The International Monetary Fund (IMF) has lowered its forecast for Russia’s economic growth in 2025 to just 0.6%, marking the second-steepest downgrade among major economies, even as it raised its global outlook, the organisation reported on October 14.
At the same time, the IMF left its growth projections for Ukraine unchanged, despite escalating Russian attacks on energy infrastructure and a widening budget shortfall.
The revised Russian projection represents a 0.3 percentage-point cut from the IMF’s July estimate of 0.9%, and a significant drop from the 1.5% growth forecast published in April. The downgrade follows a period of stronger-than-expected growth in 2024, when Russia’s economy expanded by 4.3%, fuelled largely by elevated wartime spending.
Despite the downward revision, the IMF maintained its longer-term forecasts for Russia, projecting GDP growth of 1% in 2026 and 1.1% by 2030. These figures suggest a prolonged period of subdued expansion, in stark contrast to official Russian estimates.
Russia’s Economic Development Ministry has projected GDP growth of 1% in 2025 and 1.3% in 2026, anticipating a gradual acceleration to between 2.5% and 2.8% later in the decade. Meanwhile, the Central Bank of Russia forecasts economic growth of 1–2% in 2025 and as much as 2.5% by 2028.
Alongside the growth downgrade, the IMF also warned of rising inflationary pressures. It now expects Russia’s inflation rate to reach 9% in 2025 — more than double the global average forecast of 4.2% — before moderating to 5.2% in 2026. Inflation in Russia stood at 8.2% as of early September, according to the Central Bank.
Globally, the IMF raised its 2025 growth forecast to 3.2%, up from 3% in its July update. The 2026 global outlook remains unchanged at 3.1%.
The IMF’s latest World Economic Outlook highlights a widening gap between Russia’s near-term prospects and those of the broader global economy, as structural constraints and high inflation weigh on the country’s post-war recovery.
Ukraine growth flat in 2025
The IMF forecast Ukraine’s GDP growth of 2% in 2025 and 4.5% in 2026, unchanged from its April 2025 projections. The figures signal a pause in downward revisions, though they remain lower than the Fund’s October 2024 forecasts of 2.5% and 5.3%, respectively.
Ukraine is currently negotiating a new four-year loan programme with the IMF and seeking additional international support to fill an estimated $65bn budget gap for the 2026–2029 period. The country continues to rely almost entirely on external financing for non-defence spending, with domestic revenues directed primarily toward the war effort, which accounts for roughly half of the national budget.
While Ukraine’s economy has shown signs of resilience — rebounding by 5.5% in 2023 and 2.9% in 2024 following a severe wartime contraction — output remains more than 20% below 2021 levels, according to data from the Kyiv-based Centre for Economic Strategy.
The contraction in 2022, when GDP fell 28.8%, reflected the initial shock of Russia’s full-scale invasion, which led to the occupation of around one-fifth of Ukrainian territory and triggered the displacement of nearly 6mn people.
The IMF’s unchanged forecasts come as Ukraine faces growing uncertainty over the pace and reliability of international funding. Russian strikes on critical infrastructure have intensified in recent months, raising further concerns over energy security and the continuity of industrial activity during the winter heating season.
Ukraine’s longer-term recovery remains dependent on sustained financial assistance and the stabilisation of security conditions, both of which are subject to increasing geopolitical risk.
Reports are coming in that the situation in Pokrovsk is critical. Some 250 members of the Armed Forces of Russia (AFR) have broken into the city and there are running street battles. The supply routes to this key logistical hub that supports the Armed Forces of Ukraine (AFU) Donbas operations are under heavy attack and the manpower shortage is acute. If Pokrovsk falls, as Avdiivka and Bakhmut fell before it, there is a danger that the entire eastern defence could suddenly collapse and the war will be over bar the shouting.
It’s hard to be sure what is actually going on as we are limited to one-sided Ukrainian reporting as little is coming out of the Russian side. Moreover, even Bankova has drastically restricted access to its frontlines in order to control the media message. Milbloggers on both sides – which are in touch with individual soldiers – are the best source of information and on the whole a few have emerged as pretty reliable.
The bottomline is that the fighting has clearly gone up a notch and even established western military analysts like Rob Lee and the Institute for the Study of War (ISW) say the situation is “critical.”
The western reporting on this story is afraid to go negative, but that is slowly starting to change and tone is starting to get more negative. But the Western politicians are still talking up their “irreversible” support for Ukraine, but the truth is that the campaign is in crisis and in my opinion that is starting to gather momentum.
