Old World's Last Gasp
Ukraine bulletin
Many worry about an oncoming World War III: and though we’ve been trying to keep our cool, you know that includes us, if you read between the lines of our last bulletin. But it’s not just Americans like us who have reason to worry that their government is positioning itself for war. Europeans, too, have reason for concern. Naturally they focus on the ongoing conflict in Ukraine, which—when we here at Radio Free Pizza last covered it—in late 2024 launched U.S. and UK missiles into Russian regions, prompting Russian President Vladimir Putin to revise Russia’s nuclear doctrine, lowering the threshold for nuclear response, before firing back with a hypersonic missile strike on Ukraine’s Yuzhmash missile plant. Meanwhile, NATO allies continued doubled down on their support Ukraine, with France confirming permission for Kiev to use French missiles on Russian targets. Despite fears of nuclear escalation, many analysts believed Russia’s rhetoric is more posturing than a real threat—though others proposed that, under the second Trump Administration, NATO might supply Ukraine with tactical nuclear weapons (TNWs), potentially provoking a Russian nuclear response.
Of course, such speculations have surely lost support, given the developments of 2025. In early February, the Trump Administration has proposed that the U.S. receive 50% ownership of Ukraine’s rare earth minerals as reimbursement for military and financial aid provided since the war began in 2022. (Though Trump famously claimed during the 2024 campaign that he’d have the Ukraine war “done in twenty-four hours,” he has apparently awoken to the impossibility of that, and began seeking instead the best deal he could secure from protracted peace negotiations.) The mineral deal would give the U.S. direct access to valuable materials essential for technology production—instead of monetary repayment.
Trump emphasized the strategic importance of these minerals, calling access to them a matter of U.S. “security”—similar to his rhetoric about a U.S. acquisition of Greenland. He claimed Ukraine was open to the deal and has pushed for the U.S. to gain $500 billion worth of mineral access as a way to recoup the costs incurred over three years of support for Ukraine—and, indeed, the idea of trading critical resources for continued U.S. support has been part of Ukrainian President Volodymyr Zelensky’s so-called “Victory Plan,” with Ukraine’s survival depending heavily on ongoing U.S. support. (Of course, many of these resources are currently in Russian-occupied territory, complicating matters.)
Later that same month, U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergey Lavrov met in Riyadh for the most extensive U.S.-Russia talks since the Ukraine war began. The talks opened the door to potential U.S.-Russia cooperation in energy and raised the possibility of easing U.S. sanctions on Russia, depending on future progress. The diplomats agreed to restore diplomatic staffing at their respective embassies and set up working groups to explore a negotiated end to the conflict, including possible territorial concessions and security guarantees. Amusingly, these talks excluded Ukraine and Europe, angering Zelensky, while Trump further stirred controversy by blaming Ukraine for failing to prevent the war.
Meanwhile, the Trump team had been divided on whether U.S. troops would be deployed to Ukraine: Vice President JD Vance said it’s “on the table” if peace talks with Russia fail, though Defense Secretary Pete Hegseth denied any such plans.
But I’m guessing that Vance cleared those plans off the table himself after a highly anticipated 28 February meeting between Trump and Zelensky at the White House ended abruptly without the signing of a critical minerals agreement. The meeting, intended to solidify U.S.-Ukraine cooperation on developing Ukraine’s natural resources, devolved into a public confrontation over the ongoing war with Russia when Vance emphasized the necessity of diplomacy to resolve the conflict in Ukraine and Zelensky countered by expressing deep distrust toward Putin, citing previous unsuccessful diplomatic efforts. He urged Trump not to compromise with Putin, whom he referred to as a “killer.” The exchange intensified, leading Trump to accuse Zelensky of disrespecting the U.S. and questioning his readiness for peace negotiations. Subsequently, Trump directed aides to end the meeting prematurely, instructing Zelensky to leave the White House.
The failure to sign the minerals deal left Ukraine without a potentially significant avenue for economic collaboration with the U.S., which Kiev had hoped would bolster its position in the war and facilitate additional aid from Congress. European leaders quickly rallied in support of Zelensky, with German chancellor candidate Friedrich Merz emphasizing the importance of distinguishing between aggressor and victim in the conflict while Zelensky engaged in discussions with French President Emmanuel Macron, NATO Secretary General Mark Rutte, and EU Council President Antonio Costa to seek further backing.
President Trump’s approach signaled a shift in U.S. policy toward a more conciliatory stance with Russia, causing concern among traditional European allies. NATO’s Secretary General, Mark Rutte, warned of a potential full-scale Russian attack on Europe by 2030, emphasizing the strength of the NATO alliance in defending its members. Ukraine’s prolonged war with Russia has led neighboring countries, especially those bordering Russia, to ramp up defense spending. Some fear that if Kiev falls, Russia could target the Baltic states or Poland, which could trigger NATO intervention and escalate into a global conflict.
In response, European nations are preparing for crisis situations by urging citizens to stockpile food, water, and other emergency supplies. Sweden, Finland, and Germany have updated their civil defense strategies, with Sweden mandating military service and Finland focusing on readiness due to its long border with Russia. Additionally, European nations are bolstering their air defense systems, with discussions about developing an independent European nuclear deterrent, as concerns about U.S. commitment to European defense grow.
