By Simplicius, Substack, 11/13/24

Just a day after we wrote about the ‘rumored’ new plan for the US to hold Ukrainian elections next year to give intransigent Zelensky the boot, The Economist made it semi-official by acknowledging that, ‘suddenly’, Zelensky is facing a ‘power struggle’ at home:

https://www.economist.com/europe/2024/11/12/volodymyr-zelensky-faces-a-power-struggle-in-2025

It’s in line with how Biden’s advanced dementia was just “abruptly” discovered by figures and organs of the establishment, only after becoming convenient and politically expedient enough for them to make it public. Similarly here, as soon as the memo-from-above’s arrival, The Economist sprang into pre-conditioning the ground to sell the narrative that Zelensky’s regime is now on uncertain footing; they would have never been allowed to even suggest that Zelensky faced danger at home until it became necessary to do so.

The article opens up with the admission that funeral ceremonies for soldiers in Kiev have “become more frequent” after the recent ramp-up of Russia’s offensives, a testament to the AFU’s own mounting death toll at a time when they’re desperately trying to sell the opposing claim about ‘astronomical Russian casualties’.

“For now, there are two dates on Kyiv politicos’ lips: January 20th 2025, the date of Mr Trump’s inauguration, the first moment for any possible ceasefire and lifting of military law, and May 25th, the earliest mooted date for an election.”

An election during pinnacle of wartime seems unthinkable, they write, but:

“Still, some groundwork appears to have begun. Regional election headquarters are mobilising, and work on candidate lists is beginning. The representatives of one likely presidential rival to Volodymyr Zelensky say that Ukraine needs elections; but they worry about making a public statement to this effect, fearing a fierce backlash from the presidential office.”

Then, of course, comes the obligatory backstab:

Not only did Economist now roll out some “internal polling” that seemingly didn’t exist before, but the big kicker is the predictable insertion of Zaluzhny as new heir to the throne. That’s not to mention the suggestive lay out of their preferred outcome:

“But a former colleague of the president says his best move might be to step aside regardless, and keep to his original promise only to serve one term. ‘Zelensky has only one way out to get out with an intact reputation,’ this source says. ‘That is to run elections [without him] and go down in history as the man who united the nation in war.’ The alternative is to risk being associated with a military collapse or an incomplete peace.”

Ah, so a ‘dignified bow out’ just like the same establishment forces asked of Zelensky’s fateful partner-in-crime Joe Biden. Remember, it’s either the “easy way” or the “hard way”, as Pelosi said; the same stands for Zelensky. Take your free trip to Tel Aviv or we can begin raising the level of ‘encouragement’. After all, recall Zaluzhny was directed to step down from his role as general for a long time, and it was only after his direct subordinates began to be assassinated did he heed the warning and do as he was told.

The other excerpt from the article which went viral today was the following:

“The army is censoring the most negative news to avoid fanning flames back home, he says. A senior military official agrees. Even Mr Zelensky is being shielded from the truth. ‘It’s not even that he’s being kept in a warm bath,’ the source says, using a local idiom to suggest the president was being cocooned by his top officials. ‘He’s being kept in a sauna.’”

Well, now, would you look at that? So maybe when Zelensky spouts off those ridiculous numbers about Russian losses, he’s not exactly the most trustworthy source? As preposterous as it may sound, given the above, it may even be the case that Zelensky actually believes the figures that only 30,000 or so AFU troops have died. He could very well think he’s winning the war based on his info-cocoon; scary thought.

The article ends with an interesting affirmation that Russia intends to capture the capital of Zaporozhye province, i.e. Zaporozhye city itself:

“In Kurakhove, Russian forces are outnumbering Ukrainian forces by at least six to one, and a Ukrainian retreat seems inevitable soon. Ukraine is on the back foot in the Kursk region it in turn occupies, where Russia is trying to push its soldiers out with the assistance of thousands of North Korean troops. Fighting is also beginning in Zaporizhia province for what Ukrainian intelligence believes will be an assault on the provincial capital, an important industrial hub.”

If that is indeed one of the main targets of the new coming offensive, it would seem to sketch a potential Putin plan for ending the war: one can theorize that Putin could “make it easy” on Zelensky, or whoever’s in power at the time, by taking the decision to give up Zaporozhye out of their hands. If Russian forces can capture Zaporozhye city and most of the province itself, then that would already be a major point of Russia’s negotiations demands accomplished. Given that Zaporozhye is much bigger and more consequential than Kherson, it represents a much bigger roadblock to Ukraine acceding to Russia’s terms….

By Anatol Lieven, Responsible Statecraft, 11/21/24

The UK has apparently given the greenlight for Kyiv to use its Storm Shadow missiles for attacking inside Russia. While the British government has not commented publicly, the Ukrainian military used the missiles to strike Russia for the first time on Wednesday.

In keeping with most British military “decisions,” its actions Wednesday followed the Biden Administration’s approval to allow Ukraine to use its own long-range ATACMS in the same way.

The British government seems to have forgotten that two months from now, the Biden administration will no longer be in office and the Trump White House may not take kindly to what some of its future members see as British support for a preemptive Biden attempt to wreck Trump’s peace agenda in Ukraine.

From the point of view of Britain’s own security interests (which do not appear to play any part in British establishment thinking about Ukraine), British citizens just have to hope that after January the Russian government does not retaliate against the UK — for if it does, they may not receive much sympathy from Washington.

The official argument for the ATACMS and Storms Shadows decision is to put Ukraine in a stronger position before peace talks are initiated by Trump. Russia seems certain to try to gain as much territory as possible before these talks begin, and the Ukrainian armed forces are in serious danger of collapse.

This is a dangerous gamble, because the missiles (which are guided to their targets by U.S. personnel) risk infuriating Russia without giving really critical help to Ukraine. It is especially dangerous for the UK, because if Putin feels impelled to live up to its promises to retaliate without attacking U.S. interests and alienating Trump, he could well feel that the UK makes a safertarget — it is at least a gamble based on rational calculations.

This is not exactly what the government and the British security establishment have beensaying. Like some East European governments, and influential political voices in Western Europe, the British government is still talking of helping Ukraine “win” — not to achieve a better compromise.

Like the Biden administration, British and NATO language of the “irreversibility” of Ukrainian NATO membership, and the necessity of Russia leaving the Ukrainian territory it has occupied suggest opposition to any conceivable peace settlement that Trump could seek to achieve. If the UK is seen by Trump to be deliberately sabotaging his peace agenda, this will be hugely damaging to the American-British relationship, and put Britain in an extremely exposed position.

