Christopher Walker
I’d like to welcome everyone. I’m Chris Walker, Vice President at the Center for European Policy Analysis, and for all the evident reasons, we’re at a point that is especially crucial for Ukraine. And for its part, CEPA has been focused on the steps, measures, and strategies that need to be taken to enable Ukraine’s success over the longer term. And on that count, last month, we were very pleased to release a report titled Wartime Assistance to Ukraine, which looked at both the strengths and weaknesses of such assistance over a period of time leading up to the present. We’re very pleased today to be releasing a new report titled Ukraine 2036, which is designed to offer a road map for the investments that we need to take today to get positive outcomes a decade from now, not only for Ukraine, but for Europe and the wider transatlantic community. And on that count, we’re also so pleased to have a whole host of our fellows with us who’ve contributed to these fantastic reports. I just want to acknowledge the work that they all have done and the team at CEPA to get this rather considerable piece of research to the finish line today, and so, really, congratulations to everyone on that count. So, I’ll just say a brief word about the people we have joining us to do this briefing. We have Marianna Fakhurdinova, Uliana Movchan, Kseniya Sotnikova, Volodymyr Dubovyk, and Ambassador Kurt Volker. And to moderate the session, another CEPA Fellow, Elina Beketova, and I’m going to take the liberty to hand things over to her right now for our discussion. Thank you, Elina.
Elina Beketova
Thank you so much, Chris, and hello everyone. Thank you for joining today’s press briefing on Ukraine. My name is Elina Beketova, and I’m a non-resident Fellow at CEPA. We have a fantastic group of Ukraine experts with us today. Congratulations on the report. So, I will just briefly introduce everyone. Volodymyr Dubovyk, non-resident Fellow at CEPA and associate professor at Odesa University, so it’s probably safe to say that Volodymyr knows about everything, and probably a little more about Odesa, the Black Sea, and Ukraine’s foreign policy. Marianna Fakhurdinova is also a non-resident Fellow at CEPA and coordinator of the EU Ukraine Partnership Program at the Transatlantic Dialogue Center in Kyiv. Uliana Movchan, Ax:son Johnson Fellow at CEPA, focuses her research on decentralization, wartime governance, and political institutions in Ukraine. Uliana is currently an associate professor at Karazin Kharkiv National University, my Ukrainian alma mater, by the way, in the eastern part of Ukraine. Kseniya Sotnikova, also an Ax:son Johnson Fellow at CEPA, brings extensive experience from Ukraine’s security sector and international institutions, including work with the EU advisory mission to Ukraine and NATO’s representation to Ukraine. And finally, we have Ambassador Kurt Volker, Distinguished Fellow at CEPA, who is a leading expert on US foreign and national security policy, and previously served as US Special Representative for Ukraine’s negotiations and as Ambassador to NATO. Thank you so much for joining us, and we’re looking forward to our timely discussion. All the journalists on the call, please feel free to write your questions in the chat, and I will ask those questions. Just to start, I’ll ask a very general question for all of our speakers, just for one or two minutes, to frame our conversations. So, after the Munich Security Conference and the latest talks in Switzerland, much of the discussion about Ukraine’s future focuses on the outcome of the negotiations. Why is it crucial for the transatlantic community and Ukraine to start preparing for reconstruction now, rather than waiting until the ceasefire is in place? Who would like to start? That’s a volunteer question.
Uliana Movchan
Can I just jump in? Thank you. Thank you, everyone, for joining today, and I would like to start with why it’s important to do this now, because a normal scale of reconstruction creates both an opportunity to strengthen democratic institutions and a serious risk of corruption and power concentration if the institutional framework is not ready in advance. So now, we have this window of opportunity, and Ukrainian democratic institutions have already shown resilience during the war, so there is strong momentum now for making them strong and lasting; they must start reforming during wartime, while this window is still open. I would like to point out that there is a clear division of power between military and civil administrations, or divisions of authority across different levels of government, so my core point is that reconstruction success will depend on institutional rules designed now, not after the war ends.
Elina Beketova
Thank you so much, Uliana, and then I will turn it over to Kseniya.
Kseniya Sotnikova
Thank you very much. Building on what Uliana has said, I second that the reconstruction needs are going to be tremendous, so the amount of reconstruction needs for the decades is now way beyond the previous estimate of last year, which was $524 billion, so it gives an opportunity for multiple reconstruction and recovery projects in Ukraine. But we need to understand that legal, administrative, and institutional frameworks are not built overnight, so the preparations need to be done right now while the transatlantic community has Ukraine as a stable economy, a security contributor, and a prosperous country, a source of stability rather than otherwise, and I have to admit that some frameworks for that are already being established. For instance, the International Development Finance Corporation is working with the US-Ukraine Reconstruction Investment Fund, which was launched. The ideas and projects are pouring in, also. The European Union has, and 34 countries have signed, a concept to create an international compensation commission for all the damages done by this war, but diplomatic work needs to go on, so the convention needs to be signed so the commission actually starts working and there are mechanisms and funds for this reconstruction. So, the framework is being established, and a lot of work needs to be put into it to make sure that after the war ends, the reconstruction and recovery processes can be launched as fast as possible. And of course, we need to think about the human capital because no matter how great reconstruction projects are, we need hands and minds to be put into them to make them happen.
Elina Beketova
Thank you so much, Kseniya, and we’ll definitely talk more about the reforms and the needed reforms that Ukraine has to do. But right now, I’m going to turn it over to Volodymyr, another author of the report on Ukraine 2036, and then over to Marianna and Ambassador Volker. Okay.
