On November 10, Hungary blocked €18 billion in EU financial aid to Ukraine, triggering a wave of criticism from the bloc’s leadership. Budapest said that it has had enough of joint EU borrowing initiatives. Meanwhile, protesters in Italy and other EU nations have called for arms to stop being sent to Ukraine and for lifting anti-Russia sanctions.
“I’m not surprised the Hungarians and the Italians and others will go their own way. They have every right to do that,” Joe Siracusa, US politics expert and professor of history and diplomacy at Curtin University, Australia, told Sputnik. “There’s going to be more of it. And I think every nation in Europe is going to do what they think they have to do to survive the winter and to get on with life. I mean, they’re not committed to a life and death blueprint. Europe’s not going down the rabbit hole because somebody wants to support [Ukrainian President Volodymyr] Zelensky. And I think Zelensky really expects this to happen.”
The European Commission (EC) proposed an $18 billion aid package for Ukraine on November 9 that was expected to come into effect in 2023 to help cover Ukraine’s budget needs. That assistance was meant to come in the form of highly concessional loans, disbursed in regular installments.
Ukraine is running a budget deficit of up to $5 billion per month, as per the nation’s President Volodymyr Zelensky, with the country’s defense spending jumping five-fold to $17 billion for the first seven months of 2022.
Meanwhile, the Ukrainian Ministry of Economy admitted last month that the country’s real GDP fell by as much as 40% in the second quarter of 2022. The full year contraction of Ukraine’s economic output is expected to reach 35%, according to the World Bank. To cap it off, Ukraine’s financial officials forecast that inflation could hit 40% at the beginning of 2023, morphing into nothing short of hyperinflation. Kiev does not have money to cope with the financial crunch, but instead of joining Russia at the negotiating table, it urges its Western backers to give it more.
The EC’s latest generous offer came as US officials continued chastising their European allies last month for not delivering enough to Kiev. According to the US press, Treasury Secretary Janet Yellen on multiple occasions called upon her international peers to ramp up both the speed and amount of money going to Ukraine. In addition to that, Yellen reportedly raised the issue at a private meeting with European Commission Executive Vice President Valdis Dombrovskis and European Economy Commissioner Paolo Gentiloni at the International Monetary Fund.
Eventually, Brussels agreed to fork out, but Hungary upset the EC’s bid on Wednesday: the money cannot go to Kiev without the full backing of all 27 EU countries because of the bloc’s budget rules. “We will certainly not support any kind of joint EU borrowing in this field,” Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó told a Hungarian newspaper. Budapest justifies its decision by the fact that it has already spent hundreds of millions of euros to support health, education, and cultural institutions in Ukraine. In addition to that, Hungary earlier supported the EU’s joint borrowing during the COVID pandemic, “and that was more than enough,” Szijjártó underscored.
Brussels, Berlin, and other European capitals subjected Budapest to criticism, while some mainstream media outlets pinned the blame on Hungarian Prime Minister Viktor Orban, who, according to them, has repeatedly neglected EU norms and wooed Russian President Vladimir Putin in the past.
It’s just not Hungary alone
Still, the problem is that it’s not just Hungarian politicians who are opposing the bloc’s continuous financial and military aid to Ukraine and sweeping sanctions on Russia at a time when inflation and recession are engulfing the Old Continent.
During the past weekend in Rome, an estimated 100,000 Italians took to the streets, calling on the government to stop sending weapons to Ukraine. The rally was reportedly organized by trade unions, numerous Catholic associations, and peace groups.
On November 9, Greek workers in Athens conducted a day-long strike backed by unions, such as the General Confederation of Greek Workers and ADEDY, protesting against soaring inflation and skyrocketing energy prices, which rose dramatically after the EU joined Washington’s energy embargo against Russia.
Earlier, in September, around 70,000 people protested in Prague, Czech Republic, urging their government to maintain direct gas contracts with Russia in order to overcome the unfolding energy crisis.
The European Parliament acknowledged in October that almost 50% of Greeks and 43% of Italians said they want anti-Russia sanctions to be lifted. At the same time, a survey by Eupinions, an independent platform for European public opinion, indicated that less than 40% of Italians approve of Rome supplying weapons to Kiev.
ADEDY, Eupinions, Kevin McCarthy, Kevin McCarthy,
The backlash is not limited to Europe, as US Republican lawmakers who are projected to take control of the House in January 2023 have clearly signalled their dissatisfaction with the growing burden of spending on Ukraine. On October 18, House Minority Leader Kevin McCarthy made it clear that the House GOP won’t give a “blank check” to Kiev if Republicans win the lower chamber in November.