The main points are:
• The US has withdrawn and will not supply any more arms or money;
• The EU has been left to carry the can, but has run out of money to fund the government ;
• The EU’s stockpile of weapons is also depleted so there is little military help either and the investments to make more are only now getting underway;
• The AFU is suffering from a “catastrophic” shortage of manpower and kilometre-long holes have opened up in the frontline, which is what allowed AFR troops to enter Pokrovsk; and
• the manpower shortages are being worse by rising desertion rates in the AFU, with reports recently of up to 250,000 men AWOL (impossible to check).
Ukrainian President Volodymyr Zelenskiy is putting on a brave face and has denied that Pokrovsk is surrounded, but admits the fighting is intense. He is also pushing ahead with his attacks on Russian refineries with some effect. US President Donald Trump also imposed his first and very harsh oil sanctions last week.
But it’s all too little, too late, if you ask me. If you listen to the rhetoric, then it’s all still about “all we need to do is increase/tighten the sanctions a bit more…” to make a difference. And it’s just not happening.
As we have reported, the Trump oil sanctions are unlikely to make a difference. They are the same sanctions that were imposed by the Biden administration in January on Surgutneftegas and Gazprom Neft, the third and fourth largest oil companies, in January. Those did reduce oil exports by about 15% for a few months, but they recovered again very quickly.
The same thing will happen again this time with sanctions on Rosneft and Lukoil (numbers 1 & 2), as the flaw in these sanctions – which no one is mentioning – is that the sanctions are specifically on naming Rosneft and Lukoil, not the oil they export. That means there are no sanctions on trading companies or shell companies if they switch to those to continue their exports – which of course, they probably already did the very next day.
As for the EU raising money for Ukraine, the Reparation Loans idea has failed as it undermines Europe’s financial system, will hurt trust in the euro, and exposes Belgium to huge legal and liabilities risks. Hungary and Slovakia are going to veto any proposal anyway. The talk has now shifted to issuing Eurobonds to come up with the €140bn loan, but that is an even less appealing idea than the Reparation Loan.
Given Ukraine’s drone production and its strong defensive line in Donbas, I guess that the AFU can hold out and fight on for a while, but if Pokrovsk falls the war could be over suddenly. And that will unleash a political crisis on the first order that could see Zelenskiy quickly ousted. Then all hell will break loose. Indeed, one of the theories to explain why Zelenskiy suddenly proposed a law to neuter National Anti-Corruption Bureau of Ukraine (NABU) and Specialized Anti-Corruption Prosecutor’s Office (SAPO) last month is that he is anticipating a political attack and has been drawing more raw power into his own hands in order to weather a coming storm. He has already badly stained his war hero reputation with western partners.
Another sign of trouble on the way is a string of stories looking at the Flamingo cruise missile, claiming that they are fake, which are circulating in the local press. The anticorruption watchdog, NABU, was investigating it for corruption, which both the NYT and The Kyiv Independent have reported, when Zelenskiy pushed through his law at the weekend in the middle of the summer recess.
I have had some big questions since the Flamingo story broke. How did a bunch of Zelenskiy friends from the TV business, with no engineering or weapons experience, developed a sophisticated cruise missile from a standing start in only nine months? And now have a $1bn contract with the state to make them.
Both Russia’s Kinzhal hypersonic missile and America’s Tomahawk took a decade to develop by worldclass teams of engineers with multiple decades of experience working at some of the biggest defence industry firms in the world. The lady that runs Fire Point, Iryna Terekh, the maker of the Flamingo, made her money from designing attractive flowerpots made out of concrete. She apparently moved into an empty warehouse and set up the firm, paying for the initial development from her own pocket until the government contracts started to come in.
Even the story about why the missiles are pink smacks of that scene in “Wag the dog” where Dustin Hoffman goes out at night and throws old shoes into the trees outside the White House to create a social media meme with the right connotations. The pink missile story has certainly got a lot of attention.
However, I have been watching closely for reports of Flamingos being used. The initial article in AP claimed that Fire Point was making seven a day, yet I have yet to see a single report of them being fired. They are supposed to be a gamechanger and as good (actually better) than Tomahawks.
So far this is starting to look like Werner von Braun’s wunderwaffen that Hitler was pushing at the end of WWII, the V2 rocket, that was going to win the war overnight. At least Werner von Braun was a real rocket scientist that went on to work at NASA. And let’s face it, Terekh is no von Braun.
