On the 17th March 2022, The Equilibrium Institute, in partnership with the Atlantic Council of the United States organised a discussion on the long-term impacts of the Russian invasion of Ukraine.
The Russian invasion of Ukraine, escalating the war Russia started in 2014, has marked an end to the post-Cold war era that defined the previous decades. In response to Russia’s aggression, Europe and the US have reacted to Russia’s invasion with remarkable unity, rejuvenating the transatlantic alliance with both NATO and the European Union at its core. The Atlantic allies imposed unprecedented sanctions on the Putin regime, cutting most economic ties between Russia and democracies around the globe, and Europe has notably renewed commitments to decouple Europe’s Russian energy dependence. As a result, polarization between the West and Russia has become more pronounced in this new era.
Our guests, Ambassador Daniel Fried, (Weiser Family Distinguished Fellow at the Atlantic Council, former Assistant Secretary of State for Europe (2005-09) and former State Department Coordinator for Sanctions Policy), Ambassador Réka Szemerkényi, (Senior Advisor, Transatlantic Strategy, International Republican Institute (IRI), and Mr Fabian Zuleeg, Executive Director, European Policy Centre (EPC) discussed how the past weeks will influence the geopolitics and geoeconomics of the 21st century along with an update on transatlantic sanctions policies and how they will impact European and global economics.
To begin the discussion Mr Dániel Bartha (Director of International Relations, Equilibrium Institute) the moderator of the event introduced the topic by reflecting on recent events which point to the timeliness of this debate. He started the discussion by reflecting on what kind of possible political impacts Russia’s war will have on European integration, what the future role of the US is, and how EU countries will deal with the upcoming challenges.
Ambassador Daniel Fried introduced the topic by stating that there are multiple outcomes for the future of the Russian-Ukrainian war. In his view, three scenarios are imaginable; an Aleppo scenario, an interwar scenario or a third possibility, that the Russian offensive will fail. Mr Ambassador Fried explained that the acute phase of the war and Putin remains unpredictable, therefore anything is possible, but it is for sure that the world will not go back to where it was before the 24th of February 2022, as it is just as unlikely that the pre-2015 conditions of world order will be reestablished. Hostile relations are coming between the leading powers and a new cold war is already happening.
Ambassador Fried has also declared that the sanctions imposed on Russia do work, as they have caused a financial crisis in Russia and have pounded the Russian economy, although escalatory steps are still available and might be needed. He also raised the option of diplomatic progress or even the option of a viable settlement. Ambassador Fried is sure that Putin will demand the sanctions to come down in exchange for stopping the military invasion. What we must not forget is that if the EU and the US take down the sanction imposed on Russia, that means that the sanctions have worked, as – Ambassador Fried emphasized – sanctions are a tool of policy, not a policy.
Ambassador Réka Szemerkényi started the discussion by drawing our attention to the consequences Europe will face as the aftermath of the current war. Ms Szemerkényi has emphasized that the situation we are currently facing would have been unthinkable before, but now the EU has proved that is capable of a striking transformation of its public policy. We have always seen that the member states have difficulties and that there is too much fragmentation within the EU which naturally slows decision making. Different priorities among member states made full coordination, cohesion and cooperation unthinkable, just if we think about the issue of energy policy for instance. But now, Vladimir Putin has achieved what no other issue was capable of; the Russian invasion has been achieved to unite the European Union. This cohesiveness can already be seen on the level of the EU’s sanction policy which has been imposed on Russia quickly effectively and strategically. A new era is starting now, where the EU will become a more strategically important actor in the global scene.
Ms Ambassador Szemerkényi also mentioned the aspect of the military where we are seeing events that have also been unimaginable a couple of months ago, as almost every state is now increasing its defence budget. The most striking is Germany, which has doubled military spending and introduced serious military investments. There is also the fact that now it has been allowed for the EU to pay for lethal military aid, which has been unseen, unheard and even unconsidered before.
Moreover, Ambassador Szemerkényi has raised our attention to the very new Central European geopolitical spectrum we are now experiencing. She emphasized how Central European countries like Poland, Czechia and Slovakia have taken a strategically leading role in this issue of war, and they are with coming up with solutions and bringing new initiatives to the table.
