EU-Ukraine: Paying for the War, Missing the Talks

By Nina Bachkatov

For a brief moment, it appeared that the European Union might reconsider its near-total diplomatic freeze with Russia. Yet the discussion barely began before Brussels returned to familiar ground: a new sanctions package, continued military support for Ukraine and renewed commitments to enlargement. The contrast highlights a growing European dilemma. As the costs of war mount, the EU risks financing both Ukraine’s defence and its reconstruction while playing only a marginal role in shaping the eventual settlement.

At their meeting on 27–28 May, EU foreign ministers raised the question of whether the bloc should reconsider the diplomatic isolation imposed on Russia since its invasion of Ukraine. Yet on 8 June, the European Commission announced that it was preparing a 21st package of sanctions. The measures would target banks, cryptocurrencies and drone production, while also introducing a visa ban on all individuals who participated in the war—a historic first.

Meanwhile, on 4 June, the day Hungary’s new prime minister lifted his veto on 6.6 billion funding from the European Peace Facility, President Volodymyr Zelensky published an open letter addressed to President Vladimir Putin. He proposed a face-to-face meeting in a third country—Switzerland, Turkey or an Arab state—in coordination with the EU and the United States. Zelensky appeared to hope that Putin would respond as he did: by inviting him to Russia, a proposal Zelensky had already rejected in the past.

In reality, the message was directed primarily at Ukrainians and their international partners. As Russia launched unprecedented waves of drone and missile attacks against Ukraine, including Kyiv, Ukraine intensified strikes on energy and military infrastructure deep inside Russia and in occupied territories. Zelensky described these operations as “Ukrainian sanctions”. Among the most notable attacks were strikes near St Petersburg on the eve of Russia’s flagship economic gathering, often referred to as the “Russian Davos”, where delegates were photographed against a backdrop of blue skies, historic cupolas and a distant plume of smoke.

EU Motives

Against the backdrop of a prolonged war in Ukraine, growing tensions in transatlantic relations and the wider economic consequences of disruptions in the Strait of Hormuz, diplomacy has re-emerged as a subject of discussion within European circles.

The risk of exposing divisions among member states is real. Equally significant is the prospect that Europe could find itself financing both the war effort and reconstruction while lacking a meaningful role in any negotiations. To avoid this outcome, the EU would need to re-establish at least a minimal dialogue with Russia, ideally in close coordination with Washington.

So far, attempts to reopen channels of communication have largely been left to ad hoc coalitions of member states or to individual national leaders pursuing domestic political objectives. Yet the moment the word “dialogue” entered the discussion, the limitations of the EU’s diplomatic machinery became apparent. Kaja Kallas, the EU’s High Representative for Foreign Affairs, posed a fundamental question: who should engage, and about what?

Kallas may see herself as a natural initiator of such efforts, but she faces growing criticism within parts of the EU following several diplomatic missteps, particularly regarding relations with China. For many member states and Commission officials, these controversies have become more problematic than her strongly anti-Russian stance. Nor does it help that several key portfolios related to the war in Ukraine and European security are currently held by officials from the Baltic states, while Commission President Ursula von der Leyen seeks to reassert control over foreign policy matters. Kallas’s proposal to begin with defining the “what” before addressing the “who” reflects these institutional sensitivities.

Europe’s Limits

The danger is that this process could produce one of the lengthy European debates that culminate in roadmaps rather than concrete diplomatic initiatives.

Officially, the EU is examining possible formats for discussions with Russia, focusing on European security and the conditions for future negotiations. At the same time, it continues to pursue two parallel objectives: adopting additional sanctions against Russia and advancing Ukraine’s accession process, which Zelensky hopes will culminate in the signing of an accession treaty by December.

Zelensky’s open letter reflects confidence in Ukraine’s military capabilities. Yet it also conveys the impression of a leader committing all available resources to the battlefield. Recent attacks on Russian territory have gone far beyond the symbolic operations of previous years. They have imposed tangible economic costs on Russia and affected military dynamics in occupied territories.

At the same time, strikes in occupied territories affect civilian populations that Kyiv ultimately intends to reintegrate. The destruction of four bridges connecting Crimea to the mainland has constrained the movement of troops and military equipment. It has also disrupted energy supplies and the flow of goods on which the daily lives of approximately 2.5 million Crimean residents depend. Tourism, a vital source of income for many families and businesses, has likewise been affected.

Few European leaders have expressed concern as openly as US Secretary of State Marco Rubio, who warned of the risks of escalation following Ukrainian strikes near St Petersburg and on energy exporting facilities. Most European governments have instead hoped that Kyiv would avoid actions that might force them into public criticism—for example, attacks causing significant civilian casualties.

There are also concerns about broader security risks. Ukrainian drones have occasionally entered NATO airspace en route to Russian targets, creating potential complications for alliance defence planning. Similar concerns have been raised regarding missile activity in the Black Sea. Incidents involving commercial shipping have so far been played down by shipowners and by Turkey, while environmental risks associated with attacks affecting maritime infrastructure have also attracted attention.

Small Is Beautiful

Recent statements by both Putin and Zelensky suggest an acceptance that the war could continue well into 2027 or even beyond. Meanwhile, Europe’s separation from the Russian market, the effects of secondary sanctions, fragile governing coalitions and increasingly difficult budgetary trade-offs are adding to the global economic consequences of conflict and instability in the Middle East.

These pressures strengthen the case for a more active European role in diplomatic efforts. Such engagement need not be incompatible with continued military support for Ukraine. The risk is not only that Europe pays the financial costs of war without influencing its outcome. It is also evident that time encourages the gradual privatisation of functions that were historically among the core responsibilities of the state: defence and foreign policy.

Few military specialists believe that the precision of recent Ukrainian operations is solely the result of domestic innovation. Ukraine’s leadership has cultivated close relationships with technology firms and start-ups across the West, while the rapid expansion of the country’s defence sector has created substantial commercial opportunities.

The role of private actors has become increasingly visible. Executives from major technology and defence companies regularly visit Kyiv. Elon Musk’s influence remains significant through Starlink, which played a critical role in Ukraine’s military operations during the early stages of the war. Decisions regarding access to such privately controlled infrastructure can have strategic consequences on the battlefield.

Given the growing influence of large corporations on US policymaking—visible from the Gulf to Latin America—the question is how long the European Union can remain on the platform waiting to board the train, despite having already paid for a first-class ticket.

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