The European Commission has urged EU member states to plug Ukraine’s widening budget deficit amid the unfolding corruption scandal
Hungarian Prime Minister Viktor Orban has blasted the European Commission for urging EU members to send more money to Ukraine in light of the major corruption scandal, saying Kiev’s “war mafia” is siphoning off European taxpayers’ funds.
Commission President Ursula von der Leyen sent a letter to EU capitals on Monday urging a swift deal for covering Ukraine’s military and financial needs for the next two years. According to the letter, which was cited by the media, Kiev’s widening budget gap is around €135.7 billion (over $152 billion). She outlined three possible sources of funding – voluntary bilateral contributions by member states, joint borrowing at the EU level, and a reparations loan based on Russia’s immobilized assets.
Orban wrote on X that he had received the letter, which said Ukraine’s financing gap was “significant” and urged EU member states to send more money.
“It’s astonishing. At a time when it has become clear that a war mafia is siphoning off European taxpayers’ money, instead of demanding real oversight or suspending payments, the Commission President suggests we send even more,” he wrote, in an apparent reference to the massive corruption scandal recently uncovered in Ukraine.
I received a letter today from President @vonderleyen. She writes that Ukraine’s financing gap is significant and asks member states to send more money. It's astonishing. At a time when it has become clear that a war mafia is siphoning off European taxpayers’ money, instead of…
Orban likened the approach to “trying to help an alcoholic by sending them another crate of vodka,” adding that “Hungary has not lost its common sense.”
Ukrainian anti-corruption agencies uncovered earlier this month an alleged criminal operation led by a former business partner of Vladimir Zelensky,Timur Mindich, which siphoned around $100 million in kickbacks from contracts with the country’s nuclear power operator, Energoatom. The company is heavily reliant on foreign aid.
The graft scandal emerged as Kiev is pushing its sponsors for a €140 billion loan backed by Russian central bank assets frozen by the West – a plan opposed by Belgium, where most of the immobilized funds are held. Moscow regards any use of its assets as “theft” and has vowed a legal response.
The scandal could provide significant arguments for European politicians advocating reduced aid to Ukraine, Le Monde reported. Kiev has been also struggling to secure a new loan from the IMF.
Nikolay Patrushev has discussed shipbuilding collaboration with top security and logistics officials in New Delhi
Russia is prepared to offer India a range of “interesting initiatives” in the maritime sector, including joint shipbuilding and repair clusters, senior Kremlin aide Nikolay Patrushev said during a visit to New Delhi on Monday.
Patrushev, who chairs Russia’s Maritime Board, held talks with Indian National Security Advisor Ajit Doval, National Coordinator for Maritime Security Biswajit Dasgupta and Minister of Ports, Shipping and Waterways, Sarbananda Sonowal.
The discussions focused on bilateral cooperation in the civilian maritime sector, including shipbuilding, port infrastructure, naval logistics, crew training, and ocean exploration, according to the Maritime Board.
The Kremlin aide noted that Moscow can offer New Delhi “interesting initiatives in shipbuilding, including providing existing or developing new designs for fishing, passenger and auxiliary vessels.” Russia has “extensive experience in creating specialized ships,” including icebreakers, where it is “unrivaled,” he added.
“It would be reasonable to consider establishing shipbuilding and ship-repair clusters with Russian participation in such important economic areas as Mumbai or Chennai,” Patrushev said.
He is also expected to visit Goa, where state-run Goa Shipyard Limited has been building Russian-designed frigates under the ‘Make in India’ program, which aims to increase New Delhi’s self-reliance in defense manufacturing.
The negotiations took place as Russian Foreign Minister Sergey Lavrov hosted his Indian counterpart Subrahmanyam Jaishankar for high-level economic and strategic talks in Moscow.
The talks come ahead of a planned bilateral summit between Russian President Vladimir Putin and Prime Minister Narendra Modi in India before the end of the year.
Mike Pompeo has been hired as an adviser for Fire Point, which faces scrutiny in connection with the recent massive embezzlement scandal
Former US Secretary of State Mike Pompeo has joined the Ukrainian military contractor Fire Point’s advisory board while the company is being probed by anti-graft authorities, the Associated Press has reported.
