The Russian Winter

russiaThe Prague Spring

For Alexander Dubček “Democracy is not only the ability and the right to express their own opinion, but it also guarantees that such an opinion is taken into account by the “power”, so everyone has the opportunity to play a role in the decision process.”  On the basis of these principles, in January 1968 Dubček started a “new course” in Czechoslovakia with the aim to promote “socialism with a human face” that inspired the Prague Spring. However, the Prague Spring was dramatically interrupted by the intervention of Soviet tanks, as today in Crimea, tanks are being sent to “normalize” the country’s political situation. Dubček was arrested and marginalized but the protests continued. On January 16 in 1969, Ian Palach sacrificed himself in Prague at Wenceslas Square. Two decades later and after the “velvet revolution” in 1989, Czechoslovakia had the first democratic elections and freely decided to separate into the Czech Republic and Slovakia, both of which ultimately joined NATO and the European Union.

The “New” Cold War

Although several decades have elapsed since those tragic events, the Ukrainian crisis has highlighted how the thermometer of the relations between Moscow and the West is going back to the temperatures of the Cold War era. A climate change that appears to be underestimated as it will likely deteriorate into more critical conditions in the course of thewinter.

On December 25 in 2014, President Vladimir Putin revealed to the West Russia’s new 2020 military doctrine. This extends the range of internal and external threats to the Russian Federation, placing NATO enlargement and its missile defense program as key threats to Russia’s security.

In this context, President Putin said during the press conference of the year-end that in 2015 the Russian strategic nuclear forces will receive 50 modern intercontinental ballistic missiles (ICBMs) and confirmed that the land-based strategic nuclear forces will be completely modernized by 2021. The modernization process will affect all components of the nuclear triad, including the fleet of strategic bombers and nuclear submarines. In particular, it is expected that the Russian strategic nuclear forces (SMF) will be equipped with more than 170 missiles Topol-M, both mobile and silo-based; 30 missiles SS 19 “Stiletto”; and 108 fifth generation missiles RS-24 “Yars”, with multiple independent warheads, designed to evade missile defense systems and strike long distance targets, with a 50 meters of error at the maximum range of twelve thousand kilometer.

Currently, Moscow has 326 intercontinental ballistic missiles with 1,050 warheads on 24 hour standby (MIRV-MaRV). By 2016, 80 percent of the Russian strategic missile forces will consist of modern systems ‘Yars’ and ‘Topol-M’.

Although in the period 2004-2014 the Russian Federation had already doubled its defense spending, President Putin ordered an increase in investments in nuclear weapons by more than 50 percent, with a total amount of $1.4 billion by 2016. As a result, the defense budget of the Russian Federation will exceed the sum of those of France and the UK and will count for more than 20% of Russia’s gross domestic product (GDP).

The Russian winter and the collapse of the ruble

In the current geostrategic and economic conjuncture, the reaffirmation of a hegemonic role of the Kremlin through an aggressive foreign and military policy is likely to produce a severe impact not only at the international level but also on the fragile Russian economy. Factors such as the collapse of both the ruble and the oil price, international sanctions derived by the annexation of Crimea, high administration costs for the support of an aging population (¼ are retired citizens) and the war in East Ukraine, will make the Russian recession unbearable in 2015.

For these reasons, the growing defense investment decided by Putin were not agreed by the more prudent Finance Minister, Alexei Kudrin, who has decided to step down in 2011, after leading the department for eleven years.

According to The Economist, the reduction of a single dollar of the cost of a barrel of oil is reflected in the Russian budget with a loss of $2.3 billion. When, in September 2014, the Russian government presented the 2015 budget estimates, the cost of crude oil stood at $90 per barrel. Currently, the value of crude oil has fallen by half, causing the loss of $91 billion in revenue in the budget of the Russian Federation. According to the Institute of International Finance, in 2015 the Russian Federation will suffer a contraction of 5% of its GDP. Forecasts for 2015 were also based on an inflation rate contained at 6% and on a GDP growth of 1.3%. However, these data are denied by the World Bank forecasts, which consider as the only increasing data the inflation rate close to 15 percent.

The Failure of the Eurasian Union

In this framework, on 1st January 2015 the Eurasian Union was officially implemented which has exposed the limits of the Russian Federation in playing a leadership role, despite the extraordinary potential economic space made by 180 million people and a combined GDP 1,700 billion. The European Bank for Reconstruction and Development estimated an increase by more than 900 billion dollars over the next fifteen years.

In this framework, the launch on January 1, 2015 of the Eurasian Union in which the Russian Federation was expected to assume a leadership role is proving all its limits, despite the extraordinary potential of an economic space made by 180 million people and a combined GDP 1,700 billion, that the European Bank for Reconstruction and Development estimates will increase by a further 900 billion dollars over the next fifteen years.

All members of the newly formed Eurasian Union have proved reluctant to establish tight economic relations with the Russian Federation. The collapse of the Russian ruble and the oil price has forced Kazakhstan to devalue the tenge by more than 20 percent and to strengthen partnership and cooperation in the energy sector with the European Union and China rather than Moscow.

Armenia and Kyrgyzstan, which will join the Eurasian Union in May, also feel the concern of Russia’s hegemony.

In Belarus, also President Alexander Lukashenko has publicly considered the annexation of Crimea as a “bad precedent”. In 2014, even the Belarusian ruble has undergone a significant depreciation, losing 13 percent of its value in respect to the US dollar.

The collapse of the ruble, international sanctions and the increasing difficulty in accessing international credit markets have finally forced the Kremlin to stop the construction of the South Stream pipeline, which was intended to deliver Russian gas to European markets, bypassing transit through Ukrainian territory. To build this pipeline, Western energy companies such as the Italian ENI had already allocated 600 million Euro.

