Trans-Atlantic ties face Trump threat

Quietly hitting back at the US for its claims of Europe ‘decaying’ and its leaders ‘weak,’ the EU indefinitely froze $246 billion of Russian assets held by it. This offset President Donald Trump’s Ukraine peace plan and prevented Hungary and Slovakia, nations close to Russia, from vetoing further rolling of the freeze. This decision has angered Moscow and Washington. The recently released US National Security Strategy (NSS) had mentioned, “We want to support our allies in preserving the freedom and security of Europe, while restoring Europe’s civilizational self-confidence and Western identity.”

Moving further, it blamed the EU for “undermining political liberty, sovereignty, migration policies, censorship, suppression of political opposition, loss of national identities and self-confidence,” adding that “the continent will be unrecognizable in 20 years or less.” This was not the end of the tirade. In an interview to The Politico, shortly after release of the NSS, Trump lambasted European leaders by stating, “I think they’re weak,” adding, “But I also think they want to be so politically correct. I think they don’t know what to do. Europe doesn’t know what to do.” The President of the European Council, António Costa, responded by stating, “Allies do not threaten to interfere in domestic political choices of their allies.” He believes that the US and EU do not have similar views on the international order.

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Others generally ignored the comments. Trump is so caught up in his MAGA (Make America Great Again) campaign that he believes that he alone can ‘Make Europe Great Again.’ His assumption is that Europe is unlikely to increase its defence spending to 5 per cent of its GDP by 2035, of which 3.5 per cent would go towards military capabilities and the balance towards cyber and infrastructure. Spain was the first to turn down this demand. In retaliation, Trump threatened Spain with additional tariffs and expelling it from NATO. The anger of Trump is largely directed against the EU, rather than NATO, as it has displayed unity in standing alongside Ukraine against his peace plan for concluding the Russo-Ukraine conflict, thereby denying him the Nobel Peace Prize.

The US will covertly work to break the EU in the coming years, by cozying up to Italy, Hungary, Poland and Austria. In addition, there was the issue of frozen Russian funds. On the EU rejecting his peace plan, the NSS mentioned, “This lack of self-confidence is most evident in Europe’s relationship with Russia,” adding, “The Trump Administration finds itself at odds with European officials who hold unrealistic expectations for the war perched in unstable minority governments, many of which trample on basic principles of democracy to suppress opposition.” Last week, leaders from Germany, France and UK met with Zelenskyy, the Ukrainian president, and offered support against Trump’s plan which involved Ukraine handing over territory to Russia as part of the peace deal.

A frustrated Trump mentioned in his Politico interview, “They talk, but they don’t produce, and the war just keeps going on and on.” After a joint call with heads of state of Germany, France and the UK, Trump tweeted, “we discussed Ukraine in pretty strong words.” European leaders have sent an updated plan for ending the conflict to Trump. Zelenskyy subsequently held a virtual discussion with leaders and representatives of 30 nations (part of the coalition of the willing) to gain support against Trump’s proposal. Facing corruption charges, Zelenskyy is under pressure from Trump to conduct elections, which he has banned under the pretext of the conflict.

On this, Trump mentioned, “they (Ukraine) talk about a democracy, but it gets to a point where it’s not a democracy anymore.” Zelenskyy offered to hold elections, provided it was provided guarantees by the US and Europe that elections would go unhindered by Russian actions. On Russia’s frozen funds, the US was pressurizing EU nations against utilizing these funds to back future loans to Ukraine. The US believes that such an action would prolong the conflict and reduce chances of a peace deal. Russia claims that the funds are approximately USD 300-350 billion, comprising of bank accounts, securities, real estate and yachts, but has not provided details. Most of it is in Europe with a majority controlled by Euroclear, a central securities depository in Brussels. The US controls just about $5 billion. The EU believes that “the US can only decide about assets held in its own jurisdiction.” Russia is also critical of the EU’s plans.

Belgium believes that exploiting frozen assets to loan funds to Ukraine could result in litigation. There are already multiple cases, ongoing in Moscow, against the EU’s freezing of Russian assets. Trump’s counter proposal includes $100 billion of frozen assets being employed for “US-led efforts to rebuild and invest in Ukraine”. Europe would contribute a similar amount from its own resources. The balance funds would be invested in joint US-Russia ventures aimed at “creating a strong incentive not to return to conflict.” The US plan envisages benefitting US companies, its government and Russia. Europe’s counter proposal is to exploit these funds for loans for sustenance of Ukraine as also its reconstruction.

An added irritant is EU imposing a $140 million penalty on Elon Musk’s X platform. Trump’s initial reaction was that the fine was ‘nasty.’ He added, “Europe has to be careful. It is going in some bad directions.” The EU is targeting Elon Musk’s Blue checkmark system, which enables “manipulation by malicious actors.” Other US tech giants are also on the EU hit list. Trump only responds to strength. He was forced to accept China as a p e er basically because of its stranglehold on rare earth minerals. Trump seeks rapprochement with Russia and an economic rebalancing with China. On the contrary, he considers Europe as weak and hence attempts to bully it. The NSS also highlights, “We will no longer tolerate, and can no longer afford, free-riding, trade imbalances, predatory economic practices, and other impositions on our nation’s historic goodwill that disadvantage our interests.”

Evidently, under Trump, the US will link all relations with allies based on trade. Europe in Trump’s opinion is incapable of defending itself and piggybacks on the US. By threatening Europe on security, Trump is able to push his agenda forcefully. European leaders are aware of reality and hence have little choice as their own military power is low, while they believe the Russian threat looms large. The EU will fight back but how firm it remains under Trump’s threats is to be seen.

(The writer is a retired Major-General of the Indian Army.)