Matthew Gordon-Banks

Mad panic in the West over Kyiv

The United States Government and the UK Government are panicking about running out of money to ‘keep Ukraine afloat’. Setting aside the deteriorating weather and the military situation, Kyiv (Kiev) is kept afloat largely by US taxpayers who are paying a huge amount of money to pay for everyday expenditure and salaries of Ukrainians. One former colleague tells me it is about £50bn a month. I do not know. The actual statistics for the US are frightening. Their unfunded debt is rising by about $1trillion a month. Their total debt has passed $333trillion. All this adds to inflation and there is a view that official statistics are being massaged. They desperately need to cut expenditure or raise taxes.

In the UK, former Defence Secretary Ben Wallace asked Prime Minister Sunak for an additional £2.3billion before he left office. Sunak drew the line and said No! UK is already paying over £100billion a year on interest payments alone on its national debt and the money Wallace wanted would have had to be borrowed. On top of all that, senior UK military voices are saying that we have nothing left to send to Ukraine in terms of military kit. This of course is all before you even consider the impact of the Israel-Gaza conflict.

So now intelligence and diplomatic sources are briefing that the UK and US are putting some pressure on the European Union to allow Ukraine to join the EU speeding up a process that, even if agreed, could take years. We are running out of money so they want the EU to pay more both in cohesion funds and funds for weapons. In this regard the decisions of the informal 3rd European Political Community Summit in Granada a few days ago is instructive. I will return to this in a moment.

Covid, the cost of living crisis, over-spending on war, especially by the United States, and much else has led to a very serious economic climate in Europe and in America. Elsewhere in the world things are not easy either, for a wide variety of reasons. The printing of money is risking disaster across the European continent and the financial situation in the United States has led to strife in Congress; which could get even worse.

Only this week the International Monetary Fund (IMF) has warned that European central banks could end up with heavy losses over the next two years as a result of problems in the Bond market. Large losses of around £50Bn-EUBn 55 may be seen, they say, and that the Bundesbank could be worst hit. The European Central Bank bought Euro 5trillion of bonds during the covid and eurozone crisis trying to support economies and it was financed by printing money. The UK is also experiencing difficult times and it is going to take a long while for things to get better.

So, officials in the US and UK, who have actually been driving the conflict from the Western perspective, seek to get EU money to bail Ukraine out. Brussels in the form of von der Leyden and Borrell have announced their intention to make Ukraine a full member of the European Union in less than seven years. Frankly, it is perfectly possible that in a shorter time-frame there may be no Ukraine left to join. However, it is all part of their big plan to include the Western Balkans.

To say that Kiev’s potential accession to the EU had started a significant debate would be an under-statement. A leaked memo of internal analysis, no doubt leaked by a country concerned about the prospect, stated that £161billion would be the cost of turning some countries into net-payers for the first time looks like an understatement as well. If Ukraine joined it would take all the cohesion funds for things like agriculture that the EU has; with smaller countries like Lithuania losing out. I do not see how Ukraine in any way meets the genuine criteria to join; but that will not worry von der Leyden.

The budget battle on Capitol Hill and the removing of aid to Ukraine from the budget in order to stop a US Government shutdown is crucial. Many commentators in UK and US simply blame “Trump’s people”, but the racking up of serious debt in the US is causing concern. It is unsustainable! That is aside from the issues of bleeding areas of the US domestic economy of finance. Of course I know full well that there are some in the US who say they are spending too much on NATO and the Europeans are not pulling their weight. This argument and concerns expressed on this side of the Atlantic are frequently made by the absolutely huge number of people who have a vested interest in talking up the Russian threat because their jobs, salaries or profits depend on it; as, too, so many in Congress are funded by the Defence industries of America. Quite a few Think Tanker’s rely on that money too.

The reality is, that even before the Hamas strikes in Israel which have completely altered the world dynamic, Ukraine has almost run out of soldiers to fight, ammunition to continue the fight and the West is economically and militarily exhausted in helping them, that by the end of this year the Ukrainian ‘offensive’ is over and not to be resumed.

It is time for the Ukrainians themselves to accept a need to negotiate and for western leaders to encourage this. I have said all along that there are two sides to the conflict in Ukraine. Most of the time in UK only one side is heard. By not listening to intelligence Israel has been caught off-guard. By not recognising the long time concerns of Russia about its security the US, aided by Britain, have allowed a senseless war to start simply to try to cut down the Russian Federation a peg or two; and look what has happened. The arguments were largely sorted by Minsk, later it was largely sorted by the Russians and Ukrainians themselves with the help of Turkey; and then Boris Johnson arrived in Kiev as the conduit of Washington.

If Ukraine was collapsing before Hamas struck Israel, it is sure collapsing now. Ukraine is of little strategic importance to the US, but conflict in the Middle East is entirely a different matter. Militarily, politically and economically a peaceful Middle East is vital to the whole world.





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