Such an interpretation by Trump is likely to be encouraged by the talk in Washington, London and European capitals about “Trump-proofing” aid to Ukraine, and suggestions by European analysts that Europe both should and can support Ukraine in continuing to fight even if the Trump administration withdraws U.S. support.

At ameeting in Warsaw this week, European foreign ministers pledged (without giving any details) to increase aid to Ukraine. Furthermore – in words, which if meant seriously, would make peace impossible —declared:

“(that we) remain steadfast in our support for a just and lasting peace for Ukraine, based on the UN Charter, reaffirming that peace can only be negotiated with Ukraine, with European, American and G7 partners by its side, and in making sure that the aggressor will bear consequences, also financial ones, of its illegal acts that violate rules set out in the UN Charter.”

This is lunacy. It is not even likely that Europe will be able to sustain present levels of economic aid to Ukraine for long. Budgets all over Europe are under intense strain, leading to bitter politicalstruggles. The German coalition government has just collapsed due to a fight between its constituent parties over how to pay simultaneously for support to Ukraine, German re-armament, German industrial regeneration and social welfare.

Berlin had already announced radical cuts to its bilateral aid to Ukraine. For the European Union to take up the full burden of existing European aid — let alone replace that of the U.S. — would almost certainly require acceptance of EU control over collective European debt, through a huge issue of “Defense Eurobonds.”

This would, however, likely be opposed by dominant elements in the German Christian Democratic Union (CDU), which seems certain to be the dominant partner in a new coalition after elections now due in February. Their opposition stems not only from their own convictions, but also from the fear that ceding German economic sovereignty in this way would deeply anger many Germans and give a strong boost to support for populist opposition parties of the Right and Left.

As to Europe replacing the U.S. in terms of military support for Ukraine, this looks absurd. In critical areas like air defense systems, European military industries are not remotely capable even of providing for their own countries’ defense, let alone of providing what Ukraine needs.

Earlier this year, European governments rebuffed Ukraine’s appeal for more air defense weapons. These shortages extend across the board. Almost unbelievably, the British government’s decision on Storm Shadows occurred simultaneously with an announcement of further deep cuts to the UK armed forces, including its last amphibious assault ships and a large proportion of its transport helicopters.

Europe can of course buy from the U.S. — but only if Washington is capable of supplying systems for Ukraine and for Israel and adequately supplying America’s own forces for possible war with China. Is it likely that a Trump administration angered by Ukrainian and European rejection of a peace deal would prioritize weapons for Ukraine, even if the Europeans were paying for them?

The utterly confused state of British and European thinking about the military realities of the Ukraine conflict and Europe’s role is in large part due to the pitiful ignorance of military matters on the part of politicians — and therefore governments — who with the rarest of exceptions have never served in the military themselves, or bothered to study military issues, or devoted serious study to any foreign country.

This makes them completely dependent on advice from their foreign and security establishments; and for decades now, these establishments have outsourced to Washington not just responsibility for their national security, but thinking about it.

If you ask most members of European think tanks to define the specifically British, or French, or Danish interests in the Ukraine War, they are not merely incapable of answering, they clearly regard the very question as somehow illegitimate and disloyal to the U.S.-mandated “rules-based order.”

But the America to which these Europeans are loyal is the old U.S. foreign and security establishment — not the America of Trump, which they do not understand and deeply hate and fear (just as they do their own populist oppositions). Indeed, until a very few months ago the great majority of European politicians and experts simply refused to believe that Trump could possibly win the elections.

Many have now lost their heads entirely, and are just running around in circles. Others, like the Poles and Balts, have their heads firmly screwed on, but back to front.

As to the British government and security establishment, since the U.S. elections they have resembled their predecessor King Charles I, who according to legend went on talking for half an hour after his head had been cut off. Perhaps given time they can grow a new head of their very own. But in the meantime, for people in this embarrassing position, a period of silent inaction would seem to be the wise course to adopt.

By Ben Aris, Intellinews, 11/14/24

Russia’s economy has been battered by sanctions and high inflation, but there is no chance of a major economic crisis occurring anytime in the next three to five years, says a new authoritative report from CASE. [https://case-center.org/wp-content/uploads/2024/11/case-241112-en_fin2_compressed.pdf]

The authors of the report are amongst the keenest observers of Russian economics. Sergey Aleksashenko is a renowned Russian economist who served as Deputy Finance Minister of Russia from 1993 to 1995. Dmitry Nekrasov held various positions in Russia’s Federal Tax Service and Presidential Administration during Dmitry Medvedev’s years in the Kremlin. And Vladislav Inozemtsev is a famous Russian economist in exile who is the founder and director of the Center for Post-Industrial Studies and former professor at the prestigious Higher School of Economics in Moscow.

Inozemtsev has been well ahead of the curve, being the first to predict how the Russian economy is cooling as the military Keynesian effects start to wear off in August. The theme of Russia’s growing economic problems has been take up by many of Russia’s opponents and culminated in a recent article from opposition publication Meduza predicting that Russia faces a wave of bankruptcies in 2025 thanks to the soaring cost of borrowing.

But in his latest paper, Inozemtsev takes some of the wind out of the sails of this pessimistic outlook. The reports general conclusion is that “Russia has been able to withstand the blow caused by the Western sanctions due to a combination of factors, including its well-developed market economy, its indispensable position as a supplier of primary commodities to the global market, highly professional responses by its government officials, and the West’s inability to isolate Russia on the international stage.”

“An unbiased assessment of Russia’s economic capabilities presented in the report excludes almost any chances of a serious crisis caused by internal factors in at least three-to-five-years perspective,” the report concludes, running counter to the predictions that Russia’s economy will run into a brick wall in 2025.

Growth without development

Russia’s economy was expected to collapse after the extreme sanctions were imposed in 2022. And indeed, the first few months were a shock. But during the summer it unexpectedly boomed and in 2024 it has been the European economies that have fallen into recession as the boomerang effect of the sanctions begins to bite. The West underestimated how fast and how successfully Putin could reorient his trade to the Global South and how deeply integrated Russia is into European economies.

Since mid-2023, the Russian economy has undergone important structural changes: military spending has increased, the geography of foreign trade has changed and the citizens’ real disposable incomes have grown as wages are driven up by a chronic labour shortage. Together, all this has provided the Russian economy with strength and stability and made it capable of meeting the needs of Kremlin’s military machine in the years to come while providing the necessary financial resources for funding welfare programmes on a scale preventing an increase in protest sentiments, the authors say. The flourishing oil trade means Russia has plenty of money, but the war has killed off meaningful progress.