Volodymyr Dubovyk
Well, thank you, Elina. So, I think that this is a very important initiative led by CEPA. Well, actually, CEPA has been doing a lot of very good work, in my mind, in the last four years, coming up to the first anniversary of Russia’s full-scale invasion, so this report is just another contribution, and I’m happy and honored to be part of that effort. I think it is obvious that Ukraine needs security. Now, it’s not only that Ukraine needs security for itself for its own sake, but it needs security for the sake of greater Eastern Europe, for the entire European security, one might say for the Atlantic security; Ukraine needs to have its place secured, safely and confidently, for the entire continent to feel better. If Ukraine is under threat, if Ukraine is hanging in limbo, then it means that European security is not fully finalized. That’s the first point we’re trying to get across. The second point is that, yes, Ukraine might need some security needs right now, in the immediate future, and then in more of a midterm future down the road, within this 10-year period stretch of time. And right now, of course, our thoughts are entirely on a peace process and negotiation process, and there was another meeting in Geneva that just actually finished today and was running through yesterday. We are not necessarily very optimistic in Ukraine about where it’s leading, but at the same time, we appreciate the efforts of our American partners in pushing Ukraine and Russia to some sort of a consensus. Unfortunately, consensus is far from being found so far. There are still some important sticking points of principle, matters that still differ in positions between Kyiv and Moscow, but we also need to think about what happens when there is a ceasefire, or when there is some kind of peace treaty. If we ever get to that, Ukraine will still be at the mercy of belligerents and realistically Russia, I don’t think that that would change, and therefore would require security in the longer run, in a more strategic way, and that’s what we’re trying to think about, what Ukraine would need, the things that would need to change within Ukraine, and the things that would need to change outside of Ukraine. There are many countries within a coalition of the willing that are helping Ukraine as we speak; the security guarantees are an important issue right now. If anyone asks me what the most important issue is in the current peace process, it’s security guarantees. We can’t really do anything about our future without a firm understanding of what kind of security guarantees are given to us. The algorithm is that we give out something and make more concessions, and then maybe we start talking about some security guarantees. It’s not good for us. So, there is a long road ahead for us in Ukraine, and of course, security includes the hardcore security, the tanks, airplanes, missiles, the entire air systems, but also security for people domestically in Ukraine, which includes them being warm, then getting electricity, but also then continuing to enjoy the fruits of Ukrainian democracy and Ukraine returning to a more normal mode after the eventual end of martial law.
Elina Beketova
Thank you so much, Volodymyr, for emphasizing the security needs of Ukraine, and we’ll definitely dive more into it further in our conversation; it’s just the opening question. So, Marianna, over to you, and then to Ambassador Volker.
Marianna Fakhurdinova
Thank you, Elina. I will try to be short, and I think I will continue the line that was started. I think reconstruction is really important to plan. Kseniya mentioned hearts and hands, who will be doing this, what amounts will be allocated for Ukraine, but now being present in Ukraine, still seeing Russia’s obvious unwillingness to stop shelling of civilians and to stop their further war efforts, I would say at this point we still need to focus on Ukraine’s survival because if there is no Ukraine, there will be no reconstruction, obviously, and I will be happy to later develop a little bit more on the military assistance to Ukraine because, again, as we’ve seen during the past few weeks, the lack of very important equipment, the lack of air defense missiles, led to massive destruction of Ukrainian cities, Ukrainian infrastructure, which, over time, results in huge amounts of money being invested into the reconstruction. Therefore, we believe that it’s much cheaper to help Ukraine protect Ukrainian cities and help Ukraine survive now, so as not to invest more and more and more into reconstruction in the future. So, I would stop here. I would say that it’s important to work and to talk about these issues. It’s important to have people working on these issues. But I would say we don’t need to make reconstruction a central issue, and we need to keep thinking of helping Ukraine to survive in this world.
Elina Beketova
Thank you so much, Marianna. And now, finally, to Ambassador Volker, who has just returned from the Munich Security Conference and can share his views because he has spoken to politicians and policymakers from both continents. So, should we be optimistic or pessimistic in terms of the transatlantic community this year?