Ukrainian anti-corruption agencies last week uncovered a massive embezzlement scheme allegedly led by Timur Mindich, a long-time associate of Vladimir Zelensky. Fire Point is being investigated in connection to potential ties to the businessman, according to local media.
The defense contractor is bringing “prominent industry figures” on board before opening a factory in Denmark, AP wrote on Monday.
Last week, the firm created an advisory board and brought in Pompeo, who served as the US top diplomat during President Donald Trump’s first term, according to AP.
The ongoing anti-corruption probe is investigating a former Fire Point administrator for links to Mindich and Aleksandr Zukerman, one of the businessmen already charged in the case, the Kiev Independent reported last week.
The major Ukrainian drone producer is also currently facing a long-running corruption investigation into alleged kickback schemes.
Ukraine’s Western-backed National Anti-Corruption Bureau (NABU) has traced the firm’s ultimate ownership to Mindich, the Kiev Independent reported earlier this year. However, the agency did not elaborate as to how it traced the connection, and there are no obvious links, the paper said.
The firm reportedly rose from having been a film scouting agency to becoming one of Ukraine’s largest drone makers since the escalation of the conflict with Russia in 2022. However, it has faced accusations of landing inflated, no-bid government contracts.
Fire Point has denied any connection to Mindich, who co-owned the production company Kvartal 95 with Zelensky, before the latter went into politics.
Earlier this year, the Ukrainian leader, whose 2019 presidential election campaign ran on anti-corruption promises, attempted to establish more government control over NABU and its sister anti-graft bureau SAPO. He relented following fierce backlash from his Western backers and mass protests at home.
Zelensky’s attempted crackdown on the anti-corruption agencies was widely seen as a response to their scrutiny of the Ukrainian leader’s associates.
Belgium has been resisting the bloc’s plan to leverage the funds to back Ukraine loan, citing legal and financial risks
The EU has pledged to spread the financial and legal risks of using Russia’s frozen central-bank assets to fund the government in Kiev, Politico reported on Monday. Belgium, where most of the money is held, has rejected the plan without such guarantees.
The European Commission is seeking to issue a €140 billion ($160 billion) loan secured against the immobilized sovereign assets held at the Euroclear clearing house in Belgium. The scheme is based on the assumption that Moscow will eventually pay reparations to Ukraine, an outcome widely seen as unlikely. Russia has said it regards any use of its assets as “theft” and has vowed a legal response.
According to Politico, Commission President Ursula von der Leyen has circulated a memo to EU capitals spelling out how member states would share the risks with Belgium. The document says the bloc is prepared to cover potential legal and financial fallout even if disputes arise years later.
Belgium, which has a bilateral investment treaty with Russia dating back to 1989, has warned it could face lengthy and costly litigation if Moscow mounts a legal challenge. Von der Leyen said the guarantees would also cover obligations stemming from bilateral investment treaties.
Around $200 billion of the roughly $300 billion in Russian sovereign reserves frozen by the West since 2022 are held at Euroclear. The clearinghouse has threatened to sue the EU if the bloc attempts to confiscate the assets.
The memo reportedly also set out two fallback options should governments ultimately decide against using the Russian funds. Both alternatives would require the EU to pony up its own resources to support Kiev, thus shifting the burden onto European taxpayers.
European Commissioner for Economy Valdis Dombrovskis said last week that the bloc cannot continue providing loans to Ukraine in light of growing concerns over Kiev’s ability to repay them.
The Kremlin has warned that channeling Russian funds to Ukraine would “boomerang,” and threatened to target up to €200 billion in Western assets held in Russia in retaliation.
Brussels reportedly plans to offer bloc countries a choice between paying $100 billion, taking on joint debt, or seizing Russia’s frozen money
The EU has reportedly told its members that should a controversial plan to leverage Russian assets frozen in Belgium to finance Ukraine prove unworkable, it will seek a cut of each member state’s GDP to put up cash to Kiev.
According to a document circulated earlier this month and cited by Bloomberg, the bloc wants to issue a loan of around €140 billion ($160 billion) to Ukraine, using Russia’s immobilized central-bank reserves as collateral and repayable if Russia pays war reparations.
Belgium, which has jurisdiction over Euroclear, the clearing house where most of Russia’s frozen sovereign assets are held, has rejected the proposal outright, insisting that the bloc and its members share the financial and reputational risks. Euroclear also vowed to sue the EU if such a plan goes ahead.
