By Yves Smith, Naked Capitalism, 8/8/24

Poison pill noun

a financial tactic or provision used by a company to make an unwanted takeover prohibitively expensive or less desirable

-Merriam Webster

Yours truly must confess to having overlooked a critical component of Putin’s proposed peace terms, which he articulated on June 14, and his Foreign Minister Sergey Lavrov just reiterated in an exclusive interview to Newsweek, which was his position on sanctions. Admittedly, Putin included it almost as an afterthought.

First, let’s look at Lavrov’s recap, since it’s more compact than Putin’s formulation (which Putin set forth in two places in his speech, so it was not a tidy, self-contained list). From Newsweek:

“On 14 June, President Vladimir Putin listed prerequisites for the settlement as follows: complete AFU withdrawal from the DPR [Donetsk People’s Republic], LPR [Luhansk People’s Republic], Zaporozhye and Kherson Oblasts; recognition of territorial realities as enshrined in the Russian Constitution; neutral, non-bloc, non-nuclear status for Ukraine; its demilitarization and denazification; securing the rights, freedoms and interests of Russian-speaking citizens; and removal of all sanctions against Russia.”

Aside from Putin setting forth all these issues, including recognition of the four oblasts plus Crimea as being part of Russia, in his June 14 speech, important media outlets also stated the key points (see for instance the Anadolu Agency writeup).

We will skip over the fact that Putin warned, not long after the Istanbul talks collapses, that the longer the war went on, the harder it would become to negotiate with Russia. By implication, just by virtue of Putin’s last offer being made in June and it now being October, with Russia having made considerable breakthroughs on the ground, that Russia would insist on even tougher terms now. That is confirmed by Russia’s position that it would not negotiate with Ukraine at all as long as it has forces in Russia. And many commentators have said opinion in Russia hardened even more against Ukraine after the Kursk invasion, and more citizens wanting Russia to fully subdue Ukraine and dictate terms that before.

Currently, Western commentators are focusing on what is sure to continue to an area of no bargaining overlap: that of Ukraine neutrality and foreswearing membership in NATO. That was tentatively agreed in Istanbul in March-April 2022 because the US and NATO were allowing Ukraine the appearance of autonomy. That is no longer very much the case. NATO and other Western officials now regularly yammer that Russia has no business deciding whether any country joins NATO. Of course, a Ukraine under different management (including most Banderites dead or run out of the country) could but the US and NATO would not give any security guarantees. Some Western pundits and officials are engaging in new versions of cope, such as advocating Ukraine cede the Russian-occupied land (temporarily!) for NATO membership. Amusingly, Zelensky and the Azov types are incandescent.

The part of Putin’s proposal that I saw as particularly cheeky but got comparatively little attention in the Western press was the condition that Ukraine withdraw from all of the four contested oblasts, which goes beyond what Russia occupies and that that be recognized as Russian territory. For those who have not been paying careful attention, the Banderites have threatened Zelensky if he gives up any part of Ukraine.

From the Kremlin translation of the Meeting with Foreign Ministry senior officials:

“Certainly, the rights, freedoms, and interests of Russian-speaking citizens in Ukraine must be fully protected. The new territorial realities, including the status of Crimea, Sevastopol, Donetsk and Lugansk people’s republics, Kherson, and Zaporozhye regions as parts of the Russian Federation, should be acknowledged. These foundational principles need to be formalised through fundamental international agreements in the future. Naturally, this entails the removal of all Western sanctions against Russia as well.”

You will see that Putin goes from agreement terms that can be granted by Ukraine alone, to ones to be granted by other countries, admittedly down the road. Even if a future Ukraine agrees to recognize the four oblasts and Crimea as part of Russia, it seems well-nigh impossible that the US and EU would ever concede that. However, most BRICS members probably would, so that would confer considerable legitimacy

It’s thus odd to see Putin, who obviously know what he is doing, toss in the idea of reversing all Collective West sanctions almost as an afterthought. These were formally imposed on a state by state basis. The US, UK, EU, Australia, Japan and South Korea all implemented sanctions packages. That included the seizure of Russian central bank assets by the EU, US, and UK, with the EU holding the bulk of the frozen lucre.

Let’s engage in some thought experiments. The EU has been desperately trying to “Trump-proof” various Ukraine arrangements. If Trump were to become President and be willing to meet Russia way more than halfway and give some sanctions relief, you can be sure that the EU would do everything in its power to undermine Trump, particularly where it has more degrees of freedom, as with the sanctions. Remember also that Ursula von der Leyen is about as hysterically anti-Russian as the Baltic states, and has filled the top ranks of the Commission with female uber-hawks. EU experts please pipe up. I assume modifying or ending the sanctions would require a unanimous EU vote, and not just a qualified majority, which amounts to na ga happen.

Mind you, I expect this implacable rejection to continue even when it became more self-destructive than now. What if things get so ugly in the Middle East that oil goes over $120 a barrel and stays there? Yes, China will be hurt, but so too would be the recessionary EU. But it seems vanishingly unlikely that they’d roll back the Russian oil sanctions, or that Germany would accept gas from the still-working one of four original Nordstream 2 pipelines.

Given all that, one has to think that Putin clearly understood that his Western potential interlocutors would reject not just some but all of his deal points with prejudice. So why make an offer that the other side is set to reject? First, Putin (as we and others have stressed) finds it important to make clear to his Global South economic partners that he’s not being the difficult party, that Russia is not the impediment to ending the war. Most of these countries are still viscerally uncomfortable with Russia invading and occupying a neighbor even if they understand why intellectually.

To put it another way, setting out terms, even if they are objectively reasonable, or at least a not-crazy opening position for talks, that the other side looks set to reject, looks like an exercise in papering the record, rather than negotiating. Lavrov underscored the idea with Newsweek: “At present, as far as we can see, restoring peace is not part of our adversary’s plan.”

So one can argue that Putin had concluded before June 14 that the only way to resolve the conflict was through a battlefield victory. His provisions were a way to make that official without saying so.

But second, this may have been Putin doing his own early Trump-proofing. Remember, he made this speech before the Biden-second-term-killing debate with Trump. Trump then looked to have good odds against Biden due among other things lack of enthusiasm for Biden dampening Democratic party fundraising. And Trump has told anyone who would listen that he can secure a peace in Ukraine in 24 hours.

So was this outline of terms a bit of Russian Trump-proofing? Recall how Putin over time found dealing with Macron’s various peace schemes to be tiresome. So he might want to short-circuit similarly pointless talks with Trump by pointing to his position and playing broken record.