“The current stance can be described as a “growth without development”, being characterised by a quantitative increase in the volume of production of long-mastered products, an expansion of the service sector, and limited modernisation of infrastructure without significant technological progress.

Indeed, in many respects Russia’s economy has gone backwards. CBR Governor Elvira Nabiullina warned companies at the start of the war they might need to go back “two generations of technology” to keep their factories running.

And even more worrying for the global economy, sanctions have created a new class of Bandit Counties that champion massive violations of intellectual property rights, illicit foreign trades and the use of non-traditional forms of international settlements.

“The Kremlin sees opportunities for institutionalising this model and is laying it down as the basis for its geopolitical claims, trying to establish itself as a leader of a “non-Western” community of nations.

Getting it wrong

The authors point out that analyst keep getting Russia wrong, overestimating the power of sanctions, underestimating the quality of the country’s economic leadership and its ability to remake its markets in the face of sanctions.

In April 2022 the World Bank predicted Russia’s GDP would decline by 11.2% by the end of the year, but the final estimate came to only minus 2.1%. In 2023, the Russian economy grew by 3.6% against the January IMF forecast of 0.3%; and in 2024 its growth could achieve 3.8-4.0%, while at the start of the year international experts gave a figure of just 1.3%. These are not small mistakes. They belie a deep misunderstanding of what is happening in Russia, the authors argue, and lead to very poor policy recommendations.

“We believe this disconnect is largely subjective, reflecting essential features of three main groups of analysts.

“The first group consists of long-time Russia specialists who view current events through a Soviet-era lens, interpreting Putin’s dictatorship as an attempt to restore the Soviet system.

“The second group includes analysts who work for Western governments or NGOs, and feel compelled to propose sanctions and restrictions, projecting confidence in their effectiveness.

“The third group is made up of experts with Russian backgrounds, including those former politicians who despise Putin and are convinced of his regime’s imminent collapse.

“The deep biases of these groups hinder objective assessments of the Russian economy’s current state and prospects,” the authors opine.

Sanctions don’t work because the “international community” is in reality only the handful of counties that make up the Global North, and even in Europe, within the EU itself, the willingness to impose sanctions is weakly followed or enforced. Turkey’s propensity to continue to act as a way-station for trade with Russia, Austria and Hungary’s continued imports of Russian gas and Germany’s luxury carmakers that continue to export top of the range cars to Moscow via Minsk are only a few of the manifold examples of how sanctions are being undermined. The West’s failure to get China and India on board and refusal to join the regime by the real “international community” of the Global South, which makes up 90% of the world’s population, blows a major hole in the sanctions regime.

Another miscalculation is to put all the growth at the feet of the military-industrial sector. The civilian sector has also flourished. Several things have gone into this growth but among the most important was Russian businesses reacted to sanctions by investing heavily into retooling factories to replace hard-to-obtain Western technology, and booming consumption fuelled by the rapid rise in real disposable incomes.

In 2023, the largest increase in gross value added was recorded in the hotels and catering enterprises (by 10%), in the information and communications sector (10%), in financial and insurance activities (8.6%), in wholesale and retail trade (7.3%) and in construction (7.0%), which reflects an increase on the share of final consumption expenditures in GDP to 68.7% from 64.9% in 2022, including the share of household expenditure to 49.8% from 47.4%.

“It seems that the development of the Russian economy in the last two years, as well as the real effect of sanctions, should have led to a re-evaluation of the quality of the expertise used by policymakers – but this has not happened yet,” the authors say.

Russia’s robust growth

The introduction of the twin oil price cap sanctions at the end of 2022 and start of 2023 were also misunderstood. When the budget figures were released in March 2023 and showed a massive deficit for 2022 and collapsing tax revenues in January 2023, the oil sanctions were hailed as huge success. However, the numbers were misleading.

“Bureaucratic factors became more important: the excessive strengthening of the ruble exchange rate under the influence of paramount currency restrictions and the Ministry of Finance’s sluggishness in changing the methodology of determining the price of oil for tax purposes [which used to be based on the price of the sanctioned Urals blend, but was changed to a Brent benchmark],” the authors explain.

“When these factors ceased to have an effect, budget revenues stabilised and soon began to increase rapidly, outpacing economic growth – the Ministry of Finance began to collect an “inflation tax” of additional revenues from VAT, profit tax and personal income tax, caused by a significant excess of the inflation rate over what was anticipated in the draft budget,” which bne IntelliNews reported on at the time and also discussed in an oil podcast, but was not well understood by most commentators.

In 2023 the Ministry of Finance had to dip into the National Welfare Fund (NWF) for RUB3.46 trillion to cover a 17% of the budget shortfall. In 2024, the budget spending to date is fully funded by revenues – although it may not stay that way, as typically 20% of all spending usually happens in December. Currently, the official forecast for the deficit is 1.7% of GDP of around RUB3 trillion, increased from 0.8% earlier in the year. For 2026, the Ministry of Finance is expecting the budget deficit to be flat.

“One should add that the Russian government’s debt is insignificant by modern standards,” say the authors. Debt is expected to reach 18.1% of GDP by the end of 2024, which leaves a huge space for domestic borrowing. The Ministry of Finance is planning to issue RUB4 trillion of domestic debt in 2024 (nearly double pre-war levels), tapping the estimated RUB19 trillion of liquidity in the domestic banking sector. That is enough money to continue Putin’s war in Ukraine for years.

The growth of real disposable incomes during the war was an even bigger boon, as it came after the longest period of their fall in Russian history – from 2014 to 2021 – ironically caused by the chronic labour shortage as men were bled away from the labour pool to fight on the frontlines. In three years since the start of the aggression against Ukraine, this figure will grow by at least 17.5% (4.0% in 2022, 6.9% in 2023 and, according to the government forecast, about 7% in 2024).

Domestic consumption has become a bigger growth driver than the booming raw material exports. It has created a new War Middle Class and is fuelling activity in the civilian segment of industry. At least until mid-2024, the rate of income growth accelerated (the maximum figure of 8.1% was recorded in the first half of this year) with ever higher pay going to soldiers, who earn three times the average salary.

The growth of incomes is part of the reversal of Putinomics that war has brought with it. Pre-war the Kremlin effectively ran an austerity budget, starting in about 2012 when Putin launched a drive to modernise the military. The CBR hoarded cash, building up a huge $600bn reserve, debt was paid down and investment into non-strategic sector was muted. Since the war started, the Kremlin has opened the spending spigot and money has poured into wages and investment, as much as is needed to get the job done. From mid-2023 to mid-2024, the Kremlin paid RUB3 trillion in military salaries, equivalent to the entire budget deficit.

