Tuesday, February 10, 2015

Hold on to your hats, times are getting more interesting

If one can take a dispassionate view of something, not be swayed by emotion but examine it as a doctor might examine a broken leg, now is the time to take another look at two things: the euro and Nato. Now is the time because both could well be facing the ultimate stress test, and if they fail they will, among other things, be consigned to history. I say ‘among other things’ because of different consequences of them failing, being consigned to history will be the least interesting and least important consequence. We will be worrying about other things.

The stress test Nato might soon be facing will be brought about by one Vladimir Putin, the president of Russia who has, to put it mildly, been in the news recently. As usual, I can only go on what I read in the media and hear on TV and radio, but by those accounts Putin wants to re-establish Russian pride and the pre-eminence it once had in world affair. Nothing much wrong with that, of course, but it is the means by which he seems to be doing it which is causing concern in the West (which is again putting it mildly). I am not one for taking very seriously pub bores and wholesale merchants of instant opinion, but I am inclined to listen carefully to the view of former British ambassadors to Moscow, and one of those in Tony Brenton (as he cares to sign his newspaper articles) aka Sir Antony Brenton, who was ‘our man in Moscow’ from 2004 to 2008. Brenton says he first came across Putin when he was mayor of St Petersburg and where he was a man who ‘got things done’.

A potted history of Putin from Brenton is that after a somewhat misspent early youth when by his own account he behaved like a hooligan, Putin, whom Brenton credits with ‘iron self-discipline’, took an interest in judo and went on to study law. After graduating he joined the KGB with whom he served until the KGB-backed attempted putsch on Mikhail Gorbachev. Brenton and others also say Putin plays things very close to his chest and can be alarmingly laconic. He also stands out in that he is a teetotaller (as we all know drinking doesn’t exactly keep the mind clear), keeps himself very fit for a man of his age and is always impeccably turned out, which, Brenton, records rather sets him apart from the men who surround him.

Elsewhere I have read that Putin, despite the belief in the West that he has some kind of masterplan, is actually more someone who reacts to situations. So, for example, when the West more or less did nothing over what can only be regarded as Russia’s acquisition of the Crimea (and many Russians would describe it as a ‘re-acquisition), Putin was emboldened to push his luck a little further. So now Russia is, apparently, actively supporting the ‘rebels in Eastern Ukraine’. One suggestion is that Russia would like to have control of a sizeable strip of Eastern Ukraine in order to have a land link to the Crimea which it doesn’t, at present, have.

There is also the suggestion, however, that despite its support for the insurrectionists, Russia doesn’t have as much ‘control’ over them as the West believes. Most recently, Germany’s Angela Merkel and France’s Francois Hollande flew off to Moscow for what turned out to be abortive talks with Putin in view of the deteriorating situation in Eastern Ukraine. (Incidentally, I’ll leave the questions as just

                                                           As some see it . . .                                               ©ft.com

how popular the insurrection is and just how much support the rebels command among the general population for others to answer. As usual with such questions, you reads the papers, you pays your price and you makes your choice, which is to say most of us give the most credence to those reports which seem to substantiate the view we already hold. Me, I have no idea and no means of establishing ‘the truth’.)

After that visit, from which Merkel and Hollande returned ‘empty-handed’ and which was compared by some to Neville Chamberlains’ flight to Munich for a chat with ‘Herr Hitler’, rather alarming talk began of an incipient World War III. Here, I’ll succumb to the temptation to give the most credence to those reports which seem to substantiate our views, in my case my hope: Brenton – I think it was Brenton in a piece for the Daily Telegraph, but it might well have been someone else – suggested that Putin will not try to take on Nato, by for example invading one of the Baltic states, its newer members, because he knows that in the long run he will be the loser. The trouble is, of course, that even if that is true and Putin and Russia do come off second best in a dust-up with Nato, a great many lives will have been lost and a great deal of disruption will have been caused in the meantime.

