What Ukraine thinks of Republicans’ loan plan

From the SitRoom to the E-Ring, the inside scoop on defense, national security and foreign policy.
Mar 19, 2024 View in browser
 
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By Matt Berg and Eric Bazail-Eimil

Ukrainian President Volodymyr Zelenskyy (left) shakes hands with U.S. Sen. Lindsey Graham, R-S.C.

Sen. Lindsey Graham (R-S.C.) said he raised the prospect of converting aid for Ukraine into a loan with Ukrainian President Volodymyr Zelenskyy during his trip to the country on Monday. | Ukrainian Presidential Press Office via AP

With help from Paul McLeary, Alex Ward and Joseph Gedeon

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A proposal to convert aid for Ukraine into a loan is gaining traction on Capitol Hill as a solution to satisfy Republican skeptics and Democrats and DONALD TRUMP, at least in theory. Ukrainians, on the other hand, say they need to see more details.

Republicans are seriously considering making $12 billion of the $60 billion that the Biden administration wants to send to Ukraine into a loan. Sen. LINDSEY GRAHAM (R-S.C.) said he raised the prospect, which was inspired by Trump, with Ukrainian President VOLODYMYR ZELENSKYY during his trip to the country on Monday.

While the idea has circulated for weeks in Congress, Ukrainian officials suggest that Kyiv hasn’t been kept in the loop as much. And they have questions.

“I have not heard any specific proposals for such a strategy being offered to Kyiv,” a person close to Zelenskyy’s office, granted anonymity to speak candidly, told NatSec Daily this morning. “But Kyiv would definitely need to know the conditions under which Ukraine will not have to pay it back.”

That was backed up by Ukrainian Foreign Minister DMYTRO KULEBA, who told reporters today that while he wasn’t shocked to hear about the idea, Ukrainians still “haven't seen any details of this proposal except the broad mentioning of loans instead of grants.”

Because the loan would be potentially waivable, according to Graham’s tweet, the idea “does not sound so critical,” the person close to Zelenskyy’s office added.

Generally, however, Kyiv doesn’t love the idea: It is “somewhat offensive to people here” given security guarantees under the Budapest Memorandum signed in 1994, the person added.

Under that agreement — signed by Ukraine, the U.S. and others — Kyiv gave up its nuclear weapons, though the country could ask for assistance if it “should become a victim of an act of aggression or an object of a threat of aggression in which nuclear weapons are used,” according to the text.

Ukraine has been making the case throughout the war that it needs more assistance yesterday, but this seems truer now more than ever. Russian troops have advanced since the beginning of the year, taking villages and pushing Ukrainian troops back. Zelenskyy has warned that his troops are extremely short of ammunition, and Kyiv is struggling to fill its ranks with men willing to fight.

These concerns were likely front of mind for Defense Secretary LLOYD AUSTIN during a meeting of defense leaders at the Ramstein Air Base in Germany today, during which he made the case that the West must get its act together quickly to support Kyiv.

“The United States will not let Ukraine fail,” Austin said. “This coalition will not let Ukraine fail. And the free world will not let Ukraine fail.”

Other Ukrainians want any help they can get, loan or not, arguing that the U.S. will be handsomely repaid if the West helps Kyiv succeed.

“If we win, you will be paid back in Russian oil, gas, diamonds and fur,” said VOLODYMYR OMELYAN, who used to serve as the country’s infrastructure minister. “If we lose, there will be no issue about money — it will become the issue of how the West can survive.”

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The Inbox

‘NOT RIGHT NOW’: Current U.S. plans to deal with the crisis in Haiti do not “right now” involve American service members on the ground in that country amid escalating gang violence and political uncertainty, Gen. LAURA RICHARDSON told Alex during an Atlantic Council event today.

The U.S. Southern Command chief said the U.S. military always plans and prepares for any contingency. Richardson is also hopeful that the United Nations-approved, Kenyan-led mission to offer police security to the Caribbean country will be up and running soon, depending on how a political transition in Haiti shapes up. But a “U.S.-only solution is [not] what we need to be doing,” she continued, adding U.S. forces “could be” part of an international solution.

“We wouldn’t discount that at any time,” said Richardson. “We are prepared if called upon by our State Department and Department of Defense.”

The Biden administration has been adamant that U.S. forces won’t set foot in Haiti to deal with the crisis there. But Richardson’s comments just barely eked open the door to that possibility. Of course, that mission might not be to secure the country but rather to escort U.S. officials out of Haiti and protect refugees making their way out.

