World leaders are meeting for a Nato summit and Ukraine is top of the agenda. Ukrainian President Volodymyr Zelenskiy is calling for accelerated accession as the only way to strengthen Ukraine’s position ahead of ceasefire talks that are widely expected as soon President-elect Donald Trump takes over in January. But despite the rhetoric of Ukraine “irreversible” accession to the security alliance, Ukraine’s chances of being offered membership are virtually nil.

The new Secretary General Mark Rutte is in the front line but dodged the question when asked when will Ukraine join. Instead he said NATO members must focus “more on delivering weapons to Ukraine” or debating possible scenarios for peace with Russia.

"Ukraine doesn't need more ideas on what a peace process could look like," Rutte said, avoiding the question of Ukraine accession entirely.

There will be no immediate decision on Ukraine's Nato membership, Rutte told Deutsche Welle. Some members still insist that an invitation cannot be extended as long as Ukraine is at war with Russia, Rutte clarified.

Instead, the main line most Ukraine allies are taking is to pump more weapons into Ukraine so that it can better protect itself, ignoring the fact that the standard policy of supplying Ukraine has been “some, but not enough” weapons since the start of the war.

EU foreign policy chief Josep Borrell admitted openly earlier this month that the EU has failed to provide Ukraine with everything it needs. The EU had allocated €122bn in aid to Ukraine since the start of the war including €45bn in military support. "But we have failed to provide Ukraine with sufficient resources to protect it from constant air attacks on its civilian and energy infrastructure," the diplomat noted.

Moreover, both Borrell and French President Emmanuel Macron have warned that the EU “might collapse” next year as Russia’s allies continue to flourish and undermine the Western pre-eminence in geopolitics, with Borrell specifically pointing to the number of Global South  countries that flocked to the Russian-hosted BRICS summit in Kazakh in November that are building an active anti-Western bloc.

Nevertheless, the new chief of EU foreign policy chief, former Estonian Prime Minister Kaja Kallas, a Russia hawk, continues to take a hard and uncompromising line that is out of kilter with many in the EU.

Speaking at the Nato-Ukraine Council meeting in Washington a few months ago, she said that Ukraine and Nato are “closer together today than ever.”

"Yesterday, we took important decisions to bring Ukraine even closer to the alliance," the Estonian Kallas said. "Nato will take a leading role in coordinating security assistance and training for Ukraine. Allies also pledged long-term financial support for Ukraine. These are very clear, practical preparations for the country's accession to Nato. Ukraine's rightful place is in the alliance, and its pathway to membership is irreversible."

European Commission President Ursula von der Leyen, who was recently re-elected and is an implacable Russian foe, has tightened her control over the European Commission executive and is increasingly at loggerheads with those in the EU that would prefer to see a compromise negotiated solution to the war in Ukraine.

Kallas is still talking about “helping Ukraine to victory” when it is increasingly obvious that Ukraine is about to lose the war. At every step the West has undersupplied Ukraine with sufficient, and sufficiently powerful weapons, for the last two and half years, as bne IntelliNews reported in January last year in a cover feature “running out of ammunition.” Last year former EU foreign policy chief Josep Borrell promised the EU would provide Ukraine with 1mn artillery shells by March this year, but due to Eu members reluctance to sign off on long-term procurement contracts, the privately owned European arms manufactures were reluctant to make the investments to produce those shells. Borrell just announced those millions shells were ready – nine months late.

Likewise, Zelenskiy called on Nato to provide fresh ammo for air defence for 20 key Ukrainian energy installations at the December 4 meeting, but as part of the April’s new US military aid package, instead of sending Ukraine new Patriot air defence missiles from its extensive stockpile, Washington decided to order new missiles from manufacturers that will take at least nine months to make.

"To get there, it is crucial that more military aid will be pumped into Ukraine," the Rutte repeated at the Nato summit on December 3, while Zelenskiy complained only two weeks earlier that Ukraine has received only 10% of the supplies promised under the US $61bn aid package promised by the US congress on April 20. Facing this reality, Zelenskiy recently switched his rhetorical tack from “victory” to “resistance” nine months after US President Joe Biden switched his rhetorical tack from “as long as it takes” to “as long as we can” last Christmas.

