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Academic year: 2022


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Edward Hunter Christie, Senior Research Fellow, FIIA



As a new threat of war looms, Western leaders need a new security policy position to induce Moscow to de-escalate. Tis should include specifc investments in Ukraine. Indeed, peace is cheaper than war.

The Russia-Ukraine War over the Donbas region is now entering its eighth year. Over time, Western European governments appeared to adopt a ‘never-ending story’ per- spective. The Minsk Agreements are unattractive to both Ukraine and Russia, and therefore they will never be implemented, existing sanctions will never be lifted, Rus- sia never leaves, and Ukraine never joins the Euro-Atlantic institutions.

Conversely, war is no longer neces- sary. Moscow achieves its foreign policy objective without further aggression – and Ukraine never becomes strong enough to defeat Russia and so it never tries. In the intervening period, which may last indefnitely, Western European dip- lomats can ask Ukraine for more re-

forms while resuming engagements with Moscow on lucrative projects outside the scope of the sanctions, such as Nord Stream 2.

Still, something evidently changed in 2021. Early that year, Kyiv imposed restrictions on infu- ential Ukrainian citizens who were ostensibly Kremlin agents. Then, following Azerbaijan’s successful use of Turkish armed drones against Armenia in the Karabakh War of 2020, Ukraine procured the very same system – the Bayraktar TB2 – and used it in response to a cease- fre violation in Donbas in October 2021. Tese two factors are decisive in explaining the nature and timing of the Kremlin’s war preparations.

In light of these events, the draft treaties hurriedly posted on the

Russian Foreign Ministry’s website in December 2021 are really about Russian leverage over Ukraine, and the loss of it. Moscow seems to be anticipating future trends that it believes have become more likely:

if Ukraine stocks up on offensive drones and other relevant capabil- ities, perhaps Kyiv will be tempted to poke at the line of contact and begin to change the conversation in the Donbas region or, in a more daring version, to launch a cam- paign to reconquer the territories.

Russia wants to completely rule out any such scenarios well before they become possible. In short, Russia is ready to launch a pre-emptive war of aggression.

The West is effectively pursu- ing a two-track approach: direct


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negotiations with Russia on the hard security aspects, and joint US-EU preparations of economic sanctions. Te consensus-building process and the design criteria for the sanctions appear similar to what they were in 2014, including for in- stance the goal of balancing costs between EU member states. This approach will make Germany the balancing actor once again. It is also unlikely to lead to heavy sanctions.

This is dangerous if the sanctions are to be a signifcant component of the overall position to deter Russia from war.

Additional considerations are needed for a more efective package of measures. First, Western nations should also consider positive eco- nomic inducements, not towards Russia, but towards Ukraine. The conversation should shift to the nation’s progress towards peace and prosperity based on improved access to Western markets for Ukrainian goods and services. All Western allies should rapidly agree to this. Programmes to facilitate civilian investments and transfers of civilian technology could also go a long way towards supporting Ukraine’s development.

Second, the United States should endorse the special responsibility

that Moscow is de facto asking it to adopt, namely to place limits on military activities – both actions and postures – in Ukraine. Tis does not mean abandoning Ukraine to a possible Russian invasion. Te goal should be to shift the military con- versation from active conflict to- wards credible but well-controlled deterrence. Ukraine should be a hard and costly target, while steer- ing clear of unnecessary frictions close to the line of contact. Techni- cal assistance could be deployed to transform the line of contact into something more like a demilitarized zone. In that light, an open presence of US personnel inside Ukraine could be transformed from an alleged threat into an actual reassurance for Moscow. Te ball will then be in Moscow’s court to interpret devel- opments in a constructive spirit.

Tird, sanctions should be deep and long-lasting, but with the ear- nest hope that they need never be deployed. Rather than expecting war to actually happen while seek- ing sanctions that have low costs, Western governments should adopt a sharper bifurcation: it’s either business as usual or decoupling. If this principle could be fixed, the incentive for all concerned to pre- serve peace would be far greater.

Decoupling would take the follow- ing form: new export taxes and im- port tarifs on all exchanges of goods and services with Russia, including energy. Tis would come in addition to financial measures and export controls that have already been dis- cussed. Te decoupling policy could start with 20% tax and tarif rates, with automatic increases every year.

Te relevant provision of the Gener- al Agreement on Tarifs and Trade, Article XXI (b) (iii), has already been held to apply to the Russia-Ukraine conflict. The revenues would cross-subsidize import and export diversification away from Russia.

Russia would have to restructure its energy transportation system and its technological and industri- al base. Politically, it would be the overdue end of the dream of trans- forming Russia through trade and investment. Nevertheless, this stra- tegic divorce would have a reliable schedule and should be reversible if designated territories are returned.

Dreams, like never-ending stories, have a habit of ending. But it is not too late for the West to design and implement incentives that preserve that which matters most. Ukraine, and Europe, admit- tedly not whole, but free, at peace, and prosperous.



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