It may be difficult for an American to admit, but the confrontation between Russia and the West will not be solved by the power and influence of the U.S. The contestant on behalf of the West is Europe, led by a Germany that steadily sees itself as the guardian of European values. Much depends on Berlin in how this confrontation plays out, because it has become the unifying factor in Europe’s stand against Russian actions in Ukraine. Europe’s success is far from certain, because Russia has a clear vision for how the use of force can achieve its desired political ends. Russia has the means and the political will to execute it. Germany, however, has not presented a vision for how Europe’s use of economic and diplomatic power will result in a resolution to the conflict in Ukraine or in the broader confrontation with Russia. Almost a year into the crisis, this is a problem.
In Ukraine, Germany’s only visible plan so far is to keep the Europeans together on the several tiers of sanctions leveled against Russia. Not a simple task, given France’s desperation to deliver the Mistral helicarriers, and other member states looking for the first excuse to start repealing them. The sanctions have worked to hurt Russia, according to the Minister of Finance, Anton Siluanov. They have cost $40 billion in 2014, but they are not a deciding factor in any part of this conflict. Russia has lost another $100 billion due to the crumbling oil prices and the fact it was already entering a recession at the start of 2014. This year’s growth expectations have been slashed from 1.2 percent of GPD to a .8 percent contraction, the ruble has devalued by over 30 percent, and inflation is likely to be in the 9 to 10 percent range. The sanctions have put Russian companies in a bind by cutting them out of the Western financial system and creating an artificial liquidity problem. But this problem is within Moscow’s financial means to solve.
The challenge for Europe is that not only have the sanctions failed to be coercive, they are ineffectively punitive. Russia faced economic adversity anyway, and there are no Western terms it can meet in Ukraine that will serve to improve global oil prices. Saudi Arabia’s decision to suppress U.S. shale production by keeping its oil output level at a loss is more to blame for Moscow’s economic woes than anything Europeans have done all year. Ultimately the sanctions make a great scapegoat for economic failures that would otherwise have been blamed on Vladimir Putin, and rally the Russian public to an extent unseen during his 15 year tenure. They have thus far gained no demonstrable respite for Ukraine on the ground.
Germany is busily keeping Europeans together in this policy, reminiscent of its austerity prescriptions for the financial crisis in Europe. But these temporary measures could soon become the norm in the West’s relationship with Russia. To paraphrase Milton Friedman, nothing is as permanent as temporary government measures. Nothing good can come of these sanctions becoming permanent, because they are not a visible means to any political end. If the strategy is to raise the cost of aggression for Moscow, then clearly the West has not figured out a price that Russia is unwilling to pay for pursuing its interests in Ukraine. Such a price might easily be beyond the West’s will to implement. It is evident that Germany rallied European states to implement these sanctions too soon, and likely did so out of a political calling to become the unifying voice in Europe as opposed to just the mediator. Now it is stuck, because Moscow is undeterred, and applying further economic pressure on Russia risks damaging its economy so much that it could eventually collapse or politically destabilize the country.
Ukraine itself is just at the start of an arduous journey as a country. Its economic and political needs would test Western commitment on their own, but how can Germany lead an effort to rebuild this dysfunctional nation if Russia plans to sabotage it? With each month, the EU discovers not only that Ukraine will need billions more in bailouts, but additional sectors of the country’s economy where Russia has the controlling leverage. Having temporarily solved the gas-pricing dispute, the EU quickly finds that half of Ukraine’s electricity depends on coal in separatist hands. Its defense sector is highly interdependent with Russia’s. Ukraine has lost more than 7 percent of its GDP, its reserves are desperately low, and the currency valuation is a disaster. Meanwhile, Russia has augmented roughly 25,000 separatist fighters in the breakaway enclaves with 7,000 to 8,000 of its own regulars, an arsenal of heavy armor, and weekly shipments of ammunition. This is a force quite capable of driving through Ukraine’s army if Vladimir Putin decides there should be another offensive.
The ceasefire signed in Minsk was a stopping point, not the basis for a permanent agreement. Russia appeared under the impression that Western leaders would press Ukraine into hard compromises with its proxy separatist representatives, giving them autonomy and influence over national politics. Otherwise there was no reason for it to propose a ceasefire when it had Ukraine’s army completely routed. Certainly the separatists had no need for it. Instead the West has keenly used the deal to push for Russian troop withdrawal, demand a ceasefire, and buy precious time for Ukrainian fighters to regroup without having Kiev sacrifice anything in the process. Ukraine’s parliament approved an opaque limited autonomy for select parts of the separatist enclaves and promptly repealed it after the elections. This is a brilliant negotiating approach, except that it gives Moscow little choice but to resume the war to force a new agreement that might give it what it wants. Hence the Russian general staff is busily setting up the military option in the Donbass. More sanctions seem to be a mismatched response, if there is anyone in the Kremlin, who is not on the janitorial staff, still left to sanction.
