In fact, months ago, the president asked North Atlantic Treaty Council Organization (NATO) countries for a proposal by each state for putting peacekeeping troops in Ukraine. The Europeans dithered and then expressed consternation that Trump was keeping them out of the negotiations with Putin.

More pertinently, the president suggested that NATO countries increase their defense expenditure to five percent of gross domestic product (GDP). This is a far more realistic assessment of the decline in European capabilities than that which calls for a growth of defense expenditure to three percent of GDP.

The British, French, and Germans all expressed varying degrees of outrage at Trump’s actions including the suggestion by some that he is creating a “Munich”-like outcome in his negotiations with Putin by conceding too much even before the discussions began. The fact is that Trump is playing his cards knowing full well that the Europeans have no plan.

Why Five Percent Is Impossible

When one looks at NATO’s defense expenditure, countries like Canada, Italy, and Spain are below the two percent threshold while France, Germany, and the Netherlands barely cross it.  Yes, countries like Estonia, Latvia, and Lithuania are above the two percent threshold, but they are small nations with populations less than that of Chicago. Estonia has a mere 1.6 million people.

To get to three percent, let alone five, would require NATO countries to add tens of billions to their defense budgets and require cutting the social services that their citizens expect and value. As Politico pointed out, for France, which is one of the voluble proponents of European rearmament, to go from two to three percent of GDP would require Paris to add about 30 billion euros to its defense budget.

Given the country’s budgetary problems that is unlikely to happen. Five percent is a bridge too far. Britain, which is also facing economic headwinds, cannot afford such an increase. In Germany, despite the 100 billion euros committed to modernization, which largely went to refurbish existing equipment that was mothballed, Berlin made it clear it is a long way from substantially increasing its defense budget. Countries like Italy and Spain, given their own economic compulsions, will also find five percent impossible.

The Europeans raise the issue that even if they went to five percent their defense industries are not able to crank up production to meet the demand for new weaponry. That is not the primary problem for these countries. Instead, it is an issue of manpower. Europe is aging and lacks the population for expanded militaries. Worse, as part of the peace dividend, conscription was removed in most countries in the 1990s. This left Gen X, the millennials, and now Gen Z, without any memory of military service.

Reinstating conscription, as seen from the figures below, would be the way to give teeth to European militaries. Compulsory military service, however, is hugely unpopular among the younger generation and a push to draft people would lead to an electoral backlash that few politicians in Europe want to face.

As Table I shows, the major European militaries drastically downsized after the Cold War:

Source: The Military Balance [IISS: London], 1972, 2017, 2023, 2024 editions.

The above figures clearly show that remilitarization would require a major intake of manpower that the European countries would be unable to achieve because of the factors discussed above. Yet, this does not stop them from making bold pronouncements about future militarization efforts. Reality is something else.

The Kiel Institute for the World Economy states the German case of weakness quite bluntly:

The decline in German numbers over the past 20 years is particularly striking: in 2004 Germany had thousands of tanks and infantry fighting vehicles and even almost one thousand howitzers. By 2021, these numbers had come down to the hundreds, as Germany only had 339 tanks and 121 howitzers. The German numbers for 1992 must be interpreted carefully, as they include weapons and equipment from the newly incorporated East German army. Still, when considering the available Leopard tanks, i.e., the West German tanks, Germany had around 4200. The German decline in military stock is thus massive.

Despite all the optimistic talk emanating from Berlin, German rearmament is a myth.  The country’s industrial capability, which is in the doldrums, will not allow it to rapidly militarize. And young people will not join the military in droves as Olaf Scholz and Ursula van der Lyon fondly believe. There is a reason Ukraine has not dipped into its pool of 18–21-year-olds for the current war. It would probably lead to mass flight from the country by younger Ukrainians.

If Europe cannot remilitarize easily and lacks the manpower to build Cold War–level forces, what can it do? The answer is simple. Write checks.

Ukraine requires reconstruction. The World Bank estimated that it would cost around $486 billion, while Zelensky put the number closer to $700 billion. It is a year since the World Bank made its estimate so one can safely assume that in the intense conflict of 2024 the damage to infrastructure may have added another $50 billion to $100 billion to the bill. The Europeans can make a $25 billion a year commitment to Ukraine for the next twenty years to aid reconstruction. This would lead to the rapid build-up of Ukraine’s economy and stop the population from fleeing the war-torn nation.

As things stand, Ukraine’s population is set to decline to around 30 million by 2050 and it will largely be a country of old people thanks to a decline in fertility. If Kyiv stands a chance, it needs a sustained dose of financial aid with no strings attached. A side benefit would be that China would not be the major post-war economic player in Ukraine.

From the European perspective, Brussels can go to Trump and say that yes, we engaged in burden sharing and it would be a lot less expensive than five percent of GDP and far less socially divisive than the imposition of conscription.