About energy security Ms Szemerényi quoted IEA Executive Director Fatih Birol; “Nobody is under any illusions anymore. Russia’s use of its natural gas resources as an economic and political weapon show Europe needs to act quickly to be ready to face considerable uncertainty over Russian gas supplies next winter,” Ms Ambassador Szemerkényi emphasized that diversification will take years and we shouldn’t have false thinking about this but we have to come up with a solution from where we will get alternative gas from, as the issue is gonna upset the whole system and will have serious implications for the future of the EU’s energy sector. She also mentioned how the EU Commissioner for energy has stated that the electricity grids of Ukraine and Moldova have been successfully synchronised with the Continental European Grid, which will add Ukraine to keep their electricity system stable. This is a major step forward, as this will have an immediate effect on keeping Ukrainian nuclear power plants working. This EU support for Ukraine in the energy sector is a thing in the right direction
Mr Zuleeg has stated that the 24th of February, 2022 has been a watershed moment in EU history, meaning that we will have to look at EU integration in a new way. The war was the result of a tremendous miscalculation on Putin’side; he underestimated Ukraine and overestimated his military capabilities. But – Mr Zuleeg emphasized – Putin was right in one thing: he saw the West be in decline. This might have been true but now this military offensive has placed EU cooperation and integration at a new level. For the first time in decades, the EU has done what we, the European community have talked about for a long time. The European Union is now showing that the EU can have a real impact and can surprise not only Putin but also its allies with its cohesiveness. The European Giant has awoken, the only question remains whether the moment has come when we can finally do the things we have talked about for so long, stated Mr Zuleeg. All policy eras will be affected by this change; decision making, enlargement, neighbourhood policy, external relations, solidarity, industry, technology, sovereignty, food security agriculture, and trade. There might be new challenges as well; the climate change issue might face a setback on behalf of the Union, and energy security is also a question awaiting resolution. The big question is; will we come together to face the challenges or are we gonna go back to fragmentation. In the aftermath of the war, the EU has to be clear: Putin has not only declared war on Ukraine but also on democracy and on our values and we have to respond accordingly, which will be costly and will hurt but we have no other choice.
Mr Zuleeg declared that the impact of this war is going to be very uneven. We have to support those countries which are negatively affected, moreover, we shouldn’t forget those countries outside the EU. We, the European community have to support those countries which have been negatively affected by the EU’s sanction policy. Germany will be for example be negatively affected but has the fiscal capacity and mechanism to deal with the obstructive implications. But there are other countries that do not have the same capabilities, therefore we have to find a way to support them, especially the developing countries outside the EU who will be impacted for example in the food sector. The EU is going to be able to cushion the negative effects within the EU, therefore we have the responsibility to help those who will be not.
In the question of Germany, if Putin weaponizes LNG and switches it off, Germany and the whole EU will have to live without it. The wish would be to phase out gas gradually, but if this can not be the case then there might be in the short-term a reconsideration of nuclear power and the use of coal and fossil fuels to supplement supplies that are not there. If you have a country like Poland, which has a high reliance on coal, the temptation will be big to switch back entirely to coal. The cost of net-zero might seem too high and too costly now.
Ambassador Fried explained that everything about the future of Europe will depend on how this phase of the war will end. If there is a settlement, and the war has ended, one Ukrainian demand will certainly be a bigger security guarantee from the United States. And Putin will demand the end of sanctions immediately. if there is going to be a “free Ukraine” or a “west Ukraine”, the US will have to provide some guarantees on Ukrainian security. The Swedish model of neutrality will certainly come up as an option during the peace talks, as the Scandinavian country has a military, is a part of the EU and have a strong bilateral security arrangement with the United States. On the other hand, they are not a member of NATO they do not have Article 5 guarantees. There is going to be a wish to strengthen Ukraine for sure and the war even may escalate, therefore a settlement is very difficult to foresee.
Ambassador Szemerkényi says we all hope for a negotiated settlement, but at this point, we can not predict the outcome of the peace talks. The “Afghanistanisation” of the situation is a horrible but not fully excluded possibility. Moreover, there is pressure on Ukraine for “Finlandisation”, as another possible outcome, while “Belarusianisaton” is also on the table when it comes to future Russia-Ukraine relations. In the case of Russia, the country might become the next North Korea, as it is on the right way to entirely isolating itself from the world. This option could be revered as an “orange type of revolution” by the Russian public. The predictions are uncountable and the income is impossible to foresee, but it is for sure difficult times are ahead of Ukraine and all of its allies.