Here we go again-Ukraine once again

[Skybird]

Marcus Matthias Keupp heads the Department of Military Economics at the Military Academy of the Swiss Federal Institute of Technology in Zurich and analyzes in depth what is happening in Russia and Ukraine. He sees many misguided plans and explains in an interview with Der Tagesspiegel why the war could reach a turning point for Russia in seven days.

Mr. Keupp, Vladimir Putin wants to provide gas supplies to "hostile states" such as Germany only in exchange for rubles, what is his purpose in doing so?


I would call this a verbal intervention, for one thing. This is something that central banks, for example, like to do. Mario Draghi stood up in 2012 and uttered the famous phrase "Whatever it takes." He managed to stabilize the euro exchange rate just by saying that. And something similar has happened with the ruble now. So just because Putin said that, the ruble exchange rate has already stabilized somewhat. That is one side, this verbal intervention.

So far, the supply contracts are in euros and dollars, what else is behind that?


The largest market for rubles is in Moscow, and these transactions would ultimately always have to be settled at the Russian Central Bank. In other words, this is an attempt to circumvent the sanctions against the central bank, whose euro reserves are frozen abroad. But now you also have to consider that some of the supply contracts for gas are very long-term.

So you can't imagine that you go to the weekly market and say, today I need so and so many cubic meters and I'm going to buy that quickly, but these are contracts, some of which run for 10 or 15 years. And they are negotiated in euros and US dollars. If he wants to enforce that, he would have to break the contract. I can't imagine how that would work. That's why I would call it more of a verbal intervention.

In principle, he is trying to blackmail the West: Rubles and euro foreign exchange for Moscow or gas freeze - but the German government, for example, says that would endanger hundreds of thousands of jobs.


Of course, politicians stand up and create such pictures now. But first of all, we have to get away from this view, according to the motto Europe needs so and so much Russian natural gas. In Switzerland or Sweden, for example, it doesn't matter at all. There, you can replace the share of natural gas in the energy mix quite quickly. In Western Europe, Italy or the Netherlands in particular are now experiencing problems. So you have to take a close look at each country: How important is natural gas in the energy mix, and what percentage of natural gas comes from Russia? Then the situation is put into perspective. Under no circumstances should we make the mistake of simply buying into these excited images that politicians are conveying.

Putin's announcement has already caused the price of gas to rise by around 25 percent.


Yes, but that's a risk premium, so to speak, because the market expects the supply to tighten. But so far there is just as much oil and gas flowing out of Russia as there was before the war. But it's not like there's no natural gas in the world now, or that the world is dependent on Russia or at Russia's mercy, for better or worse. Now we should move to a globalized, or LNG, gas market. The U.S. has already signaled that it wants to supply Europe with LNG tankers.

Can this really circumvent the sanctions?


Well, to bring in the foreign currency to Russia, we don't need the central bank in principle; they still have non-sanctioned banks that handle the business of gas payments. The best example would be Gazprom Bank. So this step that Putin took yesterday, I don't really need it. I could also collect the foreign currency normally, i.e. through normal commodity trading. But of course, when you look at the Russian economy, the Russian government now has a lot of problems to solve at the same time.

Which ones in particular?


It has to slow down the currency devaluation, it has to plug the holes in the bank balance sheets, because the companies are slowly starting to collapse. And Russia will have to intervene very deeply in its national welfare fund. And on the other hand, it's not selling oil or gas anymore.

It's about cushioning the economic consequences of the sanctions for the real economy and for the financial sector. And this balance, it's getting worse by the day.

And at some point, the national welfare fund will be empty. Then the state will have to keep the country going with the money printing machine. And that is the great tragedy of this story. The war doesn't end, but the Russian real economy, it will completely decay.

But you say an energy boycott would not stop Putin's war machine.


Exactly. It wouldn't stop the war. That's because of two things. The Russian war machine is independent of the export business. We talk a lot in the West about exporting oil and gas, and that is also significant for the Russian economy, but not for the Russian military. If you look at the war in military economic terms, you have to look at two things. One is the defense industry, where the weapons and the vehicles are manufactured. And that is completely self-sufficient in terms of raw materials.

In terms of labor, in terms of technologies, in terms of financing, it doesn't depend on foreign exchange earnings. And the second important point, that is the logistics, that is, first of all, the fuels oil, diesel, kerosene. And all this comes from Russia's own production.

Out of eleven million barrels of oil per day, three million per day go to Russia's own consumption. And that includes the armed forces. That's all supplied by Rosneft and invoiced in rubles. Likewise, the armed forces are paid in rubles.

That's exactly why this consideration doesn't work. That people in the West say okay, now we boycott Russian oil and gas and then the war will stop. That is not the case, and I can only warn against uncritically adopting this line of thought. The war will not end because of that.