I won’t go into detail here, but I filled the rest of the list today with our Asian team’s reporting on global leaders gathering in Gyeongju in South Korea to shape APEC cooperation as that summit gets underway. As we have been reporting, while Europe distracts itself with the slowly imploding Ukraine war story, the rest of the world is getting on with the business of doing business. This is part of building what we have dubbed the Global Emerging Markets Institutions (GEMIs) to counter the West’s dominance of global geopolitics.
The main take out is that there seems to be a pause in the Sino-US showdown after Trump met with Chinese President Xi Jinping. Both sides have agreed to put off their retaliatory actions for a year and to meet in April when presumably a trade deal can be done. Trump has threatened 100% tariffs, but Capital Economics released a note saying the actual adjusted tariffs are currently 30%. Trump has agreed to ease restrictions on the export of top end microchips while Xi has agreed to delay rare earth metals (REMs) export restrictions for a year.
The final thing I will say is that watching this whole row develop, what has struck me is that at every step Xi has been reasonable and called for partnership, not confrontation. He did this in conversations with former US Secretary of State Antony Blinken and former US Treasury Secretary Janet Yellen, who both met him in Beijing and were frankly rude and aggressive. He just used the same rhetoric with Trump. So there does seem to be some real common ground to do a real deal.
This week has seen Russian forces advance in two pincer movements from the center of Pokrovsk and villages to the northeast with only a few miles separating the military advances, according to DeepState’s maps analyzed by NYT. DeepState, a reputable Ukrainian OSINT group, reported a “massive infiltration” of this Donetsk region city, which Russian command claims to have encircled along with Kupyansk, warning on Oct. 29 that “the situation in Pokrovsk is on the verge of [being] critical.” In a follow-up Oct. 31 assessment DeepState reported that Russian forces advanced in Pokrovsk while Ukraine’s Korrespondent.net reported on the same day that “a fierce battle is ongoing for the city of Pokrovsk.” If captured, Pokrovsk would be the largest city to be taken by Russian forces since Bakhmut in May 2023, according to The Washington Post. Its fall will be a serious setback, as the city is a junction for road and railway lines and would bring Russian forces closer to the Donetsk region cities of Kramatorsk and Kostiantynivka, according to the Post. In the past four weeks (Sept. 30–Oct. 28, 2025), Russian forces gained 154 square miles of Ukrainian territory, an increase over the 146 square miles these forces gained during the previous four-week period (Sept. 2–30, 2025), according to the Oct. 29 issue of The Russia-Ukraine War Report Card. In the week of Oct. 21–28, 2025, Russia has gained 39 square miles of Ukraine’s territory, up slightly from the previous week’s gain of 33 square miles, according to the card.
Tilman Ruff is the Honorary Principal Fellow, School of Population and Global Health, at The University of Melbourne.
US President Donald Trump has instructed the Pentagon to resume nuclear weapons testing immediately, “on an equal basis” with other countries’ testing programs.
If Trump is referring to the resumption of explosive nuclear testing, this would be an extremely unfortunate, regrettable step by the United States.
It would almost inevitably be followed by tit-for-tat reciprocal announcements by other nuclear-armed states, particularly Russia and China, and cement an accelerating arms race that puts us all in great jeopardy.
It would also create profound risks of radioactive fallout globally. Even if such nuclear tests are conducted underground, this poses a risk in terms of the possible release and venting of radioactive materials, as well as the potential leakage into groundwater.
The Comprehensive Nuclear Test Ban Treaty has been signed by 187 states – it’s one of the most widely supported disarmament treaties in the world.
The US signed the treaty decades ago, but has yet to ratify it. Nonetheless, it is actually legally bound not to violate the spirit and purpose of the treaty while it’s a signatory.
What testing is used for, and why it stopped
In earlier years, the purpose of testing was to understand the effects of nuclear weapons – for example, the blast damage at different distances, which provides confidence around destroying a given military target.
Understanding the consequences of nuclear weapons helps militaries plan their use, and to some extent, protect their own military equipment and people from the possible use of nuclear weapons by adversaries.
But since the end of the second world war, states have mostly used testing as part of the development of new weapons designs. There have been a very large number of tests, more than 2,000, mostly seeking to understand how these new weapons work.
The huge environmental and health problems caused by nuclear testing prompted nations to agree a moratorium on atmospheric testing for a couple of years in the early 1960s. In 1963, the Partial Test Ban Treaty banned nuclear tests in all environments except underground.
