By Lord Robert Skidelsky, The American Conservative, 1/1/25

Donald Trump’s victory in the U.S. presidential election of November 2024 has shredded the liberal script about the Ukraine war. That script was to offer unconditional moral and material support for a Ukrainian victory, defined minimally as recovery of the invaded territories of Crimea and Donbass. In Britain, it was considered almost treasonable to suggest otherwise.

Even before Trump’s election, the script had subtly changed into “doing what it takes” to put Ukraine in the best possible bargaining position in peace talks with Russia. This shift recognized that, unless the level of Western support were massively beefed up, Ukraine faced imminent military defeat. In the face of military reverses and with no expectation of further military aid from the Biden administration, President Volodymyr Zelensky too has abandoned his maximalist position and now pins his hopes on diplomatic pressure to induce Russia to negotiate. 

Since the start of Russia’s invasion of Ukraine on February 22, 2022, I have been one of a handful of advocates in the UK of a negotiated peace.  On March 3, 2022, I co-signed a letter to the Financial Times with the former British Foreign Secretary David Owen which urged NATO to put forward detailed proposals for a new security pact with Russia. On May 19, 2022, I called for the resumption of the “Ankara peace process” in the same paper.  I didn’t then know that bilateral peace talks between Russia and Ukraine, hosted by the Turkish government, had been aborted by the visit of Britain’s then–prime minister, Boris Johnson, to Kyiv on April 6, promising Ukraine all the help it needed to go on fighting. There were several further peace calls by myself, sometimes in good company, in the next two and half years, with increasing emphasis on the danger of escalation unless peace were quickly secured. But the only front-line British politician who agreed with this line was Nigel Farage, the leader of the Reform Party. From the non-NATO world came peace initiatives from China and Brazil. 

Trump’s second coming will bring about a shift from a passive war policy to an active peace policy. This is bound to bring about a ceasefire, possibly by the spring. That the peace terms remain vague is less important than that the killing will stop. Once stopped it will not easily be restarted. The question is why it has taken so many hundreds of thousands of lives, killed and wounded on both sides, to reach this moment. And what lessons can we learn? 

The most obvious lesson is the importance of diplomacy. All nations have their own story to tell. The clash of their stories can cause or inflame wars.  It is the traditional task of diplomacy to reconcile conflicting stories so that like can live in peace with unlike. The Ukraine war resulted from the catastrophic failure of diplomacy—in fact the disappearance of the global class of diplomats—leaving the leaders of belligerent countries free to pursue their ambitions without accurate knowledge of others’ reactions. In the run up to the invasion of 2022, Putin’s pronouncements looked too much like sabre-rattling; the United States and its NATO allies made little effort to try to settle the security issue which lay at the heart of the conflict with Russia. After Russia’s seizure of Crimea in 2014, there was a complete breakdown of trust. Chancellor Angela Merkel is reported to have said to Vladimir Putin: Can you guarantee that you will not attempt to make further changes of borders? To which the Russian president is said to have replied: Can you guarantee that NATO will not expand further?

It is generally believed in the West that Putin’s stated fear of NATO’s eastward expansion was simply an excuse for Russia to try to regain lands it had lost with the collapse of the Soviet Union. This is too simple. For centuries Russia had seen these “lost lands”—the Baltic states, Ukraine, Belarus, Georgia—as part of its empire’s shield against foreign invaders. Putin’s story is not just propaganda. Its roots are to be found in the mixture of 19th-century Russian nationalism and the geographic vulnerability of the Tsarist empire. 

Most of us in the West simply cannot recognize in NATO the “encircling claws” of Borodin’s Prince Igor, or the “insidious enemy” of Prokofiev’s opera War and Peace. NATO, we insist, is a purely defensive organization; countries join to defend themselves against Russia, not to attack it. This, however, is not the general view of NATO in the world outside the alliance, where its extension is largely, though not universally, viewed as an extension of Western imperialism.  The Russian Federation’s hostility to the eastward expansion of NATO has been the most consistent thread in its foreign policy in the quarter century since the collapse of the Soviet Union. How could we in the West, with the notable exception of diplomats like George Kennan and Henry Kissinger, not have understood that when Russia had regained strength this was one wrong it would seek to put right?  

We have here two opposing stories, each with some claim to truth, and no diplomatic mechanism for reconciling them. 

