Putin does not have to worry about serious economic retaliation. Germany has effectively vetoed use of the financial “nuclear option”,which would be to expel Russia from the SWIFT system of international payments. Berlin’s argument is that such sanctions have asymmetric blowback. The US has little direct exposure and would suffer modest loss. German and European companies with large interests in Russia would take the brunt.
This leaves little on the table beyond surgical sanctions on Russian banks and other manageable frictions. “I don’t see anything on the economic front that would seriously frighten Putin,” said Ian Bond,former ambassador and British security planner now at the Centre for European Reform.
If Putin is to attack,he must act soon. He has a narrow window for a combined-arms invasion with tanks and towed-artillery before the ground turns into a bog.
The military imperative is to lunge deep into Ukraine and deliver a knock-out blow before the mid-March thaw. That is not easy:it took six weeks for Russian forces to clear the Chechen capital of Grozny in urban fighting. Kyiv,Kharkiv,Dnipro,Zaporizhzia,and Odessa are all larger.
A team of ex-military officers and planners writing for the Atlantic Council say that Putin has over the past week “set the conditions to execute a high intensity,multi-domain attack”.
This includes the deployment of air-defence systems,electronic-warfare platforms,Iskander-K medium-range ballistic missiles,and combat sustainment units. It has used forthcoming manoeuvres with Belarus as cover to bring forward Su-35 advanced fighters and S-400 surface-to-air missiles. Still missing is the clinching evidence that Russia has begun to call up reservists.
Members of Ukraine’s Territorial Defence Forces,volunteer military units of the Armed Forces,train in a city park in Kyiv,Ukraine.Credit:AP
The Centre for Strategic and International Studies in Washington has laid out the likely options for the Kremlin in an essay by CIA veteran Philip Wasielewski and CSIS security chief Seth Jones.
Putin could peel off the Black Sea coast and link up to the Crimea,perhaps pushing beyond Odessa to deprive Ukraine of its entire coast. However,the British warning on Sunday suggests that he aims for total decapitation of the Ukrainian state.
He could seize the whole of Orthodox Eastern Ukraine as far as the Dnieper River. But this would leave a large enough rump to survive as a viable state and permanent headache.
The conquest would have to include Kyiv,the great prize for Putin,who harks back to Kievan Rus as the ancient cradle of the Russian nation in his mythologised ethno-nationalist version of history.
The CSIS says Putin could go further and annex all of the country,except the mostly Catholic lands to the West (old Galicia). This former Habsburg pocket would be hard to hold down over time.
Putin could try to take everything and announce a tripartite Slavic union of Russia with Ukraine and Belarus,reuniting “all the Russias” of the Tsars. This would require ruthless Russification,by the methods of Catherine the Great or Stalin.
Energy dependence has turned core Europe into an accomplice by default. Russia is currently supplying roughly 120 billion cubic metres of gas through all pipelines or as liquefied natural gas (ICIS data). This accounts for half of German needs in industry,power,and home-heating,and even higher ratios in a string of EU countries.
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If this was cut off entirely – tricky for Russia without damaging its own gas fields – the gap could in extremis be plugged from global sources. ”It would take 160 LNG cargoes a month,out of the global total of 400,” said Thierry Bros,former head of energy security at France’s economy ministry. “It would be like the Berlin airlift. It is doable,but I think it would prove much harder than it looks on paper,” he said. US liquefaction export plants are already running at 95 per cent capacity. Much of the global LNG supply to Asia is on fixed contracts. You cannot reroute cargoes on a huge scale except by political force majeure. Prices would go through the roof and there would be industrial rationing in Europe and Asia,a violent shock for supply chains.
Europe has no stomach for such an experiment. Top figures in the German Social Democratic Party are not even willing to take Nord Stream 2 off the table if Putin annihilates Ukraine. Defence minister Chrisinte Lambrecht said there is “no connection” between the two issues.
Chancellor Olaf Scholz has belatedly agreed to demands from Washington and his Green coalition partners that there should be some linkage,but the commitment is too vague and half-hearted to have much deterrent value. He still insists that the pipeline is a purely “commercial” matter.
Germany has not only refused to sell vital weapons to Ukraine - although it is the world’s fifth biggest arms exporter - but is actively preventing its NATO allies from doing so.
Putin can ignore Europe. What he does have to worry about is what happens inside Ukraine itself. He cannot know for sure how much of the population will acquiesce in a Slavic Anschluss. He must contend with Ukraine’s battle-hardened army,equipped with US and British Javelin anti-tank missiles,and backed by 900,000 reservists on call and in location. It might resist tenaciously and greatly raise the political cost for Putin in Russia.
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The Kremlin has overwhelming air superiority,but the US is upping the ante by providing Ukraine with Stinger anti-aircraft missiles. These come too late to change the immediate battlefield balance,but they signal a US intent to supply a Mujahideen-style insurgency after any invasion.
Washington is dusting down the Reagan Doctrine of the 1980s. The US judged - correctly - that it could bleed the Soviet Union dry by arming resistance movements wherever the Soviets were overextended. For every dollar spent,it cost Moscow $10.
Will Ukrainians go along with an attrition policy in which they pay the highest price? These are the unknowns that may yet cause Putin to hesitate.
Investors are struggling to price this extraordinary showdown. Markets always have trouble adjusting to geopolitical convulsions. There is a reflexive assumption that talks will avert the unthinkable and that the status quo will reassert itself.
The London and Paris bourses remained becalmed in the weeks before the First World War,slow to grasp why Sarajevo was different and unique,a “gift from Mars” as it was later discovered to have been called by the German high command.
There again,perhaps the collective intuition of the markets is that earnings will scarcely miss a beat even if there is an invasion. It is a fair bet that Europe will roll over as it did over Crimea. A despairing Washington might accept a fait accompli and cut its losses. Such a squalid outcome is all too plausible.
The Telegraph,London