Since then, nuclear-armed states have stopped explosively testing at different times. The US stopped in 1992, while France stopped in 1996. China and Russia also aren’t known to have conducted any tests since the 1990s. North Korea is the only state to have openly tested a nuclear weapon this century, most recently in 2017.
These stoppages came in the 1990s for a reason: by that time, it became possible to test new nuclear weapon designs reliably through technical and computer developments, without having to actually explode them.
So, essentially, the nuclear states, particularly the more advanced ones, stopped when they no longer needed to explosively test new weapon designs to keep modernising their stocks, as they’re still doing.
With the exception of this significant development, however, everything else has been going badly.
All nine nuclear-armed states (the US, China, Russia, France, the United Kingdom, India, Pakistan, North Korea and Israel) are investing unprecedented sums in developing more accurate, stealthier, longer-range, faster, more concealable nuclear weapons.
This potentially lowers the threshold for their use. And it certainly gives no indication these powers are serious about fulfilling their legally binding obligations to disarm under the Nuclear Non-Proliferation Treaty.
Moreover, multiple nuclear-armed states have been involved in recent conflicts in which nuclear threats have been made, most notably Russia and Israel.
This includes those in military stockpiles, those that have been deployed (linked to delivery systems such as missiles), and those on high alert, which are the ones most prone to accidental use because they can be launched within minutes of a decision to do so. All of these categories are on the increase.
Nearly all of the hard-won treaties that constrained nuclear weapons since the end of the Cold War have been abrogated.
There’s now just one remaining treaty constraining 90% of the world’s nuclear weapons, which are in the hands of the US and Russia. This is the New START Treaty, which is set to expire in February next year.
Putin offered to extend that treaty informally for another year, and Trump has said this is a good idea. But its official end is just four months away, and no actual negotiations on a successor treaty have begun.
The US has also said China needs to be involved in the successor treaty, which would make it enormously more complicated. China has not expressed a willingness to be part of the process.
Whether anything will be negotiated to maintain these restraints beyond February is unclear. None of the nuclear-armed states are negotiating any other new treaties, either.
All of this means the Doomsday Clock – one of the most authoritative and best-known assessments of the existential threats facing the world – has moved forward this year further than it has ever done before.
It’s really an extraordinarily dangerous time in history.
In November 1983, during a particularly tense period in the Cold War, Soviet observers spotted planes carrying what appeared to be warheads taxiing out of their NATO hangars. Shortly after, command centers for the NATO military alliance exchanged a flurry of communication, and, after receiving reports that their Soviet adversaries had used chemical weapons, the United States decided to intensify readiness to DEFCON 1—the highest of the nuclear threat categories, surpassing the DEFCON 2 alert declared at the height of the Cuban Missile Crisis two decades prior. Concerned about a preemptive strike, Soviet forces prepared their nuclear weapons for launch.
There was just one problem. None of the NATO escalation was real—at least, not in the minds of the Western forces participating in the Able Archer 83 war game.
A variation of an annual military training exercise, the scenario started with a change in Soviet leadership, heightened proxy rivalries and the Soviets’ invasion of several European countries. Lasting five days, it culminated in NATO resorting to the use of nuclear weapons. Soviet intelligence watched the event with special interest, suspicious that the U.S. might carry out a nuclear strike under the guise of a drill. The realism of Able Archer was ironically effective: It was designed to simulate the start of a nuclear war, and manyargue that it almost did.
Able Archer 83 was one of at least six drills included in Autumn Forge 83, a NATO military training exercise. Photo by Marc Deville / Gamma-Rapho via Getty Images
Perhaps most concerning is that the danger was largely unknown and overlooked, both during the exercise and throughout that precarious year, when changes in leadership and an acceleration in the nuclear arms race ratcheted up tensions between the two superpowers. A since-declassified 1990 report by the President’s Foreign Intelligence Review Board (PFIAB) concluded, “In 1983 we may have inadvertently placed our relations with the Soviet Union on a hair trigger.”
Almost 40 years later, the Russian invasion of Ukraine has evoked comparisons with the Cold War, particularly when it comes to Russian President Vladimir Putin’s vaguely worded threats. At the onset of the war, Putin warned of “consequences you have never seen”—a declaration interpreted in some quarters as a nod to his country’s nuclear capabilities. More recently, U.S. President Joe Biden’s announcement of new weapons for Ukraine elicited an admonition from Moscow about “unpredictable consequences.” Biden has declined to send American troops and cautioned that “direct confrontation between NATO and Russia is World War III.”
