A peace on Russia’s terms will create a financial trap for Europe – Reuters analysis

A truce may cost Europe too much

Discussions about a possible ceasefire between Ukraine and Russia have intensified in recent weeks, but along with them, warnings from analysts are growing. In a Reuters column, expert Pierre Briançon emphasizes: peace “on Russia’s terms” will create a long-term financial trap for Europe, while strengthening Moscow.

The main point is simple: almost all truce proposals from the US and European politicians imply the actual retention of territories captured by Russia. This forms a zone of constant uncertainty, which can pressure the European economy for years.

Frozen $300 billion of Russia — an issue the world will not resolve

Approximately $300 billion of Russian reserves are frozen in Western countries’ accounts after the start of the full-scale invasion. EU leaders would like to use these funds for Ukraine’s recovery, but Reuters notes: there is no reason to believe that Putin will ever come to terms with their loss.

The idea being discussed today in the EU is the use of about $210 billion of the Russian Central Bank’s assets as guarantees for a “reparations loan” to Ukraine. But for this scheme to work, decisions are needed quickly. Any hasty “peace” could lead to the unblocking of assets — and then Europeans themselves will have to pay.

Ukraine’s recovery is becoming more expensive — and investors risk leaving

A year ago, the cost of Ukraine’s recovery was estimated by the World Bank at $524 billion. Today, this figure is already approaching $600 billion, and the trend is clearly upward.

But more importantly:
If the status of the occupied territories remains “blurred”, private investors will not come to Ukraine.
No fund will invest where there is a likelihood of a repeat invasion. This means that most of the financial burden falls on EU states.

A fragile status quo will force Europe to spend more on defense

If an “unstable truce” is established, Europe will face the need to:

• increase defense budgets faster than planned;

• strengthen the security of countries bordering Russia;

• consider that conceding to Russia creates a precedent dangerous for the entire continent.

Lifting sanctions will revive the Russian economy and accelerate rearmament

According to Reuters, the initial version of the discussed truce included a point on the partial lifting of US sanctions.
For the Russian economy, which has been operating in a military mobilization mode for three years, this would become:

• a powerful respite,

• a stimulus for industrial recovery,

• an opportunity to quickly accelerate army rearmament.

In other words, Europe will only gain temporary peace, and in a few years — a stronger and more aggressive Russia.

Conclusion: “quick peace” is a deferred threat to Europe

A truce on Russia’s terms will indeed lead to a reduction in losses here and now. But in the long term, Europe will face:

• a financial vortex,

• weakening of Ukraine,

• restoration of Russian military capabilities,

• a real risk of a new conflict.

This is why economists and analysts warn: concessions to Moscow could turn into a strategic mistake for the entire European continent.

This topic remains key in the editorial agenda of «NANews — News of Israel | Nikk.Agency».