NATO summit in Vilnius: Russia readies economic response

Ukraine is not going to become a NATO member as a result of the NATO summit in Lithuania's Vilnius. However, it will get more modern weapons and ammunition. Russia is likely to respond by pulling out from the grain deal and cutting off gas supplies to Europe.

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Two options for the outcome of the NATO summit in relation to Ukraine

The two-day NATO summit opened in Vilnius on July 11. Ukraine would like to join NATO during the summit in order to draw the alliance into direct military confrontation with the Russian Federation. The United States and Germany are strongly opposed to such a development for obvious reasons. Germany remembers 1945, and the United States is aware of the fact that Russia is the only country in the world that can destroy America in a nuclear strike.

Therefore, Ukraine will not join NATO either in Vilnius or in any city. NATO currently considers two options:

1. Pretend that Ukraine is going towards NATO membership endlessly through "reforms". According to US National Security Adviser Jake Sullivan, NATO will outline a reform path for Ukraine so that it can join the Atlantic alliance, but without a "calendar".

Hungarian Foreign Minister Péter Szijjártó said that the final document in Vilnius would not include either a schedule or a date for Ukraine's entry into the alliance. It will probably say that it will enter "after the war." This means that Ukraine will join NATO after the conclusion of a peace agreement according to the Korean scenario — i. e. without part of its territories.

2. NATO may offer Kyiv security guarantees similar to those that Israel has. US President Joe Biden made such a proposal. Biden is expected to hold a meeting with Zelensky on July 12. Israel currently receives about $4 billion in aid a year, with no guarantees of its physical protection.

Ukraine received $75.5 billion in aid from the United States in 2022, The Hill said. This year, the United States allocated $45 billion to Kyiv. That is, the "Israeli option" requires a lot more funds. These are gigantic investments even for the United States.

The creation of the Ukraine-NATO Council is another measures of support. This comes as a continuation of the Budapest Memorandum that ended fruitlessly for Ukraine.

NATO to supply more modern weapons

The Armed Forces of Ukraine are running out of ammunition. Therefore, one shall expect announcements of new arms deliveries before and after the summit.

British Prime Minister Rishi Sunak said that the British capacity for the production of 155-mm artillery ammunition would be increased eight times, Reuters said.

France will transfer long-range Scalp missiles to Ukraine to support the offensive, Emmanuel Macron said upon his arrival in Vilnius. This is a French version of the British long-range Storm Shadow missile that the UK earlier supplied to Ukraine. The range of the French missile is about 250 km.

Germany will transfer additional air defence systems and infantry fighting vehicles to Ukraine, Spiegel reports. The new €600 million military aid package will include launchers for the Patriot air defence system, Marder-type armoured vehicles and Leopard 1 A5 tanks, as well as about 20,000 artillery shells, shells for Leopard tanks and reconnaissance drones.

Russia will respond with an economic blow

How shall Russia respond to the escalation? Russian drones struck the port of Odessa at night. This already suggests that the Russian Federation is pulling out from the grain deal. This will deprive the Kyiv regime of significant financial support — about $12 billion a year.

The head of Gazprom, Aleksey Miller, warned that the Russian natural gas monopoly would impose sanctions on Ukraine's Naftogaz should the latter continue bombarding Gazprom with lawsuits.

If Russia cuts gas supplies to the European Union — 42.4 million cubic meters per day — will create difficulties not only for Kyiv ($1.25 billion of losses from transit per year), but also for Europe — winters will be harder to live through and inflation will grow.