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Nosemonkey's EUtopia

In search of a European identity

Russia: History and humiliation

Two interesting – and thematically related – pieces look at past conflicts in relation the the Georgia / Russia spat over the last couple of days have prompted some thoughts along the old comparative history line (always an interesting intellectual exercise, as long as you don’t take it too seriously or literally).

First, over at Fistful, Douglas Muir looks at the Second Balkan War of 1912, and the impact Bulgaria’s failure to win had on that nation’s subsequent history (short version: bitter resentment, paramilitary reprisals, fighting on the losing side in both World Wars, more bitter resentment). Georgia’s failure to reassert her dominance over South Ossetia, Douglas posits, is decidedly comparible to Bulgaria’s failure to retake Macedonia and other “Bulgarian” territories in the Balkans. Or, as Douglas puts it,

“losses of national territory are hard for any nation to accept”.

Then, on BlogActiv, Stanley Crossick looks at the post-Fukuyama return of history and the possibilities of Cold War Mk.II:

“Cold War II may soon be with us – indeed will be with us – if we have still to learn the cost of humiliating the Russian Bear… Vladimir Putin has stated that the collapse of the Soviet Union was the worst geopolitical disaster of the 20th century: he means it.”

Russia was on the losing side in the Cold War – hell, Russia WAS the losing side in the Cold War. Russia is now weak, with a shaky economy that relies largely on the money of her erstwhile enemies. She has lost large chunks of her former territory, and has to see ethnic Russians and Russian speakers scattered throughout the lands of near neighbours where once those lands belonged to her. Meanwhile, her old enemies in NATO are pushing ever closer to her borders, sucking in former allies and making new treaties with countries that used to be Russia’s friends.

For any country, such post-defeat humiliation would be hard to bear, and breed ever more resentment of the victors – both among the politicians and the people. For a country like Russia, with a long macho culture, such humiliation is even more unbearable. But have we learned our lesson? For we have made this mistake before:

From Harold Nicholson‘s diary, written while he was a junior diplomat at the 1919 Paris Peace Conference (from the Wednesday, 28 May entry):

“The more I read the [German peace treaty], the sicker it makes me… If I were the Germans, I shouldn’t sign for a moment. You see it gives them no hope whatsoever, either now or in the future.”

As the old USSR fell apart during the 90s, the US-backed “shock therapy“, designed to push the country towards neoliberal capitalism and democracy, humiliated and alienated the Russian people just as did the reparations clauses of the Treaty of Versailles the Germans. Resentment grew, especially of the “oligarchs” – prompting first the 1993 constitutional crisis, where Yeltsin sent in the special forces against the Duma, then (arguably) the First Chechen War of 1994-6. The 1998 financial crisis (followed swiftly by the Second Chechen War) was, for many, the final proof that the Western way of doing things had failed. It was, with hindsight, to post-Soviet Russia what the Wall Street Crash was to Weimar Germany – the final catalyst to spark the reaction. With Putin’s 1999 rise, the reforms of the Yeltsin years began to be swept back. He determined not to tolerate Chechnya’s de facto independence any longer, to clamp down on the oligarchs, to reassert state control over companies left, right and centre. Russia had been humiliated and exploited enough.

And yet now, despite the failures of the 1990s, the West is demanding that Russia return to that self-same path of neoliberal reform. We’re still saying the same things that we were in ’89, in ’91, in ’93 and in ’98. And all the while, the influence of the West has been advancing – the expansion of NATO into the old Soviet / Warsaw Pact sphere in 1999 and in particular the 2004 expansion of the EU (and NATO) to include old USSR territories Estonia, Latvia and Lithuania – bringing the borders of the EU to within 80 miles of Putin’s home town of St Petersburg. Just as Weimar Germany saw parts of its territory go over to its erstwhile enemies, so has Russia. Hence the desperation to hang on to Chechnya. Hence the sabre-rattling over the US missile defence shield. Hence the ongoing meddling in Ukraine and Georgia.

For the duration of the Soviet Union, Russians were raised to distrust the West, to regard it as decadent and full of corruption. Russia’s experience of rampant neoliberal reform during the 1990s merely confirmed this as the rich got richer and the poor stayed poor.

And still the West persists with pressurising Russia. With the best intentions, no doubt. But democratic reform cannot come about if the people themselves don’t want it. Free markets will only be enthusiastically adopted if the people experience the benefits, rather than just entrepreneurs who swiftly become insanely rich oligarchs through dodgy deals and exploitation.

By trying to impose our will on the defeated side, we will only foster ever greater resentment that the war was lost. Russia is unlikely to breed a Hitler; but the rise of extremist nationalism, the tentative nibbling at the edges of former territories, the economic resentment – all these we have seen before in other times, other places.