While many commentators have pointed to the huge military salary bill as a weakness, the Kremlin doesn’t appear to think so. The current 2025-2027 budget proposal keeps military spending at 6% of GDP and this is not seen to be excessively high, but the current budgetary structure looks sustainable over a three-year horizon, maintaining the massive military spending. What is spent on salaries can be offset to a large extent by what is earned on taxing consumption and growth. Already the non-oil part of the budget revenues is easily outstripping those from oil.

A dramatic U-turn in strategy, the reversal of Putinomics has unleashed years of pent-up growth. Another side-effect of the spending is to undo some of Russia’s legendary income inequality, as the poorest regions have been the biggest winners of the Kremlin’s largesse, as that is where most of the military factories are located as a legacy of the Cold War. Putin stressed the importance of balanced investment into both civilian and military parts of the economy in his guns and butter speech in May and more generally, the Kremlin continues to push its National Projects 2.1 agenda aimed at improving the lives of the average family.

“With the outbreak of the war, a trend in the transformation of social policy became especially noticeable: the efforts of the authorities and budget funds are directed at those Russians who either belong to less well-off social strata,” say the authors, “or do not show a tendency to emigrate.”

“It should be noted that in Russia a significant part of both individuals and businesses does not experience profound economic discomfort either from Putin’s aggression against Ukraine or from the Western nations’ reaction to it,” the authors add. “The main effect of sanctions has so far been felt by the upper middle class, which has historically taken the most critical stance vis-à-vis Vladimir Putin and his policies.”

And the upper middle class are actually making money from the strain the economy is under. Sky-high interest rates are threatening SMEs, but they have also become a cash cow for the middle class, which are depositing their cash in banks for the interest income that can be earned. Over the first nine months of 2024 retail deposit soared by 53.8% year on year and companies are also placing so much of their cash in deposit accounts the CBR is currently planning to impose special restrictions on corporate deposits in order to keep this cash in circulation.

Sale of the century

“The first and most important circumstance is the free market character of the Russian economy, which has been underestimated by analysts,” the authors argue.

Most of Russia’s detractors have tried to paint Putin as reverting to Soviet control. The famous Yale University report that predicted Russia’s economy was headed into oblivion, mentioned the word “Soviet” 19-times, although few modern economic commentators make any reference to the Soviet Union today. The report was debunked by bne IntelliNews at the time, and by Russia’s performance since.

As Putin established control over Russia’s largest corporations, the idea of the “étatisation” of the Russian economy, and consequently about its growing similarity to the old Soviet system, spread amongst the Western expert community. It was argued that the state controls 100% of the railway and pipeline infrastructure, and that by 2018 the share of state-owned companies in overall corporate revenue had reached 63% in the oil and gas industry, 79% in the machine-building sector and 92% in banking. The observers therefore arrived at the conclusion that Russia’s economy could collapse just as easily as the Soviet one once did.

But this ignores the fact that half of Russia’s economy is privately owned and that even the leading state-owned enterprises operate in highly competitive environments. As part of Putin’s hybrid ZAO Kremlin model, the state purposely sets up two big state-owned companies to directly compete against each other and also encourages privately owned business to also keep their feet to the coals. It has been a successful model that ensures both state control over key sectors but also efficiency and competitiveness in the leading state-owned enterprises.

“Many large state-controlled corporations (one may just look on the banks) operate in a highly competitive environment, acting as if they were owned by private capital,” the authors conclude.

The Kremlin’s changes to the regulations after sanctions were imposed – most importantly the legalisation of “parallel imports” that undid a decade of intellectual property rights rules – that opened up a plethora of new opportunities to sell famous brands royalty-free.

Likewise, the departure of scores of foreign brands, many of which simply sold their Russian businesses to their Russian managers, was probably the largest transfer of property in Russia’s modern history. What was in effect the appropriation of decades of FDI has also opened huge opportunities for entrepreneurs as they took over businesses worth billions of dollars at knock-down prices.

In just the car sector – by far the worst hit of all the sectors by sanctions – all the Western brands have left but Russian carmakers and the leading distributors have taken over their businesses. The Renault-Nissan sold the largest car concern in Russia Avtovaz for just one ruble, while the sector as a whole has completely recovered after production came to a complete standstill in 2022. The team that took over the McDonald franchise claim its replacement Vkusno i Tochka (Tasty. Period) is now more profitable and its predecessor. There are similar stories in nearly every sector of the economy.

The Yale report claimed the departing international companies had revenue that was equivalent to 40% of GDP, but this revenue didn’t leave the country; it was simply taken over by Russian businessmen.

“No less important is the fact that property became the main reason for non-resistance to the authorities, since fears of losing it perfectly disciplined the Russian entrepreneurs. In other words, the private and market nature of the Russian economy made it much more resilient than the Western policymakers had expected,” the authors wrote.

The commodities backstop

Russia’s economy has always been strong thanks to the bedrock of the commodities subsidy. Even during the chaotic 90s, Russia has suffered from multiple crises, but the economy has always bounced back relatively quickly and each crisis did progressively less damage than the last one.

“Despite a probable slowdown in economic growth in the second half of 2024, Russia looks safe from the collapse of the existing economic model in the near future: the budget remains balanced, and real disposable incomes are expected to grow further. Of course, the increased military spending provokes growing inflation, but for now it is kept within single-digit numbers,” the authors argue.

This resilience is thanks to the subsidy the country earns from the export of things like oil and metal. The best way to understand this is from the so-called non-oil deficit. For all of Putin’s reign until the war in Ukraine the headline budget has been in surplus, but if you magically remove the oil and gas revenues then the non-oil budget has been around -4% of GDP in the non-crisis years. In other words, the Kremlin has used the oil and gas income to subsidise the rest of the economy. In times of crisis the non-oil deficit can blow out to -13% at its most extreme in the past, as the Kremlin taps its cushion of cash to ease the pain.

[Table mot here]

As the table shows, the government continues to rely on its raw materials subsidy to cushion the cost of the war by running a non-oil budget deficit of around 8% of GDP. This is a high number, but not the most extreme non-oil deficit Russia has ever run. For comparison, in 2020 during the pandemic the government ran a 9.8% of GDP non-oil deficit, equivalent to RUB10.4 trillion.

