The "Russian Spring" was proclaimed in 2014 as a response to the Euro-Maidan with the intention to mobilize eastern Ukraine against Kiev. At the time, Putin balked at an open military invasion and, after some hesitation, opted for the Minsk Agreement and a half-frozen, smoldering conflict. According to the Kremlin's interpretation, the agreement calls for elections to be held in Luhansk and Donetsk under separatist leadership. At the same time, the government in Kiev did not regain sovereignty over Ukraine's borders with Russia. This implication, unacceptable to Ukraine, led to a dead-end. It would be the last time that the Europeans and Putin sat down together in serious negotiation. Even Ukraine President Volodymyr Zelensky, who started out as a moderate leader with great hope, could not find a way out of the dilemma. In 2019, Ukraine wrote its desire to join NATO into its constitution. The West's efforts in recent weeks to find a peacefully negotiated solution without fundamentally calling into question NATO's presence in Eastern Europe and thus not addressing Putin's core demand have failed.

There is now a war in Ukraine. And while it’s not the first in Europe since 1989, it certainly is the most decisive for the European order in the post-Cold War era. The country needs our solidarity and support. Russia's invasion has ended the Western Europeans' manoeuvring between joining NATO and moving closer to the EU on the one hand, and trying to maintain cooperative relations with Russia on the other. The political landscape – especially in Germany – regarding Ukraine is re-sorting themselves under tremendous pressure to act. But the world is still puzzled as to why Putin now sounded the attack. Many political reasons have been cited: the weakening of U.S. President Joe Biden and Zelensky, the change of government in Germany, and the crushing of any beginnings of a genuine organized opposition in Russia. Putin's image in the West has changed in one fell swoop from one of a clever and unscrupulous power pragmatist to that of a psychopath. Both interpretations, however, focus too much on Putin's personality; they underestimate the importance of ideology and the Great Russian logic of power, which perceives Belarus and Ukraine as its historic parts. In the following, I would like to offer some further considerations for understanding the new historical situation.

Geopolitics and geoeconomics

That Russia's war is an aggressive act of revision of the post-Soviet order in Europe established under U.S. dominance is hardly disputed anymore. The impression that Putin and the "Russian patriots" are falling into a trap of their own making also seems to be coming true. By permanently comparing the Ukrainian leadership with right-wing extremists and Nazis since 2014, Putin and his supporters set themselves up to have their own claims undermined by the unexpected resistance of the Ukrainian people. However, this history trap is not only a product of the Russian propaganda machinery. It is also closely related to the rise of a new "mission civilisatrice" that defines Russia as a distinct civilization that belongs neither to the West nor to the East. Putin has embraced this idea. This is where the KGB agent's interest in both history and the politics of history stems from. But the construction of Russian civilizational identity results from a long discursive process that began in the late 1990s. Today it is part of the official canon with which the political class expresses its loyalty to the regime.

 On 24 February 2022 Vyacheslav Volodin, chairman of the Duma, stressed on a trip to Cuba that the "special operation" was exclusively for the "defense of peace" against the "occupiers" of a Ukraine that is controlled by NATO and Brussels. On the same day, Vyacheslav Nikonov, the first deputy of the Duma Committee on International Affairs, appeared before the Rossiya 24 camera and recalled the words of his grandfather Molotov at the start of Nazi Germany's war against the Soviet Union on 22 June 1941: "Our cause is just. The enemy will be defeated." Both have long been considered illiberal conservative ideologues. Volodin invokes the argument that Ukrainians and Russians are "one people" - "one culture" and "one faith," and he makes it clear: Russia's "strategic goal" has long been known. "We need a peaceful, free, sovereign Ukraine that is in friendly relations with Russia." [1]

However, this "we need" has not only an identitarian and geopolitical dimension, but also a geo-economic one concerning the ordering of large economic zones. It is an idea that rarely occurs in the Western puzzlement over what "Putin wants," but is self-evident to the Russian elite. Without Belarus and without Ukraine – so goes the widespread belief – no successful Eurasian Union can develop, which had been in planning since 2012 and was established in 2015. The Russian leadership knows that its great power status is on feet of clay if it has to rely solely on the military and does not accrue from being a major economic power. Therefore, the creation of a Eurasian economic area between Europe and Asia that can compete with other economic centers in terms of market size has a special urgency. This size requires industrial potential and demographic growth, as Russia's population is shrinking massively.

