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Where will the war in Ukraine take us?

Three Key Questions

There are three questions that are central to understanding what has unfolded since Russia’s invasion of Ukraine. Was it predictable, was it preventable and did the US/Nato/EU think through the consequences of sanctions and how they might magnify the pressures on an already stressed global environment.

Then there is one more question: how much attention do we – you and I – give to the increased probability of the conflict escalating into a nuclear exchange, and who will protect us in such an event?

The UN Secretary General visited Moscow in late April to seek Russian agreement to humanitarian ‘exit corridors’ from the besieged city of Mariupol. Subsequently, he visited Ukrainian President Zelenskyy and war devastated Kyiv. It was the latest effort at de-escalation and securing a way out of the cul de sac of war in which Europe, Russia and the much of the West is now mired.

Meanwhile, the US Secretary of State and the Defence Secretary visited Ukraine, bringing an additional $800 million to the $ 8billion provided or pledged in military assistance – with an additional $33 billion in weaponry, sought by President Biden. Germany is sending Tanks. How does one make sense of it all?

The Madness of (Nuclear?) War

Russia’s invasion has generated a humanitarian crisis in Ukraine – suffering and migration on a scale that only wars produce – as well as widespread disruption across the global economy. What started as a Russo/Ukrainian conflict ignited, following Russia’s invasion in February.

This  triggered a proxy war between Nato and Russia. It has now metastasised into something closer than most will admit to a full US/NATO/Russian confrontation – spawned under the cloud of a nuclear end-game. In a matter of weeks the conflict has gone from refining possible peace negotiations to arming to ‘win’ a war that threatens to trip into a nuclear event. The warnings and the omens are all there. It is madness.

President Putin has, it is reported, gone cold on the possibility of achieving a negotiated settlement. Ukrainian President Zelenskyy was originally elected on a platform of seeking a rapprochement with Russia. Now,  supplied with a widening array of heavy weapons as well as military manpower from Nato, Ukraine has backed away from substantive political negotiations – which was the priority just a month or two ago.

Civilian casualties and military deaths, on both sides, continue to increase. Courage abounds. So does grief.

It makes no sense. There are now unprecedented economic, as well as military, risks confronting Europe and the global economy. The risks are especially acute for low-income countries already harrowed by food shortages and the effects of accelerating inflation which is slipping beyond the control of Central Banks.

Seeds of The Crisis

The seeds of the Ukrainian crisis were sown in the seven year hiatus following the Minsk agreement, brokered by France and Germany, and which inexplicably remained in stasis until Russia’s invasion in February. It rapidly escalated from a conflict between Russia and Nato, pivoting on Ukraine’s problematic application for membership of NATO which had long provided training and assistance to Ukraine. It has metastasized into a near full-on confrontation between Russia and US-led Nato.

Russia initially ‘red flagged’ the threat to its national security of the possibility of  Ukraine’s membership of Nato, believing it reinforced NATO’s strategy of what Moscow saw as an ‘encirclement’ of post-Soviet Russia.The EU, initially prioritising peace through negotiations, has radically re-pivoted from politics to providing troops and heavy military armaments, augmenting US-led military support and pressurising all countries to do likewise – most recently Germany.

A negotiated peace that seemed feasible a few months ago has now become a casualty of a mind- set of ‘winning’ a war. There is a strong sense that the tides of war are impelling Europe towards a conflict that is being redefined quite literally in real time and shaped by agendas that go way beyond peace. It is no longer about negotiating peace. It has become about something else.The imponderable is whether either, or both, sides will resort to nuclear options as part of an end- game.

Momentum towards Nuclear Option

The core question is whether the madness can be stopped short of this point and peace restored to the epicentre. There are, of course, always ‘backchannels’ which exist between protagonists. Even so, a nuclear event with unstoppable consequences is measurably more likely now than it was before the political rhetoric imploded into war.