Despite the rapidly deteriorating situation in the warzone, EU high officials are maintaining the upbeat “Ukraine can win” rhetoric and ignoring the realities on the ground.

Kallas suggested on December 1 in an interview that the allies were still considering sending Nato troops to Ukraine, as “noting can be ruled out.”

“The discussion has revolved around which countries might be willing to send soldiers to Ukraine. I believe we must maintain a certain degree of strategic ambiguity and avoid ruling anything out,” Kallas said. But she added that any decision would ultimately rest with Ukraine.

Another new rhetorical troupe that has emerged in recent weeks as the end of the war in Ukraine looms, is that a Russian victory could bolster China, Iran and North Korea in an illiberal axis in opposition to the West.

 

Nato accession will never happen

There are three practical problems to bringing Ukraine into the Nato alliance:

– It is fighting an active war and so in theory could trigger the Article five collective security clause the next day;

– All 33 members of Nato would have to approve the decision, giving Russia’s allies in the alliance like Hungary and Turkey a de facto veto; and

– Ukraine has already given up its Nato aspirations in March 2022 during the peace talks hosted in Brest, Belarus, promising to return to the neutrality enshrined in the constitution until 2014.

These problems have triggered a wide variety of solutions. In theory it is possible to admit part of Ukraine to Nato and leave the occupied parts out. That is what happened when West Germany was admitted to Nato following reunification. The borders that define the Nato security deal don’t necessarily have to be the same as the national borders. However, the danger with this option is that Kyiv chooses to attack Russian occupied territory from its “safe” Nato-covered territory and trigger a response against the “Nato-backed” territory.

Russia's allies in Nato could be bullied into agreeing, but Hungarian Prime Minister Viktor Orban in particularly has shown himself to be particularly immune to EU threats. Turkish President Recep Tayyip Erdogan even more so, who is not even a member of the EU.

Giving up on Nato and going back to Ukrainian neutrality is a much more workable alternative, as that is exactly what the Kremlin has been demanding all along since the Russian Ministry of Foreign Affairs issued an eight-point list of demands in December 2021 that started with “iron-clad legal guarantees” that Ukraine would never join Nato.

The Ukrainian negotiators in the first month of the war suggested enshrining Ukraine’s neutrality in the constitution again, which is a legally binding commitment to never joining Nato. Given the Kremlin will never accept even Ukraine’s partial membership of Nato, a return to neutrality is the only viable option and would create the common ground for real talks to begin. Currently there is no common ground between the two.

Neutrality was also a core element of the Istanbul peace deal agreed in April 2022, and Putin has said repeatedly that any talks should begin by taking the framework of the Istanbul deal as a starting point, although he also added that any talks should take “realities on the ground” into account.

However, in what looks like a trial balloon, the Kremlin recently leaked comments that it is willing to compromise and give up some land in talks, after five top officials gave details to Reuters suggesting there is some wiggle room at least on the borders of the four regions Russia annexed last year.

EU divided on Ukraine support

Nato members themselves are deeply divided on Ukraine’s membership in Nato and how best to support Kyiv going forward. The Baltics and the UK, for example, are still calling for arms supplies to be surged to allow Ukraine to win the war. The pro-Putin supporters like Hungary and Austria want to go back to business as usual. And Germany is in the middle, pledging to continue to support Ukraine, but at the same time refusing to send it the powerful Taurus cruise missiles, and German Chancellor Olaf Scholz remains implacably against Ukraine’s membership of Nato. The memories of what a Russian invasion feels like are still fresh in Germany’s collective memory.

Trump remains the wild card, and any number of plans have been bandied about in Washington since Trump won the presidential election, including flooding Ukraine with weapons if Putin won’t negotiate to cutting Kyiv off entirely if Zelenskiy won’t negotiate. Amongst the more workable plans is to write off the 20% of Ukraine occupied by Russia and kick the territorial resolution issue down the road, leaving a demilitarised zone in place in the meantime – very similar to the 12-point Chinese peace plan Beijing suggested on the first anniversary of the start of the war.

