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The World is at Financial War

Roundup
tags: Russia, international relations, Central Banks, Economic Sanctions



Adam Tooze is a New Statesman contributing writer and the author of Shutdown and Crashed.

Ukraine’s resistance to Russia’s invasion has changed everything. Analysts in the West did not expect the war to go like this. They thought Ukraine would fold and that Russian forces would roll into Kyiv. Then, after the fact, the West would apply punishing economic sanctions and eventually force Russia to accept some modified version of the Minsk agreement, which was signed in 2015 and supposed to end fighting between Ukraine and pro-Russian separatists in the eastern Donbas region.

How hard they expected those sanctions to be is difficult to gauge from the lurching and seemingly haphazard manner in which the economic measures have escalated. Joe Biden’s announcement of US sanctions on Thursday 24 February was limited and clearly constrained by resistance from Europe — probably from Germany and Italy.

In any case, the crucial point is that the West expected sanctions to be delivered as punishment in a postwar situation with Ukraine crushed, humiliated and occupied. The continuity of energy supply from Russia to the US and European states is an emblem of how people expected the war to go. We would punish Russia’s crime but life would go on.

By the first weekend of the invasion that seemed increasingly incongruous. How can Europe and the US still be buying Russian gas and oil when Russia is waging this murderous, brutal and incompetent war against such a heroic, good-natured people? The brilliantly orchestrated spectacle of Ukrainian resistance has made a huge impact on global public opinion. It is yet another demonstration of the way in which battlefield events can change history, especially when relayed by TikTok.

In trying to make sense of the Napoleonic war, the Prussian military theorist Carl von Clausewitz discerned three separate moments in modern conflict. The first was the reality of combat and its mastery. The second was the force of passion, an irreducible element of violent conflict. And finally there was the dimension of policy, or “politik” — geopolitical calculation. Any one of these moments has the capacity to escalate a war. Since last week we have seen all three reinforcing each other in a terrible spiral.

Ukraine may still be overwhelmed by the material superiority of the Russian military. That seems most probable. But, whatever the outcome, Ukraine’s resistance has changed the meaning of the conflict forever. Russia’s attempt to crush it has triumphantly and undeniably vindicated Ukrainian sovereignty.

 

Read entire article at New Statesman

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