Kurt Volker
Thank you very much, Elina, and just on your first question, and everyone else touched on this, but I’ll just address it quickly. We don’t know when the war is going to end, and Ukraine needs to be strong, resilient, and economically prosperous in order to fight and survive the war. So, it needs reform, and it needs as much investment as possible. And second, most people overestimate the degree to which it is difficult or dangerous to do business or to live and work in Ukraine. Yes, Russia fires missiles and drones at night and has killed civilians and destroyed civilian infrastructure, but it is certainly possible to invest profitably and to do business and be in and work with Ukraine today. So, I think we people need businesses and investors to look specifically at geography and at the industry sector and see where there are things that can be done right now which are beneficial to them, as well as to Ukraine, and I think that that can be done. And then someday, I do believe there will be a ceasefire. I don’t believe there will ever be a peace agreement. I don’t believe Vladimir Putin will ever accept that there is an independent and sovereign Ukraine, so that mindset, again, of the West, of governments, of investors, businesses, needs to be one that assumes that we will have a strong, growing, prosperous democratic European Ukraine that is safe and worthy of investment and business growth, very much like South Korea, without a final peace agreement with Russia, that’s just going to be where we are. So, if one adopts that mindset, there’s very little reason to hesitate from investment today as well. Now to your second question, Elina, about the Munich Security Conference, I’ll make a couple of points. One, Marco Rubio came and delivered a speech that was about the civilizational challenges to the West, very much as JD Vance did a year ago. However, Marco Rubio’s framing of this argument was very transatlantic-friendly. It described how both the US and Europe face these civilizational challenges, and we need to address them together. We have always seen the US as linked to Europe, and we want to continue to work together in that way. So, it was a deliberately positive transatlantic framing of the broader message of the MAGA trans-Trump administration, which I take positively. I think that this was Rubio doing his best to put this in the right context because he’s not going to change US policy or Trump’s views, but he can frame them in a way that is more constructive, and he did that. Unfortunately, the European response to this was still one of skepticism and resentment, saying that, well, this is just the same message as last year, and we don’t buy it, and still a lot of pushback from Europe. A couple of other things about Munich that were significant. For the first time, there was a Ukrainian house. This is a regular at Davos, but in Munich, there have been Ukrainian events, but not a venue that is dedicated to Ukraine. That changed this year. There was a full-blown Ukraine house, lots of events and activities going on all the time, high-level discussions; it was a step up, I would say, in terms of the role of Ukraine and the attention paid to Ukraine compared to future years. Second, the conclusion of European leaders, both going into and coming out of Munich, is that they need to do more. This frustration with the United States that I described is real, but it has also led them to say we’re going to have to figure this out more on our own. And indeed, they are doing so more and more, so I take that as positive. And then the final thing is that, following Munich, we have these Geneva talks, which took place yesterday and today, and these are going absolutely nowhere, and the reason they are going nowhere is that no one is pressuring Russia to end the war. Russia continues to wage the war. No one is calling for a ceasefire, as we should be. We should all be demanding an immediate ceasefire. Instead, we’re calling on Ukraine to give up Ukrainian citizens and Ukrainian territory to Russia, which is obviously a non-starter for any political leader. So, Russia is using its demands for more Ukrainian territory and this willingness to keep waging war as a way to pressure Ukraine and divide the US and Europe, and divide the US from Europe and Ukraine in these negotiations. So, Russia is sitting there happily with no pressure and continuing the war. This really has to change. We need to stop telling Ukraine to give up territory and start telling Russia to implement a ceasefire immediately.
Elina Beketova
Thank you so much, Ambassador Volker, and I think it’s very important what you have just highlighted because when you think about Ukraine, we all understand that there are two possible futures, and this is, by the way, what the report Ukraine 2036 is about because, basically, it’s a secure eastern flank anchored by a credible European security presence in Ukraine, or it’s going to be a gray zone at the European Union border that constantly consumes time and resources. And by what you have just highlighted, do not overestimate, meaning that people do open businesses in Ukraine, people live in Ukraine, and people invest in Ukraine. And right now, by the way, Marianna is in Kyiv, so just for all the journalists to understand the reality, we are all in different parts of the world right now, but Mariana is in Kyiv and she can pick up on that later, but just so that we could move to our conversation and more highlighting of the reforms and what needs to be done, I will just hand it over to Kseniya at first and with the question, what policies should Ukraine prioritize now before the war ends, so that it could lay the foundation for a successful post war economy, society, and security architecture, so that it was the scenario number one, where it’s a secure eastern flank, not the second scenario.
Kseniya Sotnikova
Thank you. First of all, I would like to thank Ambassador Volker for mentioning the last point because I fully agree that talking more about Ukraine’s possible concessions instead of talking about Russia’s responsibility is really blurring the lines of any negotiations and steering them in the wrong direction, and it needs to be addressed. Thank you very much. Speaking of when the war is going to end and how we prepare, what policies need to be implemented right now, first of all, Ukraine has been under pressure for a long time to conduct elections. Of course, there will be first post-war elections, but it’s very important to make sure that there is a proper legal framework because the way these elections are going to be held are going to determine democratic legitimacy for years, so lots of work needs to be done right now to make sure that every Ukrainian will be able to implement their constitutional right to vote and to be elected. We are talking about internally displaced persons, about 4.5 million of them, and about 7 million Ukrainians abroad. How are we going to make a proper infrastructure, because no foreign embassy or consulate has the capacity to do it? Also, it’s important to address the issue of, for instance, residence requirements. A lot of people run away from the war, and it needs to be considered whether their right to run for office might be affected by this, so this framework needs to be established right now. There is systemic work in the parliamentary committees for that, several working groups elaborating the draft laws, but a lot of work and coordination is ahead. Second, as I have already mentioned, it’s very important to bring the Ukrainians back, and already now, there needs to be a concise and systemic policy of working with Ukrainians abroad. A lot of them are assimilating there, and not all of them are willing to come back to Ukraine, and it’s not going to only affect the demographic situation and the labor market, but in general, we appreciate and value and need every Ukrainian back to rebuild our country. Another thing is, as we are talking about reconstruction and recovery projects, we need to make sure that there is a proper climate for our investors. Of course, the key concern of the investors is security, but other concerns are, for instance, potential corruption risks, issues with the rule of law, and other obstacles to doing proper business. So, in order to make the climate attractive, some changes need to be made right now. Anti-corruption infrastructure needs to be reinforced, the reforms in the area of the rule of law must continue, and there should be some technical solutions, like offering easier issuance of permits for businesses. And in addition, given the amount of destruction that Russia has caused in Ukraine, a lot of territories could be rethought in terms of their further economic development. For instance, in several regions, we have massive destruction of industrial facilities, so the authorities will need to decide how to rebuild them, whether to rebuild them and where, and prepare for our potential investors the solutions to do that; indeed, some of our international partners are already investing in Ukraine. In Ukraine, for instance, Bryan Metal is going to build some facilities, and the land has been allocated in a more secure region of Ukraine, so this is one example that investments are coming, and I hope many more examples will come. Another thing is its veterans’ policy. Now, Ukraine has about 1.5 million veterans from this war, and this number is only growing, so there will need to be rehabilitation capacities and some retraining programs to help them reintegrate, and stimulus for businesses to hire veterans. And speaking of recovery and reconstruction, the cities will be rebuilt, and inclusivity must be one of the key features there, and those could be one of the interesting and promising projects. And last but not least, speaking of policies, Ukraine should keep working on the diplomatic track, working with international partners, because, only for this year, Ukraine’s budget has more than 27% of GDP for defense, so we are grateful to our international partners for their financial aid that allows Ukraine to pay for social expenses. And this is not going to change overnight, so Ukraine needs to keep working on the sustainability of international assistance to make it work. Thank you.