Britain has been Biden’s cheerleader in stoking the Russia–Ukraine war. We must turn to history to understand why. Modern Britain has never been truly “isolationist” because, until well into the 20th century, it had a world empire that needed defending. Outlining the principles of British foreign policy in 1852, the Foreign Secretary Lord Granville wrote that “it is the duty and the interest of this country, having possessions scattered over the whole world, and priding itself on its advanced state of civilization, to encourage moral, intellectual and physical progress among all other nations.” This self-image of Britain as both global policeman and mentor bred a conflict between the muscular and pacifist wings of British liberalism, with non-interventionists like John Bright and Richard Cobden arguing that it was free trade which would civilize the world and the interventionists saying that free trade was only possible in a world made civil by British power and British values. What is striking today is the collapse of that pacifist tradition

So, when Tony Blair, Britain’s Prime Minister said in Chicago in 1999 that “the spread of our values makes us more secure,” he was proclaiming a continuing mission of British foreign policy. The claim to the higher moral ground of democracy and human rights would justify attempts to spread western values to those areas that remained mired in dictatorship and autocracy. Arguably Britain’s most successful export was the export of its moral evangelism  to the United States as America emerged from its isolationism.

Nevertheless, this historical story does not exhaust the causes of Britain’s exceptional belligerence.

One needs to add the shame of the British establishment over the Munich Agreement of 1938, by which Britain ceded the Sudetenland of Czechoslovakia to Hitler and thereby helped unleash the Second World War. One can hardly overstate the strength of Britain’s Munich reflex. Thus, when the Egyptian leader Col. Gamal Abdel Nasser nationalized the Suez Canal in 1956, both Prime Minister Anthony Eden and the Labour leader Hugh Gaitskell were quick to compare him to Hitler. And the Tory MP Sir Robert Boothby provided the rationale for a military response, which reasoning also underlies the current British reaction to Putin: “If we were to allow him [Nasser] to get away with it, it would be a damaging blow to the whole concept of international law.” Where does the devil stop?

The comparison of Putin with Hitler comes from a sweeping generalization that sees democracy as the peaceful form of the state and autocracy as its warlike form. Against this we should counterpose the notably “realist” summary of historian A.J.P. Taylor: “Bismarck fought ‘necessary’ wars and killed thousands; the idealists of the twentieth century fought ‘just’ wars and killed millions.” It’s the idealists who are more likely to want to win at all costs, the autocrats who want to stop wars before their thrones crumble. 

At some point genuine western admiration for Ukraine’s struggle for its independence has morphed into a proxy war against Russia, with only a tacit bow to Ukraine’s own best interests. The West’s promise of unconditional support for a Ukrainian victory undoubtedly prolonged the war by blinding Ukrainians to the realistic prospect of a limited victory which nevertheless secured genuine independence Unforgivable is the British and American promise to give Ukraine “all it takes” for victory, when they had no intention whatsoever of doing so, Ukraine was sold a pup by Boris Johnson in 2022 and has been bleeding ever since.

Which brings us back to Trump. Both those who applaud and those who attack his approach to international relations describe it as “transactional.” Supporters argue that it will enable Trump to “do deals” with dictators in America’s interest; opponents deplore precisely its lack of a moral dimension. What both sides miss is that peace itself is a moral objective—in Christian teaching, it is the highest good. Pope Francis has frequently called for negotiations to end the Ukraine war, most recently in his Christmas message.  It is the refusal of our hawks and their passive camp-followers to recognize the paramount claims of peace which is the biggest danger facing the world today; Trump offers the most promising escape from an increasingly dangerous future. 

Robert Jacob Alexander Skidelsky is an independent peer of Britain’s House of Lords, and a renowned scholar on Keynesianism.

By Alastair Crooke, Strategic Culture Foundation, 12/23/24

Syria has been disintegrated and pillaged in the name of ‘liberating’ Syrians from the threat of ISIS, which they – Washington – had installed in the first place.

James Jeffrey, former U.S. Ambassador to Iraq and Turkey, in a March 2021 interview with PBS Frontline, laid out very plainly the template for what has just happened in Syria this month:

“Syria, given its size, its strategic location, its historical importance, is the pivot point for whether [there can be] an American-managed security system in the region … And so you’ve got this general alliance that is locked in with us. But … the stress point is greatest in Syria”.

Jeffrey explained (in the 2021 interview) why the U.S. shifted its to support to Jolani and Hayat Tahrir al-Sham (HTS):

“We got Mike Pompeo to issue a waiver to allow us to give aid to HTS – I received and sent messages to HTS” -The messages coming back from HTS were: “We [HTS] want to be your friend. We’re not terrorists. We’re just fighting Assad””.

The PBS Frontline interviewer asks: The U.S. was “supporting indirectly the armed opposition”? To which Jeffrey responds:

“It was important to us that HTS not disintegrate … our policy was … was to leave HTS alone … And the fact that we haven’t targeted [HTS] ever, the fact that we have never raised our voice to the Turks about their cohabitation with them — in fact, I used this example the last time I was talking to very senior Turks – when they started bitching about this relationship we [the U.S.] have with the SDF [in eastern Syria]”.

