The New Minsk Ceasefire: Avoiding Putin’s trap

Angela Merkel’s Monday visit to Washington made the gap between Europe and the United States even more obvious than had the recent transatlantic spat. Forceful proponents – and strong arguments – favoured supplying arms to Ukrainian troops to enable them to better resist Russia-supported separatist forces. Strong arguments – and forceful opponents – were dead set against this course of action. US Congress members, along with many others, belong to the former group, while many European governments – including the German and the French – belong to the latter. President Barack Obama seems to stand somewhere in between. But whether or not to supply arms is a question that concerns the Europeans more than anyone else. The price of a wrong decision will be paid not in the form of a mere setback in a strategy game played out on a Eurasian geopolitical board, but first and foremost, in Ukrainian blood.

Will the Russian leader and his allies in eastern Ukraine regard Merkel and François Hollande as weak-kneed appeasers, like Neville Chamberlain and Édouard Daladier in 1938?

For this reason, many observers now associate Minsk – where today and yesterday’s Russian-Ukrainian-German-French summit took place, resulting in a new agreement on an armistice in eastern Ukraine – with the infamous 1938 conference in Munich. At that meeting, the British and French prime ministers gave Adolf Hitler a de facto free hand with Czechoslovakia, and gave away peace in the process. But “Munich”, now synonymous with counterproductive “appeasement”, was not wholly irrational at the time. Just 20 years before, Europe had been devastated by the First World War. Without the gift of hindsight it must have seemed worthwhile to make one more, final effort to find a peaceful solution.

Today, the main objective is to spare the Ukrainians more suffering and avoid an escalation. And to this end Merkel and Hollande have sought a new agreement even after Vladimir Putin and the Ukrainian separatists violated the first Minsk agreement of August 2014. With this new agreement, will the Russian leader and his allies in eastern Ukraine regard Merkel and François Hollande as weak-kneed appeasers, like Neville Chamberlain and Édouard Daladier in 1938? Back then, Britain and France were wrong because they didn’t see through the game Hitler played: Hitler was gambling on the Allies’ fear of war.

This is the major reason for Putin to set his war trap for the West: sanctions work, and they are beginning to undermine popular support for the Russian president.

Today, the gambler sits in the Kremlin. But his gamble is the opposite of Hitler’s: he’s gambling on forcing his adversaries into a war. Putin does not doubt US resolve – he has seen a lot of it, and he hopes for more of it. But world war is not what he needs. Putin understands that if Western arms were provided to Ukraine, instructors would have to be sent to help the Ukrainians use this sophisticated weaponry – which means boots on the ground. This would mean pitting one nuclear power (be it the US, Britain, or France) against another, which would result in a stand-off on the ground: a long war of attrition that would take in more and more of Ukraine. Putin understands that neither side could win. However, for Putin, a continuing armed conflict of low intensity, while it would not directly fulfil his revisionist aims, might achieve three important objectives. It would continue to destabilise Ukraine, making it very unlikely that its political and economic reconstruction would be successful. It would instil fear in Russia’s immediate neighbours in the European Union, which are home to sizeable Russian minorities; chances are, the governments of these countries would tread carefully the next time perceived Russian interests were at stake. Most importantly, a war would in all likelihood rally Russia’s people once again behind Putin. Right now, the danger for Putin is that his existing support dwindles when the economic downturn becomes the primary concern of Russians. This is the major reason for Putin to set his war trap for the West: sanctions work, and they are beginning to undermine popular support for the Russian president.

As sanctions have gradually tightened, money has flown out of Russia by the hundreds of billions of dollars, the rouble has depreciated, and the bonds of Russian enterprises have become significantly less valuable. It has become difficult to refinance state companies. Standard and Poor’s rating for Russia has been lowered (in effect, almost a sanction by itself). Individual Russians close to the regime suffer from visa restrictions and their bank accounts abroad have been frozen. A recession is imminent. Of course, Russia’s is not a very complex economy – it mainly depends on oil exports, so the global fall in oil prices is another reason why Russia is likely to experience minus 5 percent growth in 2015. Goods have become expensive, which is also down to Russia’s ban on foodstuff imports – which demonstrates that the Russian government’s countermeasures tend to hurt Russia more than its Western business partners. (In the case of Germany, for example, business with Russia has declined by 20 percent – but exports to Russia only make up 1.2 percent of Germany’s exports.) Sanctions have hurt Russia, and they will become more painful when they are further strengthened, for example, by expanding the list of Russians to whom travel restrictions apply, and by excluding Russia from the international SWIFT banking information exchange arrangement, which will make it next to impossible for Russia to conduct international business.

Using economic power has costs, but unlike with military power, the cost is paid not in lives but in money. 

The bottom line is that economic power is hard power too. Using it has costs, but unlike with military power, the cost is paid not in lives but in money. The use of economic power thus means that those who wield it must be ready to make dramatic economic sacrifices. This pertains most of all to the Europeans. Should Putin not stick to the new Minsk agreement, the EU, in order to apply even more of the sanctions that bite, will need to talk seriously to countries such as Hungary and Greece, whose leaders are at the moment the most reluctant to damage a country with which they feel some sort of spiritual kinship. It does not make sense to enter into a military quasi-conflict as long as there still is the option of using economic means. For the US, that means avoiding seemingly easy solutions – avoiding Putin’s trap. For the EU, it means making every effort possible to employ peaceful means to solve the problem, so as not to give an excuse to those who would prefer to send arms to Ukraine.