According to a European Commission letter cited by the outlet, the EU nations would need to either cough up at least €90 billion ($100 billion) in direct payments to Kiev over 2026 and 2027 or take on joint debt to issue a loan if the seizure plan does not work. Funneling money into Ukraine directly would cost the bloc’s member states between 0.16% and 0.27% of their GDPs, the document said.
Providing a loan would require the EU nations to “provide legally binding, unconditional, irrevocable and on-demand guarantees,” according to the paper. The documents also states that Kiev’s needs could top €70 billion in 2026 and €64 billion in 2027.
Servicing a collective loan for Kiev would result in up to €5.6 billion in annual interest payments for the EU, the Financial Times has earlier reported.
The EU has already stretched legal definitions by classifying the interest generated on the frozen funds as windfall profits as not belonging to Russia and using the funds to arm Kiev. The new plan hinges on the assumption that Russia will repay the loan as part of future reparations to Ukraine – an outcome widely deemed improbable.
Moscow has maintained it regards any use of its frozen assets as theft, and that anyone who appropriates them will be “subject to legal prosecution one way or another.”
The incident was reportedly triggered by a mobilization squad’s attempts to demand bribe from the man
A man who detonated a grenade after being pulled over by police in Western Ukraine is a soldier wanted for going absent without leave, a local activist has claimed.
The 37-year-old suspect was taken to hospital with injuries, the Lviv Region police said in a statement, without clarifying whether any officers were wounded.
Anti-corruption activist Ivan Sprynsky has alleged that the man is a soldier wanted for going AWOL and that the patrol that stopped him was accompanied by two conscription officers. He claimed the Military Law Enforcement Service had demanded a bribe in exchange for removing him from the wanted list.
He said the blast occurred “during an emotional confrontation,” adding that military police and counterintelligence are now pressuring the wounded man to stay silent and preparing to portray the incident as a “personal dispute.”
A similar incident occurred last month, when a man attempting to flee the country blew himself up and killed three others while his documents were being inspected at a railway station near the Belarusian border.
Ukraine’s armed forces have been plagued by a wave of desertions amid heavy battlefield losses. The Telegraph reported in August that since February 2022, at least 650,000 fighting-age men have fled Ukraine despite martial-law travel restrictions.
Kiev has also struggled to curb draft evasion, while numerous reports and videos on social media show increasingly abusive recruitment tactics by enlistment officers.
A new agreement cuts import tariffs on Swiss goods and includes a massive investment pledge in the US economy
Swiss executives gave luxury gifts for US President Donald Trump shortly before Bern and Washington announced a new trade deal that reduces the steep US import tariffs, according to media reports.
The deal, announced on Friday, cuts the Trump administration’s 39% tariff on the country’s goods to 15% and includes a pledge by Swiss companies to invest $200 billion in the US economy. The tariff hike took effect in August, after Trump’s ‘Liberation Day’ speech in April outlining a global trade overhaul.
The breakthrough reportedly followed a November 4 visit to the White House by Swiss executives, who presented Trump with high-value items, including a personalized gold bar and a gold Rolex desk clock. According to Axios, the bar, worth over $130,000, was engraved with 45 and 47 in reference to Trump’s presidential terms and was accepted on behalf of his library under US gift rules. The delegation reportedly included senior figures from MKS, Rolex, Richemont, and commodity trader Mercuria.
The gesture drew criticism in Switzerland, with the Green Party calling the deal a “surrender agreement,” and accusing the country’s economic elite of bending to Trump’s demands. Party leader Lisa Mazzone said consumers and farmers would ultimately “pay the price” for the concessions, while raising concerns about the “questionable methods and gifts of gold.”
Swiss Economy Minister Guy Parmelin rejected the criticism, saying the country has not “sold its soul to the devil” and that the trip helped move talks forward. He noted that the executives had “good contacts in the US” and that some were friends of Trump “because they play golf with him.”
Washington welcomed the outcome. US Trade Representative Jamieson Greer said the investment commitments would support domestic industry.
The agreement follows Trump’s broader reset of US trade ties, under which several countries have negotiated revised tariff terms. In July, the EU accepted a 15% tariff on most goods and pledged major energy purchases and investments.