“I said to them, “Look, Turkey has always maintained that you want us in northeast Syria, which they do. But you don’t understand. We can’t be in northeast Syria without the platform, because we only have hundreds of troops there”; … I said: “It’s just like you in Idlib …”.

“We want you to be in Idlib, but you can’t be in Idlib without having a platform, and that platform is largely HTS. Now, unlike the SDF, HTS is a UN-designated official terrorist organisation. Have I ever, or has any American official ever, complained to you about what you’re doing there with HTS? No …”.

David Miller, a British academic, has noted that in 2015, prominent Syrian Sunni Muslim scholar, Shaykh al-Yaqoubi (who is anti-Assad), was unconvinced by Jolani’s efforts to rebrand Al Qa’ida as Jabhat al-Nusra. Jolani, in his al-2013 Al-Jazeera interview twice confirmed his allegiance to al-Qa’ida, saying that he received orders from its leader, Dr Ayman [al-Zawahiri] … and those were to not target the West. He confirmed his own position as being that of hardline intolerance toward those who practiced a ‘heretical’ Islam.

Miller comments:

“While ISIS put on suits; allowed Syria to be carved up by the U.S.; preach peace with the Zionist state; want free markets; and cut gas deals with their regional patrons – their ‘true-believers’… in the Sunni identitarian diaspora haven’t yet clocked that they’ve been sold out – as was always the plan”.

“In private, the planners of this war in NATO states laugh about sending young Salafi cannon fodder from around the world into a meat grinder. The $2000 salaries are a mere speck of sand compared to the gas and construction wealth that is expected to be returned to Turkish, Qatari, Israeli and American coffers. They killed Palestine for this, and they’ll spend the next 30 years justifying it, based on whatever line the very expensive PR firms hired by the NATO and Gulf states shill to them…The Syrian regime change operation is the rug pull of the century”.

Of course, James Jeffrey’s account was nothing new. Between 1979 and 1992, the CIA spent billions of dollars funding, arming, and training Afghan Mujahideen militia (like Osama bin Laden) in an attempt to bleed the USSR dry by pulling it into a quagmire. It was from the ranks of the Mujahideen that al-Qa’eda emerged.

“And yet, by the 2010s, even as the U.S. was ostensibly at war with al-Qaeda in Iraq and Afghanistan – it was secretly working with it – in Syria on a plan to overthrow Assad. The CIA spent around $1 billion per year training and arming a wide network of rebel groups to this end. As Jake Sullivan, told Secretary of State Hillary Clinton in a leaked 2012 email, “AQ [al-Qaeda] is on our side in Syria”, as Alan Macleod observes in Consortium News.

Turkish press accounts largely confirm this Jeffrey scenario was the current gameplan: Ömer Önhon, former senior Ambassador and Deputy Under-Secretary in charge of Middle East and Asia at the Turkish Ministry of Foreign Affairs, writes that:

“the operation to overthrow Assad’s regime in Syria was meticulously planned for over a year, with coordinated involvement from Turkey, the United States, and several other nations. Through various statements it has become clear that Assad’s departure resulted from an intricate web of agreements between virtually all stakeholders. Whilst HTS is actively working to rebrand itself – this transformation remains to be proven.”

This HTS story has a precedent: In the summer following Israel’s 2006 (unsuccessful) war on Hizbullah, Dick Cheney sat in his office loudly bemoaning Hizbullah’s continuing strength; and worse still, that it seemed to him that Iran had been the primary beneficiary from the U.S. 2003 Iraq war.

Cheney’s guest – the then Saudi Intelligence Chief, Prince Bandar – vigorously concurred (as chronicled by John Hannah, who participated in the meeting) and, to general surprise, Prince Bandar proclaimed that Iran yet could be cut to size: Syria was the ‘weak’ link that could be collapsed via an Islamist insurgency. Cheney’s initial scepticism turned to elation as Bandar said that U.S. involvement might be unnecessary. He – Bandar – would orchestrate and manage the project: ‘Leave it to me’, he said. Bandar separately told John Hannah: “The King knows that other than the collapse of the Islamic Republic itself, nothing would weaken Iran more than losing Syria”.

Well … that first effort did not succeed. It led to bloody civil war, but ultimately President Assad’s government survived.