Thus, as with Belarus, Ukraine is by no means about a simple restoration of the Soviet Union or even of tsarist Russia, but about Russia's future role in the world – a world in which China is preparing to change the global rules of the game. In this scenario, Russian elites are repositioning their country as an anti-liberal power, with a claim to co-determination for all of Europe. "Restoration of the Future" was the title of one of the many anti-Western, conservative manifestos in the 2000s.

Even if hardly anyone in the EU and the United States likes to hear it at the moment, the disaster was not predetermined from the beginning. We should acknowledge that the European Union's Association Agreement with Ukraine contributed to this development. It stood in direct competition with the Eurasian integration project, the EAEU, because it called for the harmonization of norms and standards and also provided for deeper cooperation on security issues. At the same time, the European accession prospects for the country was extremely uncertain. Putin, however, is ideologically a Great Russian nationalist and not a Eurasian. His interest in the EAEU waned noticeably after 2014. Nevertheless, the fight over Ukraine – like in Belarus – is not only about political and military control, but also about integration into an economic area that forms its own powerful center in global competition. Enforcing this apparently justifies the use of force. It is meant to cut the Gordian knot of the last eight years. Putin and the "Russian patriots" are astonishingly unconcerned that such violence burns into the historical memory of the people.

 Putin could not have expected that the second "Russian Spring" would trigger a similar enthusiasm among the domestic public as the annexation of Crimea. But he may have calculated that after eight years of conflict in the Donbas region and its propagandistic processing, the population would agree to the recognition of the Donetsk People’s Republic (DNP) and Luhansk People’s Republic (LNP). According to the VTsIOM polling institute, before the war began, 73% of respondents in Russia supported recognition of the independence of the two self-proclaimed republics, and 78% favored signing the Treaty of Friendship and Cooperation.[2] Meanwhile, a poll from 17 and 21 February 2022 by the Levada Center, a non-governmental polling and research organisation, nuances this picture. According to Levada, compared to previous surveys, the percentage of those who have a negative attitude toward Ukraine increased from 43% of respondents in November 2021 to 52%.[3] Some 60% of respondents believe that the United States and NATO countries triggered the aggravation of the situation in eastern Ukraine. However, before the official decision on the status of the People's Republics, only 33% of respondents believed that the DNR and LNR should become independent states, and only 25% believed that Russia should take them in. There was no mention of conquering all of Ukraine or war in either the parliamentary resolution or polls. "War" itself was excluded from the media's vocabulary. However, the longer it lasts and the greater the casualties become, the less it can be suppressed that the Russians did not give Putin a license to wage war against Ukraine.

Western sanctions options and their limits

The Western alliance reacted with sanctions in 2014 and must now resort to this instrument again if it does not want to go to war with Russia. Putin could count on this. But apparently the risk seemed calculable to him, although Russia's economic growth has been low on average for the past ten years and inflation has again reached a high of over eight percent, while the standard of living is stagnating and even falling. What may explain this puzzle beyond the fact that Putin expected an easy victory over the "Nazi-occupants"?