The First World War’s bad peace was the primary cause of the Second World War. Let’s try to avoid the Cold War’s bad peace sparking a sequel as well. If we don’t want Russia to get ever more resentful, ever more humiliated, threats and punishments are not going to do the job.


  1. It seem as if everyone is getting their knickers in a twist. Everyone is looking for historical parallels and throwing around anything that they think is vaguely applicable with a very ‘loose’ understanding of history. This is a completely different age. Europe needs Russia and Russia needs Europe. There is far too much money at stake. Apart from some stock market jitters and a few overly nervous businessmen in Russia leaving, there are no real signs of any melt down. Europe has long been too lazy to seal a deal with Russia and have been far more hypocritcal and insulting than the US. Ukraine gets to join the WTO but not Russia?!!! How long has Russia been trying to join now? Europe had its chance and frankly didn’t care as long as the profits kept haemorraging back home from their businesses (german supermarkets, IKEA etc.)

    What a joke.

    Despite all this, Putin will surely be pushing for a grand deal with the EU. The problem is, and always was, the new member state who are still buds with the US. How can the EU seal any kind of deal if these new states continue to hide behind nato and the EU and deliberately poke the Russians? What a bunch of wierdos. In Poland, big multinational companies want applicants with Russian language skills. From almost no interest in learning russian post 1989, language courses have sprung up.

    On another economic note, western airlines save $$$ in fuel costs by being allowed to fly the great circle route over Russia to the east (though the russians still charge an arm and a leg and do not grant these rights to all western airlines). What of the potential to transport goods from asia via south korea & north korea directly overland to Europe by the russian railway system? It would be much cheaper to do and lower consumer prices, it would cut sealane traffic (in strategic choke points like the malacca straits), ship bio-pollution etc.

    I think the real big historical question that some have touched upon, is how will the US cope with its diminishing ability to influence world evens unilaterally or even with some european cooperation? For all the screaming english language press saying that the ‘world has an eye upon Russia’ and will be judged, well what of the Indians, the Chinese, Asia & Latin America? Where is their condemnation? They certainly don’t see with the same eyes.

    The US is being kicked out of LatAm, just now having been formally asked to leave Manas airbase in the Kyrgyz Republic (will major effect on NATO in Afghanistan) and a direct bitchslap by putin and the landbridge for NATO through Russia to Afghanistan has now also been put in doubt, Manta in Ecuador (Panama refusing to provide and alternative, which is quite amazing – it is the equivalent of giving them the bird). Smaller countries seem to be more willing to ignore US demands.

    Maybe it is the US which is the bigger threat to the world than Russia? Russia is still militarily weak, its economy yet sufficiently diversified and it is fighting on home turf. It is the US that is over-extended globally and cannot seem to focus on more than one crisis at a time. While it spends over $500b a year on weapons and Iraq & Afghanistan is sucking resources into war rather than its economy, the Chinese are quietly powering ahead, using ‘soft power’ more effectively than is being managed by the EU.

    When the Berlin wall fell, everything east was forced to change. Russia’s mass shock privatization had nothing to do with the economy, but to stop the communists from ever regaining power (google ‘Noreena Hertz’, hence the lack of ‘advice’ and pressure to privatize in countries such as Poland. These new states have already been adapting at break-neck speeds. The US ‘won’ the Cold War, but sat on its laurels thinking it could just continue without having to make some real changes. What is it the Americans really want? To pick fights with Russia? To be a ‘globo-cop’? To have European allies in NATO who spend miserly amounts on defense and depend on the US to hold their hands? Morals? Even the great Clinton refused to call Rwanda a ‘genocide’ because that would have meant intervening. It is funny how such ‘small’ episodes slip the mind of our media illiterati when they are busy moralizing against other countries or just ignoring that our ‘friends’ actually turn out to be far more dangerous (i.e. Pakistan) than our ‘enemies’.

    The US can always talk tough, but they pushed for globalization which makes everyone much more dependent on each other and makes it much harder to punish a single country without ‘collateral damage’ on its neighbors. Turkey was the first to learn that after the first Gulf War when sanctions effectively killed most of its trade with Iraq. In the former Yugoslavia, sanctions punished all the neighboring states and bred criminality, the legacy we still see today in Bulgaria and Romania. Now we read of western fear of ‘sovereign wealth funds’, stories such as Dubai Ports not being allowed to buy US ports etc. etc. What does the US-Indian nuclear ‘deal’ say to other countries about being serious on non-proliferation? It certainly does not help a common framework that other countries can trust, but old skool make a deal with a big powerful country politics.

    The US is ultimately punishing itself both economically and politically in its behavior. As for Russia, how long did any of you think it would be before Russia pushed back? How long did they think they could get away with it???