Elina Beketova
Thank you so much, Kseniya. And by the way, speaking about the elections, we might also talk more about them, but we know that there is a working group right now working on all the issues that you have just raised: people on the front lines, veterans, internally displaced people, and people abroad, because it’s definitely what you have raised. It’s many questions to address at one point, and all the experts say that it’s possible to hold an election, at minimum, six months after the ceasefire, so that is why it’s so important for Ukraine to have a ceasefire, but we’ll talk more about the elections. Just a kind of reminder to all the journalists that you can write your questions, and I will ask the experts, but I’ll just turn it over to Uliana right now because we have heard about the legal frameworks and tasks that Ukraine has to do, but also, how can Ukraine best conduct meaningful institutional reform in the midst of the war? We understand that there are many obstacles to such reforms in this context, so how can Ukraine overcome those obstacles?
Uliana Movchan
Yeah, first of all, I already mentioned, but I also would like to point out that it’s important to remember that actually reform during the war is already happening in Ukraine and wartime conditions actually helped move forward additional reforms, restructuring of key additional governance body, and strengthening of anti-corruption enforcement, and in some cases, who created political urgency that made reform possible that had been blocked like before. So, Elina, about your question of obstacles and what kind of solution we can offer, we can say it in different parts. So, for example, first we have a problem of the balance between civil and governance and military authority that actually has become blurred in some areas, and, for example, local governments lost power in certain regions, but in others, executive authority became more concentrated, and this measure actually helped crisis response, but it weakened normal democratic checks. Another problem, as Kseniya mentioned about human capital, but it’s also institutional pressure and limited human and material resources. So now, we have courts that are understaffed, infrastructure that is damaged, and public administration also works under extreme pressure, and so Ukraine needs to complete key institutional reform, including staff and courts, strengthening the judicial appointment system, building resilience infrastructure, before reconstruction actually creates these massive new legal and economic demands, and also the third problem that I would like to mention is that reconstruction-related corruption risk and the solution to avoid corruption could be maintaining independence and capacity of anti-corruption institutions, by embedding transparency and oversight into reconstruction governance. So, the purpose of the reform now is to make sure that when reconstruction begins, the system is capable of managing this scale and pressure without losing accountability. Thank you.
Elina Beketova
Thank you so much, Uliana, and I’m just going to turn it over to the chat because we have a question from David from the Sydney Morning Herald. Marianna said in her opening remarks that the reconstruction cost will be greater because military supplies from the West are not enough. Is this because of a shortage of air defense and other military equipment that can be shipped from European partners, or is it possible for European nations to do more? Marianna, over to you.
Marianna Fakhurdinova
Thank you, Elina. Well, I would say, yeah, it’s first of all because of the shortage of air defense. The US is the producer of the Patriot systems and Patriot missiles, and is even willing to do more; Europe is unable to substitute those systems produced by the US. President Zelensky was also commenting on this issue: some of the very heavy attacks on Ukraine a couple of weeks ago were made possible by a lack of air defense missiles for Ukraine, so I would say European partners are doing more, much more already since the beginning of this year through multiple initiatives, but again, it’s impossible to substitute. Some of the European partners are procuring weapons from the US through the Pooling and Sharing initiative, but again, with some of the political transatlantic tensions, they might influence the willingness and the desire of some of the European partners to keep procuring something from us. So, that would be my short answer, and I will be happy to dwell more on this later.
Elina Beketova
Thank you so much, Marianna. Ambassador Volker, over to you.
Kurt Volker
Thank you. Regarding air defense, of course, Ukraine needs more air defense munitions on a constant basis to take down missiles and drones that get through, but no one should think that air defense is sufficient. There is no way Ukraine will ever be able to take down 600 projectiles a night, three to four times a week. This is simply not doable. That’s why Ukraine needs effective long-range systems in order to take out missile factories, drone factories, fuel facilities, and platforms that are delivering drones and missiles. This is what needs to happen, and the reluctance of both Europe and the United States to do more on long-range weapons is very frustrating because there is no air defense solution to protecting Ukrainian citizens alone. It has got to be taking out the missile and drone factories that are being used to attack Ukraine as it is, and Elina, I’ll pass it back to you, but I see Paul Adams’ questions. I’m happy to address that too, if you want.
