Putin and the ghost of Empire

Putin (and, more broadly, the Kremlin) suffers from phantom pain: the Soviet Empire, which perished 30 years ago. He intends to restore that Empire by expanding the Russian sphere of influence. The goal: to be seen as a world power again on an equal footing with the great Western powers, even though Russia is a demographically shrinking country living purely on commodity exports, with a GDP the size of Spain. His method is destabilisation of neighbouring states, as is happening in Belarus and Kazakhstan.

The weakness of the West

The West is currently showing sufficient weakness for Putin to flex his muscles. Biden fled Afghanistan in September, like Trump in Syria before him. He abandoned his allies and sees only China as a strategic rival. Europeans have their own national concerns to worry about, and the EU is barely taken seriously as a strategic power.

Military build-up on Ukraine’s borders

Putin, meanwhile, keeps all his options open. Since last spring, he has gathered about 125,000 troops on the eastern and south-eastern borders of Ukraine and in Crimea, accompanied by heavy military equipment, and is organising military exercises in southern Belarus.

Putin has gathered troops on the borders of Ukraine and in Crimea; his offensive options are substantial, though not limitless

Of course, these troops are far from sufficient for the conquest and occupation of a nation of 52 million and the defeat of an army of 215,000 (albeit one worse equipped than its Russian counterpart). In the worst case scenario, Putin could formally annex the two 'people's republics' of Donetsk and Luhansk (which he already effectively controls). He could follow it, under 'provocation', with a limited war to secure a land corridor along the Sea of Azov to Crimea. Its right flank would probably have to stretch as far as the Dnieper. In the spring at least, this would pose significant logistical problems.

At the same time – as with his war in Georgia in 2008 – Putin could launch a 'relief' attack on Kyiv from the north, but without taking the city. Of course, hybrid actions would constitute fewer risks in terms of response from the West. These could include a naval blockade in the Black Sea or a series of hacker attacks.

The West’s limited options

As in the Cold War, peacekeeping depends on the credibility of effective deterrence – though Ukraine, as a non-NATO member, cannot count on military assistance. It would be left alone in its hour of need. So what can the West do?

The issue with sanctions

Britain and the US continue to supply military equipment, despite Russian threats. The US has increased its military aid to Ukraine to US$650 million.

Then there is the threat of sanctions. The continued blockade of Nord Stream 2 and, above all, the exclusion of Russia from the SWIFT payment system would be devastating for the Russian export economy and financing of the state budget, which is fed mainly by its revenues. Yet, while this might not affect the energy self-sufficient US, Europe would suffer. In the event of an interruption in the supply of Russian gas, oil and timber to the EU there would be an explosion in world market prices. Countries such as Finland, the Baltics, Slovakia and Bulgaria, for example, are 100% dependent on Russian gas. Shooting oneself in the foot is not a credible deterrent.

Sanctions might not affect the energy self-sufficient US, but Europe would suffer

Moreover, to absorb the impact of possible Western sanctions, Russia has accumulated a considerable vault of gold and foreign currency reserves, worth US$630 billion. This has been fed mainly by oil revenues. And, unlike the West, Russia has pursued a sound fiscal policy (national debt stands at only 19% of GDP). It cannot be driven into national bankruptcy.

Confiscations: an alternative?

An alternative action for the West would be to threaten to confiscate the international possessions of Kremlin rulers and assorted oligarchs, including Putin. There is much to threaten. The villas and wine cellars on the Côte d'Azur, the chalets in Chamonix, the townhouses in Mayfair, the bank accounts in the Caribbean and Cyprus, and the beautiful yachts... (Notably, Putin brought his own yacht to safety in Königsberg before its repairs – in a German shipyard – were complete.)

But would Putin be prepared to lose a few billion in exchange for territorial expansion?

Putin’s secure power base

Since 2013, the Russian economy has stagnated, partly because private enterprise is systematically plundered by the apparatchiks and associates. Real incomes have since fallen by 10%. Inflation stands at over 8%. The ruble has lost half of its value. The main concerns of Russians are inflation, impoverishment and corruption.

Putin is the focus of international attention and can negotiate on an equal footing with the US

Putin is unpopular, but because he has effectively eliminated organised opposition, he is not at risk. Sanctions, therefore, are unlikely to undermine his power base.

A US-Russian summit?

Putin has successfully built up a threatening backdrop. He is the focus of international attention and can negotiate on an equal footing with the US. A summit with Joe Biden is becoming increasingly likely. There is a lot they could usefully discuss: disarmament of medium-range missiles in Central Europe on both sides (including the Iskander missiles around Königsberg); maximum limits for military manoeuvres and deployments at the respective alliance borders; border guarantees; deployment of manoeuvre observers; demilitarisation of the Crimea and Donbass; joint solutions for Syria, Libya and Iran; post-mortem management of Afghanistan; and a withdrawal of Wagner mercenaries from Africa.

The two countries need to rise above the current power play, remembering that Russia and the West have no 'clash of civilisations'. They are part of a common Western cultural heritage. Their current quarrel favours only one country: China.

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