Russia-Ukraine war and related tensions Megathread

[urutzizu]

NYT reports US moving towards secondary sanctions to severely limit Russian oil revenues. Previously US held back from secondary sanctions because of the potential backlash from China, India etc. (and Europe, which is still unable to agree the proposed oil embargo).

https://www.nytimes.com/2022/05/19/us/politics/russia-ukraine-oil-sanctions.html

U.S. Aims to Cripple Russian Oil Industry, Officials Say

BERLIN — The Biden administration is developing plans to further choke Russia’s oil revenues with the long-term goal of destroying the country’s central role in the global energy economy, current and former U.S. officials say, a major escalatory step that could put the United States in political conflict with China, India, Turkey and other nations that buy Russian oil.

The proposed measures include imposing a price cap on Russian oil, backed by so-called secondary sanctions, which would punish foreign buyers that do not comply with U.S. restrictions by blocking them from doing business with American companies and those of partner nations.
[...]

The U.S. government could also cut off most Russian access to payments for oil. Washington would do this by issuing a regulation that requires foreign banks dealing in payments to put the money in an escrow account if they want to avoid sanctions. Russia would be able to access the money only to purchase essential goods like food and medicine.

Not a full block on Russian Oil imports, but the effects for Russia would be similarly painful. In March China threatened the US with "firm and forceful" retaliation if US implements secondary sanctions (although realistically speaking, there are few options here, the reason why Chinese companies have already been very reluctant to do more business with Russia).

[urutzizu]

Instead of sending tanks to Ukraine Scholz is posting this:

https://twitter.com/GermanyNATO/status/1530166800490680320?s=20&t=yPngl6RQgxYDd_6UjyOzhA

The comment was made at a large gathering of Catholic laity ('Katholikentag' - a major social and political event in Germany) and was part of a general defence of increasing German military spending and sending arms and money that can be used to buy arms to Ukraine to an audience not terribly keen on either. Unfortunately the language used in the bit quoted there is a little ponderous and the translation a little too literal which makes it easy for a certain type of grifting conspiracy theorist (and I'm afraid there's a lot of this about now: there are obvious parallels with the sillier end of Resistance Twitter during the Trump administration) to make it go viral without context. Always check where something has come from.

This would be an correct point in and of itself (although I am not sure about the "translation a little too literal" part - if anything in the the German version the implication of "darf" is actually worse than the English translation "can").

The problem is, it is literally almost every day something like this happens. The German readout from the phone call yesterday almost makes you want to cry: "Putin assured..." "Putin agreed...", Scholz and Macron "took positive note...", Scholz, Macron and Putin "agreed on the central role of the United Nations" (The French readout has nothing of the like). This is a guy who is in the process of committing a genocide, and condemning large swaths of the world's most vulnerable people to starvation.

And I would even have some tolerance for Scholz if there was the convenient excuse of "it's not a Scholz problem, it's a German problem", "he has to do this to keep the German people onside". This would have even been correct right up until 24/2, I actually believed this for a long time.
No! No other Minister does this. Literally every opinion poll shows he is out of step with a clear majority of the German population, and even his own coalition. He is getting criticized from journalists across almost the entire media spectrum, centre-left and centre-right. It is increasingly tenuous for me, as a guy who voted for the SPD and actually *wants* to support him, to find excuses every. single. time. - other than: he genuinely believes this.

[urutzizu]

https://mobile.twitter.com/haynesdeborah/status/1541850166390669313

And, as predicted, Turkey approves NATO membership for Finland and Sweden. And even in time for Madrid summit. Despite the media narrative at end of the day there is a fundamental difference between a regime like Hungary which is a genuine admirer and collaborator of the Russian regime, and Turkey which has legitimate national interest, but fundamentally no sympathy for Russia.

According to Turkish media these are the concession Turkey recieved:
- Sweden/Finland will lift its arms embargo
- Both will support Turkey on PKK, stop support to YPG
- They will amend their laws on terrorism
- They will share Intel with each other
- They will extradite terror suspects
- Finland and Sweden will support Turkey’s participation to EU’s Pesko
- Turkey, Finland and Sweden will establish a permanent joint mechanism to consult on justice, security and intelligence

(of course this is likely to be a bit exaggerated)

Nothing about US F-16 sale, but likely discussed behind the scenes in the Biden phone call with Erdogan this morning.

[urutzizu]

https://www.scmp.com/economy/china-economy/article/3183537/us-trade-sanctions-china-attempt-frighten-firms-amid-soaring

US implements sanctions against 5 Chinese companies for technology transfer to Russia. The companies in question (Connec Electronic, King Pai Technology, Sinno Electronics, Winninc Electronic and World Jetta (HK) Logistics) are relatively minor, and these are technically not secondary sanctions as is commonly understood, but sanctions for violating existing export controls against Russia, which function extraterritorially. Nonetheless a clear signal. A number of companies from other countries such as the UK, Singapore and Vietnam but many with a presence in China were also sanctioned.

