The Wrongologist

What’s Wrong Today:

On Wednesday, President Putin suggested a peaceful solution in Ukraine:

Sounds good. But Putin goes on to say:

So, he is saying “postpone all elections” until we talk some more. Note that Russian Foreign Minister Lavrov has already dismissed calls for a Geneva 2 meeting.

More food for thought: Russia is moving military assets to Crimea for Victory Day. These assets consist of fighter jets, strategic bombers, transport and attack helicopters, paratroopers and SAM batteries.

Putin will attend, so there will be a “no-fly” zone declared for the celebration. A cynic might call this a test run of a Ukrainian “no-fly” zone. Subsequently, Russia could impose a “no-fly” zone on all of Eastern and Southern Ukraine without much warning or preparation.

Those assets could stay in Crimea and be ready for use in the event that the talks break down, or if the referendums go forward and follow the Crimea playbook.

Once it is known that the referendum supports independence, the new republic could immediately request protection from Russia. It is easy to see how that could lead to a Russian “no-fly” zone over Eastern Ukraine. If Kiev cannot control the airspace over Eastern Ukraine, it will be very difficult to win on the ground and avoid a partition of the country.

Mr. Obama and NATO must have game-planned this outcome: Will Russia intervene? What is the logic for a Russian intervention? It is possible that Putin and Angela Merkel have a deal in mind to split the country and avoid a war?

Russia’s Strategy:

Russia is working on driving a wedge between Germany (and the rest of the EU) and the US. Putin is banking on the US escalating sanctions which will cause economic damage to Germany. The harm will be so great that Merkel (or her successor) will distance Germany from the US and move toward Russia.

US Strategy:

The US strategy is to split Russia from the EU. In the long run, that can work, but it will take years just to reduce the EU’s energy dependency on Russia. The US hold on the EU is strong, and the US has cards to play. But first, employing stronger sanctions will cause German unemployment to skyrocket, and much of the EU might freeze one winter, but: “freedom and democracy”!

The WSJ Online reported that the biggest names in German business—including chemical giant BASF, Siemens AG, Volkswagen AG, Adidas AG and Deutsche Bank —have expressed opposition to broader economic sanctions against Russia. As a result, Germany’s position on additional, tougher sanctions is unlikely to shift, barring a dramatic escalation of the conflict in Ukraine—a message Ms. Merkel apparently delivered to Mr. Obama when they met in Washington last Friday.

Germany knows that the US has its back with NATO and it has to spend virtually nothing on its own defense. This allows them to keep doing business with the devil instead of actually standing for something geopolitically. Germany does not want to experience any inconvenience or any sacrifice of its economy.

The big strategic consideration is that Ukraine has the EU’s largest Natural Gas reserves, and they are ready to be fracked. If Ukraine can develop them, it could put a huge dent in Putin’s money machine, and reduce Europe’s dependence on Russia. The gas could start flowing within a year, given political stability. One would think this is a no-brainer, but the Germans and French are not yet trying to get into the game. BTW, there is also lots of frackable Natural Gas east of the Dnieper, where Russia is likely to prevail.

Russia will not invade Ukraine, because it won’t be necessary. The IMF agreements that come with the IMF bailout will be in force. This will lower pension payouts and wages. Fuel prices will have to rise, people are going to be pissed at their own country. Civil war could ensue.

So, Putin’s strategy is to wait.

OK, so what are Obama’s options? Can he wait as well? He knows he can’t be seen to be the loser h
ere. All the rhetoric coming from Washington and the major news outlets is an uncompromising “Russia must stop its ‘provocative’ behavior and accept the coup – that is, Russia must surrender.

There is an American election in November: If Washington does not prevail vs. Russia, Republicans will say Mr. Obama doesn’t have the stuff to make it clear to the world that we will do whatever it takes to enforce our will globally.

This must be Obama’s calculus – Russia folds, or they fight. Then, either way, Obama is a winner. But if Germany has lost the support of its large corporations, Obama has a weak hand indeed.

Given the geography, tactically there isn’t much more that the Administration can do. There will be more sanctions, but absent EU willingness to go further, and given a very disorganized Ukraine that cannot defend itself or pay its own way, Obama is not able to do more than watch Putin and Merkel play out the hand.

Which probably means a partitioned Ukraine, divided by the Dnieper River.

What’s happening in Ukraine is vastly important. It will determine the shape of the blocs facing each other for the next 20 years, and it is playing out right in front of us.

If the US wins the battle for the EU, it probably ensures that China will have Russia’s support and that could have geopolitical ramifications which are difficult to unwind. 

The Ukraine crisis is not a fight for democracy or freedom, but a deadly serious struggle for supremacy and geopolitical influence, with the US and Russia as the major players. Ukraine changes the character of international politics. As the atmosphere turns dark, the task of promoting and maintaining world order grows more daunting.

Future historians will scratch their heads in the same way we do when looking back at the run-up to World War I. Fifty years after Barbara Tuchman’s great book, The Guns of August, it is good to remember that things in the Balkans have a way of spinning out of control.