Europe must build a war economy, Al Jazeera analysis argues

An opinion article published by Al Jazeera argues that Europe must build a war economy, saying the continent can no longer assume the United States will guarantee its security and needs the financial capacity to sustain Ukraine's defence and its own.

The article, written four-and-a-half years into Russia's war in Ukraine, says the conflict has devastated much of Ukraine's south and east even as the front lines have shifted only slowly, and that for Europe the challenge has never been confined to the battlefield. With US President Donald Trump seeking to force what the author calls a disadvantageous settlement on Kyiv and repeatedly threatening to withdraw US support, Europe faces the prospect of shouldering more of that burden alone.

Wartime finance, built crisis by crisis

The article traces how the European Union has already moved towards joint borrowing for the war. It cites the EU's 18.1-billion-euro ($21bn) share of the G7's $50bn Extraordinary Revenue Acceleration (ERA) loans in 2024, and a new 90-billion-euro ($100bn) loan finalised in April without US commitment. Both were financed by common EU borrowing, but the author describes them as crisis-by-crisis improvisations rather than a standing framework.

Internal divisions remain, the article notes, particularly over constraining Russia. The EU recently adopted its largest-ever round of sanctions listings, but the measures did little to broaden the scope of restricted activity and did not accelerate the phase-out of Russian energy imports, with pipeline gas imports still permitted until autumn 2027. European leaders have also expressed concern over Trump's decision to waive new Russia-related sanctions.

The author points to the US-Israel war on Iran as evidence that Europe's measures against Russian hydrocarbons could have gone further. Before February, about 20 million barrels per day (bpd) of crude and oil products and roughly 110 billion cubic metres (bcm) a year of liquefied natural gas passed through the Strait of Hormuz, compared with Russian exports of about 6.5 million bpd of oil and products in September and some 43bcm of LNG last year.

Frozen assets and Gulf partnerships

Among its proposals, the article backs a standing EU framework for joint borrowing, modelled on the 750-billion-euro NextGenerationEU recovery fund created in 2020, and says deepening fiscal and capital markets union would provide the foundations of Europe's power and its ability to deter and win wars.

It argues that Russia's frozen sovereign assets offer a way to support further borrowing, noting that Belgium, which hosts the lion's share at Euroclear, opposes such a move over fears of Russian legal action and damage to its position in the global financial system. The author says that risk is overblown and should be shared.

The piece also urges Europe to take greater control of its remaining economic links with Russia, citing Austria's Raiffeisen Bank. In 2025, it says, a Russian court ruling led to more than 2.1 billion euros being taken from Raiffeisen's Russian subsidiary to compensate Rasperia, a company tied to sanctioned oligarch Oleg Deripaska, and a Vienna court ruling has now opened the way for Raiffeisen to seek compensation from Rasperia's frozen EU assets.

Finally, the article says Europe should reduce US influence over its foreign and security relationships. It cites comments by US Ambassador to Turkiye Tom Barrack in Qatar that Washington was moving away from its decades-old bargain of security for Gulf oil, and notes that the UK and France are deploying jets, air defences and refuelling support to help Saudi Arabia against Houthi attacks. The author concludes that Europe has the means to finance its own security but must find the will to borrow for it.

Source: Al Jazeera.