Big guns have mostly remained silent in eastern Ukraine last week, but diplomatic battles at the United Nations General Assembly have not shown any recess. Russia used to be able to score some easy points at this seasonal show by denouncing the United States’ unilateralism and hegemonic arrogance. This time around, however, it is Moscow which has been the main target of censure, a tone set by President Barack Obama, who defined Russia as one of the main threats to international security, on par with the Ebola epidemic and Islamist militant groups operating in Iraq and Syria (Kommersant, September 26). Russian Foreign Minister Sergei Lavrov tried every professional trick to deflect this severe criticism, but his reassurances of Russia’s commitment to a “peaceful solution” to the Ukraine crisis ringed false (Nezavisimaya Gazeta, September 27). No amount of political hypocrisy can camouflage the odd configuration established in the eastern Ukrainian war-zone by Russia’s military intervention. Ukraine finds it unacceptable, the motley crowd of Moscow-backed “rebels” seemingly cannot make any sense of it, and Russia itself apparently has no clue about what to do with the “rump Novorossiya” its actions have created.
The ceasefire remains fragile. But Moscow has demonstrated readiness to maintain it, perhaps assuming that at this stage of the “hybrid war” with the West for Ukraine, economic levers will deliver greater impact. Toward this end, President Vladimir Putin has demanded a thorough revision of the association agreement between Ukraine and the European Union, threatening to punish the former with trade barriers (Grani.ru, September 26). At the same time, the Kremlin is sending persistent signals to the latter regarding the mutual Russian-European interest in lifting the sanctions (Nezavisimaya Gazeta, September 22). The problem is that Russia is not prepared to meet even the most moderate conditions for easing the West’s sanctions regime (Kommersant-FM, September 26). At the same time, Gazprom has reverted to playing hard-ball in its gas negotiations with Ukraine, assuming that every disagreement will exacerbate European concerns about the reliability of supplies for the coming winter (Gazeta.ru, September 27).
This eagerness to engage in such an exchange of blows over business activities might appear irrational given that Russia’s economy is dwarfed by the combined might of the EU and US. Indeed, the World Bank has revised down its forecast for Russia’s feeble growth, and the government in Moscow is now developing a set of scenarios that describe a trajectory of stagnation with a possible protracted recession if the oil price finds a new plateau below the mark of $100 per barrel (Kommersant, September 25). Former finance minister Alexei Kudrin, who used to be Putin’s key advisor but now finds his opinions ignored, argues that zero growth is the best possible performance Russia’s capital-starved economy can hope for and that sanctions have already undercut the growth potential by about 1 percent (Newsru.com, September 16). While experts keep debating the direct and indirect impacts of sanctions, the ruble continues to lose value against the euro and the US dollar, which translates into rising inflation and prompts further capital flight (RBC, September 26).
The state budget has deteriorated far from the perfectly balanced draft approved last autumn, but Putin’s “special friends” like Igor Sechin, the boss of Rosneft, or Andrei Kostin, the head of VTB bank, continue to raise their demands for compensation of the losses inflicted by sanctions—as they seek to write off the blunders of their mismanagement (Gazeta.ru, September 26). This anxious greed feeds the feuds between business barons, so that Vladimir Yevtushenkov, the owner of the Systema conglomerate, is left to reflect on his mistakes of judgment under house arrest, while Igor Zyuzin, the chief of the Mechel mining-and-metals company, could be the next victim (Vedomosti, September 22; Ezhednevny Zhurnal, September 26). Russians may have become rather indifferent to the revelations about palaces around Moscow or on the sunny coasts of Italy, which are owned by top bureaucrats or well-connected entrepreneurs, but they cannot fail to see that the patriotic hysteria produces a steady squeeze on their income (Novaya Gazeta, September 26; Slon.ru, September 26). Second thoughts about the costs of the Crimea annexation are still lingering below the mainstream enthusiasm, but the reluctance to pay for the “brotherly Donbas” is quite pronounced (Moscow Echo, September 27).
The ambiguous peace deal has allowed thousands of refugees to return to Donetsk and Luhansk, which are in fact not that badly damaged by shells and rockets, but life in the rebel-controlled cities has not yet returned to daily routines that could be described as “normal” (Colta.ru, September 24). Russian humanitarian convoys deliver some basic supplies, but nothing resembling a functioning economy has yet emerged in this “black hole” inhabited by some two million Russian-speakers, who may be very angry at the Kyiv government but have to acknowledge that Kharkiv, Dnepropetrovsk and Odesa are not entertaining any ideas about “Novorossiya.” The cessation of hostilities leaves Ukraine in a dire situation, but with firm resolve to move forward with elections and reforms, while Russia is stuck with burdensome “prizes” and marches backward toward a dysfunctional and un-reformable authoritarianism.
The Kremlin expects that in the pause of the war, Ukraine will reach the brink of financial bankruptcy, while the EU will balk at the costs of preventing this state failure. New fruits of discontent will then ripen for the “green men” to pluck. This refusal to recognize Ukraine as a “real state” committed to forging a European identity has shaped every glaring miscalculation Moscow made in the course of this crisis, from the attempt to make former president Viktor Yanukovych an offer to join the Custom Union (which he could neither accept nor refuse) to the intention to sponsor a mass uprising in the eastern Ukraine (which never happened, so that Russian battalions had to be moved in to prevent a defeat of the “insurgents”).
Worse miscalculations are apparently being made regarding Russia’s own readiness to withstand economic hardship and rally around the Kremlin flag, defying Western pressure. The remarkably strong anti-war rally in Moscow (September 21) has brought back fears of self-energizing street power, while the overheated propaganda machine will have incredible difficulty being fine-tuned to account for a temporary truce in the hybrid war. Every step forward in consolidating Ukraine’s shocked but not defeated state, and every dose of doubt in the outcome of the confrontation inside “Fortress Russia” become grave threats to Putin’s regime, which apparently cannot secure its existence by peaceful means.