“Germany will become totally dependent On Russian energy if it does not immediately change course,” President Donald J.
Trump said at the United Nations in 2018. In response, the German delegation, which included the country’s foreign minister, Heiko Maas, laughed.”
Report from The New York Times, July 22
We have got Putin where we want him. He is forced to sell his oil to India and China at a discount, and is having trouble producing all he can sell. Prices are so high that even with discounts he is raking in more revenue than before he says Ukraine invaded Russia, but no sanctions are perfect. Meanwhile, oil prices here and in Europe are fueling inflation, and consumers weep when they watch the dial on the gas pump spinning crazily.
We also have Putin’s back to the wall in natural gas markets. He now bears responsibility for deciding whether Europe will freeze in the dark come winter, or have enough supplies to keep factories running in France and Germany, two countries from which invasions were launched on Russia in what Putin considers recent times. Decisions, decisions instead of carefree days at the dacha, including whether to ring up Biden and offer to ease the President’s burdens by resetting relations as Obama and what’s-her-name tried to do years ago, if only he stops supplying the Ukrainian aggressors.
We also have him where we want him when it comes to the ruble. Instead of collapsing, as sanctions advocates predicted, Putin’s ruble is the world’s strongest currency, up almost 50 per cent against the dollar since January. That makes his commodities more expensive in world markets, which gives him the problem of managing an over-valued currency. He might be forced to call a meeting at the Plaza hotel like Reagan once did to deal with a strong dollar. But it would be difficult to get a visa, and the hotel is no longer owned by his old fan, Trump, but by the Qataris, who are trying to provide Europe with an alternative to Russian gas. Perhaps the Waldorf Astoria, where Xi can get him a special rate.
Unhappy Oligarchs
Finally, sanctions are creating a real problem for Putin by forcing Russia’s oligarchs to move their boats to Turkey and the UAE to prevent American and European pirates from seizing them. They badger Putin with complaints about that inconvenience. If they don’t stop complaining, he might be forced to de-oligarch them and move their assets into his own account, which means meeting with boring accountants and lawyers and tinpot politicians from small islands the names of which he has difficulty remembering.
Can Sanctions Survive Until They Bite?
In reality, these are some of the things that has Putin believing he is winning: robust sales of oil and gas, high revenues, a strong currency, greens complaining as Germany revs up power plants that burn lignite, the dirtiest of fossil fuels. Of course, the long-term impact of the techie brain drain, chip shortages and other problems will greatly increase over time. But democratic politicians face what Martin Luther King, in another connection, called “the fierce urgency of now.”
Putin is gambling that the high cost borne by the nations imposing sanctions will force democratic politicians to relax them before they really hit his economy hard. At this writing he is operating the Nord Stream 1 pipeline at 20 percent of capacity, allegedly for technical reasons, but if overcome with generosity will bump it up to 40 percent, still sufficiently low to prevent Europe from filling reservoirs to meet needs during the high-demand winter months.
Tables Turned On Germany
EU foreign-policy chief Josep Borrell senses the “democratic fatigue” on which he says Putin is counting. Germany was never enthusiastic about backing its promises with arms, a politically diminished Emmanuel Macron has little to offer Putin on his periodic telephone calls, Italy contains enough Putin sympathizers to bring down its government. When Greece, Spain and Italy, were short of cash, richer Germany told then to go on a diet of austerity; now, Greeks, Spaniards and Italians say they are unwilling to cut back their use of natural gas to make more available to Germany, which finds itself short of the fuel.
America, Henry, And Powerless Russians
In America, the Pentagon worries that shipments of military equipment to Ukraine have depleted its weapons inventory, and Biden is being pressed by his left and Trump’s right-MAGA defenders to stop squandering billions on a quarrel in a faraway country, between people of whom we know nothing.
Then there is Henry Kissinger 101. The side being supported by sanctions must be willing to tailor its war aims to the staying power of its supporters, rather than insisting on unrealistic objectives. That is clearly not the case with Ukraine, at least not yet, as it prepares to fight to regain territory, whatever the economic cost to its supporters.
Perhaps most important, for sanctions to produce a change in behavior, the leader of the sanctioned country must fear being deposed by a suffering citizenry. Sanctions, writes Cornell University historian Nicholas Mulder, “rely on economic total war to intimidate peoples into restraining their princes.” No chance of that in Russia, or even in Venezuela, or in Iran, or in Cuba. It is the princes who do the intimidating.
Putin’s Vision vs. Western Needs
The added problem with sanctions is not that they are porous, although in a world in which Putin has powerful allies they certainly are. The problem is that they are aimed at inflicting economic harm on an enemy with goals that transcend economics and are rooted in a vision of creating a new world order, cost be damned. And are being inflicted by countries far from united, internally or with each other, on their alternative vision of a desirable future and are absorbed with the more mundane goals of eliminating crime, cooling the planet, containing inflation, keeping their economies humming, remaining warm in winter.
“From the available data,” writes Mulder after an extensive review of their use since 1914, “the history of sanctions is a history of disappointment.” Economists often dismiss predictions that the future will repeat the past with that famous phrase, “This time is different.” It rarely is.