New personal sanctions were to be expected, depriving elite members of their possessions in Western Europe. But even if it were possible to comprehensively include the family and friends of those sanctioned and to actually freeze all assets, Putin did not have to expect an elite revolt. On the contrary, these sanctions only drive the political class and the politically disempowered "oligarchs" further and further into the dependence of the narrow circle of power that controls central state resources. For some time now, the Russian government has been making attempts to re-nationalize the elites and eliminate Russian offshore centers abroad, mainly in the EU and London. Already since 2013, state officials and political functionaries at the federal level have not been allowed to hold foreign accounts in banks that do not have a branch in Russia. Since the 2020 Constitution, they have not been allowed to hold dual citizenship or foreign residence permits. In addition, the Russian government has repeatedly campaigned against Russian companies' and individuals' offshore accounts in Luxembourg, Cyprus, or the City of London, albeit half-heartedly and so far not with much success. The government renegotiates double tax treaties or cancels them when there has been no willingness to do so, as with the Netherlands. Since 2021, the Russian government has been tightening control over money transfers from abroad by all Russian citizens and trying to bring the thriving Russian cryptocurrency market under control. Some anti-Western economists are hoping that the sanctions will finally stop the gigantic outflow of capital from Russia that Putin has been unwilling and unable to stop. "People are watching with interest the return to the country of the capital exported by the oligarchs and of the oligarchs themselves, who fear confiscation and arrest in NATO countries" – exults the well-known anti-Western economist Sergei Glazyev. [4]

With regard to economic sanctions, it must first be remembered that Russia is self-sufficient in two key areas. This concerns energy supply on the one hand, but also food security, which has been high on the agenda of the national security strategy since 2006. Encouraged by Russian counter-sanctions against the West's post-2014 sanctions, the government launched an extensive import substitution program. Although the hoped-for great advances failed to materialize, one sector in particular – agricultural production – celebrated success. Russia is now self-sufficient in basic food products, unlike in the 1990s and 2000s. Imports of poultry and meat have been almost completely replaced. It has also been able to significantly increase its exports of agriculture products, especially wheat. In addition, rising world market prices and the burning issue of feeding the world's population mean that the outlook here remains promising.

Russia's power elite also felt prepared for partial exclusion from the global financial market. One of the traumas of the 1990s that had a strong impact on Putin was hyperinflation. Therefore, macroeconomic stability had been a very high priority in Russian monetary policy by then, and was preferred to stimulating growth by providing cheap credit to the real economy. The Russian Federation had also taken on the public debt of the entire Soviet Union, which kept increasing through borrowing, especially from the IMF, in the course of the 1990s. For Putin, "financial sovereignty" vis-à-vis foreign creditors, (but also vis-à-vis private domestic creditors) plays a major role. This is the main reason why Russia's public debt is unusually low. It stands – after tentative increases since 2018 – at 18% of GDP, 80% of which is owed to domestic creditors. A ban by Western states on their financial markets to buy Russian government bonds therefore does little to deter them. Moreover, the state-owned corporations and "loyal oligarchs" that have helped themselves to the international financial market have already been highly dependent on the Russian state since the global financial market crisis. If the West blocks access to the global financial market, this dependence will increase, especially since attempts to switch to the Chinese stock market have so far been approached only hesitantly.

What's more, even during the Covid pandemic the Russian central bank continued to replenish the National Reserve Fund and built up international reserves that, according to its own figures, reached a record level of more than $630 billion at the end of January 2022. Lower reserves had already enabled Russia to overcome the severe consequences of the 2008/9 global financial market crisis on its own. This crisis management also seems to have entered Putin's 2022 calculation. Together with a restrictive budgetary policy, Russia apparently felt armed to cushion the harsh sanctions imposed by the West, at least for a while and did not expect a reaction that freezes its accounts in western banks. After all, in China they believe they have a potent financial backer that could compensate for liquidity bottlenecks for the Russian state and its corporations. The radical increase of the main interest rate from already high 9% to 20% at February 28 – a usual response of the Russian central bank to fight inflation – hits the whole economy. Yet, the main burden on companies is again put on Russian small and medium-sized enterprises, which have no special access to state funds. They have little "voice" in Putin's economic system anyway.

