The warning emerged from the Vienna Institute for International Economic Studies in an analysis following the release of the controversial “peace plan” for Ukraine proposed by U.S. President Donald Trump.
The original 28-point document faced criticism from Kyiv and most European leaders for incorporating key demands from Moscow, including the ceding of Ukrainian territory and a drastic reduction of its military.
While acknowledging that the implementation of the proposals remains uncertain, the report considers the risks “considerable,” warning that “a rapprochement between the United States and Russia at Ukraine’s expense and the European security order would open increasingly bleak prospects for Kyiv and Europe.”
If Ukraine were forced to accept a “peace dictated” by Moscow, the country would be “effectively reduced to a vassal state of Russia,” which in turn would undermine the current European model of security and growth, warn economists Vasily Astrov, Richard Grieveson, and Olga Pindyuk, authors of the study.
Ukraine risks becoming a “colony,” with its raw materials exploited by both Russia and the U.S.
Central and Eastern Europe would see their growth model, driven by foreign direct investment, impaired, with negative effects on growth, as foreign investors would hesitate to invest without credible security guarantees, the experts explain.
The remaining EU countries would see the so-called “peace dividend,” enjoyed since the Cold War, come to an end without genuine U.S. security guarantees. Consequently, they would have to significantly increase their defense spending, exacerbating debt or making substantial cuts in social spending.
On the other hand, Russia would benefit economically in this scenario, even considering that it would have to subsidize newly occupied territories for decades.