Tens of billions are being spent on military equipment that will neither deter fighting, nor defend a problematic definition of Ukrainian ‘sovereignty’. The awkward question is whether, or not, Nato is committed to an authentic sovereignty – or an ideological agenda fronting a war machine.

The mind-set that is now embedded in Moscow and in Washington (and, more difficult to understand, Brussels) cannot deliver a just and sustainable peace. The price will continue to be invoiced in civilian casualties and the deaths of thousands of husbands and sons, on both sides.

No one thought it would come to this – they should have. No one tried hard enough to stop it. Why not, if they had rigorously thought through where it might lead? The consequence of this failure are epochal. The EU is one step short of becoming irrevocably militarised. ‘Europe’ didn’t start out with that in mind– quite the contrary. Even more  ominously, there is an unstoppable impetus to a new, and almost unimaginable, arms race–unimaginable because of the destructive capabilities, and near invulnerability of what’s already embedded in silos, in the air 24/7 and in submarines.

Here in Ireland the moral witness of principled neutrality is lauded by the public and rubbished by politicians. Madness again. We are joined at the hip to the EU’s military mind set. We should not be– there is the most compelling case for formally incorporating neutrality into our Constitution. Ireland should stand against a militarisation that is destructive beyond belief. What on earth is the point of the EU being “Green” while Nato is embroiled in a war that prospectively threatens the ecosystem of the entire planet.

Denial of impact of Nuclear Option

We need to bear in mind that nuclear weapons HAVE been used on Hiroshima and Nagasaki. They have nearly been used on other occasions. They are made precisely to BE used. We in Ireland are avoidant. We prefer to think that the US or Brussels or ‘the Government’ have it covered. They don’t.

Is this apocalyptic? No. Our reluctance to envisage how far we are now along this road has to do with what Nobel Laureate Kahneman calls biases and skews in the way we think about the future. A nuclear war will never happen – not to us, not in our world. Really?

Think Dublin. One recent authoritative (because its Balance Sheet is on the line) analysis points out:

“The atmospheric overpressure caused by the shockwave of the nuclear explosion would be able to destroy entire buildings up to tens of kilometres away, apart from those made of hardened reinforced concrete….Hundreds of thousands of people could be instantly killed or injured by debris or collapsing buildings. In addition, the explosion would create visible, infrared, and ultraviolet light waves that would combine to produce a kind of large, very hot fireball capable of burning everything and creating third-degree burns within an even larger radius than the blast damage. Contaminated populations would have to deal with subsequent radioactive fallout…”

At a global level, a 2019 Princeton University simulation estimated that within just hours of a US-Nato//Russian nuclear exchange, 90 million individuals would be dead, or severely injured at the very least”. That’s just the start.

We should be clear: it is near certain that  the plans and protocols and civilian controls are already in place behind protected passwords. Ireland – or Ukraine for that matter – will have no say in the matter. Sovereignty counts for nothing in a nuclear exchange. Principled neutrality that is articulated and advocated by the Government in European and global fora does. Ireland’s neutrality is not in safe hands.

Historians will see the origins of the conflict in the efforts of the US to stymie the emergence of the Post- Soviet Russia as a future rival and threat to its hegemonistic world order. Nato remained in existence, seeking a new rationale, although its equivalent, the Warsaw Pact, was stood down. In the intervening decades there have been stand offs, rifts as well opportunities to engage. These latter including Russia’s stated interest in joining the Nato and even the EU. Even so, Nato’s strategy of ‘encirclement’  continued while Russia strategized how best to mitigate what it perceived as a trap.

Three Questions

Historians will ask three questions. Firstly, was the Ukrainian conflict predictable? Was the re-integration of Crimea into Russia the decisive factor? Or had Russia simply lost trust in the willingness of the West to engage with Post-Soviet Russia and acknowledge and respond to its substantive security concerns with ‘encirclement’?

Secondly, was the conflict that led Russia to invade Ukraine avoidable? This much, at least, should be said – and it was ever said better than by Pope St John Paul 11 in January 2003, looking across the abyss of escalating conflict in the Middle East.