Xi Jin Ping suggested Chinese and Indian peacekeepers be inserted in Ukraine. This would change the future security architecture of the region. Russia will be far more comfortable with such a peacekeeping force rather than a crypto-NATO force posing as peacekeepers. It will be interesting to watch how this plays out.

Perhaps most interesting is the fact that Trump called Europe’s bluff. If London, Paris, and Berlin want to be relevant, it is time to write a big check. At least for now, Americans are no longer willing to subsidize Europe’s welfare states.

Amit Gupta is a Senior Fellow of the National Institute for Deterrence Studies. The views in this article are personal.

The European Dilemma: Five Percent and Manpower was originally published on Global Security Review.

The incoming administration may prefer a blend of hard power and transactional diplomacy. An exit strategy for Ukraine and Russia is for both to come across as winners through conflict resolution.

A Russian maximalist position would require Ukraine to lose on all fronts. This means no return of territory; no European Union (EU) or North Atlantic Treaty Organization (NATO) membership. In theory, Russia needs to be incentivized to either give back the territories, and/or allow Ukraine to join NATO and the EU. The latter, however, is the least likely since it was Western encroachment on Russian borders and Ukrainian efforts to join Western organizations that served as Russian justification for their aggression.

In reality, Russia will never return Crimea to Ukraine. Crimean history, for Russia, is a bloody struggle against the Ottomans, making Crimea important to Russian pride.

The normal EU or NATO accession process takes years or decades. Expediting Ukraine’s accession to either will only reinforce Russian fears that the West is attempting to encircle Russia.

Ukraine’s reconstruction represents a serious economic challenge for the West. The United Nations currently estimates the cost of reconstruction at $486 billion. Who will pay for that reconstruction may play a large role in any negotiations.

Previous public statements by Western officials calling for the expedited membership of Ukraine in NATO only provokes Russian recalcitrance, which will be a challenge for Donald Trump to overcome. With Finland and Sweden now part of NATO, the Baltic Sea is a NATO lake that is closed to Russian naval assets. Ukraine in NATO will threaten Russia’s warm-water ports.

Ukraine in NATO is a non-starter for Russia. Keeping Crimea is an important part of ensuring Russian security. An acceptable compromise will require both sides to walk away unhappy while claiming victory. Ukraine may have to accept the loss of Crimea and the Donbass. It may also require an agreement to forgo joining NATO and, likely, the EU. Russian troops will end their aggression against Ukraine and leave. Western states will likely have the unenviable task of rebuilding Ukraine.

The Biden administration’s decision to allow Ukraine to strike Russia with American weapons is not sustainable in the long run, making it difficult for Ukraine to coerce Russia into a “good deal” in any peace talk. Public opinion in Ukraine supports ending the war short of victory. Ukrainians just want the war to end.

The endgame for Ukraine does not stop at Ukraine’s border. The Trump administration is expected to also play a role in protecting NATO member-states near Russia from further aggression. Appearing too weak empowers Russian aggression, while imposing unrealistic conditions will not end the war.

The exact conditions of any deal are certain to include elements that are not strictly related to the conflict’s settlement. For example, European states may agree to purchase American natural gas instead of Russian natural gas. European NATO member-states may also be required to pay for reconstruction.

A return to the purchase of Russian natural gas, Russia’s biggest export to Europe, may serve as a bargaining chip in negotiations, it is easily conceivable that a Trump administration will want payback for previous American support. This may include a much larger position on Europe’s energy and other markets.

Germany, which is heavily dependent on Russian natural gas, will care deeply about such negotiations. Lifting sanctions will be important for Russia and Europe.

The brave new world that is the future of Europe may stand somewhere between a new NATO versus Russia bipolarity and balkanization. Some countries may attempt to play all sides involved. Deterrence may still hold, but European NATO must certainly rearm.

Across NATO, there is an effort already underway to learn the lessons of the Ukraine war. Any endgame must ensure the West is far more effective at making sense of those lessons than are China, Iran, North Korea, and Russia. Developments in cyber, space, drone, and missile warfare are all critical elements of post-war learning.

For the sake of the Ukrainian people, it is time to end this conflict. But it must be done in a way that protects the future of Ukraine while understanding Russian fears. Rightly, Russian President Vladimir Putin deserves the disdain of the free world. Absent the ability to impose a clear victory on Russia, which is a challenge given Russian nuclear arms, a negotiated settlement is the only viable option.

Christophe Bosquillon is a Senior Fellow at the National Institute for Deterrence Studies. He has over 30 years of international experience in general management, foreign direct investment, and private equity and fund management across various industries in Europe and the Pacific Basin. The views expressed in this article are the author’s own.

An Endgame in Ukraine was originally published on Global Security Review.