Elina Beketova
Yeah, yeah, I see it. And I would like to talk more about the elections because it’s a very important issue. The question Paul Adams, BBC in Munich, has is that President Zelensky said that he might be willing to hold elections soon, if the US insists. He said that this would require a two-month ceasefire, among other conditions. Kseniya indicated that elections would need a six-month ceasefire first. Do panel members think that Zelensky was being serious, or does he know that the chances of swift elections as early as the spring are probably zero? So, let’s go to Kseniya first, then the ambassador, and then Uliana, Volodymyr, and Marianna. I think we can all reflect on this question because it’s a very important issue. Kseniya, over to you, but like one to two minutes, of course.
Kseniya Sotnikova
Thank you. Well, as a politician, of course, Zelensky has mentioned that Ukraine is willing to hold the election, and Ukraine is willing to hold the election, and a 60 day ceasefire is one of the conditions. But it’s definitely not the only condition. As we have discussed today, there are several subgroups in the parliament that are preparing the legal drafts, and it’s very important to have quality over speed because it’s going to define Ukraine’s fate for years. So, I’m sure that Zelensky and his team are taking this issue very seriously, and while a 60 day ceasefire is a necessary condition, it’s not the only condition.
Uliana Movchan
Yeah, I can also continue on Kseniya’s point that, actually, when we talk about how a ceasefire is not enough, martial law should be lifted to hold elections, and also then we talk about holding a referendum and election at the same time, it’s also prohibited by the current Ukrainian election law. And also, I would like to add that, actually, there is no institutional capacity to hold a democratic election right now, as yes, we have groups that discuss it, but also, there should be political willingness to pass all these laws, so it will take maybe more discussion inside this committee than we think right now. So, this election in six months is not feasible right now with what we have now in institutional capacity. I can also point out so many obstacles, like security, like mining territory, for example, or some possible hybrid warfare from Russia, also election infrastructure, yes, we mentioned today, before that according to central electoral commissions of Ukraine, more than 7,500 premises of polling stations are destroyed, so we also need to think about where people will vote and also about the access of elections. What we mentioned before is IDPs, military refugees; how can they access the voting stations? Thank you.
Elina Beketova
Thank you so much, Uliana. Ambassador, now I will turn it over to you, but just a small remark. You know, I’m from Crimea; I’m an internally displaced person in Ukraine, so for that, I will need to change my residency permit and residency requirements. That’s one law. Then, if I’m abroad – I’m abroad right now – I will need to take another way to vote abroad somehow. So, there are so many questions that Kseniya and Uliana have just pointed out, which means that, yes, Ukrainians are working on them, but I don’t think that it’s going to be very fast to address all these issues, and this is just a small remark, but it’s to understand the case.
Kurt Volker
[audio cutout]…than to have people in occupied territories vote. In fact, they might put even more people there than are there in order to get them to vote, so I would not think that that’s quite the opposite. I think you would have to rule out voting from occupied territories that elections would be for, in territories that Ukraine actually controls. Now to Paul’s question, though, I, and first of all, let me say, I appreciate and agree with all of the problems and difficulties that were identified about holding elections, to hold elections within two months of a ceasefire, and, of course, lifting martial law in order to do that. But according to the Constitution, this will not be a good election by any international standard in the sense of: Is it free? Is it fair? Is the registration right? I have a lot of problems. However, there is also a political imperative for Ukraine, and particularly President Zelensky, to demonstrate that Ukraine is a democracy and that he is a legitimate democratic leader, and I think he is quite sincere when he says that if we have a ceasefire for two months, we will hold an election. It won’t be pretty, it won’t be perfect. He’s pretty confident that he will win. In fact, I’m not even sure any serious competition would even run. It would be more of a referendum or a validation to keep things as they are until there’s a more peaceful situation. But I think he’s very sincere about that because I think he knows that it is being used as a weapon against him in Ukraine to say that there have not been elections.
Elina Beketova
Thank you so much, Ambassador Volker. I just want to be mindful of time. We have another question: why do you think the EU and UK have done so little to improve munitions production despite all the talk of increased spending on defense? I would turn it over to Volodymyr and Marianna.
Volodymyr Dubovyk
Well, I think it’s easy, I mean, there’s a multi-layered answer to it. One is just a legacy of the whole Cold War, peace dividend, when people in Europe, and I would include the UK here in Europe, learned to mindlessly not think about their security, not think that there would be a major security threat, and therefore focus all of their resources and budgets on other things, non-military, non-defense. That’s one thing. Second thing, this legacy and this kind of thinking, relaxed, hedonistic, if you like, is not something that changes fast because it’s really encrusted in your genes, in your political genes, in your political parties talking about it, and the electorate also does not like the idea in some leading European countries. Let’s take Germany as a most vivid example, you know, why should we spend money on defense when we actually can spend it on infrastructure, health care, education, and so on? Another thing is that there was a lot of red tape. Frankly, there’s a lot of bureaucracies, there are a lot of rules that you need to satisfy, like there is one case going around, also about Germany, where a factory was planned to be built in a certain town, but then one guy basically blocked that decision because he said that the noise from construction site would prevent him from having his MIDI meditation, so that’s just one example. But, in a society that is democratic, which is trying to take into account all people’s wills, demands, and needs, it is not easy to move forward. And one more point, maybe, is that people thought that maybe the war between Russia and Ukraine wouldn’t last that long, and therefore, why would we change our mode of operation drastically here? If this is a one-time thing, then we shouldn’t have to repurpose, re-budget a lot of our money, and reallocate a lot of our money. The US factor is important. Clearly, a lot of Europeans said, “Okay, the US is so powerful. They can actually deal with it, and we’ll just help. We’ll provide what we can. We can contribute some minor things here and there.” And that was the case in many ways, in times when Biden was President, when the Ukraine defense contact group was working, and the Americans were actually coordinating everything, and Europeans said, “Okay, but we can also contribute this and that.” But right now, this is not working, so if you’re in Europe, you need to think seriously about that, but that takes time. Also, the pressure, the domestic pressure from the electorate, from people who are saying, “Well, but Ukraine is not winning the war. It’s an endless war. How can we continue to support Ukraine, but Russia is not a threat to us?” A lot of people in Europe think that Russia is a threat to European security in general, but some people don’t think so, and they say as much: “Why should we actually spend billions and trillions on defense if Russia is not going to attack us?” “But listen to Mr. Putin; he says he doesn’t have a problem with Europe, and he’s not going to attack it.” And they say that despite the evidence of this hybrid warfare, Russia is already waging war on Europe. So, there are many reasons, and they’re all known to us, and if you take them all together, that’s a difficult background against which some of the more realistic, pragmatic, and visionary European politicians are struggling to put this on the agenda. But there are some – as Ambassador Volker said – there is some progress in that respect, but just not as fast as we would hope for the sake of Europe and the sake of Ukraine.