“The Russians have made some allusions not rising to the level of explicit threats, but it’s very, very strongly implied,” says Edward Geist, a policy researcher at the RAND Corporation, a nonprofit global policy think tank. Though he doesn’t see a commensurate change in Russia’s actions or positioning of nuclear assets, Geist interprets the message being sent to NATO as “you don’t want to actually get directly involved in this because that could escalate to nuclear war. … It’s not worth the risk, so you should stay out and let us do what we want in Ukraine.”
By the fall of 1983, the U.S. and the Soviet Union had reached a point of mutually assured misunderstanding. Relations between the two nations were at a particularly low ebb in the decades-long Cold War, which had emerged out of the ashes of World War II. The elimination of a common enemy—Nazi Germany—allowed the victors to shift their focus to each other as rivals. Following America’s use of an atomic weapon against Japan in 1945 and the Soviet Union’s own nuclear test in 1949, the arms race began in full effect.
NATO, a security alliance established between the U.S. and Western European nations in 1949, was mirrored by the Warsaw Pact, a defense treaty signed by the Soviet Union and members of its Eastern Bloc. Two years after the Warsaw Pact’s formation in 1955, the Soviets launched the world’s first artificial satellite, Sputnik I, placing space on the playing field even as the rivalry continued to take shape on Earth through proxy wars in Asia. In the 1970s, a mood of détente prevailed as President Richard Nixon and Soviet leader Leonid Brezhnev reached a series of agreements aimed at arms control.
Ronald Reagan signs a message expressing his condolences on the death of Soviet leader Yuri Andropov—seen in a portrait hanging on the far right wall—in February 1984. Bettman via Getty Images
Early in the next decade, with new leadership on both sides, détente had evaporated. After taking office in 1981, Reagan matched his campaign rhetoric by initiating a doubling of the defense budget. Soviet leader Yuri Andropov, who assumed power the following year, came to the job after heading the KGB, where he initiated Operation RYaN, whose name is an acronym describing a sudden nuclear attack. “The main objective of our intelligence service is not to miss the military preparations of the enemy … for a nuclear strike,” Andropov said in 1981.
Operation RYaN lent itself to confirmation bias, with many routine activities—such as official visits or blood drives—feeding fears of war. And when it came to looking for signs of imminent attack, Able Archer fit the bill.
On the American side, defense and intelligence officials “shared the long-held view that ‘the U.S. doesn’t do Pearl Harbors,’” writes historian Taylor Downing in 1983: Reagan, Andropov and a World on the Brink. The Americans therefore assumed the Soviets knew they had no intention of launching a preemptive nuclear attack. Early intelligence estimates after Able Archer dismissed apparent Soviet fears as a ploy to slow American defense buildup. As the PFIAB report noted, analysts “identified signs of emotional and paranoid Soviet behavior” yet saw “motives for trying to cleverly manipulate Western perceptions.”
It was a vicious circle. The Soviets refused to believe the Americans were bluffing; the Americans, meanwhile, suspected the Soviets were bluffing about not thinking the Americans were bluffing.
A series of inflammatory events that year paved the way for the fraught moments of Able Archer. In a March speech to the National Association of Evangelicals, Reagan characterized the Soviet Union as an “evil empire” and decried those “who would place the United States in a position of military and moral inferiority.”
Later that month, the president announced plans for the Strategic Defense Initiative (popularly dubbed “Star Wars”), which aimed to intercept incoming nuclear missiles from space. Reagan viewed it purely as a defensive measure, but the Soviet Union saw a shield that would enable the U.S. to take offensive action by reducing its fear of retaliation. Such protection would undermine the notion of mutually assured destruction, which was seen as a grim deterrent for starting a nuclear war.
In September 1983, demonstrators gathered near the White House to protest the Soviet attack on Korean Airlines Flight 007. Representative Larry McDonald was one of 269 people killed in the crash. Public domain via Wikimedia Commons
American military planes and ships pressed at Soviet borders in so-called PSYOPS, or psychological operations—shows of force that further aggravated the Soviets. In the spring of 1983, the looming presence of these American warcraft prompted Andropov to adopt a policy of “shoot to kill” at any similar incursion.
On the night of September 1, the civilian airliner Korean Airlines 007 went off course on its flight from Anchorage to Seoul. The Soviets, mistaking the plane for a military aircraft, shot it down, killing all 269 people on board. Reagan called it a “massacre.”
