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Should the US permanently end its financial and military support for Ukraine, European states could fill the gap in many areas or even overcompensate. A new analysis by the Kiel Institute for the World Economy shows that this would be possible with relatively little additional effort, particularly in the financial sector. Replacing American weapons and ammunition assistance is more difficult, but here, too, Europe could deliver in important areas. There is currently no substitute for US military intelligence.
Read Kiel Policy Brief now: Ukraine Aid: Europe Could Replace most of US Support (https://www.ifw-kiel.de/publications/ukraine-aid-how-europe-can-replace-us-suppo...)
European governments currently spend an average of just 0.1 percent of their gross domestic product (GDP) per year on bilateral aid to Ukraine. To compensate for the US support, the contribution for all states and EU institutions would have to rise to 0.21 percent of GDP—a level that Baltic and Scandinavian states already significantly exceed.
In absolute figures, this means an increase in European aid from the currently 44 billion euros per year to 82 billion euros. The EU institutions (increase from 16 to 36 billion euros), Germany (from 6 to at least 9 billion euros), the United Kingdom (from 5 to 6.5 billion euros), France (from 1.5 to 6 billion euros), Italy (from 0.8 to 4.5 billion euros) and Spain (from 0.5 to 3 billion euros) would be particularly in demand.
“For individual states, this means a very significant increase in their aid to Ukraine, so the EU should provide incentives, for example, through prioritized access to new EU defense funds. If all of Europe followed Denmark's example and mobilized 0.4 percent of GDP annually, we could even significantly overcompensate for US aid,” says Trebesch.
Military challenge: expand production and use alternatives
Taking the previous aid as a yardstick, the greatest dependence on US weapons currently lies in rocket artillery (e.g. HIMARS, 86% of which came from US production), ammunition for howitzer artillery (over 80% US production), and long-range air defense systems (e.g. Patriot, 70% US production). In other areas, including howitzers and main battle tanks, most of the weapon systems supplied already come from European production.
Replacing US military aid is a major challenge. To do so, European industry would have to ramp up its production quickly and significantly. “Europe has long since stopped just supplying from existing stocks; it now orders most of the weapons for Ukraine directly from industry. This process must be significantly accelerated through firm procurement commitments, particularly to produce ammunition for howitzers,” says Trebesch.
To replace critical US systems and their ammunition (notably HIMARS and Patriots), Europe could turn to the international market. It could also purchase comparable systems such as the South Korean K239 Chunmoo or the Israeli PULS system. At the same time, Europe should invest significantly more in the production and further development of European alternatives such as the SAMP/T system.
Furthermore, European governments could order weapons directly in Ukraine according to the “Danish model”. This applies particularly to drones, for which the country has built an extraordinarily innovative and productive industry.
“If we in Europe are too slow to move forward with arms production, we could alternatively invest in Ukraine itself. In the process, important know-how can flow back to Europe.”
One of the biggest remaining challenges, according to the analysis, is the replacement of US military intelligence. Europe has so far lacked the capacity to do this quickly.
Read Kiel Policy Brief now: Ukraine Aid: Europe Could Replace most of US Support (https://www.ifw-kiel.de/publications/ukraine-aid-how-europe-can-replace-us-suppo...)
Media Contact:
Mathias Rauck
Chief Communications Officer
T +49 431 8814-411
mathias.rauck@ifw-kiel.de
Kiel Institute for the World Economy
Kiellinie 66 | 24105 Kiel | Germany
Chausseestraße 111 | 10115 Berlin | Germany
T +49 431 8814-1
E info@ifw-kiel.de
www.ifw-kiel.de
Prof. Dr. Christoph Trebesch
Vice President and Director
International Finance
T +49 431 8814-577
christoph.trebesch@ifw-kiel.de
Us aid dependency by type of weapon (2022–24)
What is needed to replace US aid (0.21% of GDP per year Europe-wide)
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Us aid dependency by type of weapon (2022–24)
What is needed to replace US aid (0.21% of GDP per year Europe-wide)
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