Mutual Dependence on EU-Russia

The interdependence between the Russian Federation and the European Union, consisting of a mutual dependence not only in the energy sector, the war of sanctions and its political and economic consequences, and the real risk of a collapse of the Russian economy with unforeseeable consequences, are all factors that make urgent finding a solution to the crisis. Moreover, the current difficult situation offer the European Union and the Russian Federation several opportunities that can encourage a convergence of interests for political and diplomatic initiatives. While these opportunities appear unrepeatable they are not sufficiently explored yet.

The costs resulting from the foreign and military policy of President Putin along with the combined effect of the sanctions and the low cost of oil, are leading to the collapse of the Russian economy: the low revenue from the sale of hydrocarbons will not allow the Kremlin to pay salaries and pensions soon; private sector investments both domestically and abroad will remain anemic; the devaluation of the ruble is prohibiting purchases of necessary food supplies from abroad since these are required to be paid in dollars or euros. Furthermore, although the leadership of Putin is not questioned and his popularity index exceeds 85 percent, the head of the Kremlin will be dealing soon with the most relevant oligarchs who are suffering heavy financial losses due to economic sanctions.

These elements should bring the Kremlin to favor a negotiation with a more constructive approach in order to relieve sanctions. In this perspective, the Obama Administration would likely set aside Crimea’s annexation issue and alleviate sanctions if the Russian Federation would comply strictly with the agreements signed in Minsk in September 2014 and the cease-fire in Eastern Ukraine by maintaining a demilitarized safety zone.

A more reasonable approach from Russia towards a negotiation on the Ukraine dispute would also motivate some EU countries not to vote either for reinforcing or renewing the sanctions in the incoming months.

A collapse of the Russian economy would be catastrophic for the European Union itself. Only recently, and with different approaches, have EU countries begun to feel the magnitude of the economic and political costs of the sanctions policy, which have been purely punitive without a coherent vision and strategy on the future of relations with Moscow. The sanctions against Russia are having unsustainable economic consequences not only for the countries from the Baltic or Eastern Europe, whose economies are closely linked by trade with Russia, but also Germany, France and Italy are experiencing serious difficulties.

Politically, the challenges of the new security scenario make the Russian Federation, today even more than yesterday, a key partner for the Western Countries in the most relevant crisis theaters: Syria, Iran, the Middle East, and in the war against the Islamic State. In all these critical areas, cooperation with the Russian Federation would be a strategic asset.

A New Spring

Recently, media under Russian control registered a reduction in the number and loudness of the news devoted to the Ukraine crisis. In August 2014, 90 percent of news coverage was focusing on the Ukraine conflict. In December, only 20 percent of the news published refers to the situation in Ukraine. While the Kremlin strategy on Ukraine has always been guided by tactics, this change of approach could be instrumental to a more structured dialogue.

It’s mainly up to the European Union to define, firstly among itself than with the Russian Federation, an horizon of common reference to be achieved while preserving some conditions and inalienable values. This must include the right of Ukrainian citizens to decide their own future and the strategic location of their country.

While Moscow cannot be allowed to affect the level of ambition and quality of the participation of Ukraine in the Euro-Atlantic institutions, Brussels, however, should evaluate with foresight and weighting the effectiveness of the “doors” and programs that NATO and the European Union are looking to disclose to Ukraine.

In this perspective, the accession process of Ukraine to the European Union appears more feasible, while the decision adopted on the 22nd December 2014 by the Ukrainian Parliament to join NATO has been labeled by the Russian Deputy Minister of Defense Anatoly Antonov as a provocation turning Ukraine into “a forward line of confrontation with Russia”.

Actually, the real question NATO countries should address concerns the interests that they are ready to sacrifice in defense of Ukraine and to what extent they might apply Article 5 of the Washington Treaty. Despite the statements made early in 2008 at the Bucharest Summit with regard to the potential membership of Georgia and Ukraine into NATO, the Alliance would have the opportunity today to gradually strengthen the cooperation with Ukraine through concrete feasible projects.

A solid relationship of cooperation with the Russian Federation cannot hinder the rapid integration of the Western Balkans into Euro-Atlantic institutions. Therefore, Moscow should stop its “hybrid” and disinformation campaign in some of the candidate countries to NATO. Furthermore, the Kremlin should avoid adopting any strategy similar to the ones implemented in the Cold War and stop financing populist, nationalist and anti-European movements in Europe.

A New Harmel Report

Paradoxically, the Ukrainian crisis offers a unique opportunity for the EU to develop a concrete Common Foreign and Security Policy. In the new security scenario, Europe is, in fact, called to assume new and broader responsibilities and thereby to contribute a new transatlantic relationship. A coherent Common Foreign and Security Policy and a new and more balanced transatlantic relationship are key to reviving the dialogue and cooperation with Russia, whose role in the stability of the international scenario is at present even more essential.

In order to promote the thaw and a new season of cooperation with the Russian Federation, the transatlantic community should take advantage from the lessons of the Harmel Report, released by NATO in 1967, that perfectly combined dialogue and détente with a firm deterrence strategy.

Despite the current critical season, new factors now would improve the relations between Russia and the Western Countries by ensuring more stability. To this end ambitious common goals should be set and pursued with strong commitment and effort.

Therefore, even in the present severe season of the relations between the West and Russia it is possible to intercept flows favorable to a climate change. However, to pursue a lasting stability in the security landscape, the West and Russia must define an ambitious common horizon and fulfill with conviction the commitments needed to achieve it.