With the fate of further U.S. support for Ukraine, and thereby the future of the country, up in the air as Donald Trump prepares to return to the White House, the EU wants to send the message to Kyiv that it has its back.
Kaja Kallas, the EU's new top diplomat, was in Kyiv on her first day in office on Dec. 1. In an exclusive interview, Kallas told the Kyiv Independent that "the EU is the biggest investor in the Ukrainian defense industry."
"So 400 million euros this year, 1.9 billion euros next year. This is definitely something that's going to boost the defense industry in Ukraine with the help of the EU," said Kallas, the former Estonian prime minister turned high representative for EU's foreign affairs.
Talking to the Kyiv Independent after a long first day in office, and less than an hour before leaving the country, she focused on three main topics — doing more to support Ukraine militarily and economically, showing the U.S. that supporting Kyiv is in its best interest, and bleeding out Russia's economy to make sure that when the time for negotiations comes, Moscow doesn't have the means to continue its war.
Europe's quest for political will
Kallas' visit, together with that of new European Council President Antonio Costa, was a sign that, at least for now, the EU will attempt to keep Ukraine's economy and military industry in shape.
"I think the investments into the Ukrainian defense industry are very, very welcome because these things are produced here and immediately used as well," Kallas said.
"We are thinking about different initiatives, how we can support and help Ukraine," she added.
In the first public mention of the figure, Kallas said Ukraine had finally received the 1 million shells from the EU, which were badly needed and long overdue.
For a just and lasting peace, for Ukraine, together in a united Europe.@antoniolscosta @kajakallas pic.twitter.com/f9dnSPRl2a
— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) December 1, 2024
"Yes, this 1 million rounds of shells have been delivered, but of course, as we know here, it's not enough, more needs to be done," Kallas acknowledged.
For comparison, Russian factories could produce or refurbish 4.5 million 152 mm shells in 2024, according to a Spring report by Sky News.
With the change in EU leadership chewing up the last months of 2024 and the election campaign in Europe's biggest economy, Germany, set to take up the first few months of 2025, Kallas was not ready to discuss European production in the upcoming year.
"There is no actual number yet," she said. "We need to really speed up the process of producing more."
"There is the political will to do it."
Felix Blatt
Finance Ukraine with help from Russia
Kallas gave a sneak peek at Europe’s strategy going forward — making sanctions against Moscow more effective and using Russian Central Bank assets frozen in the West to keep Ukraine afloat.
"First, in March, the criminalization of circumvention of sanctions will enter into force," Kallas said.
"I think this is a good thing. And a signal to everybody not to circumvent sanctions. But there is so much more we have to do to make sure that the sanctions are really followed," she added.
"What I want to stress is that we also see the sanctions working, but if we concentrate all our efforts on implementing the sanctions properly, we could achieve more results, which is weakening Russia," Kallas said.
"We see their economy in a very dire state."
Oleg Sukhov
The Russian economy has in fact experienced several challenges over the past few months, with a record-high interest rate unable to stop the accelerating inflation, set to hit around 10% in 2024.
The U.S. government's Nov. 21 decision to impose new sanctions on dozens of Russian banks has added insult to injury for the country's economy, with the value of the Russian ruble dropping over 10% within a week, hitting an exchange rate of 113 rubles per $1.
"If you think about the interest rate of the Russian bank, it's 21%. Their national fund is completely depleted. They can't get the revenues from the gas that they used to get. And they have a very difficult situation with the employment market because everything is going to the military industry," Kallas said.
In 2025, Russia will spend around 40% of its budget on the country’s defense sector.
"We shouldn't overestimate the power of Russia. We should not underestimate our own power,” Kallas said, referring to the fact that the EU, with an economy eight times larger than that of Russia, must approach Moscow from the position of strength.
"We shouldn't overestimate the power of Russia. We should not underestimate our own power.”
While in Kyiv, European Council President Costa assured that the EU would continue to provide economic, humanitarian, and military assistance to Ukraine, including 4.2 billion euros ($4.4 billion) to support the Ukrainian budget by the end of the year. In 2025, the EU will transfer 1.5 billion euros ($1.6 billion) to Ukraine monthly, obtained from profits received from the frozen Russian assets.
Costa said those funds can be used for military needs.
"We also need to discuss how we can proceed with the use of frozen assets because it's clear that we have the Russian frozen assets, and it's clear that Russia is causing all the damages to Ukraine, so it should be also Russia that pays for those damages," Kallas echoed Costa's earlier remarks.
It all circles back to US
At multiple points throughout the interview, Kallas mentioned that the EU has been pulling its weight in supporting Ukraine. However, maintaining the current level of support Kyiv is enjoying in case the U.S. decreases its commitments seems hard to achieve.
"Of course, it's challenging, it's clear," she said.
European officials are now attempting to make a case for the U.S. support to continue.
"The EU has been the biggest supporter of Ukraine, and we intend to be so. We also intend to talk to our American allies about why it's in their interest to also invest in Ukraine's security," Kallas said.
"Ukraine aid is not charity, it's an investment into our own security, and in the interest of the U.S. If we look at the bigger picture, we see North Korea, Iran, China, and Russia working together. We see the North Korean soldiers now also recruited by Russia in the fight in Ukraine,” she added.
"So if the U.S. is concerned about emboldening China, then they should first also deal with Russia because, in all the places, Russia is their biggest adversary."
Kallas is adamant that it’s “up to Ukraine to decide” when to hold peace talks, which President-elect Trump’s incoming team appears eager to initiate.
"Right now, it is our obligation to support Ukraine so that it can strengthen its position on the battlefield," Kallas said.
"The stronger Ukraine is on the battlefield, the stronger Ukraine is around the negotiation table."
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