Russia poses a long-term challenge to Europe as well, besides the mess in Ukraine—a bigger problem Germany has yet to answer. Russia had been working to increase its influence and improve relations with key EU member states for years. Ironically, Germany was its primary target, and Moscow worked extensively to improve economic and political ties. Trade reached not an insignificant $76 billion in 2013; the Nord Stream pipeline came online despite Baltic opposition, and Vladimir Putin’s best relationship was arguably with Angela Merkel. Russia had made targeted energy, infrastructure, or military deals with other EU members as well. Despite years of effort to create bilateral ties, EU members unified anyway in opposition to Moscow’s actions. Undoubtedly a surprise and disappointment for Vladimir Putin, this only accelerates Russia’s other strategy to grow its support in Europe at the sub-national level.
Europeans have awoken to discover that Russia has been heavily involved in supporting right wing and euro-skeptic parties across the continent. This effort has not been wasted; 2014 saw these factions make record gains in national parliaments. Russia has tried to posture itself as the model of more traditional, conservative, European values. It does not pose an existential threat to the EU, but it alters the meaning of EU expansion. At this point, the more the EU expands, the less of a threat it is to Russia. Many of the likely prospects for EU expansion are either traditional Russian allies in the Balkans, like Serbia; countries where pro-Russian parties represent a significant portion of the legislature, like Moldova; or countries that are owned by Russia outright, like Montenegro. Georgia has walked quite far off the reformist path Mikhail Saakashvili put it on and Turkey just hosted Vladimir Putin for a state visit that looked anything but on point with Western attempts to make Russia look isolated.
Eurocrats have not considered the possibility that Russia has headed them off at the pass. This is the broader geopolitical contest with Russia that Europe may have already lost, because the countries on its future admission list are just as likely to become pro-Russian voices in the vein of Hungary than they are to be team players. Here Germany’s leadership has consisted of little more than complaining about Russia’s interference in the affairs of these states. It would be better were Russia to burn its political capital to keep them out of the EU. The greater danger is if Moscow happily sent them in, securing its influence, and steadily corrupting the EU from the inside. Instead of stopping to deal with this insurgency, and put its house in order, the EU boldly presses forward with blinders on.
Michael Kofman is currently serving as a Public Policy Scholar at the Kennan Institute, Wilson Center. His research focuses on security issues in Russia and Eastern Europe. Previously he served at National Defense University as a Program Manager and subject matter expert, advising senior military and government officials on issues in Russia/Eurasia and Pakistan.
Photo: Pete Souza.
This article was originally written in December 2014 and published in the Diplomatic Courier's January/February 2015 print edition.
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Germany Proves An Uncertain Leader In Confrontation With Russia
February 11, 2015
It may be difficult for an American to admit, but the confrontation between Russia and the West will not be solved by the power and influence of the U.S. The contestant on behalf of the West is Europe, led by a Germany that steadily sees itself as the guardian of European values. Much depends on Berlin in how this confrontation plays out, because it has become the unifying factor in Europe’s stand against Russian actions in Ukraine. Europe’s success is far from certain, because Russia has a clear vision for how the use of force can achieve its desired political ends. Russia has the means and the political will to execute it. Germany, however, has not presented a vision for how Europe’s use of economic and diplomatic power will result in a resolution to the conflict in Ukraine or in the broader confrontation with Russia. Almost a year into the crisis, this is a problem.
In Ukraine, Germany’s only visible plan so far is to keep the Europeans together on the several tiers of sanctions leveled against Russia. Not a simple task, given France’s desperation to deliver the Mistral helicarriers, and other member states looking for the first excuse to start repealing them. The sanctions have worked to hurt Russia, according to the Minister of Finance, Anton Siluanov. They have cost $40 billion in 2014, but they are not a deciding factor in any part of this conflict. Russia has lost another $100 billion due to the crumbling oil prices and the fact it was already entering a recession at the start of 2014. This year’s growth expectations have been slashed from 1.2 percent of GPD to a .8 percent contraction, the ruble has devalued by over 30 percent, and inflation is likely to be in the 9 to 10 percent range. The sanctions have put Russian companies in a bind by cutting them out of the Western financial system and creating an artificial liquidity problem. But this problem is within Moscow’s financial means to solve.
The challenge for Europe is that not only have the sanctions failed to be coercive, they are ineffectively punitive. Russia faced economic adversity anyway, and there are no Western terms it can meet in Ukraine that will serve to improve global oil prices. Saudi Arabia’s decision to suppress U.S. shale production by keeping its oil output level at a loss is more to blame for Moscow’s economic woes than anything Europeans have done all year. Ultimately the sanctions make a great scapegoat for economic failures that would otherwise have been blamed on Vladimir Putin, and rally the Russian public to an extent unseen during his 15 year tenure. They have thus far gained no demonstrable respite for Ukraine on the ground.
