With US support becoming increasingly uncertain, Europe faces an urgent imperative to mobilise its financial and industrial power to defend itself and counter Russia. For years, policymakers have treated the war on Europe's doorstep as a looming threat rather than an active crisis eroding the continent's foundations. As US President Donald Trump pushes for a disadvantageous settlement for Kyiv and threatens to withdraw American backing entirely, Europe must confront the prospect of shouldering the security burden alone.

Even if the immediate crisis is averted, European nations can no longer assume Washington will guarantee their security. The continent must develop the financial capacity to sustain Ukraine's defence, the industrial strength to protect its own borders, and the economic leverage necessary to constrain Moscow. To achieve this, analysts argue that Europe must construct a robust war economy.

While the European Union has previously stepped up with major financial packages—moving from a share of G7 loans to a recent 90-billion-euro facility financed without US backing—internal divisions continue to hinder a unified response. Sanctions have grown in number, yet they still fail to fully broaden restricted activities or accelerate the phase-out of Russian energy imports. European leaders have also expressed deep concern over Washington's shifting approaches to sanctions waivers as the US grapples with its own foreign policy costs.

To meet these unprecedented security challenges, the primary step is establishing a permanent framework for joint EU borrowing. This mechanism would serve a dual purpose: financing Ukraine's continued defence while funding the domestic industrial base required to counter future threats from Russia. Although past crises like the COVID-19 pandemic demonstrated the bloc's ability to overcome a historical aversion to mutualised borrowing through the NextGenerationEU recovery fund, these efforts have largely remained ad-hoc improvisations.

Fears regarding existing sovereign indebtedness in nations like France and the United Kingdom persist, but potential solutions exist within frozen Russian sovereign assets. While some member states remain hesitant over fears of legal action or global financial repercussions, the bloc must unify to share and mitigate these risks. Furthermore, expanding the EU capital markets union and introducing tax-advantaged structures for defence and technology firms could prove equally effective in securing the region's technological independence.

Beyond fiscal measures, Europe must take stricter control of its ongoing economic entanglements with Russia, intervening decisively in corporate loopholes and legal vulnerabilities. By deepening its fiscal and capital markets union and building a genuine fiscal-military state, Europe can establish the foundational power required to deter aggression and ensure its long-term survival.