Economically, you already see a reversion to Soviet times.


Yes, we actually have to say goodbye to modern Russia. Day by day, we are moving more and more in the direction of the Soviet Union, where we say: There is this huge military apparatus that swallows up most of the state budget, and then there is subsidized basic foodstuffs for the population. And besides that, there's nothing else.

And that's why I say it's economic suicide. It is the reversion of an economy to a developing country.

Will there be a switch to a war economy, even with the confiscation of foreign companies?


In principle, it is possible to convert an economy to a war economy, but not overnight. We are dealing with a complete failure of the Russian leadership. This campaign in Ukraine was designed to be an operation of a few days, so maybe four to five days. Then you took Kiev, then you deposed the government and installed a puppet regime.

If you plan with that in mind, then of course you are not preparing the national economy for prolonged armed conflict. But if they now say, we are preparing for a month-long campaign into a country that is one and a half times the size of Germany and has a population of 44 million, then, they have to prepare the national economy for years beforehand.

Putin has already made such approaches, after all, the Central Bank began to build up these reserves back in 2018. And Russia suddenly changed its debt policy and started to reduce its foreign debt. On the other hand, it must be said: of course, this is amateurish. You can't run an operation of this size against a territory of this size with 200 billion welfare funds. So you would really have to rebuild the entire national economy.

Do you see any possible turning points where the price becomes too high for Putin?


A major turning point will certainly come when Russian artillery is exhausted, that is, when it runs out of shells. There comes a moment when the national defense industry has to step in and supply very large quantities. The situation was similar in the first weeks of the First World War.

When the war broke out in 1914, no one expected it to last long. And even then, the national economies and the armaments industry were not prepared for such a thing. As early as the fall of 1914, artillery and shells were rationed, and the troops were told that they could only fire so many shells a day. And that's the big question now; is the Russian arms industry able to deliver supplies quickly? It can produce, that's not the problem.

The problem is more logistical. So it can get its production into the combat zone so that the war continues from that side. That will be the case in about seven days and will become an important turning point in the war.

Putin seems to be cornered, do you fear a widening of the war, even with pulling the nuclear option?


I don't think one should overestimate that. Putin still has enough ways out. For example, he can say: Yes, I have now achieved my war goal. Ukraine declares itself neutral again and will not join NATO for the foreseeable future.

He does not necessarily have to escalate now. It is entirely possible that he will also sell what the West considers a military defeat as a victory at home. As long as he controls the propaganda and the security forces, that is entirely possible. There is then a parallel world of official narrative, as in Iran or North Korea, for example. You don't always have to think about nuclear escalation right away. You have to take into account that Russian rhetoric is very colorful and very self-confident. One should not overstate that.

https://www.tagesspiegel.de/politik/.../28196134.html

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With the last answer I disagree, that is too optimistic and too focussed on rationality.

What drives Putin, whom I diagnose with a narcissistic-psychopathic personality disorder with megalomianc and paranoid delusions, is not so much reality-grounded rationality anymore, but emotion, and last but not least: hate on the West and a feeling of deep own offence for having been rejected when not being allowed to play the first violine as he wanted. Observers say that he had changed in the recent months, two or three years, and his cold facade repeatedly collapsed for a few seconds when talking about people disagreeign with him or about the West which he seems to dispise with a passion, and that then he became loud, used suddenly a rantign, emotionally charged language with juvenile terms and slurs, before his ice-cold facade and pokerface was established again. In the German-languege documentary I linked to two or three days ago, this was also pointed out by people meeting him vis-a-vis. His tone already changed however around 2007, when NATO had moved further east.

[mapuc]

Could Ukraine become a modern version of the Vietnam war ?

Where Russia is north Vietnam and Ukraine is south Vietnam.

The question came to me when I saw the news where they talked about China and their not-so-eager-to-condemn-Russia's-war attitude.

A Vietnam where NATO support with defensive and offensive weapon to Ukraine (south) and China supporting Russia (North)

Markus

[Buddahaid]

I doubt it. Russia is fast turning itself into anything but a superpower and I don't see why China would want to stop that.

[mapuc]

Originally Posted by Buddahaid

I doubt it. Russia is fast turning itself into anything but a superpower and I don't see why China would want to stop that.

Maybe you're right
As I see it the Russian's continues war campaign hinges on whether China will support Russia. If Russia hasn't decide to use either chemical or nukes as a last resort.

Markus

[Buddahaid]

I think Russia has already had more casualties in one months of the Ukraine war than they had from ten years in Afganistan as the Soviet Union, and that war broke up the the great union. Besides it's not as if Russia is a fellow communist state anymore.