“War is not always inevitable. It is always a defeat for humanity. International law, honest dialogue, solidarity between States, the noble exercise of diplomacy: these are methods worthy of individuals and nations in resolving their differences. I say this as I think of those who still place their trust in nuclear weapons.”

This should give us pause for thought. It is an insight that an erstwhile Christian, and now ‘woke’, Europe has revoked and that post-Soviet Russia has set aside.

The implementation of the Minsk 11 Agreement, brokered by France and Germany, offered a way forward. President Macron said that the 2015 ceasefire deal between Kyiv and Moscow offers a ‘path to peace’. But Minsk 11 remained in stasis, thereby increasing the probability of conflict The humanitarian disaster that followed Russia’s invasion of Ukraine, and the fact that it was followed immediately by the US/Nato ramping up the provision of military armanents and intelligence, as well as the imposition of unprecedented  sanctions, has added to the rush to war.

US-led Nato involvement, accompanied by explicit encouragement on the part of some Nato members to counterattack, has undoubtedly stymied Russia’s initial war objectives. It has also cut the ground from under negotiations for a cessation of fighting and for a settlement, based on a reworked Minsk 11. The conflict is now entrenched, deeply adversarial and with many more stakeholders. Political objectives have changed, military strategies have shifted, recent and prospective military expenditures have vastly increased the scale of casualties. It has not been matched by an equivalent intensity of effort by the US/ Nato or the EU collaboration with Russia at diplomacy and peace building.

Impact of Sanctions not thought through

The third question that will be asked is this. Were the consequences of the sanctions imposed by the West on Russia and, at one remove, on the global economy – particularly food deficit countries – thought through?

Did someone model the consequence of sanctions on an already vulnerable post- Pandemic global  economy, wracked by  the evisceration of economic growth, accelerating inflation and rising interest rates?  Who was it that decided that an almost exponential increase in sanctions were the way forward?

These are hard questions. They are also emotionally charged. There is a spoken, as well as an unspoken, fear not least in mainstream media, of venturing beyond the proposition that Russia invaded Ukraine; end of. The history of war and conflict in  the twentieth century – not least on these Islands  – should have taught us to reflect carefully on where we place our full stops.

Awkward questions need to be asked. Responding to them demands the insights of normative ethics and the nuances of professional historians. The former have been ‘exiled’ by an ideologically colonised West. The latter need the objectivity that only time, and the release of policy documentation that goes deeper than Pressers and
‘Briefings’.

In the meantime, our best hope lies in prayer, wisdom and leadership – and supporting the casualties. Those were the pillars on which Konrad Adenauer and his colleagues, rebuilt a shattered German economy, and peace in post war Europe. They are in short supply these days.

Weaponising Global Finance

In the whole engagement on sanctions, one of the most important impacts is  overlooked. The financial and trade infrastructure, which enabled post-war political stability and economic growth as a way out of poverty has, itself, been weaponised. This bears reflecting on.

The US /Nato’s/EU strategy has been to suffocate the Russian economy, stymie its trade and excise it from global financial settlements systems and from capital markets– while sequestering over $ 300 billion of its foreign reserves. Such reserves are used by all countries to price, and to settle, their obligations– to borrow and repay debt in different forms to one and other. The aim is to degrade Russia’s economy and seeking to forcing it into default.

What this misses is that this financial architecture is, as the FT’s Martin Wolfe has pointed out, a global ‘Public Utility’. It serves a wide and deep purpose, bearing on the welfare of, and engagement among, all nations. It is not there as the property of, or to serve,  political agendas, no matter how righteously they are advocated. Sanctions have corroded trust in the global reserve currency system. This is dominated by the US dollar– which gains enormously from its national  IOU’s serving as an international currency. Sanctions have undermined the welfare gains from open trading, especially for developing nations. They have fragmented the integrity of global transactions settlement systems, processing trillions of transactions.
It raises the question: why would large countries– the BRIC economies, for example– assume that their dollar reserve assets, held in Western institutions, are safe from politically motivated seizure? The fragmentation, the move away from multilateral systems to bilateral deals among the big and the strong that is already under way, is impelling the global economy towards  autarky. That is a very big deal.