So, Jeffrey was simply reiterating in 202 its sequel: the original Wahabbi-led ‘rug pull’ on Syria by the Gulf was simply to be reverse engineered into a HTS hit by a rebranded amalgam of various militia made up primarily of former fighters (many not Syrian) from al-Qaeda/al-Nusra and ISIS, directed – in this second iteration – by Turkish Intelligence and financed by Qatar.

Syria thus has been disintegrated and pillaged in the name of ‘liberating’ Syrians from the threat of ISIS, which they – Washington – had installed in the first place, and which the U.S. then used to justify the north-east of Syria’s occupation by U.S. forces. In the same mode, the unspoken part of this plan is to make secular Syria – with its legal system taken from France – ‘Islamic’ (“we will implement Islamic law”) to justify the Israeli attacks and land grabs, which are being presented as ‘defensive measures against jihadists’.

Of course, it is correct that there is likely money to be made from these events. It was never proven, but seismic surveys before the first Syria war began in 2011, seemed to show that there may well be substrata deposits of oil or gas in Syria, beyond the relatively small fields in the north-east. And yes, re-construction will be a bonanza for Turkey’s languishing construction sector.

Syria’s ailing military was no direct military threat to Israel per se. So you may wonder, why are they tearing the place apart? “Israel’s goal here is to basically wreck Syria”, Professor Mearsheimer opines. “It’s not in large part because of Israel, by the way. I think the Americans and the Turks played a much more important role than Israel did – in wrecking Syria”. “The country is wrecked and I don’t know anybody who thinks that the rebels who are now in control in Damascus are going to be able to restore order in that country … From Israel’s point of view, this is a perfectly fine situation”, Mearsheimer adds.

U.S. anti-Russia hawks also hoped that Russia might take the bait of a wrecked Syria to get enmired into a widening Middle East quagmire.

All of which takes us directly back to Jeffrey’s statement: “Syria, given its size, its strategic location, its historical importance, is the pivot point for whether [there can be] an American-managed security system in the region …”.

Syria has been from the outset – from 1949 – ‘the balancer’ to Israel in the region. That is now over, leaving only Iran to balance the Israeli thrust to a ‘Greater Israel’. It is no surprise then that the Israelis are agitating for the Americans to join with them in another orgy of destruction – this time to be visited on Iran.

Did Russia have foreknowledge of what was afoot in Idlib, and the orchestration of a transition of power? Of course! The very effective Russian services must have known, as this Syria project has been ongoing since the mid 1970s (through the Hudson Institute and Senator Scoop Jackson).

Assad had been signalling over the last four years, his desperate plan with Saudi, UAE and Egypt to a move towards a more pro-Israeli/pro-Western stance, in the hope of normalising with Washington and thereby gaining some sanctions relief.

Assad’s ploy failed – and Syria likely will emerge as ‘Greek tragedy’ whereby tragedy evolves as actors play out their own natures. Quiescent ethnic and sectarian tensions likely will re-kindle; wildfires will catch. The lid is off. And Russia was never going to take the bait of plunging in.

The U.S.-Israeli alliance has long wanted Syria. And now, they have got it. Any concomitant mayhem is down to them. Yes, the U.S. – in theory – may applaud itself for achieving more of “an American managed security [and energy dominant flow] system”.

But the U.S. ruling strata, however, were never going to let Europe be energy independent. The U.S. needs West Asia’s energy assets for itself – to collateralise its debt-overload. European states are left to tumble, as the fiscal crunch bites and European growth tails away.

Others may see a collateral scenario – that a conflicted and possibly re-radicalised Middle East will inflict further strain onto the already ‘livid’ domestic social tensions in Europe.

Israel nonetheless is relishing its ‘win’. Winning what? Former IDF Chief of Staff and Defence Minister ‘Bogie’ Ya’alon puts it this way:

“The current Israeli government’s path is to conquer, annex, commit ethnic cleansing … and to establish Jewish settlements. Polls show some 70% of Israelis, sometimes more, support this – AND for Israel to be a liberal democracy”.

“This [contradictory] path will lead us to destruction”, he concludes.

What other can be the final end to this Zionist project? There are more than seven million Palestinians between the ‘River and the Sea’. Are they all to vanish from the map?

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Alastair Crooke is a former British diplomat, founder and director of the Beirut-based Conflicts Forum.

By Dmitry Trenin, Profil, 12/18/24 (Translated by karlof1)

There is a rule: in peacetime, prepare for war, and in wartime, think about organizing peace. Now, while the conflict in Ukraine is not over, our thoughts are about victory. We are sure it will come. But it is time now to start thinking about the world that will follow. Paraphrasing Stalin’s famous statement, we can say: Bandera come and go, but the Ukrainian people remain.