[Rockstar]

[tmccarthy]

Originally Posted by mapuc

Could Ukraine become a modern version of the Vietnam war ?

Where Russia is north Vietnam and Ukraine is south Vietnam.

The question came to me when I saw the news where they talked about China and their not-so-eager-to-condemn-Russia's-war attitude.

A Vietnam where NATO support with defensive and offensive weapon to Ukraine (south) and China supporting Russia (North)

Markus

I don't think so because the US was fighting a limited war in Vietnam. I think Russia is starting with a limited war but is really fighting a total war not yet seen. I think this is a "modern version" of the Chechen Wars and Russia can and I'm assuming is prepared to destroy every city in all of Ukraine like they did to Grozny.

Cheerful thoughts... sorry I haven't seen anything good in this since the beginning and can't believe it's happening.

-Tim

[tmccarthy]

I'm working on a video about the history of the NATO expansion. I started to put together a simple montage just to show the many different countries that have their militaries involved in today's situation. But it has evolved into something else unintentionally, I've learned some new things and it's raised a lot of questions along the way. Still working on it but I just sent a friend this rough cut...

[Jimbuna]

Ukraine is re-occupying some towns and defensive positions up to 35km east of Kyiv, the UK Ministry of Defence says.

US President Joe Biden is due to visit a Polish town near the border with Ukraine as he wraps up his trip in Europe.

On Thursday Biden told world leaders in Brussels the US would "respond" if Russia uses chemical or biological weapons in Ukraine.

Ukraine's President Zelensky said Europe was "a little too late" to stop Russia's invasion, by not sanctioning Moscow and blocking the Nord Stream 2 gas pipeline earlier.

In a late-night video address to the EU Council in Brussels, he also pleaded for his country's entry into the EU

At the emergency summit, Nato's Jens Stoltenberg said four new battlegroups would be sent to Slovakia, Hungary, Bulgaria and Romania.

Russia and Ukraine held their first formal prisoner swap since the war began, officials say.

[Commander Wallace]

Originally Posted by tmccarthy

I don't think so because the US was fighting a limited war in Vietnam. I think Russia is starting with a limited war but is really fighting a total war not yet seen. I think this is a "modern version" of the Chechen Wars and Russia can and I'm assuming is prepared to destroy every city in all of Ukraine like they did to Grozny.

Cheerful thoughts... sorry I haven't seen anything good in this since the beginning and can't believe it's happening.

-Tim

I couldn't agree more. I will ask you this since you are putting together the map of NATO expansion and may have more insight. This is also an open question to our other Subsim members.


NATO started to expand eastward after the breakup of the Soviet Union / Fall of Communism in 1991. Why then did NATO need to expand Eastward ?
Wouldn't it have been better to show a sign of Good Faith and leave the current members numbers as they were ? Certainly, the U.S and other European countries like Germany and Great Britain and others could have worked with the former Soviet Bloc countries like Poland that had been in the sphere of Influence behind the Iron Curtain. This would not require membership in NATO.

I am a U.S Citizen, born and bred but I also think we have mishandled a number of things very badly. The above may be one such blunder.

[Onkel Neal]

Originally Posted by Commander Wallace

I couldn't agree more. I will ask you this since you are putting together the map of NATO expansion and may have more insight. This is also an open question to our other Subsim members.


NATO started to expand eastward after the breakup of the Soviet Union / Fall of Communism in 1991. Why then did NATO need to expand Eastward ?
Wouldn't it have been better to show a sign of Good Faith and leave the current members numbers as they were ? Certainly, the U.S and other European countries like Germany and Great Britain and others could have worked with the former Soviet Bloc countries like Poland that had been in the sphere of Influence behind the Iron Curtain. This would not require membership in NATO.

I am a U.S Citizen, born and bred but I also think we have mishandled a number of things very badly. The above may be one such blunder.

If you were a citizen in a former Russian-controlled country, you might have a better idea why they wanted to join NATO.

[Commander Wallace]

Originally Posted by Onkel Neal

If you were a citizen in a former Russian-controlled country, you might have a better idea why they wanted to join NATO.

I completely understand that and agree with you, Neal. However, as I said, If the Soviet Union had been dissolved, then were they fundamentally not a threat. Certainly, I understand Russia still maintained a vast war machine. I think with economic cooperation and integration of the former Eastern European countries, there may well have been a bit more stability. We don't trust Russia and for good reason. I'm sure Russia doesn't trust us either. I think we and Russia missed a great opportunity to build on the trust initiated by Reagan, Thatcher and Gorbachev.

I know how much those countries suffered under the control of the Soviet Union. I just think there may have been a better way that may have been a stabilizing factor in Eastern Europe.