    As for the whole Georgia thing, there is a strain of though that it was a deliberate american provocation to build up a fake threat before the next election so McCain could show his hard-as-nails credentials and define a ‘common enemy’ to bind americans together (i.e. the old trick of drawing attention away from the disaster at home by invoking some emotive bogeyman). Considering what it has cost the US so far (close to nothing), it is not as far out as it seems.

  2. It seems that the Russian market is worth it:

    iPhone sales seen at 3.5 million in two years: source

  3. @Aleks

    What exactly does Europe need Russia for? What does Russia bring to the table? Protection? Security? No, they don’t even offer the posibility of prosperity or even a little democracy.

    Oil and gas? Britain, the Netherlands and Georgia if Russia would stop their agressian all have oil and gas for sale.

    Russia is neither a real threat nor a neccessity.

  4. “Russia is neither a real threat nor a necessity.”

    Yes and no IMHO.

    Russia is certainly not a threat. There are plenty of deluded people out there who are convinced that it is, but they are living in the past and clearly can’t manage to understand what a different place the world is today.

    Necessity? Well, if it isn’t, why are all the big car manufacturers, retailers etc. etc. piling in to Russia? Just because it is cheap to produce stuff over there or because it is a country of 120 million people with a rapidly growing middle class with very decent income (have you noticed all those russian tourists when you were last on holiday)? German supermarkets, IKEA, Ford, GM, FIAT, Boeing, Airbus, Aleniaspace, EASA. I did outline in my first post how important Russia could be as a land bridge to Asia and thus reduce transport, pollution and end-user prices. Maybe not a political ‘necessity’, but ordinary joes are interested in lower prices, especially with the recent jump in inflation in the west partly brought on by its own incompetence (credit crisis, lack of strategic energy foresight etc.)

    ‘Disconnecting’ Russia, whatever that means, will be too painful and not produce any tangible results in the short term. It will hurt trade and consumers in the West. If western politicians carry out such a policy, I wonder if their citizens would be still be willing to vote for them again?

    The only heartening thing is that outside the politicians, media & military (whatever), most people have absolutely nothing against the Russians. What credibility do politicians the media and the military have with the citizens after WMD’s in Iraq, military ‘victories’ there and in Afghanistan, their failure to impose sufficient regulatory measures on the financial services or just ignoring the UN when it sees fit? Rule of law? Both the US and EU have shown scant regard for any whilst criticizing other ‘oh, but they’re worse than us’. Right.

    The EU is a hydra with different states pulling in different directions and still hasn’t formed a common identity. The eastern states only trust the US in defense but also want the money & trade from the EU yet behave as if Russia is not actually a neighbor that it would be good to do business with. Who’s really nuts?

    As for the energy stuff, it is the UK’s own fault (the market will provide mantra that has killed of its ability to build nuclear power stations and, ironically, depend on the French (mostly nuclear) to build modern ones quickly. The UK is now a net importer of oil. Germany never considered any other option than to partner Russia, hence being the first and biggest investor in Russia since 1989. If Russia is such a threat to the EU, then why do both France and Germany refuse to liberalize their energy markets? E-ON and others both produce and supply, effectively having a strangle hold on the national energy ‘market’. Their respective politicians seem to prefer to protect their national champions (or old skool monopolies) than risk them being bought out or be merged with foreign companies. So much for the EU domestic energy market bring prices down.

    It is high time the EU sorted out a deal with Russia and not let the balt and polish governments hold it up as it is ultimately also in their interests, or should Germany stop buying energy from Russia because one of their eastern neighbors gets upset by Russia?

  5. Are you actually advocating improving trade relations with Russia in light of recent events? Simply because we can make a quick pound in a very corrupt economy?

    That may produce some short-term gains but clearly as is evident by Russia’s current belligerence, strategically it would be catastrophic for the West. (and that includes Poland and the Baltics whose voice does count as they are all memebrs of NATO and the EU).

    Moreover, the companies you mention are hardly dependent on Russia. Whilst Russia is a growth market, it does not have the critical mass to influence international trade. For example, just because Boeing has sold Aeroflot (the Russian commercial carrier) 22 787s does not imply that Boeing is deeply imbeded in that market nor totally dependent. In fact, it demonstrates the opposite – 22 aircraft is a profitable order (provided Russia honours it – they have in the past demonstatd a lack of good faith) but it is hardly one that would alter Boeing’s strategic business plan. Boeing will survive with or without the Aeroflot order and by extension with or without Russia.

    And that is essentially the problem. Russia is not a world power although they still view themselves as one.