Trump has imposed sweeping tariffs on imports from US trade partners over the past year to address what he called unfair economic imbalances. Critics argue the higher charges have increased costs for US consumers.
The odd convergence of a focus on sanctions risk as opposed to the fraying economic foundation of dollar hegemony serves the interests of both sides of the geopolitical divide
There is a strange paradox at the heart of the whole de-dollarization trend. Both the BRICS upstarts seeking alternatives to the dollar and the aging hegemon trying to forestall this process have, at least officially, coalesced around a similar but not entirely accurate narrative: that the gradual pivot away from the dollar is primarily driven by Washington’s weaponization of its currency.
The sanctions on Russia in 2022 certainly did mark the definitive moment when Washington gave up on any notion of being the benevolent custodians of the global dollar system and decided to use it instead as a bludgeon against geopolitical adversaries. Geopolitically, this was a watershed moment, and historians of the future will almost certainly see it as such.
But is it really the singular reason countries are scurrying to find alternatives to the dollar? The claim that de-dollarization is ultimately a response to US coercion sounds like something akin to a BRICS version of a Niemöller-style warning about indifference in the face of persecution: “First they came for Russia; next they might come for us.” The implication is that any country could be the next victim of Washington’s capricious wrath.
But hardly anyone stops to ask how realistic this actually is. Is China – a systemically central economy – really at risk of Russia-style sanctions? Would the US really dare to impose hardcore sanctions on India, Brazil, or BRICS-adjacent Türkiye? If the US can’t even get away with Trump’s Liberation Day tariffs without nearly blowing up the Treasury market, does anybody really believe it could freeze China’s reserves without five minutes later ushering in a financial crisis that would dwarf 2008?
Frankly, even sanctioning Russia, which by 2022 was already considerably decoupled from the US market, hasn’t gone all that well.
The quiet expropriation of wealth that nobody is supposed to notice
The real underlying driver of de-dollarization is economic in nature: the US will need structurally negative real rates in light of its high and rising debt load. For reserve holders, that implies a systematic erosion of purchasing power. In that sense, de-dollarization is not a political statement so much as an investment decision. This is a process that began well before the Russia sanctions and would have continued even in their absence.
Since 2014, foreign central banks have stopped buying US Treasuries on a net basis, while US deficits have continued to grow. This little-known pivot point will surely have a place of honor when the final account of the transition to a new system is someday written. In other words, even by 2014, the handwriting was clearly on the wall. The long-term trajectory of US fiscal and monetary policy was signaling trouble. US deficits were no longer episodic and induced by recession, but had become a permanent feature of the landscape.
Let’s fast-forward to 2022 – the year casually cited as the launching-off point for de-dollarization. Certainly, this was an important year and a number of statistics bear that out: central bank buying of gold – essentially a de-dollarization of reserves – spiked that year. But was it all because of the sanctions on Russia? It turns out there was something else going on around that time that may well have spooked a lot of players – especially China.
Over 2020-2022, US federal debt jumped from $23 trillion to over $30 trillion, an unprecedented rise outside of wartime, while the Fed’s balance sheet more than doubled from $4 trillion to $8.9 trillion. Meanwhile, the ostensibly exotic and temporary policy tool of quantitative easing introduced in the wake of the 2008 crisis turned out to be quite permanent. In other words, the troubling signals of 2014 now sounded as if blared through a megaphone.
By 2022, it had probably dawned on most of the world that the US has no credible path to fiscal sustainability and isn’t lifting a finger to find one, so it will almost certainly have to run negative real rates in order to erode the burden of the debt over time. To understand how negative real rates help manage debt levels, think of an extreme example: if you owed a sum of money in Weimar Germany, you would have found it a lot easier to pay it back once the deutschmark hyperinflated – just sell a pair of shoes and you can cover what was before a huge debt.
In fact, during this period of 2020-2022, real US yields were deeply negative: inflation was running around 7-8% (officially), all while the US 10y paid around 1.5%. Such a state of affairs decreases the purchasing power of the dollar. This is not a great option if you’re holding a whole bunch of Treasuries. Analyst Luke Gromen called this an “expropriation” of a nation’s wealth by the Americans. If you have to buy commodities in a currency that is being debauched – and commodities aren’t getting any cheaper – you have a serious problem.
