The economic calculations around EU and NATO memberships for Ukraine
The economic calculations around EU and NATO memberships for Ukraine
Ukraine is on the path - likely to be a long term one - to join both the European Union and NATO. But both involve much more than declaring Ukraine to be a member of the clubs.
BBC News reports1 on the current situation, in a report that mainly includes commentary by Retired Gen. Phillip Breedlove, the former NATO Supreme Allied Commander in Europe. Currently, Breedlove serves on the board of advisors of the hawkish Center for a New American Security (CNAS), “a think tank funded by the likes of Northrop Grumman, Neal Blue of General Atomics, Lockheed Martin, and the U.S. government, among other governments and corporations.”2
We’re getting used over the last 18 months to hearing a lot of the positions of eastern European states like Poland, Estonia, Latvia, Lithuania, and (of course) Ukraine for whom the level of military assistance from the US and Western European NATO partners aimed against Russia is never enough, and apparently never will be.
In this report, Olexander Scherba, former Ukrainian Ambassador to Austria and now Ambassador for Strategic Communication at the Ukrainian Ministry of Foreign Affairs says that “NATO’s policy towards Ukraine, let’s be honest, was one big lie over the last two decades at least.”3 This is an official Ukrainian government spokesperson talking about his country’s most important set of allies in an ongoing war.
Presumably we’ll hear someday what advisers and senior officials in Washington and other NATO capitals are saying behind the scenes about Ukrainian President Volodymyr Zelenskyy’s constant public complaints about his most important allies not doing more than they are. Of course, in terms of Ukraine’s position at the moment, it’s obvious why they would see direct NATO participation in a war against Russia in the middle of Europe would be in their benefit. On the other hand, there were good reasons that the US and the Soviet Union managed to avoid such a direct military confrontation during the first Cold War.
William Arkin in a recent report on US intelligence operations in Ukraine gives us a glimpse at how there are real differences of interests and goals playing on among Ukraine and its partners. “Intelligence experts say this war is unique in that the United States is aligned with Ukraine, yet the two countries are not allies. And though the United States is helping Ukraine against Russia, it is not formally at war with that country.”4 (How “unique” that situation has been could certainly be open to questions!)
Adam Tooze stresses a couple of important points about Ukraine’s current and prospective European alliances.5
Reconstructing Ukraine
One is on EU membership for Ukraine, which would almost certainly have to precede Ukrainian NATO membership. Though officials spokespeople diplomatically avoid putting it so bluntly in public, it certainly seems that the US will expect the EU (especially Germany) will foot the bill for reconstructing Ukraine.
By most calculations, an eventual Ukrainian membership will fundamentally reshuffle the EU’s budget. And no country will more seriously affected by this than Poland, which is decisive for Europe’s relations to Ukraine and also for NATO’s strategy in Eastern Europe. In its boycott of Ukraine’s wheat exports Poland has given notice of how aggressively it will defend its sectional economic interests in any commercial dealings with Ukraine. That is Poland’s current government at least.
And he notes that because of the EU’s structure, spending for new memberships surges especially after accession to the EU:
Right now the EU’s support for Ukraine is already substantial. But all available estimates suggest that it will be dwarfed by the commitments necessary after an eventual Ukraine accession. Those are expected to run into the hundreds of billions whether in direct grants or de-risking of private lending. [my emphasis]
Even a large portion of current assistance to Ukraine is coming in the form of loans, which of course are supposed to be paid back.
Military Keynesianism and Ukraine
Tooze mentions an economic advantage to NATO membership asit is currently practiced. Which is that extending the US nuclear shield over countries via NATO membership reduces the need for conventional military expenditures. Of course, if nuclear war even on a “small” scale actually takes place, the costs of that cheaper option suddenly soar.
But another alternative to NATO membership is also being discussed for Ukraine, currently called “the Israel option.”
Whereas extending the NATO umbrella would provide Ukraine with existential security from the pooled resources of America’s existing arsenal, ensuring Ukraine’s future through military support outside NATO - the so-called Israel option - will entail an itemized bill for Ukraine military-support stretching into the indefinite future. A large part of that bill will have to be footed by the United States. And it is likely to be a lot larger than the bill it currently pays for Israel. …
You might say that the choice is false because the “cost” of supporting Ukraine, as of supporting Israel and America’s other partners, is actually not a cost but a steady flow of lucrative contracts for America’s revived military-industrial complex. The money does not disappear in Ukraine but flows back to the US in weapons contracts. But even if this is the case, it still requires a reallocation of resources within the US that entails political choices. And Ukraine’s base of political support in the US is, one suspects, less deeply and less solid than that for Israel. [my emphasis]
There will be serious challenges after the war is over, a condition that seems very unlikely in 2023. The longer the war goes on, the more physical and human damage will be inflicted. And even if the war ended today, the reconstruction costs will be enormous.
Tooze’s article helps to understand how the various nations involved will be evaluating options going forward.
Tooze also observes about Ukraine’s public griping about the inadequacy of the help its allies are providing: “If it is true that the West has repeatedly and irresponsibly led Ukraine down the primrose path, it is also true that influential segments of Ukrainian opinion tend to run down it.”
Nato summit: Allies refuse to give Ukraine timeframe on joining. BBC News YouTube channel 07/11/2023. (Accessed: 13-07-2023).
Philip M. Breedlove. Wikipedia 07/10/2023. <https://en.wikipedia.org/w/index.php?title=Philip_M._Breedlove&oldid=1164633985> (Accessed: 13-07-2023).
Zelenskyy slams NATO members' rejection of a timeline for Ukraine's accession. DW News YouTube channel 07/11/2023. (Accessed: 13-07-2023).
Arkin, William (2023): Exclusive: The CIA's Blind Spot about the Ukraine War. Newsweek 07/05/2023. <https://www.newsweek.com/2023/07/21/exclusive-cias-blind-spot-about-ukraine-war-1810355.html> (Accessed: 13-07-2023).
Tooze, Adam (2023): Chartbook 226 Membership & Money: the Vilnius NATO summit & the looming impasse over Ukrainian membership in the Western alliances. AT Substack 10.07.2023. (Accessed: 2023-07-07).