    That does not imply the West should allow Russia to re-exert it’s desire for world domination or even domination over a sphere that Russia preceives as it’s own. Let’s no forget, Georgia is a soveirn nation. It is no longer a part of the Soviet Union. And as such, Georgia has every right to self determination. That includes joining NATO if it so desires.

    Russia needs to focus on joining this international community, not dominating it or being threaten by it.

    Ask yourself, why does Russia still view the West (the EU, the US, NATO, etc) as a theat? The West wants to pursue competitive free-markets with Russia because that produces prosperity. The West wants to do business with Russia. All the companies you mention wouldn’t be in Russia if that were not the case. Why should Russia be threaten by that? Maybe after 100 years of failure (the Tzars, the Bolshovik Revolution, WWI, WWII, Stalin, USSR, the Cold War) it is no wonder they lack the confidence as a nation to be competative. Or maybe after decades of communism, they no longer understand free-markets. I don’t know, but it is curious. However that does not justify dominance and belligerence. And the West mustn’t tolerate it.

    The good news is that Russia lacks the military strength and economic influence to impose it’s will. As side point: that is what I ment by Russia not being a real threat. Any nation can pose a threat to one’s legitamate economic interests, regional stability, security or as in the case of Georgia national soveirenty. So, whilst Russia is posing threats, it lacks the power to implement them.

    In spite of perceptions and what the pundits say, the West does have many options available. But we must stay united and assert ourselves.

    The trouble is some in the West still want to make the quick and dirty pound. I hope they don’t prevale. I hope this is a defining moment for Europe. I hope we finally find our identity.

    What do you think our European identity should look like? One that is free, embraces cultural diversity and is prosperous? Or one that is dominated by short-term monetary gains and subjugated by the Kremlin?

  6. Que?

    Let me turn the question around. What practical economic sanctions can the West impose on Russia without doing itself some damage? Should the West just walk away from the hundreds of billions of dollars they have invested?

    This is not so much my view, but people with real money (or those who manage it like the rapidly growing Hedge Fund market) will deal with just about anybody.

    It is interesting that you focus on Russia’s belligerence? Exactly how many wars have they been involved in, instigated or otherwise since 1989? Now how many has the West/NATO instigated or otherwise. NATO is the threat. It is no longer an defensive organization, it’s members ignore the UN at will. Who is the threat again?

    Why should it be strategically catastrophic for the West? NATO has expanded right up to Russia’s borders. Is Russia asking them to roll back membership? No. They’ve just said ‘no more’. No normal person honestly thinks that the Russian will send troops in to the Baltics or Eastern Europe apart from those with a strong hangover from the Soviet period.

    My point about Boeing and Airbus (sorry, I should have been more clear), is that they are large companies that have many of their components produced abroad (large parts of the 787 are produced in Japan and Italy for example) and depend on foreign engineering expertise. They went to Russia because Russia has a lot of available, very high quality engineers. There is a shortage of qualified engineers in the West (as well as quite a few other professions such as programmers etc.). The UK for example lures away thousands of nurses from the Commonwealth because to its health service because it cannot afford(!) to pay domestic nurses decently. The new Sukhoi Superjet is a joint project between Italy and Russia, but most of the high value components come from established western european manufacturers. It may not be as efficient as its rivals, but it will certainly be much cheaper than them and be very attractive to the massive market out there for cheap and reliable aviation, especially in the developing world.

    The problem is that Russia may not be a ‘world power’, though that is increasingly irrelevant as coalitions of powers and economic blocks are the new it, but it has more or less been completely ignored by the US and Europe for the last 20 years. The Euro-atlants listen, offer observer status to their institutions, but just aren’t interested in Russia’s concerns. Russia did try to join, the euro-atlants just sniffed at them and offered continual ‘advice’. That is why there is so much resentment in Russia.