In both cases, the situation is dire for Ukraine and one that will require considerable external assistance. Such assistance is crucial to maintain the credibility of the West, yet the fear is that once the war ends, so, too, will Western interest—leaving Ukraine with an aging population and a destroyed economy that may not recover for decades. If that happens, the demographic decline of the state will only accelerate as it will provide few opportunities for its younger population who will leave. The West needs, therefore, to come up with a long-term plan to reverse both these interrelated trends.

Demographic Decline

Ukraine’s population is declining and has for some time. The country went from a population of 51.7 million, at the time of independence in 1991, to 43.5 million in 2020. A weak economy with few jobs led to an exodus of young people to other parts of the world, particularly Western Europe. Declining birth rates also contributed to a shrinking of the population with it reaching a fertility rate of 1.23 children per couple by 2019. Ukraine is one of the European countries that was already in serious demographic decline and the war has only exacerbated this trend. By 2023 the population shrank to 34.8 million.

The war led to 4–6 million citizens living in an area occupied by Russia, another 4 million are refugees in the European Union (EU), and another 1 million are spread over the rest of the world. Worse, about 20 percent of Ukraine’s children are now refugees in the EU and there is a big question mark over how many of these children and their parents will return to the war-torn and impoverished nation. Thus, a Ukrainian population that was meant to reach 35 million by 2050 is now expected to further shrink by that year to 30.9 million. As the Census Bureau’s data shows the bulk of this population will be in the age group 55–75, hardly a cohort that can drive economic activity in the country, foster innovation, or attract outside investment.

The Cost of Economic Reconstruction

The economic damage to Ukraine, especially the destruction of its infrastructure, continues to grow, leading the World Bank, in 2023, to estimate that the country would require $411 billion for rebuilding from the war’s devastation. This estimate now tops $486 billion, although the final figure is unclear—given recent attacks on Ukrainian infrastructure. By the time the war is over the cost of reconstruction is likely to exceed $500 billion, a staggering amount for any group of countries to provide in assistance. To put this in perspective, the EU is committing $54 billion over a four-year period to Ukraine—a sum of $13.5 billion a year. Funding at that level is too little to significantly change the fortunes of Ukraine, especially since after the war is over the EU and US may have other priorities. This means upping aid to the level where it has a meaningful effect on Ukraine’s reconstruction efforts and that leads to the other problem.

The EU and US would have to sink roughly $20 billion a year for 25 years into the country. Asking for such a long-term commitment is difficult. Western nations would likely balk at the sums involved and the length of the financial commitment to Kyiv. Further, western public opinion, while overwhelmingly supportive of Ukraine, is likely to lose interest in the minutiae of post-war reconstruction. Supplying arms, after all, is far more compelling and appealing than seeking to rebuild power grids and schools.

One solution is to take the $300 billion of confiscated Russian assets and either transfer them to Ukraine or loan them to Kyiv. The problem with this approach is that it reduces confidence in western financial institutions as secure and safe repositories of foreign assets.  Taking such an action might see foreign investors pull their holdings in the West. Funding Ukrainian reconstruction may, therefore, be costly for the West. But both for demographic reasons and for showing the strength of Western commitment, it is necessary to consider a sizeable and long-term economic package for Ukraine.

Demographically, a Ukraine that shows the prospect of being rapidly rebuilt is far more likely to attract back the millions of refugees who have crossed into other countries. It will also stem the outflow of future populations from the country as jobs and opportunities become freely available. Beginning with the Ukrainian arms industry, particularly its missile and aircraft industries, may be a good starting place. At one point, Ukraine-based Antonov was one of two producers of heavy-lift aircraft for the Soviet Union. Antonov manufactured the world’s largest transport aircraft—the An-225 Mriya. The sole operational Mriya was destroyed in the early days of the attack on Kyiv, but the manufacturing rights and technical data were sold to China in 2016. Rebuilding what Ukraine has a proven talent and capacity for would be the first right step in the path to reconstruction.

A long-term commitment would also show the rest of the world that the West is willing to bear the burden of a decades-long aid process. In doing so, it would signal that the Western alliance does not cut and run when its short-term objectives are achieved. After Afghanistan, for example, trust in the West as a reliable long-term ally reached a low given the manner of the pull-out from Kabul. A sustained commitment to Kyiv would show that the sacrifices made by the Ukrainian people were not in vain.

While the war may continue for a while, it is necessary to develop a solid long-term plan for the economic reconstruction of Ukraine and to line up donors who will fund it over a long period of time. Otherwise, Ukraine’s demographic disaster will only escalate, and the West will be seen as an alliance that does not honor its commitments.

Amit Gupta is a Senior Fellow of the National Institute of Deterrence Studies. The views in this article are his and do not necessarily reflect those of the NIDS. He can be contacted at agupta1856@gmail.com.

Ukraine’s Long-Term Catastrophes: Demographic Decline and Economic Devastation was originally published on Global Security Review.