Elina Beketova
Thank you so much. Over to Marianna,
Marianna Fakhurdinova
Yes, thank you for this question. I think it doesn’t concern munitions only, but just the military and defense production in general. I would say, first of all, when we speak about EU production, there is no such thing as the EU defense market. EU industries are very fragmented, and that’s the big problem: they don’t trust each other. They don’t want to cooperate. It’s very difficult to align these processes, and in the EU these days, there is the discussion not only on how much we spend on defense, but also how we spend this money, whether cooperatively or separately, etc. Secondly, I would say that opening new plants, new production lines, takes time; sometimes, with all of the bureaucratic procedures, with training the staff, with finding the location, it may take up to five years, so I would say these are also just some of the technical details, a part of the political details, which are all outlined already. Then I would say it’s also for defense manufacturers, for industries, the money and the long-term contracting matter a lot. For example, the long-term contracts from the state matter a lot because if the private company opens new production lines and invests lots of money into the plant, but then in a year or two, there will be no need for the system that the plant is producing, then it would be a failure for the business. That’s not only the problem for the EU, but the same is also happening in the US. Finally, I would say for European states also, as Volodymyr mentioned, the issue of increasing defense spending is the issue of either increasing taxes or taking more debts, and for welfare states, it’s a very difficult choice, and it’s something which politicians are often hesitant to do, also in the view of the potential far right, left, far left parties coming into power. So, politicians don’t want to be too radical, not to lead those countries to come into power.
Elina Beketova
Thank you so much for your points. Marianna. We have another question from Jared, from Diaria. Can the EU keep the support to Ukraine without the US, and how can it put more pressure on Putin to end the war? Ambassador Walker, maybe to you, and then whoever wants to reply, please do.
Kurt Volker
Okay, I don’t see the question. Could you repeat it again? I was trying to read it, and I’m not seeing it.
Elina Beketova
Yeah, it’s at the beginning of the chat. Can the EU keep the support to Ukraine without the US, and how can it put more pressure to end the war?
Kurt Volker
Yeah. Well, look, having US support, whether it’s weapons and ammunition that is sold and provided to Ukraine, or the political push for an end to the war, US support is very, very important, but Ukraine is going to continue no matter what, Ukraine will fight and survive no matter what, and Europe can do a lot and can do a lot more than it is currently doing. As I said, I picked up in Munich a realization among a lot of European leaders that they’re not doing enough, that they need to step in and fill a gap that the US is leaving, so there’s a lot they can do. They can step up their defense procurement for Ukraine more, so now they can speed up this $90 billion loan to Ukraine. They are going to provide a lot of that loan to Ukraine for spending inside Ukraine, so that’ll help the Ukrainian economy and defense industry. They can, in particular, use their export credit agencies to finance things in the energy sector, to make sure that the electricity grid is continuously being repaired and strengthened and made more resilient, and that electricity production is more disaggregated, so it is a harder target to take down. The long-range weapons issue that I mentioned needs to be addressed. Europe has set a 2027 target date for stopping purchases of Russian oil and gas, 100% that should be accelerated to sometime in 2026. There’s no reason to be spending money on Russia while you’re also trying to help Ukraine survive. Turn off the flow of money to Russia, put on secondary sanctions, even without the United States. Secondary sanctions by the EU would be significant to go after those actors that are helping Russia to export its oil and gas, paying them for it, and then turning around refining it and then selling it as their own. That sort of system needs to be shut down, and Europe could help with that, particularly if it were to put secondary sanctions through the SWIFT system. So, there are so many things that Europe could still do that would make a difference, in addition to the fact that the US should be doing more, too.
Elina Beketova
Thank you so much, Ambassador. Volodymyr, you wanted to pick up on this?