EARLY NEXT WEEK: The White House said today that an Israeli delegation to brief the administration on Rafah plans will arrive in Washington early next week. Press Secretary KARINE JEAN-PIERRE offered the timeline to reporters during a news conference, adding that senior U.S. officials would attend the session.

President JOE BIDEN suggested that Israeli Prime Minister BENJAMIN NETANYAHU send the delegation during a Monday call, the first time they spoke over the phone in a month. The U.S. is increasingly fearful that Israel will launch a major ground invasion of the Gaza city without an adequate civilian protection plan in place.

WHAT BIDEN TOLD BIBI: Biden told Netanyahu that he wasn’t trying to interfere in Israel’s politics and push him out of power, a U.S. official said.

Their Monday phone call centered around Israel’s plan to invade Rafah and target 3,000 Hamas militants. But Netanyahu was enraged by reports the administration thinks he will lose the premiership and particularly Senate Majority Leader CHUCK SCHUMER’s speech calling for new elections in Israel.

Biden, who last week said Schumer gave a “good speech,” promised Netanyahu that there was no concerted American effort to see him replaced as prime minister.

Axios’ BARAK RAVID first reported the news of the exchange. Ravid noted in his report that “polls published Wednesday by all three major Israeli TV channels found the majority of Israelis want early elections when the war is over — and that if elections were held today, Netanyahu would be defeated by his rival minister BENNY GANTZ.”

BLINKEN: ‘ACUTE FOOD INSECURITY’: Secretary of State ANTONY BLINKEN today warned about the worsening food crisis in Gaza, CBS News’ CHRIS LIVESAY reports.

"According to the most respected measure of these things, 100 percent of the population in Gaza is at severe levels of acute food insecurity. That's the first time an entire population has been so classified,” Blinken said during a visit to the Philippines today, echoing USAID chief SAMANTHA POWER’s comments last night.

Blinken made the remarks before he heads to the Middle East this week, as the U.S. works to minimize the impact of a potential invasion of Rafah and broker a cease-fire, according to the New York Times’ MICHAEL CROWLEY.

Blinken told reporters in Manila that he’ll be making stops in Jeddah and Cairo to discuss “the imperative of having a plan for Gaza, for when the conflict ends.” The nation’s top diplomat also said he’d be speaking with partners in the region about “what is the right architecture for lasting regional peace.”

PUTIN’S TRAVEL LOG: Russian President VLADIMIR PUTIN will head to China to meet with leader XI JINPING in what could be his first trip abroad after recently claiming another victory in a highly contested presidential election, five people familiar with the matter told Reuters’ LAURIE CHEN, YEW LUN TIAN and GUY FAULCONBRIDGE.

IT’S TUESDAY: Thanks for tuning in to NatSec Daily! This space is reserved for the top U.S. and foreign officials, the lawmakers, the lobbyists, the experts and the people like you who care about how the natsec sausage gets made. Aim your tips and comments at mberg@politico.com and ebazail@politico.com, and follow us on X at @mattberg33 and @ebazaileimil.

While you’re at it, follow the rest of POLITICO’s national security team: @alexbward, @nahaltoosi, @PhelimKine, @laraseligman, @connorobrienNH, @paulmcleary, @leehudson, @magmill95, @johnnysaks130, @ErinBanco, @reporterjoe, and @JGedeon1.

 

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ELECTION 2024

TRUMP’S NATO TWIST: Former President DONALD TRUMP has softened his rhetoric toward NATO in a new interview, while still saying that Europe needs to pay "its fair share" of defense costs, our own ANDREW MCDONALD reports.

"NATO has to treat the U.S. fairly, because if it's not for the United States, NATO literally doesn't even exist," Trump said in an interview with NIGEL FARAGE, the former leader of the Brexit Party in the U.K.

Asked directly if the U.S. — under his leadership — would come to the aid of NATO countries under attack, Trump said it would: “Yeah. But you know, the United States should pay its fair share, not everybody else's fair share.”

He added: "We have an ocean in between some problems ... we have a nice big, beautiful ocean," Trump added. "[NATO] is more important for [European countries], they will take an advantage."

“So if they start to play fair, America's there?" Farage asked.

"Yes. 100 percent," Trump said.

Read: Trump: Jews who vote for Democrats ‘hate Israel’ by our own SAM STEIN

Also read: JARED KUSHNER under fire for calling Gaza waterfront property ‘valuable’ by Eric

Keystrokes

DISINFO OPS COULD DROP: A key U.S. government agency tasked with countering foreign disinformation campaigns is on the chopping block, thanks to House Republicans refusing to reauthorize its funding, The Washington Post’s editorial board wrote this morning.

