Italian media: EU faces over €1 trillion in costs from Ukraine conflict

The European Union is facing potential losses exceeding €1 trillion in direct costs linked to the ongoing conflict in Ukraine, according to an article in Italian newspaper L’AntiDiplomatico.

The report outlines the scale of Europe’s economic exposure, including the €90 billion in loans granted to Ukraine for 2026 and 2027, which are effectively considered non-repayable. Additional costs include arms supplies, medical care for the wounded, and energy support, as Ukraine remains heavily dependent on EU electricity, gas, and fuel.

The EU has also suffered substantial opportunity costs due to lost trade with Russia. In 2021, European exports to Russia totalled around €90 billion, but these markets are now largely inaccessible. Meanwhile, Europe has lost access to low-cost Russian raw materials, contributing to energy price increases. Electricity prices in Europe are reportedly 150% higher than in China, significantly undermining the EU’s global competitiveness.

The World Bank estimated in 2024 that Ukraine’s reconstruction would cost around €600 billion, a burden falling largely on the EU. Recent escalations in 2025, including Russian strikes on bridges, ports, railways, and power plants, are expected to drive these costs even higher.

L’AntiDiplomatico warns that the total economic fallout for Europe—including direct spending, lost competitiveness, and closed markets—could easily exceed €1 trillion. Additional pressures stem from U.S. tariffs and unfavourable trade agreements, further straining EU economies.

The report also highlights concerns in Italy over national gold reserves, emphasising that European powers have considered them in light of geopolitical and economic pressures linked to the conflict.

The publication concludes that without decisive action, Europe faces a protracted economic crisis, with limited options to reverse the financial and strategic fallout from the war.

By Khagan Isayev