Volodymyr Dubovyk
Yeah, I think Ambassador Walker already mentioned quite a few things that the European Union can do, but I would just say that the European Union, surprisingly, has come across in the last four years as a very resolute actor in this respect. We’ve been talking about the EU being a security player or actor for years, if not decades, often disappointed, often calling them a talking shop and doing nothing – a lot of rhetoric and plans, ambitions, but nothing in real life. But what they did in the last four years, I think, is pretty admirable. Not only did they give assistance to Ukraine for energy, for humanitarian assistance, and continue to give that assistance to Ukraine, but they also gave money to Ukraine to buy weapons, which, if you think about the EU – what you knew about the EU 10 or 15 years ago – it’s almost unimaginable; it’s revolutionary. The European Union is giving money to a country that is not part of it. The European Union is forced to buy weapons. But that’s where we are. And of course, particular member states of the European Union are even more active in energy. Of course, the European Union is very, very active. I think the European Union should be bolder in doing more in the Black Sea region, which is very important to Ukraine. What’s going on in the Black Sea, with Black Sea security? The European Union provided a new strategic outlook for the Black Sea last year, but that’s probably not enough. They should be even bolder in terms of supporting Ukraine there, including the grain corridor, many other things that have a relation to Ukraine’s security, trade, and economy. And of course, the European Union was instrumental in hosting millions of Ukrainian refugees; we should also not forget about that. So, I think the European Union has a lot of potential in helping Ukraine even more, and therefore, we can only welcome these talks that we have with the European Union and Ukraine now, which must result in Ukraine perhaps joining the European Union. And there are some rumors and some information about maybe Ukraine joining the European Union before it’s too late, and maybe some different criteria being applied, and that’s a good way to proceed. In that way, Ukraine would be firmly anchored to the European Union, with whatever scenario or optional model of Ukraine joining they would choose and be responsible for Ukraine, and not just in terms of reforms and the fight against corruption and other things, but also in terms of its security, even in the cessation agreement back in 2014 that Ukraine signed after some delay. After the Euromaidan Revolution, there were chapters dealing with security and foreign policy and defense, and that’s what perhaps led Russia to starting its war back then in early 2014 against Ukraine to ruin our chances of going to the West, to Europe in general, to going to prevent Ukraine from going irreversibly from their sphere of influence to the other side, and that’s still an important issue for us. That’s still very important. I mean, with all of the focus on maybe NATO membership, there should also be a lot of focus on EU membership and what it can give Ukraine in terms of security as well.
Elina Beketova
Just a quick question to you, a follow-up, Volodymyr: do you believe that Ukraine might become an EU member in 2027?
Volodymyr Dubovyk
I think it’s possible. I think there are some voices that also say that, well, we have to support Ukraine, but maybe we shouldn’t fast-track it so quickly. It shouldn’t be just around the corner, but it is possible, and it is very important that Ukraine is going in the right direction, whether it be 2027 or maybe a little later. We would prefer to join quickly, but at the same time, if the European Union works with us even more and deeper, even outside of the framework of immediate membership, that would also be very helpful.
Elina Beketova
Thank you so much, Volodymyr. I want to be mindful of time. We have seven minutes left, so probably Marianna, Kseniya, Ambassador, very shortly, because we need to have time for closing remarks.
Marianna Fakhurdinova
Yeah, thank you. I’ll try to be short, just speaking about numbers from the first three years of the full scale invasion, US has supplied Ukraine with and has committed to provide $65 billion of military support to Ukraine, and the EU has committed to provide $65 billion to Ukraine, so it’s a big amount to substitute, actually, but during the last year, the EU has really made a big step, and Ukraine is very appreciative of it. So, we’ve seen several initiatives, such as, again, POOL, as I said, buying weapons from the US, which cannot be substituted, which are Patriot missiles, artillery shells, some armored vehicles, etc. We’ve seen this 90 billion euro loan, which Kurt mentioned, and actually 60 billion euros from that loan will go to the military support of Ukraine and investing in Ukrainian domestic production as well. Then, Europe has been investing in Ukraine’s domestic production through the so-called Danish model, and it was very successful in Ukraine. That’s one of the ways to move forward because Ukraine’s production capacity is expected to grow even more this year and is expected to reach around $64 billion, if I’m not mistaken. But the Ukrainian government, the Ukrainian state, can only fund less than half of this production capacity; therefore, investing in Ukrainian production is also very important, as it is cheaper, it’s sometimes faster, and it’s more relevant to the front line. And then I would say, yeah, we’ve seen the big engagement on the EU side; of course, there are possibilities to do more, and something which hasn’t been mentioned, I would say, is the shadow fleet, and doing some more successful actions in this area; this would be very much beneficial for Ukraine. I would say, despite this big fear that this huge amount of US support cannot be substituted, I think it is much less in Ukraine now because we’ve seen that over the last year, Ukraine still stands, European support keeps flowing, and therefore, there are hopes that Ukraine and Europe will be able to sustain even without the US military assistance.
Elina Beketova
Thank you, Marianna, Kseniya, and the Ambassador. Kseniya, you’re muted.
Kseniya Sotnikova
Sorry, thank you. I would like to mention that we’re talking a lot today about assistance to Ukraine, and Ukraine is extremely grateful for all the help. But I would like to highlight the fact that Ukraine is also a security contributor already. So, for instance, it has already been a year since the launch of the Joint Analysis Training and Education Center at NATO, where the NATO countries are learning from the Ukrainian experience. And just recently, for the first time in history, Ukraine was invited to participate in exercises for member states, only because Ukrainians have experience. Since this war is so valuable, also, the European countries are already benefiting from Ukraine’s cutting edge defense technology, and it’s creating workplaces in Ukraine, like Denmark has recently invested 67 million euros to create a joint production on Danish territory, and there is also a joint venture in Finland to produce drones, and these drones are going to be sold to European countries and NATO members. So, Ukraine is already contributing to the region and transatlantic security and is willing to do more.
Elina Beketova
Thank you so much, Kseniya, for that remark. Ambassador.