Ukraine within the borders of December 31, 1991 has not existed for a long time. Part of the territories of the former Ukrainian SSR—Crimea, Donbass and Novorossiya—became part of the Russian Federation through referendums. It is possible that over time, some other regions will follow this path. Perhaps Odessa with Nikolaev, perhaps Kharkov with Dnepropetrovsk. Perhaps something else. But definitely not all. It is worth attaching only what can be really integrated and, if necessary, retained.

Some part of today’s Ukrainian territories will remain outside the Russian Federation. What will this Ukraine be like? The future of Russia depends on the answer to this question–-and in fact it is a very serious challenge. In the recent example of Syria, we received a clear confirmation of the military maxim of the great Alexander Suvorov: an undercut forest grows.

In civilizational, cultural, historical, and ethnic relations, Ukraine–-or at least most of it–-is an integral part of the Russian world. However, today this territory is at the mercy of forces desperately fighting the Russian world. It is impossible not to notice that even these forces themselves and the West standing behind them are fighting us with the hands, in fact, of Russian people fighting in the Russian way— stubbornly, inventively and evilly, despite huge losses.

The liberation mission of Russia–-its historical task–-does not end with the liberation of the cities and villages of Donbass and Novorossiya. It is aimed at liberating the whole of Ukraine from the anti-Russian Bandera regime, its neo-Nazi ideology, as well as from the influence of external forces hostile to the Russian world.

Like any other country, Ukraine belongs first and foremost to the people living on its territory. Russia, however, is closely and inextricably linked with this people and the land on which they live. After the end of the war, we owe it to ourselves, first of all, to help our neighbors build a new Ukraine–-initially a reconciled and then a peaceful neighbor, in the medium term–-a partner, and in the long term–-an ally.

Russia has historical experience in turning military opponents into friends or reliable fellow citizens. Suffice it to recall the revival of the Chechen Republic, which became a stronghold of stability in the North Caucasus; the alliance of former mujahideen with the Afghan “northern alliance” or the example of the GDR and a number of other satellite countries of Nazi Germany after World War II.

In the Russian expert community, there are different visions of post-war Ukraine.

The most radical option is for Russia to take control of the entire territory of Ukraine, up to Lviv, and access to the borders with NATO countries. Logically, this military success is followed by a political continuation–-the second “reunification of Ukraine with Russia”, which actually means the abolition of Ukrainian statehood. We will not discuss the realism of such an outcome of the NWO [SMO] from a military point of view. But we can say for sure: there are reasonable doubts about the ability to keep all of Ukraine under Moscow’s control and then integrate it entirely into the Russian Federation, as well as about the material cost for Russia of such a solution to the issue.

The opposite, least acceptable and most dangerous option for us is an embittered Bandera pro-Western Ukraine with slightly reduced borders compared to 2022. It is a fiercely anti-Russian state, an instrument of the West to constantly put pressure on Russia and provoke it, and then, at an opportune moment, a springboard for a new war for the “liberation of the occupied territories.” The main idea of this “undefeated” Ukraine will be revenge. Such an option should be completely excluded.

There is one option—a weakened Ukraine, a kind of large “gulyai-pole”, an entity abandoned by the West as unnecessary and dependent on Russia. In this incarnation of the Makhnovshchina, the various interest groups and criminal gangs will fight each other incessantly and tirelessly. It is assumed that Moscow will be able, by manipulating local elements, to turn such a Ukraine into a safe buffer for Russia in the southwestern direction. In this option, two things are doubtful. First, the fact that the West will “retreat” from the Ukrainian “gulyai-pole” and will not use its “heroes” to fight Russia, which will not stop after the end of hostilities in Ukraine. Secondly, that Moscow will be able to control this Makhnovshchina.

The best and not entirely fantastic option for us would be to oust anti-Russian, revanchist elements to the western regions of Ukraine. There they could create their own “free Ukraine” under the protectorate of the West or become a zone of influence of neighboring states—Poland, Hungary and Romania. The West could console itself with the fact that part of the country has avoided falling under Moscow’s control, and speculate that Western Ukraine, consisting of five or seven regions, will become an analogue of the Federal Republic of Germany during the Cold War. Let [Пусть]. It is not scary to give up what is not only expensive for us, but also dangerous to have. The mistake of Stalin, who annexed Galicia and Volhynia and thereby infected Soviet Ukraine with the virus of nationalism, cannot be repeated.

The main thing is that “Galicia”, taking into account all possible assistance to it from the West, does not pose a danger to Russia, that is, it would have a subcritical mass. The rest of Ukraine–-isolated from the hotbed of ultranationalism, and without regions that have already joined or may yet join the Russian Federation–-would become a new sovereign Ukrainian state. At the same time, by a state that is not under our occupation. It makes sense to offer such a prospect to the Ukrainians, explaining how beneficial it is to them.

