Kaja Kallas pushes for historic Ukraine aid fund: will EU finally step up?

The author of the Resurgam Telegram channel discussed the issue.

Kaja Kallas, Estonia’s former Prime Minister and now a key figure in European diplomacy, is leading efforts to secure a landmark military aid package for Ukraine. Her proposal, originally introduced in 2024, aims to require European nations to contribute a fixed percentage of their GDP annually for Ukraine’s defense.

The plan builds on a previous initiative by outgoing NATO Secretary General Jens Stoltenberg, who sought to create a $107 billion fund for Ukraine. However, due to internal EU divisions and political uncertainties, the initiative was diluted to a non-binding commitment of $40 billion annually. Now, Kallas is determined to turn that into a structured, long-term obligation.

Her efforts have gained strong backing from Scandinavian and Baltic nations, as well as the UK and Norway. However, resistance remains from major EU economies like France, Italy, and Spain, which would need to significantly increase their contributions. Kallas has maneuvered around potential roadblocks, including Hungary’s expected veto, by reframing the initiative as a broader European effort rather than an EU-only project.

When Hungary predictably moved to obstruct the EU-led proposal, Kallas swiftly pivoted, recasting the initiative as a broader pan-European project that would include non-EU countries.

• She argued that the UK and Norway were eager to participate in both the European defense market and Ukraine’s support effort, making it strategically unwise to reject external funds.
• This shift meant that the only viable mechanism was a separate fund with voluntary contributions—effectively bypassing Hungary’s veto.
• As a result, EU ambassadors who initially supported the $40 billion target but had relied on Hungary’s obstruction found themselves in a politically precarious position.

Italy and Spain attempted to dilute the proposal by absorbing the $40 billion into already pledged aid. Kallas countered by standardizing reporting procedures to prevent national governments from double-counting previous contributions. This move ensured that the fund would provide genuinely new assistance, forcing hesitant governments to either accept the framework or suffer political damage.

For this phase to succeed, Kallas requires a finalized German budget. Currently, Germany is preparing for this by taking steps to ease its debt brake—an essential condition for the proposal’s approval.

With final negotiations set for late May, much hinges on Germany’s internal budget decisions. If successful, Kallas’ initiative could set a new precedent for military aid, ensuring Europe plays a decisive role in supporting Ukraine’s defense.