Putin Raises the Stakes of Rejecting Peace Deal

Executive Summary:

• Russian President Vladimir Putin has been unwilling to compromise to reach peace, reaffirming maximalist demands and committing to a risky strategy of provoking the North Atlantic Treaty Organization (NATO), hoping to demonstrate the alliance’s weakness to justify rising costs of his war against Ukraine.
• Russian provocations since September 10 include drone intrusions in Poland, Russian fighter jets entering neutral airspace over the Baltic Sea, and three Russian MiG-31s entering Estonian airspace. NATO’s coordinated response under “Eastern Sentry” demonstrated solidarity, undermining Putin’s assumption of Western weakness.
• Russia’s war economy dominates at the expense of all other sectors, deepening deficits and public discontent. Elite frustrations, resignations, and eroding public support for Putin’s war against Ukraine highlight Russia’s growing instability, while the Kremlin’s aggression toward NATO drives European unity instead of sowing disarray.

Three years and seven months after Russia’s full-scale invasion of Ukraine, all international initiatives to bring the war to an end have seemingly discontinued. U.S. President Donald Trump’s invitation to Russian President Vladimir Putin to make a peace deal at the summit at the Elmendorf-Richardson base in Alaska on August 15 produced a spike of hopes, but has so far been a dead-end (Re: Russia, September 15). By refusing to depart from his maximalist demands and rejecting Trump’s offers of compromise, Putin has committed to an indefinite continuation of the war—a choice that may be a mistake as grave as his decision to launch the full-scale invasion on February 24, 2022. Putin has taken a series of aggressive actions toward NATO, raising the stakes of a Russian defeat and attempting to demonstrate the alliance’s weakness to justify the mounting costs of his war against Ukraine (Republic.ru, September 18).

The Russian General Staff set the background for Putin’s escalations with the September 12–16 Zapad-2025 exercises between Russia and Belarus, which they sought to make impressive and moderately threatening (see EDM, September 15). Putin observed the culmination of Zapad-2025 not from Belarus, but from Mulino base, well east from Moscow in the Nizhny Novgorod oblast (Novaya Gazeta Europe, September 11; Interfax, September 16). The main chain of challenges was unfolding in the air, beginning on the night of September 10 with the incursion of 19 Russian drones into Polish airspace (The Moscow Times, September 14; see EDM, September 15). On September 14 in neutral airspace over the Baltic Sea, Sweden intercepted a pair of Su-30 fighters armed with anti-radiation Kh-31P missiles at the same time Danish Air Force jets intercepted a Russian IL-20 signals intelligence plane (Focus, September 17). That same day, Romania’s defense ministry detected a Russian Geran drone in Romanian airspace, and on September 21, German and Swedish fighter jets were again scrambled to assess and escort a Russian IL-20 plane out of neutral airspace over the Baltic Sea. On September 20, Poland registered a low-altitude approach of two Russian fighters to its Petrobaltic offshore oil platform and scrambled squadrons of interceptors to ensure that a Russian attack on Ukraine had no cross-border deviations (The Insider, September 20).

The key test for North Atlantic Treaty Organization (NATO) air defense capabilities was the 12-minute incursion by three MiG-31 fighters into Estonian airspace on September 19. The Russian Defense Ministry denied wrongdoing, presenting the incursion as a routine flight toward Kaliningrad (Radio Svoboda; Kommersant, September 20). The three MiG-31 fighters deviated from the routine flight path between mainland Russia and Kalinigrad, so the new route toward the Estonian island Vaindloo and Tallinn was likely deliberate, based on the calculation that the high speed of the MiG-31, designed in the Soviet Union 50 years ago as a high-altitude interceptor and modernized for carrying the Kinzhal air-ballistic missile, would make an effective intercept almost impossible (Top War, September 20). The incident nevertheless proved NATO’s newly established operation Eastern Sentry to be effective, as first the Finnish F/A-18 fighters, then Italian F-35s, and then Swedish JAS-39 Gripen fighters had the Russian trio in their sights (UNIAN; RBC, September 20).

The instant demonstration of European solidarity to Russian aggression toward NATO and U.S. President Donald Trump’s reference to “big trouble” proved Putin’s assumption of the feebleness of Western resolve wrong (Forbes.ru, September 15; RIA Novosti, September 20). Following the Polish example, Estonia invoked Article 4 of the NATO Charter for requesting urgent allied consultations and is sure to receive reinforcements for the Baltic Air Policing mission (Novaya Gazeta Europe, September 20). Russian commentators can only complain that the Europeans are exploiting Russian incursions into allied airspace to boost political support for European rearmament. European solidarity in the face of increased Russian aggression is certainly not what Putin expected when he gave the order to put pressure on neighboring states he perceived as vulnerable (Izvestiya, September 17).

These concerns are strikingly different from the recent Russian expert opinions following the Trump–Putin summit in Alaska that argued that Trump would help form a multi-polar world following Russia–U.S. rapprochement (Kommersant, September 8). Some Russian editorials even suggested that the European “coalition of the willing” sought to offer Russia a path to an acceptable compromise, without actually providing concrete security guarantees such as deploying troops from NATO member-states to Ukraine (Nezavisimaya Gazeta, September 14). Russian pundits were allowed and even encouraged to entertain ideas about an “Alaskan system” of international affairs, underpinned by a blossoming rapport between Putin and Trump (Valdai Club, September 11).

The tone of Russian commentary has shifted to asserting that the third world war is already progressing, but that hostilities are primarily economic (RIAC, September 19). The nineteenth EU sanctions package, due for approval by the European Commission this week, provides proof positive to this assertion (Kommersant, September 19). An undertone in the economic analysis is that Russia is firmly set on a war course that it cannot afford (Vedomosti, September 18). The government is scheduled to present its budget plan for 2026 this week, and  expenditures need to be significantly increased to sustain the war effort. Costs incurred throughout 2025 have created a staggering deficit (The Moscow Times, September 19).

Putin sees the military-industrial complex as Russia’s major economic driver. Its over-growth, however, fueled by state funding and unlimited credit, depresses every other sector in the economy and guarantees a crisis when the war-driven expenditures are reduced (The Insider; Izvestiya, September 19). Public perceptions of economic prospects are turning negative in parallel with the increase in support for ending the war (Levada Center, September 18).

The vision of a never-ending war is disconcerting for many elite groups in Russia. The resignation of Dmitri Kozak, one of Putin’s most loyal administrators since  the early 1990s, is one sign of this discontent (The Moscow Times, September 19). The majority of the vast bureaucracy of Putin’s regime finds few benefits in perpetuating the war, while few of its beneficiaries belong to Putin’s shrinking circles of trusted courtiers. Nobody among them would dare to hint to the boss that offending Trump by turning down the offer of a compromise deal was a mistake, but they cannot hide the apparent narrowing of available options. The pattern of progressing from one blunder to another is typical for mature autocracies, and Putin has long abandoned the habit of pragmatic measuring of costs and benefits. He finds it necessary to show readiness to play with risks deemed irrationally high by Russia’s European neighbors, expecting to find disarray. Instead, his actions are compelling them to bolster their resolve.