“Republicans will win the House of Representatives,” said Siracusa. “They’re in control of the purse. If you don’t control the House, and all you need is 218 votes, you don’t need a red wave, you don’t need a 30, 40 seat majority. All you need is one vote. And they got 218. And they can make sure that the House of Representatives, where all money bills originate, will not give Ukraine another penny. Winning the House is more important than winning the Senate. It’s in the House of Representatives that the Constitution guarantees that money will originate – money bills. So the House is very, very important. And Congressman Kevin McCarthy is going to be very, very important after this. But I think the mood in America has changed. There is no doubt in my mind, there is going to be a Republican victory in the House.”
According to the US mainstream press, this stance is shared by many Republicans from the Make America Great Again (MAGA) camp. For their part, American Democratic progressives, who are also expected to maintain and, probably, expand their presence in the US Congress, recently voiced their opposition to Washington’s military involvement in Ukraine and called on US President Joe Biden to broker peace between Kiev and Moscow. Despite their flip-flopping with a letter addressing the president on the matter, the US press admitted that anti-war sentiments persist among the Congressional Progressive Caucus (CPC).
“I think the Republicans were hesitating before the election,” Siracusa said. “There’s only so much you can give to another nation before you empty out your own arsenal. And it was quite clear if there had been a big Republican victory, Marjorie Greene’s comment about there would be no more money for Ukraine, in fact she had a wonderful comment, she said that as far as she is concerned and a number of Republicans are concerned, Ukraine is not an ally and Russia is not an enemy. And that’s kind of where it’s headed.”
Moreover, a September survey by Data for Progress on behalf of the Quincy Institute for Responsible Statecraft indicated that roughly 60% of Americans would support the US engaging in diplomatic efforts “as soon as possible” to end the Ukraine standoff, even if that means Kiev having to make concessions to Russia.
One should admit that the US, UK, EU, and their close allies have committed a lot in terms of military, financial, and humanitarian aid for the Kiev regime, which says that all the money received so far has been burned through.
According to the Germany-based Kiel Institute for the World Economy, the US, EU, and several other countries committed a total of €93.73 billion ($93.62 billion) to Ukraine between January and October 2022, with the US being the most generous giver.
In addition to sending weapons and money to Kiev, the EU is also carrying the burden of accommodating Ukrainian refugees. The number of Ukrainian refugees taken in by the US is miniscule, amounting to only around 0.02% of the US population. Washington has taken fewer Ukrainian refugees (100,000) than Poland (1,365,810), Germany (1,003,029), the Czech Republic (427,696), Italy (159,968), Turkey (145,000), Spain (140,391), and the UK (122,900), according to the UN data.
The cost of housing Ukrainians in Europe is considerable, especially amid swirling inflation and the accompanying economic slowdown. According to the Kiel Institute, for some nations the cost of housing Ukrainian refugees has exceeded their overall aid to Ukraine. For instance, Estonia is spending more than 1.2% of its GDP on aid to Kiev and housing Ukrainian refugees. Latvia and Poland’s cumulative aid also exceeds 1% of their GDP.
The looming recession
Meanwhile, Eurozone inflation hit a new historic high of 10.7% in October, according to preliminary data, with Brussels already admitting that the bloc is heading to a recession at the end of this year.
It raises the question whether European governments will halt their help to Ukraine, as Biden’s State Department is continuing to pressure them into exhaustive spending regardless of the bloc’s economic difficulties. Speaking to a US broadcaster in the aftermath of Election Day, Zelensky warned against reducing Washington’s aid to Kiev, insisting that it’s the only way to keep Europeans sending money to Ukraine. Still, it’s unclear where exactly the money goes, with millions of dollars and euros vanishing in the fog of the conflict.
Siracusa does not rule out that the US will be the first to suspend the money flow to Kiev, which even the Biden administration does not consider grateful enough.
“I think at the end of the day, Americans will call a halt to it,” said Siracusa. “And I think a number of Ukrainians will exhibit some resentment to the aid given to them, because they’ll say it wasn’t enough. I think Zelensky wanted the Americans to pick up their monthly public service and army salaries. He wanted $5 billion from the American people, heard him say it, to keep Ukraine going. What country is going to pay for soldiers and public servants endlessly? The idea of the United States Treasury printing money, $5 billion a month, to pay for Ukrainian civil service or public service, that’s nuts, that’s unrealistic thinking.”
“The Republicans want to make it very clear, they want to get this problem settled, get on to other important issues like climate change and arms control and the rest of it. I think there are people in the American Congress right now who want to reset it. They want to recalibrate,” the professor concluded.
(This piece is taken with gratitude from Sputnik International)
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