What are the possible scenarios for Russian intervention in Ukraine? And what will be the geopolitical and economic repercussions of this crisis that has escalated into a conflict?
The moment of truth has arrived. Late Wednesday night into Thursday morning, in a televised address, Vladimir Putin announced that a Russian military intervention was necessary to protect the residents of the Donbas region in eastern Ukraine. He justified this by claiming that the Americans and Europeans had ignored his desire to prevent Ukraine from joining NATO. He is seeking security guarantees. Ever since the Kremlin deployed tens of thousands of troops to the Ukrainian border, kicking off a series of escalating moves, the whole world had been holding its breath. Despite ongoing negotiations, Moscow’s recognition of the independence of the two separatist Ukrainian “republics” served as a kind of initial spark. The full-blown conflagration was not long in coming. What are the possible scenarios for this Russian intervention in Ukraine? And what will be the geopolitical and economic repercussions of this crisis, which has now escalated into a conflict?
– A lightning war or a protracted conflict?
Although the Russian president stated that his goal was not to occupy Ukraine, explosions were heard in several parts of Ukrainian territory, including Kyiv. Mykhailo Federov, Ukraine’s Minister of Digital Transformation, reported that cyberattacks were targeting official websites. The websites of the Parliament and the Ministry of Foreign Affairs are offline, and those of the Ministries of Defense and the Interior are experiencing outages.
The Russian intervention is no longer limited to the Donbas but now encompasses all of Ukraine. There is a glaring imbalance between the two countries’ militaries. Furthermore, Ukraine has no air defense. Russian strikes will wipe out reinforcements for Ukrainian ground units. The other major problem for the Ukrainian military is the extremely long front line it must hold. A national state of emergency has been declared. Reservists between the ages of 18 and 60 can therefore be mobilized. Putin’s plan appears to be a lightning-fast takeover of the capital, Kyiv, in order to overthrow the authorities and install a pro-Russian government there. The intensity of the fighting could cause this intervention to drag on for a long time. Ukrainian national sentiment will play a decisive role. It is a matter of national survival.
– Article 4 of the NATO Charter
Poland, Romania, and the three Baltic states are invoking Article 4 of the NATO Charter. Is this in preparation for a response? Article 4 provides that members may consult with one another “whenever, in the opinion of any of them, the territorial integrity, political independence, or security of any of the Parties is threatened,” but it does not include a military dimension, unlike Article 5, which stipulates that an attack against any member of the organization is “considered an attack against all the Parties.” This paves the way for “the use of armed force.” It is worth noting that Ukraine is not a member of NATO… NATO Secretary General Jens Stoltenberg, moreover, stated today, Thursday, that “NATO has no troops in Ukraine and has no plans or intention to deploy troops there.”
– China Remains Cautious
China, for its part, is acting cautiously, focused solely on its own interests in a complex geopolitical environment, despite its good relations with Russia. Wen-Ti Sung, a specialist in Chinese foreign policy at the Australian National University, believes that China would not view instability in Eastern Europe unfavorably, as it could ease U.S. pressure on Beijing. He believes that “this gives China much more flexibility and room to maneuver.”
Geopolitically, Russia is cutting itself off from the European Union for many years to come. Economic and trade relations will be affected. Moscow will turn even more toward Asia. From a strategic standpoint, Putin is proving the NATO advocates right by demonstrating the alliance’s necessity. This is particularly true for Eastern European countries. Finally, in terms of international governance, we are heading straight toward “anarchic multipolarity,” a far cry from the U.S.-China bipolarity so often predicted.
– Sanctions
The President of the United States, for his part, has been clear in stating that there will be no American troops on Ukrainian territory. However, he does have a range of economic sanctions at his disposal. Their scope remains to be assessed.
Joe Biden, for example, has authorized sanctions against the company that built the Russia-Germany Nord Stream 2 (NS2AG, whose parent company is Gazprom) gas pipeline and against the company’s CEO, Matthias Warnig (who is German). It should be noted that, for his part, German Chancellor Olaf Scholz announced the suspension of the permit for the 1,230-km Nord Stream 2 gas pipeline connecting Russia to Germany via the Baltic Sea. The idea was to bypass Ukraine and increase Russian gas deliveries to Western Europe. Nord Stream 2 is not yet operational, unlike Nord Stream 1. For now, the impact on Russia is limited, but an extended duration of the sanctions would lead to economic consequences in the medium term. The U.S. President has also decided to cut Russia off from Western financing. This decision has been supported by the Europeans. They have also decided to impose travel bans and freeze the assets within the EU of 23 “prominent figures,” three banks, one company, and 351 members of the Duma. At the same time, the consequences and sanctions imposed on Russia could affect Europe’s energy supply, shake global financial markets, and threaten the strategic balance that has prevailed on the Old Continent since 1945.
– The Consequences
The result is that Moscow can no longer raise funds in the United States and Europe and can no longer trade its debt on Western markets. The Moscow Stock Exchange opened down nearly 14%, while the ruble plummeted 9% against the dollar this morning. If the ruble is affected, the cost of imported goods would rise. The Russian political and economic elite, who hold assets in London and Geneva, will also be affected.
Russia is a major global producer of oil and gas. The price of a barrel of oil is rising sharply as a result of the tensions. It is trading at $102 this morning. It could reach $125 per barrel. As for natural gas, the risk is that Russia—which supplies 40% of the gas consumed in Europe—could see the pipeline running through Ukraine cut off or damaged.
The price of aluminum reached an all-time high this morning, at $3,382.50 per metric ton. According to Daniel Briesemann, a commodities analyst, “the rise in aluminum prices was predictable once Russia attacked Ukraine.” Market participants clearly fear that Russia’s aluminum supply will be affected in the event of severe sanctions from the West and—likely—retaliatory measures by Russia. If the situation escalates further, we believe prices could rise even more.” The price of gold is also on the rise. Finally, wheat. Russia and Ukraine are the world’s top two producers. A price increase is a concern.
Another consequence is the migration issue. A few weeks ago, U.S. intelligence agencies estimated that a military operation in Ukraine would trigger an influx of 1 to 5 million refugees. The Norwegian Refugee Council anticipates a movement of 2 million people. This would be the largest population displacement in Europe since the end of World War II in 1945.
AA /MCP, via mediacongo.net