Put in other terms, the war in Ukraine is now stressing the government’s finances less than coronavirus global pandemic did.

Russia’s oil and gas revenues occupies the most attention, but Russia exports a cornucopia of raw materials and commodities. Another miscalculation the Western sanctions has made is how deeply these inputs are integrated with the global economy.

As of 2021, in addition to the export of more than 7.8mn barrels of crude and refined oil per day, it also sold 240bn cubic metres of natural and liquefied gas, 227mn tonnes of coal, 43.5mn tonnes of steel, 37.6mn tonnes of mineral fertilisers, 49mn tonnes of grain, as well as large volumes of timber, aluminium, nickel, uranium and many other commodities, which collectively accounted for 78% of all exports and were worth a whopping $385bn in 2021. This made Russia the world’s largest supplier of crude and primarily processed raw materials.

As bne IntelliNews has reported, the vast majority of the sanctions on Russia have failed to make much of a dent in the export business. Russia has either found new markets in Asia for things like oil, or it has offered discounts to win over new customers. At the same time, the West has turned a blind eye to the daisy chain of transhipments of Russian commodities or the more obvious transubstantiation of say Russian crude oil into Indian petrol that allows Russia to continue to trade.

Despite all the introduced restrictive measures, Russian exports decreased from $491.6bn in 2021 to $425.1bn in 2023, or by a mere 13.5%.

“Overall, this creates a trend that is alarming for the West and highly significant for Russia: Russia is not simply “falling into China’s embrace” the authors wrote. “Rather, Moscow is transforming into a centre of an “alternative model of globalisation,” operating outside the frameworks of Western-controlled institutions and established rules. This trend could prove far more dangerous than the much-discussed “export of corruption” to Western countries… As recent years have shown, the use of unconventional payment systems, the export of pirated products, and the smuggling of goods from Western companies – all of these practices are much easier to implement than previously assumed.”

“Viewing all of this as merely a way to circumvent sanctions is extremely short-sighted, as the Kremlin has set its sights on fundamentally undermining the existing system and has reasonable grounds for hoping to succeed,” the authors conclude.

By Paul Robinson, Canadian Dimension, 11/22/24

Back in 1997, when Canada still had a more or less independent foreign policy, the Canadian government celebrated the signing of the Ottawa Treaty banning the use of anti-personnel landmines. At the time, it was heralded as an extraordinary achievement of Canadian diplomacy, and was a source of great national pride. One might imagine, therefore, that Canadians today would be concerned with potential breaches of a treaty that was once considered the crown jewel of our country’s foreign policy. But it appears not.

This week, the Biden administration announced that it would give anti-personnel landmines to Ukraine. Ukraine, unlike the United States (and also Russia), is a signatory to the Ottawa Treaty, and thus would be in serious breach of its international obligations were it ever to use the weapons provided.

This is something that should surely be of concern to the Canadian media and the Trudeau government. Yet although the news was the leading headline in much of the international press, topping, for instance, the BBC website, it has scarcely been noticed here. Google searches indicate no article on the topic published by the CBC, and no statements on the matter by Canadian ministers or officials. It would appear that what was once our pride and joy no longer interests anybody.

The decision to give landmines was not the only escalation of the war in Ukraine to be announced this week by the US. Another was the granting of permission to Ukraine to use American (and also British) long-range missiles against targets inside Russia. Almost immediately, Ukraine carried out a couple of strikes with American supplied ATACMS missiles and British-supplied Storm Shadows on targets in Russia’s Bryansk and Kursk provinces.

In response, Russia has now fired what President Vladimir Putin said was an experimental hypersonic medium-range ballistic missile with multiple warheads at a Ukrainian industrial facility in the city of Dnipro. Such missiles travel so fast—three kilomtres per second—that it is almost impossible to intercept them. They can also carry nuclear warheads, and their use can be seen therefore as a warning to the West and Ukraine not to escalate further.

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All this raises questions about the West’s policy of incremental escalation in Ukraine, specifically what goals it is meant to achieve, whether those goals are actually achievable, and whether the cost of pursuing those goals may be so high as to render them unwise. At present, it is very hard to discern what the goals are. Defeating Russia militarily is now considered almost impossible by all but the most hardline pro-Ukrainians. Instead, it appears that the US and its Western allies are trying merely to slow down the rate of Russian advances and to increase the costs of the war to Russia in the hope that somehow or other this will compel the Russian government to moderate its demands against Ukraine and accept a compromise peace.

What that compromise peace would consist of, and exactly how one would go about negotiating it, remains, however, a mystery. Furthermore, it’s not obvious that the policy of incremental escalation will even induce a more compromising mindset in Russia’s rulers rather than further strengthen their conviction that the war must be pursued until the point of final victory (whatever that means). In short, continued escalation along the lines of this past week may merely increase the risks involved in the war while not serving any useful role in ending it.

Had Kamala Harris won the US presidential election earlier this month, it is likely that this policy would have continued under her leadership. The return of Donald Trump to the White House in January offers instead at least a glimmer of hope that America may change its policy from one of repeated but rather aimless escalation to one of de-escalation or even war termination.

Trump himself is known to be keen to see the war come to an end and to be less sympathetic to the Ukrainian cause than Joe Biden. Much, though, depends on those around the president-elect. In his first term in office, Trump surrounded himself with officials who did their best to undermine some of his foreign policy initiatives. For instance, Trump’s decision to withdraw US troops from Syria led to the resignation of some officials and to others deliberately misleading the president about the number of troops remaining in that country.

It remains to be seen if this scenario will repeat itself with regards to Ukraine, but the signs so far suggest that Trump 2.0 team will be rather more in line with its leader than was the case between 2016 and 2020. Incoming officials such as Vice President-elect J.D. Vance, Secretary of State nominee Marco Rubio, and Secretary of Defense nominee Pete Hegseth can be viewed as foreign policy hawks, but their hawkishness is largely directed at China and Iran, not at Russia. On November 6, for instance, Rubio said that: “I think the Ukrainians have been incredibly brave and strong in standing up to Russia. But at the end of the day, what we are funding here is a stalemate war, and it needs to be brought to a conclusion, or that country is going to be set back 100 years.”

It is likely, therefore, that the Trump administration will seek to start negotiations to end the war. Trump and his team also seem willing to countenance a settlement that leaves a substantial portion of Ukrainian territory in Ukrainian hands and thus falls far short of a Ukrainian victory. What is not clear, though, is whether they are willing to offer Russia something that it will accept (which goes beyond territory and includes Ukrainian neutrality), and whether they are willing to twist the arm of Ukrainian President Volodymyr Zelensky to force him to agree to whatever is being proposed, by for instance threatening to withdraw all aid if he refuses.