Just this week an anonymous senior Nato official at the summit reportedly said the UK and France are considering various options to guarantee Ukraine's security if peace talks between Kyiv and Moscow are launched, which include sending troops to police the DMZ if the US/Chinese version of the plan is executed.

Bottom line is some sort of security deal will have to be agreed and this two was a central tenant of the Istanbul deal. There the Ukrainian negotiators suggested that in lieu of Nato membership, Ukraine sign a series of security deals with its Western partners, and not just the “security assurances” Ukraine has been offered so far that do not include promises to come to Ukraine’s military aid if Russia attacks again. The Istanbul deal failed as former British Prime Minister Boris Johnson reportedly told Zelenskiy that none of his Western allies were willing to offer Kyiv real security agreements that include military support in the event of an attack by Russia.

Time is running out

In the meantime, time is running out for Ukraine. Russia has reportedly been taking some of its heaviest losses on the Donbas front line since the war started and its economy is starting to come under growing pressure by the persistent high inflation and spirally cost of borrowing that will cause a sharp slowdown next year, according to a pessimistic medium-term macroeconomic outlook the Central Bank of Russia (CBR) released at the start of August.

But against that Russia has captured the most territory in Ukraine in a single week since 2022 as of November 27. Russia set a record for weekly advances, seizing almost 235 square kilometres of Ukrainian territory, after the front line had remained largely static for nearly two years.

As bne IntelliNews reported, Ukraine has been running out of men, money and materiel since the summer, but all of those problems are getting rapidly worse. Morale is beginning to crumble amongst the Armed Forces of Ukraine (AFU), with desertions up to 17% of the force, according to reports. Having ignored the problem of deserters until now, form January the government is going to start to prosecute deserters if they don’t return to their positions after the holidays. And the pressgangs roaming Ukraine’s streets, snatching young men to ship the front line, are undermining Zelenskiy popularity. A recent poll showed that Valerii Zaluzhnyi, Ukraine's ambassador to the UK and former Commander-in-Chief of the Armed Forces, would easily beat Zelenskiy if presidential elections were held on Sunday.

Money is running out

Ukraine will run out of money soon as funding the war is becoming increasingly hard, according to Ukraine’s own Ministry of Finance’s forecasts.

In 2025, the Ukrainian government and the IMF expect to receive $13.7bn from the EU through the Ukraine Facility, $19.1bn under the ERA plan from the G7 and the EU, $3.1bn from the IBRD, $2.7bn from the IMF and $1bn from the UK. Together, these contributions from external donors should provide Ukraine's budget with $41bn – enough to cover the projected budget deficit in 2025.

However, international donor commitments for 2026 barely reach $21bn and starting from the second quarter of 2027, in the absence of new financial guarantees, Ukraine will face the problem of a colossal external financing deficit.

Germany has already halved its financial support for Ukraine this year from €8bn to €4bn as it faces its own budget crisis, and that support will fall further to €500mn in the following two years. France, which is facing a similar budget crisis, similarly cut its support for Ukraine this year to €3bn in October as it descends into its own political turmoil that is likely to see French President Emmanuel Macron’s government fall in the next weeks. Trump is expected to cut funding completely in 2025, despite about $3bn left over from a Biden executive order allocation this year and his request this week for an additional $24bn executive funding order to Congress that is unlikely to be approved.

Bankova has been banking on the G7 $50bn loan to Ukraine, approved on June 13 at a G7 summit in Italy. However, this too has been watered down and split into three tranches paid out over the next three years. The first tranche of $20bn was due before the end of this year, but it remains tangled up in wrangling and that payment is now not expected until the start of next year, according to the most recent reports. The government was recently forced to propose unpopular tax hikes to plug at least a $12bn hole in the budget. Chief amongst the changes is an increase in a special war take from 1% to 5% of income that goes into effect in 2025.