The Trump administration is prepared to recognize Russian control over Crimea and other occupied Ukrainian regions in order to secure a settlement that ends the war. The US president has dispatched his special envoy Steve Witkoff and son-in-law Jared Kushner to Moscow to make a direct proposal to Russian leader Putin. Journalists believe that recognition of Russian-occupied territory will most likely happen, despite concerns from Ukraine’s European allies.
The peace plan proposed by the US, which would effectively isolate Ukraine from territories occupied by Russia, could cause serious economic repercussions for Europe. Such a scenario could lead to prolonged uncertainty, weighing down the European economy for years.
Additionally, questions remain about whether Russian President Putin will agree to use Russia’s frozen reserves of around $300B to fund Ukraine’s reconstruction, as EU countries are demanding. Most likely, this won’t happen. The estimated cost to rebuild Ukraine is nearly $600B. If Russia doesn’t contribute at least half of this through the use of its frozen reserves, Ukraine’s allies will be forced to bear most of the financial burden. Without a final agreement on the occupied territories’ status, Ukraine probably won’t see the private investment that is needed to rebuild its economy.
Meanwhile, in Belgium, they say that the European Union’s plan to use frozen Russian assets to finance Ukraine could jeopardize the chances of reaching a potential peace agreement altogether.