On the one hand, Trump strikes one as the kind of person who in principle might be quite willing to pursue the latter course of action. On the other hand, stories emerging from the US about what those around him might propose as a peace plan suggests that they do not fully grasp what is necessary to bring Russia onside. There have, for instance, been reports that people close to Trump are proposing a 20-year freeze on NATO membership for Ukraine. But this falls far short of what Russia is demanding, and is unlikely to be accepted.

It could be, therefore, that the Trump presidency will begin with a push for peace that will soon fail, after which everything will revert to what it was before. That said, if the Democratic Party had retained power, it’s improbable that we would be talking about a push for peace at all. Some chance is better than none, and for that at least we should be grateful.

Paul Robinson is a professor in the Graduate School of Public and International Affairs at the University of Ottawa and a Senior Fellow at the Institute for Peace and Diplomacy. He is the author of numerous works on Russian and Soviet history, including Russian Conservatism, published by Northern Illinois University Press in 2019.

By Conor Gallagher, Naked Capitalism, 10/31/24

The Bolshevik revolution of 1917 shook the elites of Europe. They likely hadn’t been that uneasy since the guillotines were getting worn out in France in 1794. In the 2021 book “The Spectre of War: International Communism and the Origins of World War II” Jonathan Haslam makes the case that the fear of Communism was a significant driver behind WWII.

Haslam has another book, “Hubris,” just recently out in which he argues “a gross and systemic lack of understanding by Britian and its allies concerning Russia’s intentions and likely actions is ultimately to blame for the ongoing Russo-Ukrainian War.”

There’s another telling of that story in which the US and UK knew exactly what they were doing, but that gives you an idea of where Haslam’s coming from. He takes a similar stance on the UK elite in “The Spectre of War”: that it was British misconceptions about Hitler that led them to pursue a pact with the Nazis or at least use Hitler against Russia.

On one hand Haslam argues that the British view of fascism as the only force standing between the Communist overthrow of the existing order was understandable; on the other he faults the British rich for politically misreading Hitler’s Germany in courting it to battle communism.

The logical conclusion, which he never quite nails down, is that it’s unfortunate Hitler didn’t play ball. In attempting  steer clear of that point, however, he does (unintentionally I think) make the case that the elites in our supposedly democratic societies vastly prefer fascism to losing any of their wealth. That’s because while the book is primarily concerned with the communist menace, it’s hard to provide convincing evidence of it being such an existential threat without referring to that fact.

From his telling of history, Haslam issues warnings for today, including that “today’s great state of balance will not last” and that Bolshevism or fascism could soon re-emerge.

What could lead to their re-emergence? Haslam offers a smorgasbord of threats, including that “the confidence to invest is being undermined by revolutionary extremism,” which sounds oddly like a call for fascism in order to preserve the existing order and wealth. Other threats include runaway inflation, a lack of economic freedom in China, crime in the US, and Iran’s “bid for hegemony in the Middle East.” Okay, then.

Nowhere does our elites’ attraction to fascism in order to protect their wealth factor in, which is probably understandable considering the point of view Haslam is writing from is as a member of that elite. He is George F. Kennan Professor in the School of Historical Studies at the Institute for Advanced Study in Princeton and Professor of the History of International Relations at the University of Cambridge and is widely considered a Soviet Union expert in the West.

Haslam relied on whatever documents — British, French, Russian, etc. — he could get his hands on from the time period, which is still limited (one can only guess as to why):

Not all of those [diplomatic documents] for the interwar period are declassified, even now. For instance, annual reports written by British diplomats stationed in foreign capitals such as Paris are still unaccountably closed…We still have no access to the files of Britain’s secret service, MI6, for the interwar period.

I wonder what a book based on the same documents but solely focused on Western elites’ attraction to fascism would read like. Maybe that book is still to be written (or I’ve missed it).

Nonetheless, while Haslam wrote a book about the threat of communism, what jumped out to me were the periodic details of UK plutocrats’ love of fascism and how it lay bare the true nature of the British ragion di stato. That’s what I’ll detail here, and in doing so, hopefully shed some light on how the Soviets and Russians have so long been a thorn in the wealthy Brit’s sides that they now hate them today the same as their dads and granddads.

***

Following the Bolshevik Revolution the consensus among the UK establishment was that the Soviets must be defeated at all costs. That thinking was put into practice almost immediately when British troops landed in Murmansk eight months after the Bolsheviks seized power. The UK bombed Petrograd and even enlisted German troops to fight the Soviets in the Baltics.

It continued in the late 1920s when the British tried to embrace the Kremlin’s only ally Weimar Germany, which was still practicing former Chancellor Otto von Bismarck’s late 19th century strategy of counting on the natural trading relationship of Russian raw materials for German industry to neutralize any rivalry. As Haslam writes, “…the massive [British] army that had been rapidly mobilized in 1914 was no more. The only means of containing Bolshevism was through diplomacy. By undermining the Soviet-German entente, the British were securing Europe.”

Those efforts continued when Hitler was in power, and despite a few brief pauses, they never really ended to this day despite Communism’s defeat.

Why? If we go back to the beginning, while Britain wasn’t overcome with class struggle, there was widespread fear of it among the wealthy. And the Bolsheviks did cause major problems for the empire, such as in China where they provided early support for the Chinese Communist Party. Haslam can go on for pages about the Japanese running amok, committing endless atrocities in Manchuria and then turn around and write something like this:

In the Far East as in Europe, the Western powers feared that undoing the status quo would unleash the forces of disorder.

Which of course were the communists and why the UK and US supported Japan despite the horrors they were unleashing on civilians.That’s because the true victims were traumatized British bourgeois in Haslam’s telling:

The customary forms of international relations were thus systematically overturned by Moscow’s messianic commitment to overturning the established international order at all costs and as soon as practicable. At the receiving end throughout Europe, the bureaucratic elite, dressed for the day in detachable collars and morning suits, sitting down to work despatching and receiving deciphered telegrams to and from the embassies of Europe, found their customary conduct of diplomacy repeatedly frustrated by Comintern subversion across the globe.