    What is this idea of ‘Russian domination’? Is it so totally illogical that Russia does not want an aggressive military alliance surrounding its frontiers? Russia would be quite happy with non-aligned or militarily neutral states on its frontiers. Please explain how being in NATO protects all these countries and from whom exactly? NATO is dead. It has been dead 20 years. It only exists because of its own momentum, bad strategic thinking and greed (the NATO ‘market’). Do you think it is acceptable that Europe is NOT allowed its own military planning offices (i.e. that doesn’t include the US). I think the EU should be able to act independently of the US, or is Europe always to be dragged into US geopolitical games far from their shores? As for Russia, it still is a power. What kind of power even they seem to be not so sure about but with 120 million people, tens of thousands of nuclear weapons and a territory spanning 11 timezones, are you honestly telling me that Russia should just relegate itself to some provincial province making cheese and chocolate? Russia wants to be seen as a partner on equal terms with the EU and the US? Why shouldn’t it be? Is it because of Chechnya etc. etc. well the West certainly isn’t covered in glory from Somalia to Iraq I & II, the Balkans. They have ignored the territorial integrity of a sovereign state (Serbia), but that is ok as it is a self-pronounced ‘unique case’, they bombed it without UN resolutions, not to mention Iraq etc. The West made the precedent. UNSCR 1244 in six places refers to Serbia’s territorial integrity. All ‘negotiations’ failed because the Albanians point blank refused to negotiate. It is not said officially but is well known that the US promised the kosovo albanians independence before the ‘war’ in 1999. The Europeans simply had no leverage against this. And what of Georgia? Saakashvili lied left, right and center and was responsible for a mass, indiscriminate artillery bombardment of a civilian center. Does this make him a democrat of the western order? Or maybe it is beating up the opposition and closing down non state television. Is this now what it means to be a member of the european community? Come on! Fine, let Georgia join NATO, just don’t expect them to have any trade or diplomatic relations with their largest neighbor with which they have shared centuries long historical, political and military links. Clearly Georgia does not need Russia at all. Hey, why not station some NATO nuclear weapons on Georgian soil to protect it, then if it ever happens, we can all die for freedom! Georgia can do what it wants, but nothing can change the fact that it is not located in central europe and it is certainly not european by any means.

    Let me take you on a journey. Imagine if Saakashvili had succeeded in ‘taking’ South Ossetia. There would be tens of thousands of refugees flooding in to Russia, most of south ossetia would be damaged or destroyed. Foreign leaders would stand shoulder to shoulder with Saakashvili and congratulating him on standing up for his country, one without ossetians that is. He then would have gone on to Abkhazia and the same would have happened there. Now what of Azerbaidjan? It now spends more on weapons than anything else in its budgets thanks to its coffers swilling with petro-dollars. They launch and attack on Ngorno Karabakh, and despite armenian resistance they slaughter every man, woman and child (they unfortunately do have a record of behaving like this – one only needs to go back to what they did in 1988), but it would be a victory for Azerbaidjan’s territorial integrity, without armenians of course. Is Azerbaidjan in Europe? Is it European? Does it embody european standards? Do you think any of the above are ‘viable’ solutions? Sure, the EU can send in peace keepers, but as we have seen from EU/NATO help in the Balkans, particularly Kosovo, none of those refugees are going to return. Supporting Saakashvhili or Baku is basically supporting ethnic cleansing (or as the ICTY redefines it these days ‘genocide’). That’s a very euro-atlant thing to do.

    The West wants a moderately weak and compliant Russia. If Russia is too weak, it will collapse and the West doesn’t want to spend its money on shoring it up. They want the trade ($$$), but not the politics. Now who here is being naive? Economic power goes in tandem with political power, or is that true of every state apart from Russia? Apart from the small embarrassments like Chechnya, the West was quite happy with Russia under Yeltsin. They would be quite happy with and equivalently weak and compliant Russia. It may be good for the euro-atlants, but it certainly isn’t good for the Russians.

    Ask yourself, why do the eastern european states (Poland) and the balts
    still see Russia as a threat? Well, the poles don’t actually see russia as a threat, their political class does though. The same is more or less true of the balts. I make a differentiation here because it is important. What countries say and do do not necessarily represent what their people think, such is the nature of foreign policy. A very simple example is popular czech opposition to having the NATO missile defense radar situated on its soil.

    Russia does not feel ‘threatened’ by doing business with the West. That is just bizzare idea. Unfortunately, the West couples business with politics. Russia is still barred from joining the WTO (as I think I already mentioned) though the Ukraine is let in. Is that not political favoritism? What the hell are Bulgaria and Romania doing in the EU? They failed to fulfill the entry criteria. Is that not political favoritism? The West has long been treating Russia differently. The programme of mass privatization was pushed on Russia but not the former satellites. Why is that? According to Noreena Herz, formerly of the IMF and involved in this programme (google her, she’s very interesting), it was solely to stop the return of communism.

    Russia can be very good at business. It is not like they cannot or are somehow unable to learn how capitalism/business works, but they still do face significant challenges, most notably corruption. This is why Medvyedev announced his central political policy of his presidency was to root out corruption. He knows that foreign investment into Russia will tail off it is not dealt with and that is a threat to Russia’s future. That shows a real understanding of economics.

    I agree with you that Russia is still weak, but it does have options, especially if it applies the chinese use of asymmetry. You don’t take on another country 1-on-1, but work on its pressure points, not necessarily related to the issue.

    The whole energy issue is interesting in that respect. Russia can’t really use it and Europe knows this, but markets are very sensitive even to the slightest mention of this. Markets like stability and predictability. So do politicians. Russia only has to sneeze. This underlines the significance of perception over reality, better known as poker. The opposition has to believe it. Russia under Putin has shown that it can still pull surprised out of the hat which gives Russia an air of unpredictability. This of course goes both ways.