‘Punishing Putin’ – at what cost?

The justification offered is to ‘punish Putin’ and to cut off Russia from access to all markets for its abundant energy resources. Brussels has pushed for a total ban on imports of ( low cost) energy from Russia which Europe needs to support recovery, mitigate the dangers of inflation and warm households.

The IMF have pointed to the consequences:” Price shocks will have an impact worldwide, especially on poor households for whom food and fuel are a higher proportion of expenses. Should the conflict escalate, the economic damage would be all the more devastating.The sanctions on Russia will also have a substantial impact on the global economy and financial markets, with significant spillovers to other countries.”

Indeed, in a recent simulation exercise, the IMF warned an immediate oil and gas embargo against Russia would raise inflation further, hit European and emerging economies hard and require even higher interest rates”.

In a word, regardless of the objective of “Punishing Putin”, the reality is that sanctions regime have not been thought through, entail hugely regressive costs and turn International Trade Economics 101 on its head. Its also questionable whether they are working.

Sanctions have weaponized the global financial architecture–the walls and the roof of the globalized economy.

A new ‘shadow financial architecture’ is emerging as a response which will, in time, challenge the hegemony of the US dollar and circumvent sanctions encouraging countries to engage in bilateral trade.Sanctions have certainly impacted the Russian economy at every level, with a projected 10% contraction of its economy this year. But the most recent data point to a sharp recovery in the rouble. Its Central Bank has, notwithstanding sanctions, has proved adept in deploying domestic monetary policy to stabilise the economy. Peace building and diplomacy are the better, more intelligent option.

More generally, the  IMF have pointed out that: “The sanctions on Russia will also have a substantial impact on the global economy and financial markets, with significant spillovers to other countries.”  There is little indication that the ‘spillover’ effects have been thought through. They haven’t. In the rush to ‘Punish Putin’, there has not been time.

So the sanctions question remains unanswered:  at what cost to the rest of the world, particularly low-income countries already threatened with hunger? In imposing its sanctions on Russia –and  deflecting the consequences onto other economies– the West is, in fact, turning its back on seventy years of institution-building aimed at putting in place resilient and trustworthy systems of economic engagement among nations.

Trade dependent low- income countries, already in food deficit, are at the sharp end of this process

Sanctions are reinforcing the regressive effects of accelerating inflation, impacting on the EU, nudging it towards stagflation and recessionary pressures on individual economies. This points towards significantly greater burdens on EU households and serious, even permanent, damage to businesses in the coming years.

At another level, the capital costs of re-building EU energy systems to eliminate ‘dependence’ on cheap and accessible Russian oil and LPG are enormous, technically challenging and complex medium- term problems. The simultaneous impact of the EU’s planned elimination of all fuel imports from Russia and the latters response in cutting of energy supply to EU members who do not pay in the Rubles, provides a microcosm of the madness and the true economic costs of this conflict.

The Financial Times reported at the end of April that:

“Futures contracts tracking Europe’s wholesale gas price advanced about 20 per cent at €117 per megawatt hour in early trading. Prices are almost seven times higher than a year ago”

(FT 26 April 2022).

 

Seven times!

Quiet reflection and common sense point to the uncomfortable reality that the sanctions regime was not thought through, is doing great damage to countries far from the epicentre of the conflict – and to the West itself, at multiple levels, from damaging the economy, accelerating inflation and putting great strain on EU  fiscal policy.

War is a defeat for Humanity

The final word should rest with the words of Pope St John Paul II cited earlier: “War is not always inevitable. It is always a defeat for humanity. International law, honest dialogue, solidarity between States, the noble exercise of diplomacy: these are methods worthy of individuals and nations in resolving their differences. I say this as I think of those who still place their trust in nuclear weapons.”

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