Ukraine is not a member of the North Atlantic Treaty Organisation (NATO); the US and Europe have only promised to impose sanctions on Russia, in case it attacks Ukraine. However, if war spills over to any of Ukraine’s neighbours that are NATO members — Poland, Romania, Hungary — under the military alliance’s “One for All, All for One” charter, we will see the world’s most powerful country go head-to-head with the country with the world’s largest nuclear arsenal. Even if this threat of nuclear Armageddon is somehow contained, there would be no escaping one of the sharpest spikes in gas and oil prices in global history.
Russia is one of the world’s largest producers of both oil and gas, and the single most important supplier of gas to Europe, supplying it with more than 200 billion cubic metres, or 40% of Europe’s gas needs. If Europe is forced to shut out gas from Russia, it would be forced to bid up the price of gas sourced from the rest of the world, and we would see a generalized increase in energy prices that squeezes growth and recovery from the pandemic out of the global economy. No wonder markets are spooked at the prospect of war in Ukraine.
Why has Russia suddenly decided to turn the screws on Ukraine? Ukraine is incidental, well, almost. Russia’s real aim is to halt NATO’s advance further East and reverse the advance already made, if possible. When the Soviet Union had been crumbling, the US had assured Mikhail Gorbachev that NATO would not move an inch to the East. Then, after the Soviet Union had collapsed and chaos and oligarchs ruled over its successor state, Russia, NATO added Poland, the Czech Republic and Hungary to its fold. That was in 1999. Russia was too weak to prevent this. Then, in 2004, NATO expanded to seven more countries, including Latvia, Lithuania and Estonia. From Estonia to St Petersburg, the distance is smaller than that between Delhi and Agra. Putin was already running Russia, but still too weak to resist this threat to Russian security. But, when, in 2008, NATO promised membership to Ukraine and Georgia, Russia took action: it sent in its troops to two rebel regions of Georgia, South Ossetia and Abkhazia. Russia will resist Ukrainian membership of NATO, and deployment of NATO missiles or soldiers there, as vehemently as the US had opposed the deployment of Soviet bombers and nuclear missiles in Cuba in 1962.
In 2014, following the so-called Maidan revolution that threw out a pro-Russian leader of Ukraine and paved the way for a pro-West dispensation, Russia annexed Crimea, where its Black Sea fleet has its base and where the majority of the population proclaims allegiance to Russia. Crimea had been a part of Russia till, in the 1950s, it was assigned to Ukraine when no one dreamed of the Soviet Union disintegrating, leaving Russia’s naval base in a different country. The West had announced sanctions on Russia, but gas continued to flow from Russia to Europe via two pipelines, one cutting through Ukraine, and another running through the Baltic Sea, from the Russian coast not far from St Petersburg, southwest to Germany’s shoreline, the so-called Nord Stream. Thereafter, two more pipelines have been laid alongside Nord Stream, these being dubbed Nord Stream II. They await commissioning, and that depends on an end to the Ukraine crisis.
Europe needs Russian gas, in particular, Germany. In the wake of the 2011 earthquake and tidal wave that knocked out and flooded the Fukushima nuclear power plant in Japan, Germany decided to shut down its nuclear plants. Since then, Germany has been burning coal and biomass, in addition to tapping gas and renewable wind and solar power. If it wants to live up to its climate-friendly ambitions, Germany has to reverse its decision against nuclear power, and, in the short run, use more of natural gas.
Putin sees the Western discourse make China the rival superpower and marginalize Russia as a global power. He also sees the ineptitude the Biden and Johnson administrations displayed in the West’s departure from Afghanistan, and the internal decay of western democracies, where a sizeable section of the population behaves as if getting vaccinated against Covid-19 were a matter of personal autonomy and ignores mass vaccination’s public health dimension affecting all of society and its economic fortunes. Putin believes that the time is right to press Russia’s right to remain secure as a country and a global power, and his own personal right to the spotlight. So, he has amassed troops on Ukraine’s borders, in Russia to the east, and in Belarus, to the north, even as the naval base in Crimea to the south remains a constant potential launchpad of Russian aggression against Ukraine.
A possible, diplomatic way out of the current impasse is for Ukraine to insist on the Minsk Accord, struck in the wake of the 2014 annexation of Crimea by Russia and Russian control of eastern Ukraine’s Donbas region, where two regions of Russian-speakers have declared independent Republics. According to the Minsk Accord, the breakaway Donetsk and Luhansk regions would have a say in Ukrainian national policy. If this is creatively developed, that would rule out Ukrainian membership in NATO, without the West losing face and accepting that Ukraine would not be admitted to NATO or Ukraine having to forswear NATO membership as official policy. Both France and Germany have been exploring this path to a compromise.
Till that peaceful resolution is reached, war remains a possibility, and financial markets would remain jittery.
Never miss a story! Stay connected and informed with Mint.
our App Now!!