Kurt Volker
Okay, two quick thoughts to wrap up. One, I think the European Union is going to reframe the way it goes about membership because of the situation with Ukraine. There is a political imperative to bring Ukraine into the EU as quickly as possible, but the pragmatic side, the practical side of this is that Ukraine is not ready in terms of reform and implementation to be a full-fledged EU member in that space of time. So, what I think they will do is develop a concept, what you might call progressive membership, where you put the point of membership very early in the process, but the closing of chapters and the benefits of being in the EU are wrapped up sequentially over time. The current process is that you go through all of these things first, and at the end of it, you have membership, and even after membership, there are still some things like Schengen or Eurozone membership that come after that. But here, the idea would be to take the point of membership, put it further forward in that spectrum, and then it would be progressive as Ukraine implements reforms in EU laws and regulations that more of the benefits and the participation in the EU would be opened as it goes through that process, but it would have the political effect of bringing Ukraine into the EU sooner. The final point that I’d like to make is that President Trump’s State of the Union address will be on February 24, which is the fourth anniversary of Russia’s full-scale invasion of Ukraine. In that year, President Trump has done a lot aimed at bringing this war to an end. He has gotten Ukraine to agree that it would accept a ceasefire in place and accept that some Ukrainian territory would be occupied by Russia on a long-term basis. He’s established the US-Ukrainian Recovery Investment Fund, the so-called minerals deal, and put money into that. He’s gotten European allies to agree to spend 5% of GDP on defense, which will make Europe stronger and Ukraine stronger. He has gotten a coalition of the willing of European allies to agree that if there’s a ceasefire, they would deploy to Ukraine and help deter future Russian attacks. He has talked about security guarantees, both from European states and from the United States, to deter future Russian attacks. So, he has done all of these things. The one thing that he has not done is put pressure on Vladimir Putin to actually end the war. So, after one year of President Trump in office, having moved this far, he still needs to end the war, and we need to be demanding a ceasefire and putting pressure on Russia to do that as soon as possible.
Elina Beketova
Thank you so much, Ambassador. And I just want to finalize it with closing remarks, but with the question, because we have many journalists online, and they would like to have careful predictions, so if we are talking about the future of Ukraine, and today’s decisions shape whether Europe’s eastern flank will be stable or permanently insecure, so how likely do you think it is that we are actually moving closer to a ceasefire this year? What will be the indicators that we are approaching the ceasefire? That’s the question: the indicators of the ceasefire, and we are closing this session. Who would like to start?
Volodymyr Dubovyk
Well, I think that we’re moving in that direction in many ways. There might be some work on ceasefire done still in the coming meetings, but I would agree with Ambassador Volker that there is more pressure needs to be applied on Moscow and more support given to Ukraine, and that’s not what we seem as realistic these days because, unfortunately, a lot of people in Europe and in the West in general basically say, “Well, if peace is around the corner, then why should we help Ukraine,” which is really hurtful in many ways, including the thinking about the future of security assistance to Ukraine, which would be needed by Ukraine even beyond the ceasefire, or even beyond the peace treaty, to beef up its security. So, therefore, I think more pressure on Russia is needed by both the European Union and the coalition of the willing, and more help to Ukraine is not going to cut it, if you just hope that Mr. Trump and his team would somehow bring it to a close, and then, for you, you shouldn’t contribute anything.
Elina Beketova
Thank you, Volodymyr. Kseniya and Uliana?
Kseniya Sotnikova
I think one of the indicators, politically, we should look at is who is in the composition of the negotiations commission from the Russian Federation. For instance, in Geneva, we saw another change to the previous composition, and it was an indicator that there is a rollback from the Tokyo security parameters to discuss in history, and we have to keep an eye on who is talking, because we practically understand what their focus and line of conversation is.
Uliana Movchan
Thank you, Lina. For me, for now it’s hard to answer your question, but what I would like to add and finish today’s conversation with is that it’s also important to point out that, actually, Ukraine shows the whole world that democracy is possible under extreme pressure, and I think this is also an important signal in the rise of authoritarian regimes across the world. It’s important for broader security and democracy to see that, actually, democratic institutions can survive under war.
Elina Beketova
Thank you, Uliana. Marianna and Volodymyr?
Marianna Fakhurdinova
I would say the ability to adhere to even the short-term energy truces, or like energy ceasefires, which have been discussed multiple times, but never adhered to by the Russian side, if those take place, I think this will be the first indicator that Russia will be eager to adhere to the longer-term peace or ceasefire. Thank you.
Elina Beketova
Thank you. Is the Ambassador with us, online or not really? Not really, alright. Well, guys, I think we had a very nice conversation, and hopefully, everything that we were talking about in Ukraine strengthens its institutions. Europe takes responsibility for security. The United States provides steady support, as Marco Rubio said that the US will always be a child of Europe, and we will see the pressure on Russia so that the ceasefire is in place. I think this is very important. We have come to the conclusion that Ukraine needs a ceasefire. Thanks so much for all your inputs, for your conversations, thoughts, and ideas. I’m just handing it back to Sarah.
Sarah Krajewski
Hi, everyone. Thanks so much for joining this press briefing. We will have a recording and rough auto-generated transcript out to you later today, along with those links to the report that went live this morning and some previous reports and relevant articles. If you have any other questions for our panelists, please feel free to contact press@cepaorg.pages.dev. I’d be happy to put you in touch with anyone, and enjoy the rest of your day wherever it takes you. Thanks so much, guys, bye-bye.