The new Ukraine would be much more Ukrainian than the Ukrainian SSR or even Ukraine without Crimea and the four regions that voted to join Russia in 2022. The Ukrainian economy would gain access to the market of Russia and the EAEU countries. At the same time, the New Ukraine would be rigidly separated from the alien Bandera element, which was historically formed in isolation from Russia and on an anti-Russian basis. Kiev would have freed itself from those who flooded and desecrated it after the Maidan coup of 2014.

A new Ukraine as a state and society would be created on a broad all-Russian–-or, if you like, East Slavic–-basis. Such a Ukraine would inherit Kievan Rus and the Zaporozhian Cossacks; it would be proud of the contribution of its people to the strengthening and prosperity of the Russian Tsardom and the Russian Empire, as well as the Soviet Union, of which the Little Russian lands were an important component. Finally, it would embody the historical dream of several generations of Ukrainians about independence.

In the realities of the modern world, the true sovereignty of Ukraine–-as well as other neighboring states of the former USSR–-is possible only in conditions of close cooperation with Russia. At the same time, the Ukrainian Orthodox Church would remain the spiritual basis of society.

The “New Ukraine” project does not have to wait for Victory Day. You can start planning now. There are many Ukrainians in Russia who are not indifferent to the fate of their homeland. Many of them have the necessary competencies to join the work on state, economic and cultural building of the future Ukrainian statehood. At the same time, it should be emphasized that this work is aimed precisely at creating a new statehood, and not at restoring the Ukraine that was swept away by the Maidan almost 11 years ago.

We are not talking only about those who have moved. After our victory, there is work to be done to separate war criminals, criminal figures, ideological opponents and incorrigible Russophobes from the bulk of the population of Ukraine. From its ranks, the New Ukraine could attract patriots–-officers, public and cultural figures, businessmen—who are ready to rebuild their country in cooperation with Russia. We, in turn, will have to give these people an initial credit of trust and treat their “Ukrainianness” with respect. They are not “khokhly”, “ukrops” who speak “language”, and not just neighbors, but a part of the Russian world that we have to return. Not for their sake, but first of all for the sake of ourselves, our safe (in this direction) future.

In our work with the Ukrainians, it is already necessary to emphasize that for the West, Ukraine and its population are only a tool, an expendable material in weakening Russia. That for the West, Ukrainians (who were massively “discovered” there only three years ago) are strangers, second- or third-class people. That the wonderful Ukrainian folk values are destined to be buried under the avalanche of Western mass culture and all the latest innovations in the field of gender policy. That the Ukrainian language is experiencing increasing pressure from English. That Ukrainian wealth – black soil, subsoil – was bought up by American and Western companies and in fact for the most part no longer belongs to Ukraine. That a hypothetical attempt by Ukraine to protect its identity will be met with the same wave of arrogant pressure from the West as the actions of the current Georgian authorities.

So, to sum up: we need to be ready for war, but we also need to be ready for peace. We will expect that all the goals of the NWO will be achieved, and hope at least for the optimal option for ending the war described above. In other words, for our victory. But this will be a victory, first of all, over the attempt of the collective West to restrain our development and weaken us. This will be a victory over the Ukrainian Bandera followers—enemies of both Russians and Ukrainians. For ordinary citizens of the New Ukraine, the day of our victory will be the day of their liberation. This was the name of Victory Day in the GDR.

YouTube link here.

By Ben Aris, Substack, 12/18/24

The EU is under intense pressure to seize Russia’s frozen $300bn of reserves, as crises in funding the war in Ukraine and finding the funds to pay for reconstruction loom.

The US has made it clear that it doesn’t want to pay for the Ukraine war anymore. It ran out of money for Ukraine completely at the start of 2023, then struggled to get an emergence $61bn aid package through in April, but according to Ukrainian President Volodymyr Zelenskiy only 10% of these funds and supplies have actually arrived in Ukraine since, with the rest caught up in committee in the US – a problem confirmed last week by US National Security Advisor of Jake Sullivan.

Washington has already passed laws making seizing the $5bn of Russian assets still on American territory legal. Now it wants Europe to do the same.

The confiscation would be unprecedented. Central bank reserves have been frozen many times, and indeed, the US continues to hold the reserves of Iraq and Afghanistan, but technically they remain the property of the country’s central bank and should eventually be returned after the wars are over. Central bank reserves of another country have never been confiscated before.

In May, the EU approved the use of profits from the frozen assets—approximately €3bn annually—with 90% allocated to military aid for Ukraine and the rest reserved for humanitarian purposes. This compromise ensured the participation of neutral EU countries.