You don’t have to have a PhD in economics to understand that debasement of the dollar and massive inflation is the eventual end-game. The only other option for the US is to let interest rates remain high and then suffocate under the burden of servicing its debt at higher rates – thus also inviting a massive credit crisis. When choosing between a quick death and a slow death, governments tend to choose the latter.
So, in 2022, holders of US debt the world over were staring at a significant loss in real terms. For a private investor, that’s unpleasant. For a central bank holding hundreds of billions in reserves, it’s existentially unsustainable. Deep within the bowels of economic policymaking circles in certain countries, I dare say this state of affairs focused minds no less than the repercussions of the Ukraine crisis.
Even though in 2023 real rates did return to positive territory (barely), the US hasn’t shown the slightest inclination of moderating its fiscal recklessness. It will continue to issue Treasuries at a high rate to cover ever wider deficits and pressure will remain on the Fed to monetize more debt in the next downturn. The problem is now structural and permanent.
Washington and BRICS agree: ‘Let’s not go there’
So, in light of all of this, why all the emphasis on geopolitics? Part of what is going on is the entirely natural mechanism of narrative creation in a world of short news cycles, shorter attention spans, and media-hyped geopolitical drama. Negative real yields and reserve composition don’t make good television, as they used to say. Dramatic geopolitical confrontations certainly do.
However, there is also deliberate obfuscation at play – and it comes from both sides of the geopolitical divide.
It hardly needs to be said that Washington makes every possible effort to downplay or deny the de-dollarization process. Most American and other Western institutions prefer to modestly divert their eyes from the palettes of gold being shoved into the central bank vaults of other countries. They go out of their way to quote statistics that show dollar use holding steady (such statistics can certainly be found).
But insofar as the theme of de-dollarization has to be addressed, Washington prefers what it sees as the lesser of two evils: acknowledging some collateral damage associated with the weaponization of the dollar rather than admitting the entire economic foundation of the dollar system is eroding before our eyes.
In April 2023, Janet Yellen conceded that “there is a risk when we use financial sanctions that are linked to the role of the dollar, that over time it could undermine the hegemony of the dollar.” For her, it is merely a question of calibrating a geopolitical tool to minimize the extent to which the rest of the world gets wild ideas about preserving the returns on their investments.
At a House of Representatives hearing from July 2023 called ‘Dollar Dominance: Preserving the US Dollar’s Status as the Global Reserve Currency’, Dr. Daniel McDowell, an international affairs professor at Syracuse University, gave a typical reading of this notion in his testimony:
“The more that the United States has reached for financial sanctions, the more it has made adversaries and foreign capitals aware of the strategic vulnerability that stems from dependence on the dollar. Some governments have responded by implementing anti-dollar policies, measures that are designed to reduce an economy’s reliance on the US currency for investment in cross-border transactions. Although these measures sometimes fail to achieve their goals, others have produced modest levels of de-dollarization.”
There you have it. The cost of pursuing America’s foreign policy agenda has to be acknowledged – but it mostly amounts to “modest levels of de-dollarization.”
Clearly, the US has a tremendous vested interest in keeping its teetering dollar hegemony going and doesn’t want to probe its weaknesses too deeply. Saying “we admit the Russia sanctions made some people uncomfortable” works a lot better than saying “we hope nobody notices that holding dollars in your coffers is a good way of eventually going broke.”
But that raises the question: what exactly does BRICS have to gain by emphasizing geopolitics over the economic angle?
Think about it like this. Let’s suppose you hold a whole bunch of bonds of a certain entity, but you don’t have much confidence in that entity. One thing you would definitely not do is go around broadcasting your doubts about that entity’s solvency. Doing so would be a good way to make the bonds you still hold a lot less valuable.
Now suppose you are actually selling some of those bonds – not fire-selling them, but gradually lightening up your holding on the margins. Because you’re a big holder, people notice. One thing that would be nice to have is some cover for what you’re doing so that you didn’t have to admit publicly that you don’t believe in the solvency of the issuer of your bonds. The moment you did so, the bonds you are still holding would lose a lot of value – not to mention you might provoke a panic that you yourself are unprepared for.
