7.2.1 Distribution of costs by country
In the previous section, we found needs of Europe to fund 258-419 billion euros in 2026, less funding from other allies, and cost savings. European governments must fund almost all Ukraine’s needs for civilian and military assistance. This speaks in favour of confiscating frozen Russian assets, or applying more of them as collateral for loans to Ukraine. Another opportunity opens when European countries’ support for Ukraine’s defensive war is likely to be partially covered under the NATO’s target for military spending. This implies that support to Ukraine will, to a considerable extent, entail costs that in any case would have to be spent on military defence , rather than crowd out other budget items. In 2025, Europe has a value creation (GDP) of about 22,500 billion euros, compared to Russia’s almost 2,000 billion euros.197 This means that when Russia increases military spending by 1% of GDP, Europe
may match that rearmament by allocating only 0.1% of its GDP.
[…]
Military spending of 3.5% of GDP is equivalent to the current level in the United States, Poland, Estonia and Greece, but would imply a significant increase for many European countries. Several countries have a backlog of pledged support that has not yet been allocated, equalling up to 160 billion euros.200 This testifies to challenges with the capacity to convert budgeting into actual investments and arms deliveries, or may indicate spending scope. For many countries, Ukraine support may be the most appropriate and strategically sensible channelling of defence appropriations in the coming years. Further, much political
controversy over support to Ukraine has been avoided by providing EU-level support as loans.201
We assume that individual countries in Europe will compensate for the loss of US support and that the EU Commission will maintain its joint support schemes with 19 billion euros, so that individual European countries will have to bilaterally donate 239 – 400 billion euros in 2026. Bilaterally, Northern countries have so far donated 87.5 billion euros and other European countries 7 billion, i.e. the shares of donations are distributed 93:7. Northern Europe has much higher value creation (16.380 billion euros) than Southern Europe (6.090 billion euros). With the same distribution as before, countries in the north must increase their support by 195 – 346 billion euros in 2026, while southern countries must raise support by 15 – 26 billion euros, but with considerably lower costs in the following years after a Ukrainian (partial) victory and a favourable peace agreement.