Burden of Ukraine Funding May be Passed Onto Europe
18:59 GMT 05.02.2024 (Updated: 19:17 GMT 05.02.2024)
© Sputnik / Anton Denisov
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US House Republicans' opposition to the Senate's border security and foreign aid bill puts the $60 billion Ukraine package in jeopardy, with the Kiev regime running out of money. So who will fund Ukraine now?
Republican House Speaker Mike Johnson has made it clear that if the US' bipartisan border security and foreign aid bill reaches the House, it will be dead on arrival.
The "compromise" legislation negotiated by top Republicans and Democratics was meant to ram the Ukraine and Israel funding through US Congress while appeasing conservatives concerned about the worsening border crisis.
However, it appears that the trick has not worked. While the House GOP is due to vote on a standalone Israel funding bill, the future of the Ukraine package is hanging in the balance, further delaying the flow of money to the Kiev regime and the Ukrainian military.
According to financial and geopolitical analyst Tom Luongo, it's hardly surprising that House Republicans see the Senate border bill as toxic.
"That should be obvious," Luongo told Sputnik. "War in the Middle East, Ukraine, and China has been on the drawing table of the globalists in the Biden administration for decades. To them, this isn’t negotiable. Our job to them is to secure their preferred future of technocratic control over Eurasian and African resources. But for House Republicans, they are now seeing the fiscal cliff we are approaching and realize that if we don’t stop this type of reckless spending there will be no future US. They are representing the people who put Mike Johnson in power as speaker. The money going out to fund wars abroad undermines the work the Fed is doing to rebuild America at home."
Meanwhile, Ukraine has been looking forward to US authorities passing the bill since December, seeking to replenish its weapons stockpiles that have been depleted during the botched counteroffensive. Even though the Kiev regime is due to get some money from the EU after the bloc managed to approve a €50 billion ($54 billion) package, this money (which will come in parts over the coming four years) is just a drop in the ocean, according to Sputnik's interlocutor.
"Ukraine just got a lifeline from the European Union after Hungary’s Viktor Orban finally succumbed to the worst arm-twisting I’ve ever seen from them," Luongo said. "But that money from the EU will barely pay the administrative costs of the current Ukraine government, no less the war effort against Russia."
"So, Ukraine needs the US to come in with pledged support monetarily which dovetails with the security agreements Ukraine is signing, first with the UK last month and soon with Germany, later this month. The money has to be in the pipeline now so that when these agreements trigger a NATO response it can be effective. Block the money, you neutralize these agreements," the expert continued.
Ukraine and the UK signed a security agreement on January 12, with France and Germany reportedly planning to follow suit. The Ukrainian-British agreement says that the UK "undertakes" to "provide Ukraine with swift and sustained security assistance, modern military equipment across all domains as necessary" in the event of "future Russian armed attack against Ukraine."
As per the Frankfurter Allgemeine Zeitung, the Ukraine-Germany security deal "should be signed on February 16 during the Munich Security Conference." German Chancellor Olaf Scholz and US President Joe Biden are due to meet on February 9 at the White House to "reaffirm their resolute support for Ukraine’s defense," according to the White House press release. They "will also coordinate in advance of the NATO Summit in Washington." Apparently, they may discuss the Ukraine-Germany security deal during the meeting.
"Scholz has already tipped his hand with the report that he's going to sign a security agreement with Ukraine," Luongo said. "Biden and his team want this as well. These are moves being made to force the Fed to turn the money spigots back on by lowering rates, ending Quantitative Tightening which will allow Congress the leeway to finance both the debt rollover and new war spending into 2025-26."
"Europe wants war with Russia, they just don’t want to fight it. They want the US to do so. That’s their path to victory in the long run. They are all more than willing to sacrifice not just Ukraine but the US and everyone else they can in the process," the financial analyst continued.
However, in addition to the backlash from House Republicans, the Biden campaign's odds don't look good as the 2024 election nears, which suggests that Team Biden won't be able to continue its spending spree.
Without "generous" US funding, the UK and Germany's security agreements with Ukraine wouldn't work, per the observer. The European countries simply cannot bear the whole burden of military action given that Germany is on track for recession with prices remaining high and de-industrialization dragging the economy down.
For its part, the UK is in no better shape, with the Organization for Economic Cooperation and Development (OECD) projecting the nation to suffer the highest inflation rate among G7 economies in 2024 and 2025. Meanwhile, the Eurozone economy is struggling to get back on track.
"Europe is still acting like they have a structural advantage over the US economically which is a delusion," Luongo explained. "They can only be right in acting this way for two reasons. They either believe the 'fix is in' in the US where their sympathizers at the top of the US political system are going to prevail in the long run spending all US capital – political, economic, cultural – beyond repair."
"Or they are simply ‘faking it to make it’ because they have no other strategy than to hope the US self-implodes thanks to warring factions within the US hierarchy. The key then is to watch whose central bank cuts rates first – the European Central Bank or the Federal Reserve. The first one to cut will lose their credibility with capital markets, which supports the other," he noted.
Under these circumstances, it appears that Ukraine has no other choice but to tighten its belt and bite the bullet. It doesn't have enough means to fight and has to replenish its troops. The ongoing power struggle in Kiev indicates that the Ukrainian elites have found themselves in dire straits as money is running out.
