a shadow fleet for gas
In the months that followed its invasion of Ukraine and punitive Western restrictions imposed in response, Russia amassed a shadow fleet to ferry its oil around the world. Now there is growing evidence Moscow has begun to do the same for liquefied natural gas (LNG).
Gas is key to the Kremlin’s plans to boost exports, replenish government coffers and fund its war machine — but that requires a larger share of the global LNG market, now that the once-lucrative European pipeline trade has been almost cut off. To date, expansion plans have been hampered by US sanctions that have kept foreign companies away and stopped delivery of the specialised, ice-ready carriers that are vital to reaching Arctic facilities.
New European curbs coming in next year, limiting port access, will hinder the current supply chain even further.
In the past three months, the ownership of at least eight vessels has been transferred to little-known companies in Dubai, according to Equasis, a global shipping database. Four are ice-class and have already been granted approval from Moscow to sail through Russia’s Arctic waters this summer.
While Bloomberg has not been able to directly connect the vessels back to major Russian entities, the details are strikingly similar to manoeuvres to create the nation’s shadow oil fleet, including the use of opaque companies and of ships so old that they would normally have already been decommissioned.
In the tight-knit LNG industry, several times smaller than the oil market, it is highly unusual for an unfamiliar name to procure specialised carriers that can cost hundreds of millions of dollars. At least three of the tankers also have their insurers listed as “unknown” on the International Maritime Organisation database — another characteristic of dark-fleet ships.
Read more: Sanctions on Russian gas are strangling Putin’s Arctic ambitions
“There are several indications pointing to efforts by Russia to create a dark fleet for LNG,” said Malte Humpert, founder of the Arctic Institute, a Washington, DC-based think tank. The purchase of older carriers, the transfer of ice-class vessels to a Dubai entity and a record number of permits for the Northern Sea Route indicated the pieces of “the dark fleet puzzle fall into place”. DM