The Russian central bank has responded to the West's first threats after the Crimean annexation to exclude Russia from the SWIFT payment system. It has developed its own system of electronic messaging between banks (BFMS) and a national card payment system, "Mir" (World), through which all disbursements of state pensions and salaries must pass. Work is underway to link it with the Chinese payment system to make it a cross-border system. Russian experts are playing out what exclusion from SWIFT would mean for energy exports, among other things, and suspect that Europeans would then settle their imports in rubles - a welcome side effect of the declared "de-dollarization" of the global economy, which the Russian government has considered a "toxic currency" for several years. A complete exclusion of Russia from Brussels-based SWIFT would also further weaken Europe’s ability to serve as a financial center and European companies’ ability to trade with Russia. The targeted exclusion of key Russian banks from SWIFT that has now been chosen was probably not anticipated by Putin's strategists, nor was the ban on Western banks servicing purchases from the Russian central bank's international currency reserves. Whether hopes for an alternative transnational payment system with China will be realized remains to be seen.

Threats from the West to stop investing in the Russian economy, on the other hand, are dismissed as ridiculous by "Russian patriots." After all, Russia has so far been a net donor on the global financial market. The bulk of European direct investment into Russia comes from Cyprus, Luxembourg and Great Britain. It is actually money flowing back to Russia. Sanctions of high-tech products, in contrast, will certainly have an effect. But what this means in the medium and long term is difficult to assess. Much depends on the willingness of Asian states to participate in the enforcement of Western sanctions. Putin has apparently speculated that enough other ways will remain open to meet the high-tech demands of Russia'a key sectors from abroad. In any case, the aim is to increase value adding for this segment at home in order to give "digital sovereignty" its own economic underpinning. Taiwan, the world's most important manufacturer of microchips, has already joined the American sanctions, which is hardly surprising. The decisive factor will be how India and, above all, China behave. With India, the Russian government has signed a military and technology treaty until 2031; in December 2021, Putin travelled to Delhi to sign more trade and other agreements, including 28 investment packages. But India, which has Soviet-era ties to Russia, has moved closer to the United States in recent years to counter China's claims in Asia.

That leaves China. The great hopes that the Russian elite nurtured around 2015 in the new strategic partner China and in the emerging markets of Asia have given way to a certain disillusionment. And the danger of being merely a "junior partner" is certainly seen, after having rejected this role vis-à-vis the United States. But important steps have been taken in recent years to advance this partnership. Talk shows on Russian television speculate on the fate of Taiwan in the context of Ukraine, and thus on similar ambitions to unify the "nation." Yet, the more bombs dropped on Kiev, the unhappier China is likely to become about its new "junior partner." The threat of a nuclear first strike is also likely to irritate more. It turns out that today's Russian leadership is more ideology-driven than driven to building long-term strategic capabilities.

One thing above all is certain, however, that Putin will not succeed in bringing to Ukraine a deadly calm similar to that which Lukashenko so willingly organized in Belarus. The embattled Ukraine will not rest easy. Rather, Putin has hastened the end of his rule.

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[1] Volodin’s telegram chat. URL: https://t.me/vv_volodin/317; accessed 28 February 2022.

[2] URL: https://ria.ru/20220223/nezavisimost-1774536048.html; ; accessed 28 February 2022.

[3] Russia’s Justice Ministry lists the non-governmental polling and research organisation as a "foreign agent". See URL: https://www.levada.ru/category/press/; accessed 28 February 2022.

[4] URL: https://expert.ru/2022/02/25/sanktsii-i-suverenitet-column/; accessed 28 February 2022

Last edits for this blog entry were on 01 March 2022, 10:45 a.m. CET. Read the German version here.

Prof. Dr. Katharina Bluhm is Principal Investigator at SCRIPTS, head of the Institute for East European Studies and Professor of Sociology at the Institute of Sociology, Freie Universität Berlin.