Germany is busily keeping Europeans together in this policy, reminiscent of its austerity prescriptions for the financial crisis in Europe. But these temporary measures could soon become the norm in the West’s relationship with Russia. To paraphrase Milton Friedman, nothing is as permanent as temporary government measures. Nothing good can come of these sanctions becoming permanent, because they are not a visible means to any political end. If the strategy is to raise the cost of aggression for Moscow, then clearly the West has not figured out a price that Russia is unwilling to pay for pursuing its interests in Ukraine. Such a price might easily be beyond the West’s will to implement. It is evident that Germany rallied European states to implement these sanctions too soon, and likely did so out of a political calling to become the unifying voice in Europe as opposed to just the mediator. Now it is stuck, because Moscow is undeterred, and applying further economic pressure on Russia risks damaging its economy so much that it could eventually collapse or politically destabilize the country.
Ukraine itself is just at the start of an arduous journey as a country. Its economic and political needs would test Western commitment on their own, but how can Germany lead an effort to rebuild this dysfunctional nation if Russia plans to sabotage it? With each month, the EU discovers not only that Ukraine will need billions more in bailouts, but additional sectors of the country’s economy where Russia has the controlling leverage. Having temporarily solved the gas-pricing dispute, the EU quickly finds that half of Ukraine’s electricity depends on coal in separatist hands. Its defense sector is highly interdependent with Russia’s. Ukraine has lost more than 7 percent of its GDP, its reserves are desperately low, and the currency valuation is a disaster. Meanwhile, Russia has augmented roughly 25,000 separatist fighters in the breakaway enclaves with 7,000 to 8,000 of its own regulars, an arsenal of heavy armor, and weekly shipments of ammunition. This is a force quite capable of driving through Ukraine’s army if Vladimir Putin decides there should be another offensive.
The ceasefire signed in Minsk was a stopping point, not the basis for a permanent agreement. Russia appeared under the impression that Western leaders would press Ukraine into hard compromises with its proxy separatist representatives, giving them autonomy and influence over national politics. Otherwise there was no reason for it to propose a ceasefire when it had Ukraine’s army completely routed. Certainly the separatists had no need for it. Instead the West has keenly used the deal to push for Russian troop withdrawal, demand a ceasefire, and buy precious time for Ukrainian fighters to regroup without having Kiev sacrifice anything in the process. Ukraine’s parliament approved an opaque limited autonomy for select parts of the separatist enclaves and promptly repealed it after the elections. This is a brilliant negotiating approach, except that it gives Moscow little choice but to resume the war to force a new agreement that might give it what it wants. Hence the Russian general staff is busily setting up the military option in the Donbass. More sanctions seem to be a mismatched response, if there is anyone in the Kremlin, who is not on the janitorial staff, still left to sanction.
Russia poses a long-term challenge to Europe as well, besides the mess in Ukraine—a bigger problem Germany has yet to answer. Russia had been working to increase its influence and improve relations with key EU member states for years. Ironically, Germany was its primary target, and Moscow worked extensively to improve economic and political ties. Trade reached not an insignificant $76 billion in 2013; the Nord Stream pipeline came online despite Baltic opposition, and Vladimir Putin’s best relationship was arguably with Angela Merkel. Russia had made targeted energy, infrastructure, or military deals with other EU members as well. Despite years of effort to create bilateral ties, EU members unified anyway in opposition to Moscow’s actions. Undoubtedly a surprise and disappointment for Vladimir Putin, this only accelerates Russia’s other strategy to grow its support in Europe at the sub-national level.
Europeans have awoken to discover that Russia has been heavily involved in supporting right wing and euro-skeptic parties across the continent. This effort has not been wasted; 2014 saw these factions make record gains in national parliaments. Russia has tried to posture itself as the model of more traditional, conservative, European values. It does not pose an existential threat to the EU, but it alters the meaning of EU expansion. At this point, the more the EU expands, the less of a threat it is to Russia. Many of the likely prospects for EU expansion are either traditional Russian allies in the Balkans, like Serbia; countries where pro-Russian parties represent a significant portion of the legislature, like Moldova; or countries that are owned by Russia outright, like Montenegro. Georgia has walked quite far off the reformist path Mikhail Saakashvili put it on and Turkey just hosted Vladimir Putin for a state visit that looked anything but on point with Western attempts to make Russia look isolated.
Eurocrats have not considered the possibility that Russia has headed them off at the pass. This is the broader geopolitical contest with Russia that Europe may have already lost, because the countries on its future admission list are just as likely to become pro-Russian voices in the vein of Hungary than they are to be team players. Here Germany’s leadership has consisted of little more than complaining about Russia’s interference in the affairs of these states. It would be better were Russia to burn its political capital to keep them out of the EU. The greater danger is if Moscow happily sent them in, securing its influence, and steadily corrupting the EU from the inside. Instead of stopping to deal with this insurgency, and put its house in order, the EU boldly presses forward with blinders on.
Michael Kofman is currently serving as a Public Policy Scholar at the Kennan Institute, Wilson Center. His research focuses on security issues in Russia and Eastern Europe. Previously he served at National Defense University as a Program Manager and subject matter expert, advising senior military and government officials on issues in Russia/Eurasia and Pakistan.
Photo: Pete Souza.
This article was originally written in December 2014 and published in the Diplomatic Courier's January/February 2015 print edition.