The board says the Global Engagement Center at the State Department has been working to expose Russian and Chinese disinformation efforts across the globe — but conservatives claim it's being used to censor speech in the U.S., despite the agency's insistence that it only operates abroad.

The GEC's $61 million annual budget and 125-person staff allow it to monitor and respond to disinformation from foreign rivals like Russia, China and Iran. Recent wins include unmasking a new Russian disinformation outfit called "African Initiative" that aimed to undermine U.S. health efforts in Africa, as well as exposing Russian disinformation about the Ukraine war targeted at Latin America.

The GEC has also historically tracked Russian and Chinese annual foreign influence operation funding, with Beijing’s now sitting in the billions.

The Complex

BERLIN FOR UKRAINE: Germany is sending a further $543 million in military aid to Ukraine including thousands of rounds of ammunition, Defense Minister BORIS PISTORIUS said on the sidelines of the meeting of Kyiv's allies today, per our own JOSHUA POSANER and LAURA KAYALI.

The fresh donations will include 10,000 artillery shells from the Bundeswehr's own standing stocks, with deliveries starting "immediately" Pistorius said; armored and transport vehicles are also included.

Read: Europe’s soldiers keep quitting, just when NATO needs them by Laura and Joshua

UKRAINE AID OVERSIGHT: The Biden administration is trumpeting the launch of a new website tracking aid to Ukraine, as it faces steep pressure from Republicans to show what billions of dollars in military assistance are going toward on the battlefield.

The website, www.ukraineoversight.gov, is a joint project of the inspectors-general for the Department of Defense, State Department and USAID. It breaks down funding by department, function and destination, highlighting what funds were used for weapons and supply purchases from U.S. companies.

PACIFIC COMMAND’S WISHLIST: U.S. Pacific Command submitted a whopping $11 billion budget priorities list to Congress, our own CONNOR O’BRIEN scoops (for Pros!).

The request, significantly larger than the command’s previous ones, comes as the U.S. ramps up its military presence in the Pacific and seeks to counter growing Chinese military presence and strength in the region.

Among the priorities spelled out in the list is funding for missile defense of Guam, a key U.S. territory that serves as a strategic outpost for U.S. forces in the Pacific.

 

JOIN US ON 3/21 FOR A TALK ON FINANCIAL LITERACY: Americans from all communities should be able to save, build wealth, and escape generational poverty, but doing so requires financial literacy. How can government and industry ensure access to digital financial tools to help all Americans achieve this? Join POLITICO on March 21 as we explore how Congress, regulators, financial institutions and nonprofits are working to improve financial literacy education for all. REGISTER HERE.

 
 
On the Hill

FIRST IN NATSEC DAILY — WATCH THIS SPACE: A bipartisan group of senators introduced a bill today that would streamline the application process for commercial space launches and the licensing of satellites to better compete with adversaries in orbit.

The Licensing Aerospace Units to New Commercial Heights Act is led by Sens. JOHN CORNYN (R-Texas), BEN RAY LUJÁN (D-N.M.), MARCO RUBIO (R-Fla.), MARK KELLY (D-Ariz.), RICK SCOTT (R-Fla.), and KYRSTEN SINEMA (I-Ariz).

“The United States cannot afford to lose its competitive edge in space, but foreign adversaries like Russia and China will continue making every effort to undermine American innovation,” Cornyn said in a statement. “The LAUNCH Act would make sure the federal government isn’t standing in its own way.”

Bipartisan support will give the senators a boost as they seek to pass the bill.

Read: Generals once again criticize Biden’s Afghanistan withdrawal by our own ANTHONY ADRAGNA

Broadsides

WAR WORRIES IN THE CAUCASUS: Armenian Prime Minister NIKOL PASHINYAN said today he must return disputed territory to Azerbaijan or risk another war with his country’s neighbor, according to our own GABRIEL GAVIN.

“Our policy is that we must prevent a war — we must not allow a war to start,” Pashinyan told locals living near a string of disputed villages near the Georgian border. He argued Armenia could face an attack “by the end of the week” if it doesn’t cede the villages.

Pashinyan’s comments speak to the complicated nature of the territorial disputes between the two Caucasus countries since gaining independence from the Soviet Union, which go beyond major flashpoints like the contested Nagorno-Karabakh enclave.