That’s all fine and good, but there are two problems with Haslam’s apologia:

1. He frequently depicts the Communist International (Comintern) as ineffective.
2. According to Haslam, it was the British who didn’t take diplomacy with the Russians seriously as the Nazi storm clouds gathered over Europe. They instead wanted a deal with Hitler to form a united front against Communism. Here’s one such example from the book:

Moscow, faced with German enmity, was actually working hard to make friends across Europe. It wanted to avoid unexpected crises arising from Comintern operations and was willing to make concessions to appease potential partners. …the problem for Soviet diplomacy was that the core objective of Comintern’s Popular Front strategy was…aimed, of course, not merely at isolating German fascism but at combating fascism in general.

Let’s look at what the UK, in comparison, was up to in the interwar years:

Alberto de Stefani, italy’s finance minister, reported to the prime minster (and foreign minister) Benito Mussolini from Paris on 7 January 1925 that “[I]n a discussion that I had today with [Winston] Churchill [then chancellor of the exchequer]…the latter expressed his sympathy for Your Excellency and his esteem for the energetic work carried out by Your Excellency in suppressing Bolshevism.”

At that point Mussolini had murdered hundreds and imprisoned thousands of Italians in those suppression efforts. Haslam goes on to quote a 1927 piece from the British newspaper Morning Post entitled “The Fascist Ideal”:

When Mussolini took hold of Italy, democracy, delirious with Communism, was swiftly and bloodily ruining the country. And because every other nation is menaced by the same disaster, the example of Italy is peculiarly illuminating, as a ‘contribution to civilisation.’

In London on 19 October 1930 Churchill, now on the back benches, told Prince Otto von Bismarck, the counsellor at the German embassy in London, that “the burgeoning industrialization of the Soviet state presents a great danger to the whole of Europe that can be dealt with only through the establishment of an alliance with the whole of the rest of Europe and America against Russia.”

Here’s the US ambassador to Germany echoing that sentiment:

[President] Hindenburg backs Bruening on the question that Germany is facing a Russian menace,” reported the US ambassador to Germany Frederic Sackett, a solid Republican businessman. “They believe that eventually Russia will be compelled by public opinion to take back Bessarabia and that this will reopen the whole question of the spread of Bolshevism throughout Europe. In this maelstrom Germany will be the buffer state and must be ready to defend itself and the rest of Europe against Bolshevism.

Here is former British Prime Minister Lloyd George in September 1933 explaining that Hitler was the only alternative to communism:

If the Powers succeed in overthrowing Nazism in Germany, what would follow? Not a Conservative, Socialist or Liberal regime, but extreme Communism. Surely that could not be their objective. A Communist Germany would be infinitely more formidable than a Communist Russia.

This belief was widespread at the British Foreign Office:

The red-headed young Robert Hadow, then first secretary of the embassy in Vienna, argued that weakening Hitler would lead towards a Communist Germany “led by utterly unreasonable men — which I do not consider Hitler to be.”

Haslam has harsher words for the Germans like Hindenburg and Schleicher who “arrogantly deluded themselves that they could simultaneously use, contain and control a populist agitator [?] like Hitler to their own ends.” It would appear they were not the only ones, however:

The British were utterly unavailable and had no intention of taking any initiative…tending towards the containment of Nazi Germany. France was thus on its own. Worse than that, the British, with no illusions about French motives, exerted their utmost influence “to prevent the Franco-Russian alliance.”

…No one could deny that the British knew exactly what they were doing, though they had as yet no clear idea as to the longer-term consequences of their actions.

Did they not though? Haslam cites the following examples, which show they did know:

A junior minister at the Foreign Office, Anthony Eden, had begun to shift from the consensus that Germany was much misunderstood and deserved the benefit of the doubt to a more realistic assessment of where the Nazis were heading. His superior Sir John Simon, however, was of a different mould. He held out to Hitler the prospect of a deal on Air Force limitation in return for a more general European settlement. When Hitler showed himself willing to take the deal without the quid pro quo, Eden of course protested. But Simon characteristically gave way.

“Simon toys with [the] idea of letting [Germany] expand eastwards,” Eden surmised…”Apart from its dishonesty…it would be our turn next.” Simon nonetheless drew consolation from Hitler’s obsession with marching to Eastern Europe.

British diplomat Sir Orme Sargent saw a war by Germany against the Soviet Union as welcome inevitable:

“The need of expansion will force Germany towards the East a being the only field open to her, and as long as the Bolshevist regime exists in Russia it is impossible for this expansion to take merely the form of peaceful penetration.”

And here’s Ambassador Phipps in Berlin:

He proffered the tactical objection that by “erect[ing too much barbed wire, whether along Hitler’s southern or eastern frontier, we will head the beast back to the west.” Sargent commented with respect to this that a “great deal” could be said for Britain making no commitments to defend Eastern Europe.

How about Lord Londonderry, “one of Churchill’s innumerable cousins”?

He was an extraordinarily wealthy man, with more than most to lose were genuine socialism to take power. Londonderry was of the view that Germany was the lesser evil.

Here is Colonel Rogers of British intelligence to his counterparts in France:

The liquidation of the growing danger [the Soviet Union] is entirely in the interests of Britain. The British will in no way attempt to do this with their own hands and will not take part openly in any anti-Soviet combinations…But should there be emerge the possibility of defeating the Bolsheviks by any combination of forces, then the British will look upon it with sympathy and will at the decisive moment themselves take part in it. If another government forms in Russia, then the possibility is not to be excluded that Britain will support it, thereby finally re-establishing the balance of power in Europe.

France signed a pact with the Soviets nonetheless, and the Brits replied by breaching part five of the Versailles Treaty with an agreement with Berlin that legitimized German naval rearmament at 35% of the British level. The UK would go on to pressure Paris to abandon the treaty as the foreign office saw it as the greatest obstacle to “any attempt at collaboration in Europe.” France had to choose between Russia and the Western European Great Powers.” Here’s Sargent again:

Sargent in late 1936 sought to revive a Concert of Europe…What he foresaw, as did The Economist, was the division of the continent into ideologically opposing camps. Spain was the catalyst, but France, as he saw it, was the real problem…As to the two fascist powers, however, the task lay in removing their “feeling” of being isolated.

Here’s Oliver Harvey, private secretary to foreign secretary Lord Halifax in June of 1938:

…the British were “praying for Franco’s victory and bringing all the influence they can bear on France to stop the inflow of munitions to Barcelona.” Halifax was no exception. He believed the civil war made it easier to find common ground with Germany, because the Communist role would cause the British to see Germany “as an ally of ours and of all order-loving folk.” The pressure from London under Chamberlain was unremitting. On 13 June French Prime Minister Edouard Daladier finally closed the frontier to arms traffic heading into Spain. Thereafter the Republic was doomed.