    The West is not ‘united’. It is a myth, a hangover from the Cold War. Europe needs to assert its identity, and as long as it is beholden to NATO, it will struggle to do this. The euro-atlant relationship seems to be the hardest of all to change and many on both sides are resisting this which is bad for and independent Europe. They can paper over the cracks as much as they want, but the US is a big part of the problem.

    I hope Europe will one day stand on its own feet, not go around the world ‘bombing for peace’ or killing people they love for peace. Europe’s role should be that of one of a number of poles of influence in the world, assisting when it is requested. It should not talk down to other countries and impose its will. It should listen and take account of other countries concerns, not just ‘listen and ignore’ as is its current wont. They have shown a distinct lack of compromise because they don’t need to. It has been a massive European failure, starting with their help in dealing with the situation in the balkans in the early 1990s. They have singularly managed to screw up just about every ‘common foreign’ policy objective they have set themselves. It’s like watching hungry cats fighting in a bag. It is also a stunning level of disunity and competing national power politics. I seriously doubt that Europe has found its identity through the georgian crisis. Honestly, what would that actually say about Europe that it would take a small war, somewhere far from its borders to come together and say our common identity is everything that is opposed to Russia? That is identity by exclusion rather than identity of inclusion (values, whatever).

    There is no question of Europe being subjugated by the Kremlin – such a redux of a long and complicated relationship bears nothing even close to reality. I have no doubt that there will be long and difficult times ahead, but the onus is equally on the EU and US to behave too. They are neither innocent of recent events nor are their hands clean, however compliant their free and democratic media is.

  7. Let me start by stating that there is no solution that does not involve some compromise by all parties impacted. No one will walk away from this unscathed. The objective is to mitigate our loses.

    The west can and is already doing a great many things. Long-term it will cripple Russia. Investors are already pulling their money from the Russian stock market – a 36% drop is by anyone’s definitition a crash and indicative of the lack of trust in the RTS. It will take years to rebuilt confidence. The EU is considering sanctions which could be elevated into an all out boycotte, thus freezing Russia out of the most stable, lucrative and trusted economy on the planet. Yes, that would mean Germany couldn’t buy cheap Russian gas anymore. Fortunately there are other suppliers. But sadely for Russia, there are no other buyers – Chinese pipelines come from Kazakhstan. The US would with certainty do the same. Moreover, the West could just freeze all Russian assets. If you were a Russian oligarch would you keep you money in a Russian bank or a Western one? That’s a lot of assets.

    The last option could be military confrontation. But everyone in the west, especially NATO, is doing everything they can to avoid that. Nevertheless, to put that possibility into perspective, the US has 11 Aircraft Carriers, Russia 1 (and it’s sea worthyness is questionable at best). Think about it. Nimitz-class vs Kuznetsov-class?

    And no, China won’t get involved. whilst they want to maintain and even improve trade relations with Russia, there is little chance of them jepordizing western trade relations for Russia’s benefit. Moreover, look at China-Russian realtions over the decades. China doesn’t like being told what to do, especially by some pip-squeek like Russia. China will be utterly neutral.

    The more united we become, the less influence Russia has on us. The more isolated Russia makes itself, the less money they make.

  8. Oh and one other point. Before this conflict Russia was an active partner with Russia. A geat many projects will now suffer. Projects that were beneficial to both sides. Cooperative organizations and structures like NATO create such programs.

    Any ‘normal’ person would have trouble seeing what threat NATO possed to Russia.

  9. Oh and one other point. Before this conflict Russia was an active partner with NATO. A geat many projects will now suffer. Projects that were beneficial to both sides. Cooperative organizations and structures like NATO create such programs.

    Any ‘normal’ person would have trouble seeing what threat NATO possed to Russia, an active partner that was on the path to membership.

  10. I agree. The only solution is talks and compromise. That will mean the West has to get off its high horse and try not to fall in the process. Not listening and compromising created this situation.

    As for 36% drop in the market, they are always very jittery. I’d rather like to see how things are in 6 months from now. For sanctions, it is just talk for now. People said the same thing about Khordokovsky and the Ukraine shut off. Things settled down quickly and returned to ‘normal’.