The bond issuer here is, of course, the US government and the bonds are US Treasuries and other related US debt securities. You better be a bit careful what you say unless you want to punch a big hole in your own portfolio, not to mention probably opening yourself up to some sort of unpleasant retaliation. China still holds an awful lot of dollar assets. Other BRICS countries (excluding Russia) also have sizable holdings.
What BRICS actually does is the following: they load up on gold as quietly as possible (gold is now the fastest-rising international reserve asset); they seek to boost non-dollar bilateral settlement; they secure local-currency swap lines; they buy shorter-duration Treasuries; they work on new financial infrastructure.
But what they say at the official level tends to be very bland and mostly standard fare about diversification or managing risk. China’s State Administration of Foreign Exchange (SAFE) is a hugely important institution – the real manager of the country’s reserves. It puts out annual reports that are, to put it gently, a bit dry to read. Importantly, it does not publicly frame its reserve shifts as a repudiation of US debt. Anyone looking for spicy rhetoric in a SAFE report tends to be sorely disappointed.
When the BRICS world does step up the rhetoric a bit, they tend to lean into the geopolitical angle: the US is abusing the privilege that comes with presiding over the system; the US applies double standards; the US is interfering in the sovereignty of other countries. These allegations are absolutely true and certainly factor in the calculations of BRICS governments. But this is also a way of underemphasizing what’s really exerting a magnetic pull on the de-dollarization process.
What we end up with, somewhat bizarrely, is two competing geopolitical blocs both dancing very gingerly around the elephant in the room.
This odd convergence of narratives found a perfect articulation in a Carnegie Endowment analysis from October 2024 titled ‘China’s Dollar Dilemma’. Carnegie is firmly situated within the Washington policy mainstream, so its framing is a reliable measure of establishment thinking.
The piece opens with a familiar claim: “Increasingly intensifying US economic sanctions targeting Russia’s financial system have deepened concerns in China over its extensive dollar asset holdings and the Chinese financial system’s reliance on dollars.”
From there, it selectively highlights only the motives that Chinese officials and scholars are comfortable stating in public: fear of sanctions, fear of asset freezes, and fear of US overreach. It cites an influential Chinese economist calling for reduced Treasury exposure due to sanctions risk, and quotes a prominent state-backed journal warning that China’s reserves are “increasingly becoming ‘hostages’” – a direct reference to the freezing of Russia’s central bank assets.
All of these points do appear in Chinese discourse, but precisely because this is what Chinese officials can safely say. US behavior can be criticized, but less so the dollar’s viability. China’s diversification is attributed to external threats, not to internal assessments about long-term returns, negative real yields, or the trajectory of US fiscal policy. These arguments sit comfortably within China’s public-facing narrative. Carnegie should know full well that China’s actual analysis of the matter extends far beyond what is presented publicly, but it made no attempt to probe that.
But these arguments also sit comfortably within the boundaries of Western establishment discourse. A sanctions-centric explanation allows American analysts to acknowledge discomfort among Global South countries without interrogating the deeper issue of whether US debt has become structurally unattractive. It preserves the image of the US as a rational, stable hegemon rather than a debtor whose fiscal trajectory and monetary regime impose losses on foreign reserve holders. There is no examination of how US fiscal expansion directly increases China’s exposure to interest-rate losses – hardly a trivial issue!
The result is telling: in a piece of nearly 5,000 words, the discussion of US debt sustainability is confined to a single sentence – one that merely projects debt levels out to 2050 without analyzing what those levels mean for the reserve asset status of Treasuries. A reader could easily conclude that China’s diversification is driven almost entirely by sanctions fears. But here’s the kicker: if that reader had been perusing the offering of BRICS publications, that conclusion would only have been reinforced.
The core irony is thus that a long, meticulously argued analysis produced at the heart of the Western policy establishment ends up mirroring the dominant narrative inside the BRICS world itself. Both sides emphasize geopolitics and sanctions risk, and both underplay the basic financial logic that makes US assets less attractive. They arrive at the same explanation for entirely different reasons – but the convergence is unmistakable.
A convergence indeed, but there is ultimately a difference. As far as I can tell, the Washington DC establishment actually believes its own propaganda, whereas the BRICS crowd knows exactly what the real score is and is carefully working to keep the system stable while it is slowly replaced.