Both countries say they are “closer than ever” to a peace deal, but negotiations have continually throttled in recent years, especially in the face of Azerbaijani military incursions into Armenian-controlled territory.

Read: Putin calls on FSB to hunt Russians who joined Ukraine’s army by our own DENIS LEVEN

 

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Transitions

— Adm. ALEXANDER MOISEEV was named as acting head of Russia’s navy, per Reuters. He previously served as commander of the Northern Fleet and Black Sea Fleet.

— HawkEye 360 tapped JAMAL WARE as the new vice president of government affairs and public policy. He has served on the House and Senate Intelligence committees, as a consultant for the Office of the Director of National Intelligence, and as national security adviser for the U.S. Export-Import Bank.

SPENCER BOYER is joining DGA-Albright Stonebridge Group to lead the new national security, defense and aerospace practice. He is the former deputy assistant secretary of Defense for European and NATO policy.

What to Read

NAHAL TOOSI, POLITICO: ‘There will be a political reckoning in Israel’

GAVIN WILDE, Foreign Policy: Technology alone won’t break the stalemate in Ukraine

HUGH HEWITT, The Washington Post: Why Israel must go into Rafah and finish Hamas

Tomorrow Today

Wilson Center, 8:30 a.m: Completing the U.S. strategic rebalance with Sen. BILL HAGERTY (R-Tenn.)

–– Ronald Reagan Institute's Center for Peace Through Strength, 8:45 a.m.: Second annual National Security Innovation Base summit

–– Center for Strategic and International Studies, 9 a.m.: The future of U.S.-Japan defense industrial cooperation

Senate Armed Services Committee. 9 a.m.: A hearing on "the final report of the Planning, Programming, Budgeting, and Execution Reform Commission"

Senate Foreign Relations Committee, 9:30 a.m.: A markup vote on nominations

House Armed Services Committee, 10 a.m.: U.S. military posture and national security challenges in the Indo-Pacific region

Atlantic Council, 10 a.m.: Discussion on a new report, "All the Autocrat's Men: The Court Politics of Putin's Inner Circle"

House Homeland Security, 10 a.m.: Examining the current status of Iran's axis of resistance and the implications for homeland security and U.S. interests

Center for Strategic and International Studies, 10 a.m.: A virtual discussion on "Paper Soldiers: How the Weaponization of the Dollar Changed the World Order"

House Foreign Affairs Middle East, North Africa, and Central Asia Subcommittee, 10:15 a.m.: Pakistan after the elections: examining the future of democracy in Pakistan and the U.S.-Pakistan relationship

Henry L. Stimson Center, 10:30 a.m.: The U.S.-Japan alliance: from peace and prosperity in the Indo-Pacific to a global partnership

Carnegie Endowment for International Peace, 11 a.m: Can Israel win its war with Hamas with former Israeli Prime Minister EHUD BARAK

Georgetown University, 1:30 p.m.: The Quad and the free and open Indo-Pacific

House Homeland Security Emergency Management and Technology Subcommittee, 2 p.m.: Securing our nation from WMDs: A review of the Department of Homeland Security's countering weapons of mass destruction office

Senate Armed Services Readiness and Management Support Subcommittee, 2 p.m.:A hearing on the state of the Defense Department acquisition system

Carnegie Endowment for International Peace, 2:45 p.m.: Dollars and diplomacy: Biden's international economic strategy

House Armed Services Intelligence and Special Operations Subcommittee, 3:30 p.m.: U.S. special operations forces and command - challenges and resource priorities for FY2025"

Atlantic Council's Scowcroft Center for Strategy and Security and the Atlantic Council's Freedom and Prosperity Center, 4 p.m.: A book discussion on "We Win, They Lose: Republican Foreign Policy and the New Cold War"

National Press Club, 6 p.m.: A film screening and discussion on "Anna," focusing on the life of Russian journalist ANNA POLITKOVSKAYA and the dangers journalists face in Russia with SEAN PENN. BOB WOODWARD, former CIA director JOHN BRENNAN and Rep. ERIC SWALWELL (D-Calif.)

Thanks to our editor, Emma Anderson, to whom we would never loan money under any circumstances.

We also thank our producer, Gregory Svirnovskiy, with whom we’d trust our credit cards and Social Security numbers.

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F-35: The World's Most Advanced Fighter

The F-35 is the most advanced, connected fighter aircraft in the world – unmatched 5th Generation capabilities for the U.S. and allies around the globe. Learn more.

 
 

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