Ones and Tooze Funding the War in Ukraine
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Dec 19, 2025 Europe's decision to loan Ukraine over $100 billion instead of utilizing frozen Russian assets reveals a paralysis in addressing geopolitical challenges. The podcast dives into the political stakes behind Europe's reluctance to share financial risk, and how failure to fund Ukraine could lead to a financial crisis. Discussions also touch on the implications of Germany's new leadership, the stalled EU-Mercosur trade deal, and the pressing need for Europe to assert its political agency amidst potential decline.
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Frozen Russian Assets Test Europe's Resolve
- Europe froze €190 billion of Russian central bank assets and debated lending versus borrowing to fund Ukraine.
- Adam Tooze argues this technocratic fight masks political unwillingness to fund Ukraine by taxes or joint debt.
Political Limits, Not Technicalities, Block Support
- Europe committed to defending Ukraine but lacks political consensus to finance it via taxes or common debt.
- Tooze warns failure to agree risks a Ukrainian bond-market meltdown and severe consequences over Christmas week.
Technocratic Workarounds Hide Fiscal Avoidance
- European leaders avoid direct fiscal politics by seeking accounting workarounds like borrowing against frozen assets.
- Tooze calls this avoidance economically irrational and a test of Europe's credibility.