What is driving the renewed debate to seize the principal assets as well is Western officials are increasingly unable to fund Ukraine. At the same time as US funding dries up, the EU has also been slacking on fulfilling its commitments. Europe has pledged a total of €241bn in support of Ukraine since the start of the war in 2022, but it has only delivered half of this amount (€125bn), according to monitoring agencies, and there are no concrete plans to send the rest.

With Europe sinking into recession it has reached the point where EU governments have run out of money to pay for an expensive war that is consuming some $100bn a year, according to Timothy Ash, the senior sovereign strategist at BlueBay Asset Management in London.

Germany has been in a budget crisis all year, and cut its allocation for Ukraine in half from €8bn to €4bn in 2024, with commitments falling to €500mn in the following two years. Likewise, France, which is also suffering from a government debt crisis, cut its allocation for Ukraine from €4bn to €3bn in October and will struggle even to meet that. Finally, the G7 $50bn loan to Ukraine, approved on June 13 at a G7 summit in Italy, has also got snarled up in red tape and was supposed to be distributed this month, but now it has been split into three tranches paid out over three years, with the first tranche of $22bn due in the first quarter of next year.

Ukraine needs about $40bn a year in international funding to make the budget work and keep the Armed Forces of Ukraine (AFU) supplied, but even the Ministry of Finance (MinFin) anticipates this halving to some $22bn a year over the next two years, according to the most recent version of the three-year budget.

And all these problems are made worse by the anticipation that President-elect Donald Trump will cut US funding for Ukraine entirely. In a precursor to the new Trump policy, US Speaker of the House Mike Johnson just shot down a US President Joe Biden proposal to add a fresh $24bn of funding for Ukraine to a congressional spending bill for 2025.

With the sources of funding for Ukraine rapidly evaporating the calculus is changing.

Brussels remains committed to supporting Ukraine, even if several member states are more hesitant. One of the big changes in recent months is the appointment of former Estonian Prime Minister Kaja Kallas as the EU foreign policy chief, who is an outspoken Russia hawk. The discussion about seizing the CBR’s money was tabled at a meeting of EU foreign ministers that was chaired by Kallas, who inevitably put the issue back on the agenda. As an Estonian, that sits cheek by jowl with Russia and was occupied by the Soviet Union for 48 years, she is fully focused on holding Russia to account and cares little about the economic or financial consequences.

The Estonians have a particular hatred of Russia following the mass deportations in 1941 and 1949 when thousands were sent to Siberia overnight. Every family in Estonia lost a family member to the deportations, which are marked by a Remembrance Day every year on June 14 that keeps the tragedy fresh in everyone’s memory.

Kallas argued that the assets could be appropriated within a legal framework. “I won’t use the word ‘confiscation’ because it’s actually using assets in a legal way,” she said at the meeting.

Kallas has little power to force the confiscations policy through. The European Commission (EC) has the mandate to set EU trade policy, but foreign policy remains the prerogative of the member states. Several EU countries are not keen on the idea, led by the conservative Germany and Belgium, which would find themselves in the front line. Given all EU decisions have to be unanimous, getting permission to confiscate the CBR’s money will be very hard.

In the meantime, many EU members remain resolutely against a confiscation. Valerie Urbain, CEO of Belgium-based Euroclear, which holds €190bn of the assets, has been particularly outspoken: “We cannot end up in a situation where assets are confiscated and then a few years later Russia comes and demands them back, when the assets are no longer there. If assets are confiscated, then liabilities must also be transferred,” she said in a recent interview with Bloomberg.

Her predecessor, Euroclear’s CEO Lieve Mostrey, similarly slammed the G7 plan to use Russia’s frozen assets to fund the war in Ukraine and finance its reconstruction in an interview with The Financial Times in February.

Bankers are also not keen on the idea as they anticipate years of very expensive lawsuits from Russian entities. The problem is that the decision to seize the CBR’s funds is political, however, its assets in Europe are protected by the same strong property rights as other assets in Europe and so are vulnerable to lawsuits. They want part of the funds, if they are seized, to be put aside to fund the anticipated wave of Russian lawsuits that will tie up the courts for years.

This is one of the objections to the confiscations: either Euroclear will lose in court and be on the hook to repay €190bn it no longer has, or the courts will be pushed to uphold a political decision and massively undermine trust in Europe’s financial system that could lead to massive capital flight. The share of the US dollar in sovereign reserve funds has already fallen to a 40 year low, thanks to the White House’s decision to weaponize its currency via sanctions that has undermined trust in the dollar.