    The Germans getting ‘cheap’ gas??? They’re certainly paying the market rate!!! Regarding the pipelines, back in 2005 when Russia announced it would build a pipeline directly to the Pacific rather than China, they agreed to build a branch line to Daquing(sp?) which I assume is under construction. This is worth keeping an eye on. There have also been several announcement from the russian railways that they will significantly boost the quantity of petroleum products to china too

    It’s a good idea to keep tabs on the high-tech cooperative projects and scientific links – when these are affected, then there is real trouble ahead. Still, it will cost the west $$$. Russia has signed a deal (a year ago or so) with Germany to completely upgrade the Moscow-St. Petersberg line to high speed, including locos. That must be more than a billion $. I haven’t really kept track of other very high value projects that have been won by european companines, but I am sure they exist. Of course, sanctions could be the final nail in the joint BP venture in Sakhalin. There’s plenty of pain to go around and with exports for both the UK and Germany becoming ever more important with a stagnating domestic economy, it is going to get very messy and there will be domestic political fall out.

    The US less so, but there was supposed to be a deal opening up the domestic US monopoly uranium market for power stations with Russia. The US can’t get enough of the stuff and they haven’t built any new reactors for nearly 30 years (thanks to fun stuff like the 3-mile island incident). If they are going to reduce their dependency on their democratic arab allies, they need to go electric – that means nuclear. They need Russian uranium. Only the french can build a super modern nuclear plant in 4 years. The british nuclear industry has completely stagnated and depends now on the french too.

    Freezing assets? The west has hundreds of billions of dollars worth in Russia. The Russians could take these or they could be sold to other countries who will continue the investment, like India, China, South Korea, Argentina, Brazil. The west is not the only game in town. Asia and Latin America are on the rise – that is why the US is significantly bolstering its strike potential in asia with nuclear sub quays in diego garcia & guam and permanent stationing of B2 stealth bombers, not to mention much greater arms spending in Australia and Japan abrogating its non-use of force outside its water from its constitution. And what will the West do if India, China, LatAm etc. continue to invest in Russia? Place them under sanctions too?

    What of the need for Russia cooperation at the UN over Iran, North Korea etc? The West won’t win any more friends globally if they continue to ignore the UN. They’ll certainly p*ss off the UN General Assembly.

    The Russians would have to be nuts to take on US aircraft carriers with their own (1.5) carriers. Nuclear weapons would likely be involved. The Russians do have world class diesel-electric submarines like the Kilo that are quieter than US nuclear subs (the US stopped building diesel-electrics in the 1960s an the brits in the 1980s) and could probably let off a nuclear torpedo within distance.

    And all this depends in the real unlikelihood that the US and Europe will agree. The war by committee over Kosovo showed that NATO could not function properly and almost destroyed it. Since then, the US has preferred a ‘coalition of the willing’.

    If the West really pulls on the thread, then god knows when the ball of wool will stop unfurling.

    Russia simply lost what ‘trust’ that remained of NATO in 1999. Dead. Kaput! The West basically squeezed the Russian lemon until the pips popped. Lemons are bitter.

    Oddly, it is the Italians (of all governments) who are being the most moderate and reasonable (Frattini). We’ve heard very little from Spain and a number of other smaller European countries.

    Certainly lots of macho posturing and chest thumping on all sides. I wish they’d just shut up and sit in a room and sort it out. This I think will happen sooner rather than later.

  11. A good review of economic relations between the US & Russia:


    “Any punitive U.S. action should be political, rather than economic, and take “into account the fragile state of the young countries between the Black and Caspian Seas” whose economies are closely linked to Russia’s, Litman said”

  12. That is an interesting article. I didn’t realize just how insignificant Russia was. So the US would only loose less than $8 billion, the cost of one or two satellites.

    Is the European interest of a similare scale? I imagine it is, except that I would guess Russian exports to the EU are likely even greater than that to the States.

    Still looks to me like Russia needs the West more than the West needs Russia.

    Whilst I and everyone, especially NATO, the EU and the US, agree that political solutions would have been more advantageous, Russia has chosen to disregard such options by violating the cease fire they signed. They have further exasperated such options by regonizing the seperatist minorities as independent states. That leaves us economic ones. Yes, it will mean the lose of a market but as your article points out, an insignificate one. The impact at least to us will be, even in the short run, almost negligable.

    And in light of China’s predictably neutral stand, that isn’t going in Russia’s favour either. Unfortunately for Russia, the West is their only game in town.

    Gives one piece of mind though; there is little chance of a military confrontation.

  13. EU investment in Russia is much, much higher than anything between the Russia & US (as google shows):

    EU27 has invested over 27 billion between 2994 and 2007.

    The EU accounts for 52% of Russia’s foreign trade and with over 60% of foreign direct investment in Russia is also the biggest investor in the country. Russia for its part is the EU’s third largest trading partner after the United States and China. In 2005 aggregate trade between Russia and the EU was worth 166 billion euro.

    The Euros (well known big mouth Kouchener) have not repeated their threat to impose sanctions, especially as the Russians promised retaliation (BP & Shell for the Brits no doubt), so it looks like you will not get your wish.