Meanwhile, Russia’s military operation in Ukraine is causing ripple effects across the region, and the increasing militarization in Europe indicate a widespread anticipation of further instability, particularly in Eastern Europe. Zelensky acknowledged the risks of escalation, with some experts suggesting that World War III might already be unfolding in certain ways.
Certainly there’s good reason some analysts have been pointing to the U.S. to explain Europe’s dedication to a war footing, given the shifting dynamics between the U.S. and Europe regarding the ongoing war in Ukraine and broader defense concerns. Those concerned highlight the increasing tensions between the Trump Administration and European allies—particularly in light of the U.S. distancing itself from Ukraine’s military needs—and the potential long-term consequences for European security.
Under the second Trump Administration, the U.S. has prioritized military engagement in the Indo-Pacific region—as we discussed last time on Radio Free Pizza—pressing Europe to build up its own defense capabilities, which has been resisted due to concerns about the cost and the potential for an American withdrawal. Despite some European efforts to increase defense spending after the 2014 Crimea annexation, Europe’s military readiness remains insufficient to independently support Ukraine or defend against Russian aggression: the U.S.’s reduced commitment to Ukraine risks creating a security vacuum that Europe would need to fill, but Europe faces significant challenges in ramping up its defense industry, including fragmentation, lack of cohesion, and insufficient investment. While Europe might aim to produce much of the military equipment Ukraine needs, it lacks the coordination and infrastructure to do so at scale. Additionally, NATO’s reliance on U.S. logistical support also complicates Europe’s ability to transition to self-sufficiency.
Moreover, the aforementioned analysts also note that European nations must overcome internal divisions and work together to address these issues. This will require political will, increased defense spending, and better coordination between EU countries, the UK, and Ukraine. They argue that the U.S. could support Europe in this transition, but must choose whether to allow Europe to take on more responsibility or force Ukraine into a less favorable settlement with Russia.
However, others see European militarization stemming not from genuine security concerns, but from more cynical motives. Economist Martin Armstrong argues that Europe’s push for war is motivated more by financial and political interests than by genuine security concerns. He outlines three main reasons behind this strategy. First, he suggests that war offers governments a way to reset their financial obligations by defaulting on debt under the cover of forming a new government—a tactic with historical precedent, such as the U.S. defaulting on the Continental Congress currency. Second, Armstrong claims that European leaders view war as a distraction from their own economic failures, including the fallout from pandemic lockdowns, net-zero climate policies, and sanctions against Russia. By blaming Russia for worsening economic conditions, leaders could deflect public anger and maintain power. Third, he contends that European elites see war as a means of accessing Russia’s vast natural resources, estimated to be worth $75 trillion. Conquering and dividing Russia, Armstrong argues, would strengthen Europe’s economic position and challenge U.S. dominance.
While Europe launches its militarization efforts, its erstwhile U.S. partner seems to have growing concerns about the likelihood of a negotiated end to the conflict. Last month, Trump threatened to impose 25% to 50% secondary tariffs on countries buying Russian oil if Moscow blocks his efforts to end the Ukraine war. Frustrated with Putin’s criticism of Zelensky and the lack of ceasefire progress, Trump warned that buyers of Russian oil could lose access to U.S. markets, emphasizing his willingness to act within a month if no deal is reached and reiterating that Ukraine would never join NATO. He also criticized Zelensky for hesitating on the aforementioned rare earth minerals deal that would give the U.S. access to Ukraine’s natural resource income. Despite his anger at Putin, Trump claimed their relationship remains strong if progress is made toward ending the war.
The threatened tariffs could heavily impact China, India, and others reliant on Russian oil. Trump also signaled potential sanctions against buyers of Iranian oil if Iran doesn’t halt its nuclear program. These measures would undoubtedly impose further disruptions to the global economy, increasing the likelihood of a sovereign debt default in Europe.
If Europe’s war footing feels desperate, that’s because it is. Whether driven by genuine fears of Russian aggression or by cynical efforts to paper over economic decay, Europe is now staring down a financial abyss—one that may make a debt default not just possible, but strategically desirable.
The signs are unmistakable. Years of economic mismanagement, costly energy policies, pandemic fallout, and the financial strains of militarizing against Russia have pushed European debt loads to historic highs. Add to that the U.S.’s shifting posture—no longer underwriting Europe’s defense unconditionally—and the cracks are starting to show.
If Armstrong’s thesis holds water, the ramifications of a European debt default would be profound. For starters, a default framed within the chaos of war could allow European governments to wipe their slates clean, dissolving obligations to creditors, gutting pension liabilities, and blaming it all on Moscow. Simultaneously, war-driven nationalizations or the seizure of assets (foreign or domestic) could provide temporary fiscal breathing room.
But this is a high-risk play. A coordinated or cascading European default would send shockwaves through global financial markets, hammering the euro, imperiling the European banking system, and likely triggering capital flight on a scale not seen in decades. Geopolitically, such a scenario could accelerate the fragmentation of the Western alliance.
Whether by accident or design, Europe appears to be approaching a point of no return. A debt default may be Europe’s last gasp—but it would not be a quiet one. It would reshape the global order, redraw alliances, and almost certainly deepen the chaos already spilling out of Ukraine. As the Old World strains under the weight of history, the real question may not be whether Europe defaults, but whether it survives.