Somewhat unexpectedly British public opinion was staunchly against Mussolini’s invasion of Ethiopia in 1935 and demanded action. The government, which looked favorably upon Mussolini’s efforts against communism, was unmoved.

“That was what was at the back of their minds,” recalled [British historian] A.L. Rowse: “the anti-Red theme that confused their minds when they should have been thinking in terms of their country’s interests and safety.”

Were they not though? As Haslam admits at one point, “This was, after all, a society run by a homogeneous caste who had, with very few exceptions, attended the leading private schools and university at Oxford and Cambridge.” If their idea of country is their caste, then they were looking out for their interests by offering tacit support for Mussolini and Hitler. And that leads to the prime ministership of Neville Chamberlain.

Chamberlain as Appeaser? 

The simple story told in the history books is that Chamberlain’s run as prime minister (1937-40) was one of naivety and weakness. He was an appeaser who failed to stand up to dictators and prevent WWII. In reality he was representing the interests of much of the British upper class, which preferred a pact with Nazi Germany.

In 1938 the British politician and diplomat Sir Harold Nicholson wrote in his diary the following:

“People of the governing classes think only of their own fortunes, which means hatred of the Reds. This creates a perfectly artificial but at present most effective secret bond between ourselves and Hitler. Our class interests, on both sides.”

Or consider Lord Privy Seal Viscount Halifax on a trip to Germany in 1937 on the Chamberlain government’s behalf:

Halifax was hosted by Goring and visited Hitler at Berchtesgaden, where he thought it appropriate to congratulate the dictator on performing what he described as “great services in Germany.” Halifax added that Hitler “also, as he would no doubt feel, had been able, by preventing the entry of communism into his own country, to bar its passage further west.”

Halifax…”liked all the Nazi leaders, even Goebbels! Whom no one likes”…He believed it vital that Britain “get on with them.”

When Germany invaded Czechoslovakia in 1939 Britain exerted maximum pressure on Prague to bow to the Germans. In July of that year Head of the Home Civil Service Horace Wilson met with the German ambassador and proposed that Britain and Germany divide Europe into “economic spheres of influence, which involved directing the Germans towards eastern and south-eastern Europe…”

Ahead of the Munich Conference, ‘Chamberlain, confident of royal support, said he would outline “the prospect of Germany and England as the two pillars of European peace and buttresses against Communism.”’

There was a reason he was confident of royal support. Here’s King Edward VIII’s hand-picked equerry, Dudley Forwood:

“We were not averse to Hitler politically. We felt that the Nazi regime was a more appropriate government than the Weimar Republic, which had been extremely socialist.”

The Duke of Windsor was “very pro-German.” As were the Duke and Duchess of Kent and Queen Mary. Moscow, slowly but surely, was beginning to figure out what was going on. Here’s a Kremlin memo following the capitulation of Czechoslovakia:

“From an analysis of the current military-political situation in Europe it follows that the main organiser and inspiration for war against the Soviet Union in the West is Fascist Germany evidently under the patronage of England and France.”

Moscow had a different word for Chamberlain’s “appeasement.” They called it “pro-fascist.”

Even as 1939 was drawing to a close Britain was making preparations for war with the Soviets, and it wasn’t so much that Chamberlain’s successor Churchill was anti-fascist, but he was worried about the German threat to the British empire. Or the view from Comintern: “The war is turning out to be between two groups of capitalist countries for the domination of the world.”

After Churchill’s rise to prime minister he refuted rumors of peace talks with Germany and declared that Britain would fight to the end as it was “a matter of life or death for England and the British empire.”

There were, however, repeated attempts still to come to terms with Berlin. Here’s one such example involving the Duke of Windsor (formerly King Edward VIII), according to the foreign department of Soviet state security:

“…Edward, together with his wife Simpson, are currently in Madrid where they are in contact with Hitler. Edward is conducting negotiations with Hitler on the question of forming a new English government, the conclusion of peace with Germany conditional upon establishing a military alliance against the USSR.”

Hitler was coming to similar conclusions about the UK that the communists were. According to Rudolf Hess’s personal adjutant, Hitler believed “that after the fall of France, Britain was more likely to come to terms if Germany attacked the Soviet Union.” Hard to blame him for thinking so.

Lessons

The lesson, we are told repeatedly, learned from WWII is to never appease dictators. This is used to sell so many of the US and friends’ interventions today.

Maybe that lesson is apt for the plutocrats and their court jesters who rued (still rue?) the fact that Hitler wouldn’t play along. Maybe they still have a lingering sense of a missed opportunity to conquer Russia.

For the rest of us the lesson from WWII might be very different: that the concentration of wealth and its stranglehold on politics and government are preludes to fascism. As Haslam writes:

Fascism in Germany, as in Italy and then in Spain, was viewed as a necessary antidote to revolutionary excesses. In some senses the official British interpretation was justifiable.

While the Western plutocrats might have missed their WWII opportunity to defeat Russia due to infighting over empire, they are on the same page this go-round. As Diana Johnstone wrote shortly after the official beginning of the war in Ukraine:

When Western leaders speak of “economic war against Russia,” or “ruining Russia” by arming and supporting Ukraine, one wonders whether they are consciously preparing World War III, or trying to provide a new ending to World War II. Or will the two merge?

As it shapes up, with NATO openly trying to “overextend” and thus defeat Russia with a war of attrition in Ukraine, it is somewhat as if Britain and the United States, some 80 years later, switched sides and joined German-dominated Europe to wage war against Russia, alongside the heirs to Eastern European anticommunism, some of whom were allied to Nazi Germany.

Unfortunately for this new alliance, the Nazis appear to be on the losing end against Russia yet again.

Another topical lesson that didn’t get learned is that the UK and other Western powers shouldn’t try to control and steer Nazis. If we want to imagine a real nightmare for Europe (as opposed to the imagined one of Putin conquering the continent), how about if Ukraine, feeling betrayed by Europe, turns its still-large army and all its toys westwards while the Americans and Russians look away? As Anthony Eden told Russian Ambassador to the UK Ivan Maisky in 1940:

“You know the greatest difficulty for me at this time was to convince my friends that Hitler and Mussolini were not quite similar to in psychology, in motive and methods, in their entire cast of mind anything like English ‘business men or country gentlemen.’ This they could never get themselves to believe. They though that I was ‘biased’ against the ‘dictators’ and that I didn’t wish to understand them…Some of our statesmen even after me attempted to communicate with ‘dictators’ as with ‘business men.’