While Merkel and Hollande opt for the jaw-jaw approach to defusing this crisis, Barack Obama yesterday declared that he would not rule out arming the Ukrainian government as it battles to defeat the insurrection in the east of its country. Many see that as the worse possible thing to do in that it can only help escalate the situation. Others, and this is the view I subscribe to, see it was the West playing good cop/bad cop with Putin, though if they are doing that, it will not be lost on Russian president and so, in a sense, is all rather pointless. If Putin does decide to test the West’s mettle and makes some kind of move into any of the Baltic states, that is when Nato’s stress test will start: under its treaty obligations and attack on any member is to be seen as an attack on all its members and to be dealt with accordingly.

I personally can’t see China sitting quietly by if the situation does escalate badly. As far as I know China is most certainly intent on world domination but only in an economic sense. Any military aggression it decides to engage in will be pretty local. I think that is also true of Russia: whatever else one might think of Putin (and the German in me is rather attracted to his reputed self-discipline), he is most certainly not daft and it would seem very unlikely that he would make a move which could result in real damage to his country despite what real damage he could cause elsewhere. He does not strike me as the kind of man who would cut off his nose to spite his face.

How all this will play out remains to be seen. (There was a claim on the radio last night that Putin and Russia are financially supporting various right-wing and extreme right groups such as France’s Front National, but that is the first I’ve heard, so all I can do here is – rather lamely – to report that some are claiming it to be the case.)

NB Britain’s Foreign Secretary Philip Hammond was on the radio the other night warning along the lines that the West could not stand by while a nation deployed troops in another country and violated that country’s sovereignty. My first thought was ‘didn’t the bloody Foreign Office have someone to hand to go through what someone like Hammond intends to say and edit it accordingly? And if they did and she or he let this though they should be sacked immediately.’ For wasn’t that a very succinct summation of what the U.S. and the UK did in Iraq? And wouldn’t Putin and Russia quite legitimately be able to claim ‘what’s sauce for the goose…’ Yes, of course they could and can, which is why Hammond shouldn’t have said it in the first place. But he has and I don’t doubt it will all come back to haunt him at some point.

For an interesting take on the situation try this from the Financial Times. (You might have to register to read it, but registration is free and you won't be inundated emails and offers. High quality global journalism requires investment.) He concludes:

A collapsing oil price and the impact of sanctions have made [Putin] more dangerous: without oil and gas revenues, his domestic support now rests on his capacity to mobilise nationalist anger against the alleged attempt by Nato and the EU to subjugate ‘mother Russia. The west’s options are limited, but the beginning of wisdom is to understand that this is not just about Ukraine.

. . .

How the growing euro crisis plays out will, on the other hand, be known a lot sooner. Greece, under is new ‘extreme left’ government – I put the description in inverted commas because I think it is complete cobblers – has announced that it wants a very large proportion of its debts written off and and end put the austerity programme imposed on it. The crunch point will be reached within the next three weeks when another tranche of the money it is being loaned is due. If that is withheld, and it at the moment it seems likely it will be. If that happens, the Greek government run out of money and go bust. And if that happens it seems likely that it will leave the euro, either by being kicked out or leaving voluntarily.

The EU is caught between a rock and a hard place: if it gives into Greece’s demands for some of its debts to be written off and the austerity programme to end, it will attract not just the ire of Ireland which gamely played the game and submitted to austerity, but also face demands from Spain (which now has it’s own anti-austerity party) and Portugal (which, like Ireland, also gamely played the game) of similar favours. If it doesn’t give in, Greece defaults and is forced out of the euro, it is possible that the whole currency will in time collapse. Britain is already said to be making contingency plans for such a collapse, as, I’m sure, everyone else is too.

So what with all that, the onward march of ISIS in the Middle East and the ongoing civil war in Syria it looks very much as though we are increasingly living in the ‘interesting times’ the Chinese were apt to which on their enemies.

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