[Skybird]

It is understandable that citizens in former Warsaw Pact memberstates wanted to slip under the protective umbrella of NATO, however: non-members do not have an inherent claim for getting under the protective umbreella of NATO. They can ask, but NATO emembers have any right one could imagine to say not only Yes, but also to say No.

We will never know if Putin would nto have gone mad if those events would not have happened, I perosnally saw the Eastern expansion of NATO as a provokation, a fault and a breaking of promises, and it is noteworthy that Putin completely chnaged his stance towards the West after it has happened, immediately, as if you were flipping a switch. However in recent weeks I got some doubts on it, and maybe it would not have made a difference, the perceptions of the West as somethign to be hated and that is in decline and degeneration probably would have stayed the same, at least for Putin. We will never know for sure if it would have made a difference not to expand. Possible that then Russia would have sought to expand its own influence there again, like it lured Belarus and two, three other ex-Sovjet provinces back into its orbit. And if that would have happened , we maybe would ask then: wouldnt it have been better if we gave those states NATO membership...

But all that is academical now. We need to deal with the present, because that is the only reality we have got.

I posted an interview with Richard Ned Lebow some days ago, why wars are being fought, and the author , a world-famous war historian, argued that we overestimate the relevance of rational decisions based on egoist motives for going to war, he showed in his work that since 1648 the overwhelming majority of wars were launched instead more by hurt sentiments of people, or individual leaders offended sentiments, and national feelings of unity. He also showed that the vast majority of wars of aggression - got lost by the aggressor. That is counter-intuitive and against what mainstrema thinking believes it knows about the origins of war. But it holds plenty of empirical evidence. We see this pscho-dynamic in football fans who feel with their club. If it looses, they fell all bad, if it wins, they all feel triumphant. Citizens of nations tend to tick like this, too. Inm the end, its "primtive" tribal psychology. Primtive maybe, but nevertheless: real. Its foolish to ignore it.

https://www.subsim.com/radioroom/sho...hard+New+Lebow

Other authors before have shown that oroiginally wars were hoighly ritualized events with strict rules and hardly aiming at completely annihilationb of the enemy, in certainb prnmtive societies until today wars are more about posing and simple acts of showing courage instead of conquest, destruction and mass killing. This changed with the industrialization of warfare, and the forming of nations. From "sports" to"gladiator games" to "wars" in modern understanding, so to speak.

Very interesting stuff.

John Keegan: A istory of Warfare, 1993
Martin van Creveld: The Culture of War, 1988
Richard Ned Lebow: Why Nations Fight, 2010 - This one I am currently reading.

[Exocet25fr]

DEFCON Level 3 > 2

Russian Foreign Minister Sergey Lavrov says Russia is facing total war declared by the West !

[Skybird]

Deutsche Welle:


In the future, the USA wants to supply the European Union with up to one-third of the natural gas that the EU currently obtains from Russia. This was announced by EU Commission President Ursula von der Leyen in Brussels. Together with U.S. President Joe Biden, she signed an agreement under which the U.S., together with international partners, intends to export an additional 15 billion cubic meters of liquefied natural gas (LNG) to the EU as early as this year. By 2030, the additional volume of U.S. deliveries is then expected to rise to 50 billion cubic meters per year.

Canada, the world's fourth-largest oil producer, wants to increase its oil exports by about five percent against the backdrop of the Ukraine war to help its European allies move faster away from Russian energy supplies.


(...)

Germany is reducing its dependence on Russian energy imports "at a rapid pace," according to German Economics Minister Robert Habeck. As early as the middle of this year, "Russian oil imports to Germany are expected to be halved," the Green minister said in Berlin. By the end of the year, the aim is to be "almost independent" of Russian oil.

The dependence on coal will drop from 50 to about 25 percent in the coming weeks, Habeck continued. By the fall, it will be possible to become independent of Russian coal, he said. In the case of gas, the process will take somewhat longer. Here, the German government is striving to become "largely independent" by mid-2024.

Translated with www.DeepL.com/Translator (free version)


Germany is the only coastal nation over here that has no liquified gas terminals, these must be build. Some years ago a plan to build such terminals was sacked due to polls amongst th einbsuitry showed that thetre was zeor interest in the idbiustry ot buy US liquified gas, because it was more expensive than other liquified gas options, the Ameicna gas stesm form fracking whcih is very controversial ove rhere, and the ags needs expensive special clenaing processes before use because of its higher degree of chemical impurities. These wree the reaosns why US liqified gas did not beocme more popular. I agree with all these reaosns, bit as thign s stand right now, we have no other chpice. However, the terminals will take years to build (see Berlin airprort...), until then any gas for Germany needs to be unloade din other natiosnb and then being delivered to Germany via infrastructure existing on the continent. Can be done, but its a bit complicated.