Perhaps most alarming to the Soviets was NATO’s deployment of new intermediate-range ballistic and cruise missiles that could strike the U.S.S.R.—and Moscow itself—faster than previously possible. Though this operation took place in response to the Soviets’ development of similarly potent missiles in the late 1970s, Soviet leaders still saw the move as menacing. Just weeks before Able Archer, Soviet Defense Minister Dmitry Ustinov characterized the NATO missiles “as means for a first strike, the ‘decapitation strike,’” in a meeting with fellow Warsaw Pact officials, according to documents held by the National Security Archive. The threat posed by the missiles increased the argument for a launch on warning strategy, which made speed—and therefore a decrease in decision-making time—the linchpin of defense.
In June, during a private meeting with a former American emissary to Moscow, Andropov expressed fears of a conflagration far worse than the Second World War, in which the two nations had been allies. “This war may perhaps not occur through evil intent,” he said, “but could happen through miscalculation.”
Able Archer 83 was part of a constellation of recurring NATO exercises. But some elements—including the dummy warheads, the DEFCON status changes and communications patterns (including periods of speculation-inducing radio silence)—were unique to that year. Managed out of NATO’s headquarters in Brussels and involving components across Western Europe, the training simulated coordination across the alliance’s commands in response to aggression by the Warsaw Pact.
As the Able Archer scenario intensified, the head of the Soviet air forces ordered a state of readiness that “included preparations for immediate use of nuclear weapons,” according to later-declassified sources referenced in a memorandum by Lieutenant General Leonard Perroots, then the Air Force’s assistant chief of staff for intelligence in Europe. During the exercise, analysts concluded that at least one squadron “was loading a munitions configuration that they had never actually loaded before.” Perroots’ concerns were echoed by the PFIAB, which called the reaction of Soviet intelligence, including 36 surveillance flights, “unprecedented.”
President Ronald Reagan meets with KGB member Oleg Gordievsky, a double agent for the British, in the Oval Office in 1987. Public domain via Wikimedia Commons
At the time, Perroots chose to continue monitoring development and not escalate in kind. (His prudent inaction has drawn comparisons to Soviet Lieutenant Colonel Stanislav Petrov, who correctly interpreted a false alarm of nuclear attack that September.) In his memorandum, Perroots outlined a “potentially disastrous situation,” one that he found even more alarming after Oleg Gordievsky, a high-level KGB officer who served as a double agent for the British, revealed that the Soviet security agency believed Able Archer would serve as an ideal “cover” for an attack. After the exercise, with the benefit of hindsight, the PFIAB report called Perroots’ patience a “fortuitous, if ill-informed, decision.”
“We now know how nervous the [Soviet] leadership became, … [putting] the entire [state] arsenal with its 11,000 warheads on to maximum combat alert,” writes Downing in his book. He describes a seriously ill Andropov conferring with military leaders at a clinic outside of Moscow as the exercise proceeded apace, capturing the essence of the problem that was at the crux of Able Archer and the “war scare” as a whole: “It was impossible for satellites to pick up any insight into the state of paranoia in the Soviet leadership.”
Though these men never publicly mentioned Able Archer by name, glimpses into their mindsets at the time are available. Days after Able Archer concluded, defense minister Ustinov wrote in the state-run Pravda newspaper that NATO’s exercises “are becoming increasingly difficult to distinguish from a real deployment of armed forces for aggression.”
Blind spots were plentiful on both sides. Robert Gates, then the CIA’s deputy director for intelligence, told Downing that “we may have been at the brink of nuclear war and not even known it.” In retrospect, the “miscalculation” that Andropov had feared five months earlier seemed plausible.
Scholars still debate exactly how dangerous this juncture was. Simon Miles of Duke University has argued that the retrospective analysis of Able Archer is overblown, as evidenced by Soviet actions that fell short of their nuclear capabilities. Contemporary extrapolations based on what the Soviets did or did not do will always be impossible to fully prove or disprove.
The Soviets refused to believe the Americans were bluffing; the Americans, meanwhile, suspected the Soviets were bluffing about not thinking the Americans were bluffing.
Jones, who is also the Freedom of Information Act director for the Washington Post, notes that some information about the exercise remains inaccessible to the public; even portions of the 1990 PFIAB report are redacted. “I would say to the skeptics that the more that’s declassified, the more scary it looks,” he adds.
The precarious decline of U.S.-Soviet relations throughout those months left an impression on Reagan. Presented with a summary of recent Soviet actions that pointed to broader war preparations—including the bolstering of domestic civil defenses, the pattern of troop movements within the country and shifts from commercial to military use—the president called them “really scary.”
