EU leaders failed to agree on Ukraine military aid

European Union leaders met in Brussels but failed to agree on a plan to provide €5 billion ($5.4 billion) in military aid to Ukraine. The discussions were marked by disagreement, with countries like France and Italy hesitant to commit to specific amounts. A follow-up meeting is scheduled in Paris on March 27, but expectations for progress are low unless Germany agrees to shoulder the majority of the costs. French President Emmanuel Macron expressed disappointment at the lack of a clear commitment in support for Ukraine. The summit also highlighted concerns among EU leaders about being sidelined in diplomatic negotiations with Russia, particularly under U.S. leadership. Spanish Prime Minister Pedro Sanchez called for a dedicated negotiating team from the EU to take part in discussions. The talks became contentious, with disagreements over the leadership and participation in Ukraine-related diplomacy. Ukrainian President Volodymyr Zelenskiy reiterated the urgent need for financial assistance, emphasizing the continuous demand for military support to boost Ukraine's defense capabilities. The EU leaders are also facing challenges regarding their financial strategies. Germany's shift toward higher spending could raise borrowing costs across Europe, particularly affecting countries with already high debt levels. Italian, Greek, Spanish, and Portuguese bond yields have risen significantly this month amid concerns over fiscal stability. As the EU looks to fund increased military aid, worries are growing about sustaining confidence in European government bonds. Some member states are exploring creative financing solutions, including leveraging private capital and even considering the sale of gold reserves to finance defense budgets. In summary, the EU is grappling with internal divisions as it seeks to support Ukraine amid ongoing tensions with Russia. The inability to reach a consensus on military aid and financial strategy reflects broader concerns about fiscal stability and economic cooperation within the bloc.