    It is interesting that you talk of political solutions, but it is sad to note that neither the US, EU nor NATO sought these in the Balkans over several occasions, going to war without security council resolutions on bogus propaganda and illegal recognition of another state within an pre-existing state without its agreement. The West has not moral authority left, maybe they believe so amongst themselves, but the rest of the world (i.e. not the euro-atlants) are truely not impressed.

  14. If any nation has moral failings to account for, surely it is Russia. But none of that is relavant, Russia squandered any chance for a political solution when they violated an agreement with their biggest customer.

    Moreover, 27 billion over 10 years is utterly trivial. If Russia thinks they can hold the West hostage over that, then they are as laughable as they are incompetent. The entire world has turn its back on Russia – even Cuba and Venzuala.

    You for reasons that I wouldn’t begin to try and understand have an axe to grind against the West. That’s your issue. But Russia has over played it’s hand.

  15. Unfortunately you seem to be one of many people out there who see relations with Russia through a single prism. The West has faced no sanction for its behavior since 1989 and has acted with impunity. Might is right – contrary to all the propaganda about rule of law that the West hold dear. The Euro-atlants have shown the way in ‘violating agreement’ or just ignoring international law or interpreting agreements in a way they see fit because no one is going to hold them to task for it.

    Why not say how the ossetians are ethnically cleansing the remaining georgians from their territory while russian ‘peace-keepers’ stand idly by?!! It’s shocking! It must be condemned. Only a few short years back, NATO troops stood by whilst the KLA drove out 250,000 Serbs and gypsies. But that is ok, they ‘the enemy deserves it’, ‘we’ couldn’t do anything to stop it. Nobody can bully the big bully. International law? ‘Agreements’?

    Is it not curious that Russia is often called ‘paranoid’ and living in the past, but the balts and poles ‘fear’ of Russia (much more at a political level than at the citizen level) continually talks up the fear of Russian tanks crossing the border? Who’s paranoid again?

    From the first link, it shows Russia received 75billion euro in FDI in 2007, up from 40billion in 2006 and about 35billion in 2005 (but you would have seen this if you’d looked at the pdf). Even what you call ‘insignificant’ would mean German leaders explaining to their industries and trades unions why they can’t export as much as they do, but that of course would be irrelevant to you. Euro-atlants don’t need jobs.

    Of course you offer only criticizm, but no solutions – sanctions and punishment. That’s really going to make the Russians role over playfully and allow their bellies to be rubbed by ‘the West’! That is the view of someone who holds an dogmatic point of view against Russia (for whatever reason that might be). That you sloppily say “The entire world has turn its back on Russia – even Cuba and Venzuala.” is patently false and that you had absolutely no idea before hand the extent of trade relations the EU has with Russia shows that you are not actually interesting in understanding the dynamics behind this relationship, but rather sticking to your firmly held views.

    As to whether Russia has ‘overplayed its hand’, it unfortunately shows that you have a very short term and myopic outlook. It is still farm far to early to be able to tell how this will pan out. You can ‘win’ as many battles as you want, but it means nothing if you loose the war.

    I have no ‘issue’. I have a problem with double standards, hypocrisy and political favoritizm (regardless of whether it is warranted). I don’t believe that we, euro-atlants, should get away with behavior we condemn in others.

    Why not have a death match? I.e. tot up the number of people who have been killed by euro-atlant interventions since 1989 vs. the number that the Russians have killed? Or might that turn out to be embarassing to see how many people we have killed to ‘save’? God forbid!

    If some people cannot help but see Russia as the ‘problem’ or the ‘enemy’, then so be it, but if there are others who claim to be ‘informed’ yet refuse to bone up a little to understand the underlying historical, political and economic issues that have lead to the current crisis between Russia and the euro-atlants (notice I don’t say ‘the World’ or ‘the International Community’ – because it is simply not true), then I consider it a challenge. I’m not trying to change people’s minds (that’s hard enough in itself – most people with already formed opinions tend to be loath to admit they didn’t really ‘get it’), but if they are starved of proper information or miss whole relevant parts, then at least they should be presented with other informed that it is out there and not just the heavily edited, biased trollop that emanates from the big media corps. They are going to make their own mind up then (unless they are being stubborn). That’s how it should be. I also hope the lurkers out there might have picked up something useful and interesting in these posts.

    BTW, I just notice from an earlier post that you said Russia was an “an active partner that was on the path to membership.” That is just soooo wrong. Where on earth do you get your information from?

    Some of the best reporting and analysis of Russia came from exile.ru (now ‘shut down’) but replaced by http://www.exiled-online.com, but then again, I doubt you’ll be interested.