Reagan’s November 18, 1983, diary entry reflects a realization that these fears were genuine: “I feel the Soviets are so defense minded, so paranoid about being attacked that without in any way being soft on them we ought to tell then no one here has any intention of doing anything like that. What the h—l have they got that anyone would want.”
The ensuing years brought a reduction in tensions that led to the end of the Cold War. The shift in Reagan’s approach was complemented by the ascension of Mikhail Gorbachev in 1985. Despite leading on opposite sides of the ideological spectrum, the two men found avenues for cooperation in the later 1980s.
The Cold War is now three decades in the rearview mirror, and the invasion of Ukraine is a far cry from a fictional exercise. But while history doesn’t necessarily repeat itself, it does mutate—and once again, nuclear-tinged rhetoric is makingheadlines.
Geist considers the nuclear threat low risk at present but acknowledges that the mere specter of it still carries great influence. “It’s framing what is considered possible for basically all … foreign governments, including our own,” he says. “The idea of direct intervention would be much more seriously considered against a non-nuclear power.”
Common to this or any other chapter of the post-World War II nuclear world is the fact that no nuclear threat, whether vague or explicit, comes without a degree of risk. As Jones point out, “The danger of brinksmanship”—a foreign policy practice that pushes parties to the edge of confrontation—“is it’s easier than we think for one side to fall into the brink.”
President Trump’s latest about face on dialogue with Russia doesn’t change the fundamental predicament Europe finds itself in: unable to inflict a strategic defeat on Russia but unwilling to face the political consequences of ending the war in Ukraine.
The Budapest Summit between Trump and Putin is now off, it seems. European leaders and Zelensky have clearly sold the US President on the idea of entering a ceasefire along the current line of contact. Yet, caught between a rock and a hard place, European leaders continue to deny the obvious realities of the dire situation in Ukraine, which will only worsen over time. I see no evidence of any willingness to change course, despite the obvious political hazard they face and the increasingly grim forecast for Europe and for Ukraine should they continue to push an unwinnable war.
The war in Ukraine is now entirely dependent on the ability of European states to pay for it at a cost of at least $50bn per year, on the basis of Ukraine’s latest budget estimate for the 2026 fiscal year. Ukraine itself is bankrupt and has no access to other sources of external capital, beyond that provided by the governments sponsoring the ongoing war.
That then brings the conversation back to the creation of a so-called ‘reconstruction loan’ underwritten by $140bn of the Russian foreign exchange assets currently frozen in Belgium. The term ‘reconstruction loan’ is itself disingenuous, on the basis that any expropriated Russian assets would not be used for reconstruction, but rather to fund the Ukrainian war effort. Indeed. Chancellor Merz of Germany recently suggested that the fund could allow Ukraine to keep fighting for another three years.
The most likely scenario, in the terrible eventuality that war in Ukraine did continue for another three years is that the Russian armed forces would almost certainly swallow up the whole of the Donbass region – comprising Donetsk and Luhansk oblasts. This – Ukraine’s departure from the Donbas – appears to be the basis of President Putin’s conditions for ending the war now, together with a Ukrainian declaration of neutrality and giving up any NATO aspirations. More likely, the Russian Armed forces might also capture additional swathes of land in Zaporizhia and Kherson oblasts, and also in Dnipropetrovsk, where they have made recent incursions.
So, there is a strong likelihood, at the currently slow pace of the war effort in which Russia claims small pieces of land on a weekly basis, that three years from now Ukraine would have to settle for a peace that was even more disadvantageous to it than that which is available now, having lost more land, together with potentially hundreds of thousands of troops killed or injured.
Logically, European policymakers would be able to look into the future to see this grim predicament with clear eyes and encourage Zelensky to settle for peace now.
But European policy is driven by two key considerations. Firstly, an emotional belief that an extended war might so weaken Russia that President Putin was forced to settle on unfavourable terms. The idea of a strategic defeat of Russia – which is often spoken by European politicians – however, doesn’t bear serious scrutiny.
Russia doesn’t face the same considerable social and financial challenges that Ukraine faces. Its population is much larger and a wider conscription of men into the Armed forces has not been needed – Russia can recruit sufficient new soldiers to fight and, indeed, has increased the size of its army since 2022. Ukraine continues to resort to forced mobilisation of men over the age of 25, often using extreme tactics that involve busifying young men against their will from the streets.
