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By Mario Holzner

Shockwaves rippled through Kyiv and across Europe when Donald Trump unveiled his infamous 28-point plan in November 2025. It soon became clear that the US president’s so-called ‘peace plan’ for Ukraine was largely built around Russia’s core demands and appeared to have been drafted in close consultation with the Kremlin. The proposal required Ukraine to renounce all territories seized by Putin’s forces, imposed a cap of 600,000 troops on the Ukrainian armed forces and formally ruled out Ukraine’s accession to NATO.

Under pressure from European governments, the plan was watered down during negotiations in Geneva. However, crucial issues – including Ukraine’s future borders, the question of NATO membership and long-term security guarantees – were deliberately left unresolved. Instead, the revised draft stipulated that these highly contentious matters would be addressed in further negotiations at presidential level.

This has fuelled fears that US President Trump may ultimately impose a dictated peace on Ukraine largely on Russia’s terms. Determined to end what he regards as a troublesome war at almost any cost, Trump appears eager to clear the way for renewed economic relations with Moscow, allowing him to focus on business deals with the Kremlin. Russian President Vladimir Putin, for his part, has already made it clear that he will demand sweeping territorial concessions and a significant curtailment of Ukrainian sovereignty – or else he will simply continue the war, convinced that he is on the path to military victory.

But what would such a dictated peace mean? For Ukraine, it would undoubtedly be a nightmare. Deprived of significant territories and its political independence, all hopes of rapid reconstruction and a prosperous economic future would be dashed for the foreseeable future. Without credible security guarantees through NATO membership and without powerful Western peacekeeping forces on its territory, there would also be a risk in the medium term that the country would be reduced to a Russian vassal state with a government loyal to Moscow. Putin would find it hard to resist this temptation – just look at Belarus.

Without watertight security guarantees, however, every Western investor would think twice about investing even a single euro in Ukraine. Given the immense reconstruction costs – estimated at well over EUR 500bn – and the country’s heavy reliance on Western financial assistance, the outlook for Ukraine’s already fragile economy is bleak. A lack of economic prospects and an uncertain future in Moscow’s orbit could also lead to the further mass emigration of young and well-educated people – the kind of people whom Ukraine already sorely lacks today. Since the Russian invasion, almost 7 million people have left the country. A further exodus could lead to a massive labour shortage after the war, which would jeopardise Ukraine’s reconstruction and economic development for decades to come.

Ukraine’s prospects of joining the European Union would therefore recede into the distance – even if Putin were, in principle, to ‘grant’ membership, as he has patronisingly suggested. Without sustained economic recovery, the development of competitive industries and profound institutional reforms to strengthen the rule of law and curb corruption under a pro-Western government, EU membership would, in practice, be off the table.

Such an outcome would push the country further into the grip of Russian imperialism and entrench its economic underdevelopment for years to come. Beyond the morally reprehensible and internationally unlawful rewarding of territorial conquest by the Russian aggressor, this would likely represent the most bitter defeat of all for the Ukrainian people.

Across Central Eastern Europe – now home to 11 EU member states – a dictated peace on Putin’s terms would seriously endanger the region’s current growth model. This model relies heavily on foreign direct investment from multinational corporations, for which credible security guarantees have been essential. Until now, the military protection provided by the US through NATO has been an indispensable prerequisite for such investment.

These hard security guarantees are now in question. While Putin seeks to reshape the European security order to Russia’s advantage, Trump has simultaneously undermined NATO’s credibility and cohesion – not least through his claims to Greenland, which belongs to Denmark, a NATO ally.

Without firm and credible security guarantees, foreign direct investment would likely dry up, as few investors would be willing to risk their capital in the face of a persistent Russian threat. Drone incursions, cyberattacks and acts of sabotage are already generating uncertainty in EU and NATO member states in Central Eastern Europe, undermining investor confidence.

This deterioration in the situation is reflected in the sharp decline in foreign direct investment in the region since the Russian invasion of Ukraine, with damaging consequences for overall economic sentiment. In practice, the countries of Central Eastern Europe are already engaged in a hybrid and largely invisible conflict with Russia. While economic growth has so far remained relatively resilient, this sustained pressure is increasingly weighing on their economies.

If peace were to be concluded on Russia’s terms and without firm security guarantees, the old EU members of Western Europe would be forced to increase their defence spending even more drastically than they had been planning in the event of robust security guarantees for Ukraine. This would result in even tougher cuts in other areas of government spending,  even higher public debt, or even higher taxes.

Politically, such pressures could provide a fillip to populist movements and further destabilise Western European democracies – an outcome that Vladimir Putin would certainly welcome. A dictated peace in Ukraine would serve his interests and his interests alone, and would significantly strengthen his position. Western decision makers should think long and hard about this.