In Ukraine, Russia reaps gains as Europe's coffers drain

Additionally, Russian battlefield victories have won it access to valuable Ukrainian resources—notably the steel plants in Mariupol, the fertile farmlands of Kherson and Zaporizhzhia, and the strategic ports on the Black Sea. These gains give Moscow both short and long-term leverage in global trade.

And while Russia's economy is weaker than it was before the war—with higher inflation, depleted foreign currency reserves, and domestic business challenges—the gains outlined above put Moscow squarely in the driver's seat, explaining its reluctance to engage in serious negotiations to end the war.

Yielding Europe

As for Europe, the picture is far less rosy. The war in Ukraine—particularly now with Trump's push for NATO members to boost their spending—is draining Europe's coffers. Its leaders are no longer only lobbying for Ukraine's protection; they are also seeking ways to revive their fragile and slow-growing economies. According to recent reports by Capital Economics, the EU GDP is expected to fall by 0.5%.

Making matters worse, Europe is also facing another challenge in the form of Trump's 15% tariffs. This is an added expense on top of the cost of funding Kyiv's war efforts. This could explain why European leaders have been kissing up to Trump in recent weeks, like students in front of their teacher.

And even though Europe has reduced its reliance on Russian gas, the persistent threat of supply cuts (down from 40% to 11% in 2024) fuels volatility in energy markets, giving Moscow important leverage.

Strained Ukraine

But perhaps the bleakest picture is the one unfolding in Ukraine as it continues to bleed, with reconstruction efforts and investment opportunities flailing and its ability to export grain and transit energy into Europe severely curtailed.

All of the above demonstrates the widening gulf between Europe and Ukraine's wishes on the one hand and the emerging facts on the ground on the other. Perhaps the Alaska summit delivered a much-needed reality check to those who still see the Ukraine war through rose-coloured glasses.