Critically, Russia could likely continue to prosecute the war on the current slow tempo for an extended period of time without the need for a wider mobilisation of young men, which may prove politically unpopular for President Putin domestically. Yet, the longer the war continues, Ukraine will come under increasing pressure, including from western allies, to deepen its mobilisation to capture young men below the age of 25 to shore up its heavily depleted armed forces on the front line.
There has been considerable resistance to this so far within Ukraine. Mobilising young men above the age of 22 would prove unpopular for President Zelensky but it would also worsen Ukraine’s already catastrophic demographic challenge: 40% of the working age population has already been lost, either through migration or through death on the front line and that number will continue to go south, the longer the war carries on.
Russia’s financial position is considerably stronger than Ukraine’s. It has very low levels of debt at around 15% of GDP and maintains a healthy current account surplus, despite a narrowing of the balance in the second quarter of 2025. Even if Europe expropriates its frozen assets, Russia still has a generous and growing stock of foreign exchange reserves to draw upon, which recently topped $700bn for the first time.
Russia’s military industrial complex continues to outperform western suppliers in the production of military equipment and munitions. In the currently unlikely event that Russia started to fall into the red in terms of its trade – what commentators in the west refer to as destroying Russia’s war economy – it would still have considerable scope to borrow from non-western lenders, given the strength of its links with the developing world, aided by the emergence of BRICS.
Ukraine is functionally bankrupt because it is unable to borrow from western capital markets, on account of its decision to pause all debt payments. With debt expected to reach 110% in 2025, even before consideration of any loan backed by frozen Russian assets, it depends entirely on handouts from the west. Ukraine’s trade balance has continued to worsen throughout the war, reinforcing its dependence on capital injections from the west to keep its foreign exchange reserves in the black.
So while the determination of Ukraine to fight is unquestionable, the emotional belief in the west that this will overcome the enormous social and economic challenges the country faces in an extended attritional war with Russia is wildly misplaced.
So, let’s look at the rational explanation for Europe’s continued willingness to prolong the fight in Ukraine. The uncomfortable truth is that Europe’s political leaders have boxed themselves into this position because of a hard boiled determination not to concede to Russia’s demands in any peace negotiations. Indeed, there is a steadfast and immovable objection to talking to Russia at all, which has been growing since 2014.
However, across much of Europe, the political arithmetic is turning against the pro-war establishment with nationalist, anti-war parties gaining ground in Central Europe, Germany, France, Britain and even in Poland. And despite so far fruitless overtures made by President Trump towards negotiation with President Putin, Trumpophobia provides another brake on the European political establishment shifting its position.
So, changing course now and entering into direct negotiations with Russia would have potentially catastrophic consequences, politically, for European leaders, which they must surely be aware of. A full 180 degree change in diplomatic course by Europe would require an acceptance that the war against Russia was unwinnable, and that Russia’s underlying concerns – namely Ukrainian neutrality – would finally have to be accepted as a political reality.
On this basis, European politicians would face the prospect of explaining to their increasingly sceptical voters that their strategy of defeating Russia had failed, having spent four years of war saying at all times that it would eventually succeed. And that would lead potentially to internationalist governments falling across Europe starting in two years when Poland and France will again go to the polls, and in 2029 when the British and German governments will face the voters.
There are deeper issues too. An end of war would accelerate the process of admitting Ukraine into the European Union with potentially disastrous consequences for the whole financial basis of Europe. The European Commission will face the prospect of accepting that a two-tier Europe is inevitable, admitting Ukraine as a member without the financial benefits received by existing member states; for probably understandable reasons, this would cause widespread resentment within Ukraine itself, having sacrificed so much blood to become European, precipitating widespread internal dissent and possibly conflict in a disgruntled country with an army of almost one million. Alternatively, the European Commission would need to redraw its budget and face huge resistance from existing Member States, who would lose billions of Euros each year in subsidies to Ukraine. And the truth is that it will in all likelihood be unable to do so.
Caught between hoping for a strategic defeat of Russia which any rational observer can see is unlikely, and accepting the failure of their policy, causing a widespread loss of power and huge economic and political turmoil, Europe’s leaders are choosing to keep calm and carry on. If they had any sense, the likes of Von der Leyen, Merz, Starmer or Macron would change tack and pin their hopes on explaining away their failure before the political tide in Europe evicts them all from power. But I see no signs of them having the political acumen to do that. So we will continue to sit and wait, while storm clouds grow ever darker over Europe.
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