Another problem is the Kremlin is threatening to launch cases in Russian courts and seize billions of dollars in Russian accounts that belong to Western firms. As bne IntelliNews reported, only 9% of western companies have left the Russian market and they still owned significant assets in Russia.

A decree signed by Vladimir Putin in May enables the use of foreign-owned assets in Russia to compensate for damages caused by Western sanctions. Finance Minister Anton Siluanov announced in October that Russia has initiated “mirror responses” against the West.

Reconstruction elephant

But the elephant in the room is where the money will come from to rebuild Ukraine after the fighting stops. Trump has famously promised to stop the war “in 24 hours” after taking over. With the Ukrainian defence in the Donbas slowly crumbling – military analysts predict the fall of the key logistics hub at Pokrovsk in the next 2-5 months that could lead to the collapse of Ukraine’s resistance – the war appears to be in its end game.

Estimates of the damage caused by Russia’s campaign start at just under $200bn for the physical damage and run up to between $500bn to $1 trillion, depending on what is included in the calculation. The Centre for European Policy Analysis released a detailed report analysing the damage sector by sector in April this year.

All the talk and funding plans so far have focused on funding the budget to keep the government and the AFU working, but as the end of the war looms thoughts are slowly turning to how to pay for reconstruction. Currently, there is no plan.

At the Ukraine Recovery Conference in London last year it was suggested that the private sector pays for the rebuild. However, fund managers told bne IntelliNews that was going to be a tough sell.

“Of course, Ukraine is a fantastic opportunity, but I would want to wait for at least a few years,” one famous veteran of Eastern Europe investment told bne IntelliNews. “We need to see the domestic political turmoil that will follow a ceasefire die down first and Bankova prove its commitment to a stable and predictable investment climate. And then there is the threat of a second Russian invasion that also needs to be abated.”

It’s a Catch-22 situation: the investment won’t come until the investment has already come and the post-war bounce-back-boom is well underway.

In the first year it will be up to the EU to prime the pump, however without the CBR’s $300bn budgets will be tight. According to another study by Elina Ribakova, non-resident senior fellow at the Peterson Institute for International Economics, counting out the CBR money there is a total of some $75bn committed in the form of the EU’s Ukraine Facility and other International Financial Institutions (IFIs) commitments. That may or may not be enough. And even getting old of that money will be hard: pre-war Ukraine typically received about $3bn a year from the IMF – half of its three-year Extended Fund Facility commitments, reduced due to Kyiv’s foot-dragging on promised reforms and eventually downgraded to a one-year Stand By Facility.

All these problems are likely to resurface after the war is open as Ukraine remains one of the most corrupt countries in Europe. Ironically, Georgia is much further down the road to complying with the EU accession criteria thanks to the Saakashvili administration and the work of the late former-oligarch and reform major domo Kakha Bendukidze.

Damage is already done

In this context, confiscating the CBR’s money starts to look a lot more appealing. There is no other way to fund the investment needed to kick start Ukraine’s recovery and start that bounce-back-boom. And the investors are interested. In a long-forgotten story, there was a banking gold rush in 2006, when foreign investors rushed to Kyiv to snap up banks at crazy six-times book multiples after it appeared that Ukraine’s economy had finally turned the corner. But it all went wrong again in 2008 during the Great Financial Crisis and those same investors have been left licking their burnt fingers.

The biggest question left is what damage will seizing the CBR’s money do? The lawsuits are inevitable, but that problem can be coped with. However, in my personal opinion the damage to the EU’s reputation and the euro has already been done.

In the first week of the war European Commission President Ursula von der Leyen held a press conference where she announced both the seizure of the CBR’s reserves and the introduction of the SWIFT sanctions that effectively cut Russia off from using the dollar. Both sanctions were unprecedented. The SWIFT sanctions had been mentioned in the run up to the war, but ruled out by Berlin in particular. The CBR sanctions came completely out of left field.

Underlying the objections to confiscating the CBR’s money is the assumption that once the war ends things will go back to normal and so preserving the trust in the euro and European banks is paramount. But thanks to the sanctions that trust has already been undermined in the eyes of the Global South bankers and central banks. The dollar is so deeply ingrained as the currency of choice to settle international trade deals that it can probably cope with the dent in its reputation it has taken from its weaponization, but the euro is a lot more vulnerable. Moreover, the reputational damage the EU has taken from its unabridged support of Israel’s campaign in Gaza, versus its backing of a de facto proxy war against Russia in Ukraine has been significant.

Confiscating the CBR’s money will do a lot less damage than feared as the damage has already been done. Bottom line, there is no other way of funding Ukraine’s recovery other than seizing the CBR’s money.