Page 74 - bne IntelliNews monthly magazine October 2024

74 Opinion
bne October 2024
and the restraining force of China. But net net, when it comes to the warnings of retaliation from Putin over the Western supply of F16s to Ukriane or now permission to use long range missiles against targets in Russia, the same Russian red lines are not serious. Putin is not going to attack Nato in response or resort to WMD, as that would be both an acceptance by him of weakness and failure (in Ukraine) but also would hasten his own defeat by bringing in Nato and China against him.
The recent debate about green lighting long range missile use for Ukraine, just affirms to me that the Biden administration, and absolutely the German government, have still not learned much about Putin from the two and a half years of this war. But spelling it out to them, in simple terms, Putin is a bully, who only respects force. You show him weakness and he will exploit your weakness.
Putting all this together the West should focus on providing Ukraine with the full range of conventional weaponary needed to win the war. This will send the best message possible
to Putin that he cannot win the war, and will force him to negotiate peace – from a postition of Ukrainian strength.
Lack of leadership on sanctions
The West has gone a lot further on the sanctions front than
I think anyone, including Putin, imagined in the run up to
the full scale invasion. But the reality is that sanctions have been still too timid and slow moving to have enough effect. Yes, sanctions are only one part of the toolkit of statecraft,
but we could and should have done much more. Partly I think the mistake made by the US, in particular, was this desire to ensure Western unity, and to try and bring all Western nations on board. There has also been a reluctance to take pain by the West. Hence there has always been a long negotiating process to minimise the damage to individual Western economies, and companies (many lobbied hard against), and hence we ended up with sanctions by the path of most resistance.
Too little, too late, often, and giving Russia lots of routes to circumnavigate sanctions. The reality is the question should have been, is Russia an existential threat to Western national security – answer, absolutely. Then how can we hit Russia hardest, and to change behaviour as quickly as possible, and if so we need also to be prepared to take some pain. And in the end, forget about Western unity, the US is the dominant economy in the Western world, and everyone complies
with the US Treasury. The US should have just said, this is a national security issue, this is what we are doing, you have
to follow, or else. You are either with us or against us. Then obviously the US, and it’s allies, should have followed up more aggressively with secondary sanctions ensuring that the likes of China, India, Turkey, et al did not try and circumvent the sanctions for their own benefit.
Lack of leadership around financing Ukraine
Linking sanctions and financing of Ukraine, the issue of making Russia pay and the adequate funding of Ukriane to win are interwoven through the issue of immobilised Russian
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assets – particularly the $330bn in immobilised Russian assets in Western banking systems.
On the sanctions list, perhaps if Russia thought it would have to pay for the destruction wrought in Ukraine, through the loss of the $330bn in immobilised Russian assets, maybe it would have been less willing to cause the destruction.
“The reality is the question should have been, is Russia an existential threat to Western national security
– answer, absolutely”
On the financing front the data is the data. Western funding for Ukraine has been running at around $100bn a year since the full scale invasion. That’s enough funding for Ukraine to just about stay in the war, but I would argue that Ukraine needs more like $150bn a year to win. I would argue that the threat from Russia to Western security is such that funding Ukraine
to the full $150bn should be a Western public good, payable by Western taxpayers – and it’s only a few percentage points of Western GDP. But I get the global cost of living crisis and competiting demands for government spending in the West. In reality the West has not been able to increase spending to the $150bn a year level for Ukraine to win, and given political strains in the Western alliance – the $61bn stuck in the US Congress for months – funding has at times dropped well below the $100bn annualised for Ukraine to win, and at those times Ukraine has tended to be pushed on the back foot in the war. It would be nice if Western leaders were honest with their electorate and explained that this is the Russian threat, Ukraine is the best means to defeat Russia and alleviate the risks, and this is the cost ($150bn a year). Unfortunately our leaders have neither adequately explained the threat or how the funding is to be met. As is I don’t think Western taxpayers are willing to write a cheque for $100bn a year or $150bn even. And as the war likely extends into 2025, and with the risk of a Trump presidency late this year and US funding (40% of total Ukraine funding), I think Ukraine will face a financing cliff next year.
Now guys like me, and others like Zyskind, Zelikow,
Zoellick et al have warned for more than two years about the funding crisis and identified the only means to fund Ukraine adequately to win is to use immobilised Russian assets – the $330bn in CBR assets. But our calls have gone on deaf ears and been countered by European governments (Germany, Belgium and Italy) which have stalled the process of freeing immobilised Russian assets for Ukrainian use. Their arguments against are weak, and their opposition fundamentally reflects oppositon from business vested interests, rather than the interests of their own taxpayers. But let’s not beat around the bush, if Ukraine is not adequately financed it will lose the war and the costs then