I have posted this before, but from what I have seen the vast majority of Chinese companies seem very reluctant to do anything with Russia that might make them vulnerable to sanctions. Sanctions-busting seems to be much more going on through countries like Belarus, UAE and through Central Asia and the Indian subcontinent.

[urutzizu]

Sep. 25th 2018, UN General Assembly:

https://twitter.com/marcusgilmer/status/1044604107997237249?

And here is Germany['s Foreign Minister] literally laughing at Trump after he says the country could become totally dependent on Russian energy

https://twitter.com/dbroessler/status/1045058678469079040
Statement German Foreign Minister, same day: "There is no dependence on Russia, especially not on Energy ... We will not get tried from confronting these claims with the facts"

July 21st, 2022:

Head of the German government energy regulator, Bundesnetztagentur: "We are at Russia's mercy"

https://www.welt.de/politik/ausland/article240029967/Gas-Lieferungen-weiterhin-unsicher-Bund-will-Vorgaben-fuer-Gas-Speicher-Fuellung-verschaerfen.html [03:50 am]

German foreign Minister: "if we don't get the gas turbine, then we won't get any more gas, and then we won't be able to provide any more support for Ukraine, because then we'll be busy with popular uprisings"

[urutzizu]

Well, then it's a good thing our greater GDP allows us to weather the damange relatively painlessly while Russia will be crippled for decades to come. The West's economic dominance affords it considerable geopolitical power if it's actually willing to make full use of it, and I guess now is the critical test to see if we are.

Given that no country outside of “the West” will ever trust it or more importantly, its institutions, again after this year, it may well be the last time.

This is the watershed moment, guys! The handling of the financial and COVID-19 crises, invasions like that of Iraq and the rise of joke premiers did not destroy Western countries' relationships with the rest of the world, but sanctions on Russia will.

Never mind that harsher sanctions regimes have been imposed for much less without denting these relationships. Countries will accept being sanctioned for pursuing nuclear energy like Iran, but they won't accept the possibility of being sanctioned if they choose to invade their neighbours.

/s

I should mention the same goes for Ukraine, too. We've sold out other countries and peoples before, so selling them short wouldn't come close to completely isolating Western countries from the rest of the world.

Probably should’ve phrased the comment in a more disciplined manner. Obviously, “the West” will continue doing business with “the rest” (just as we have continued to do business with Russia, because a full unwinding of our economic relations is impossible). Nonetheless, the actions of Western governments will damage their ability to exert influence over the rest of the world in the long run, continuing the process that, yes, involved the Iraq debacle, the financial crisis etc. Take an example - the Canadian government passed a bill last month enabling the expropriation of the assets of Russians in Canada, based on the dubious assumption that these all of these individuals are in some way responsible for the invasion of Ukraine. If you’re a Chinese investor, or a Saudi investor, or an Indian investor, and you’ve put money away in a Western bank or in Western real estate under the assumption that this money would be safe as long as you complied with that country’s laws (rule of law!!!) this is going to give you significant pause for thought, as you’ll be thinking “gee, if my government does something that upsets the West am I going to lose my money”? Too soon to say how this will unfold, but I think a slowdown in investment by “the Rest” in “the West” is a likely outcome of the unhinged Western response to the war in Ukraine. Why place your faith in Western rule of law if it can be junked at the drop of a hat?

The same of course goes for other flows of trade and investment; de-dollarisation is also going to be accelerated by this. All this will, in time, reduce the ability of Western governments to throw their weight around. Alternative institutions will be constructed, countries outside “the West” will seek means to insulate themselves from Western meddling, as the Russians have already (incompletely) done. You know, the policy of massive sanctions has already failed; it has not forced Russia to end the war; it has not prevented a single death or war crime. We should have known this would happen, given that massive sanctions have not worked against any other country in recent history. All that remains is the spectacle of Western governments desperately scrabbling around for ‘things to do’ to ‘punish’ Russia, as they push their own economies into recession and hurt the well-being of their own citizens. Maybe Russia will ‘crack’ first (although a Russian crackup would not be a pretty sight and would cause enormous problems of its own) - personally, I don’t think that’s going to happen, so all of this sturm und drang will have been for nothing.

The distrust point is correct, but I really doubt whether it will be enough. With China at least the distrust has been there for a very long time, at least since 2012 (see: Document No.9), the Chinese government has definitely identified any dependence on the west as a massive threat to national security, and tried to ensure it is sanctions-proof from sanctions through western (or western-aligned) financial markets, tech etc. and it hasn't really worked. If anything they have gone in the other direction. Which is why you have seen China cooperate with the SEC regarding HFCAA, to avoid getting Chinese companies delisted from US stock exchange. Or semiconductor where China is extremely dependent, and although making efforts, imports have actually increased further recently. And fundamentally, you also need an alternative, which so far isn't forthcoming. It is a quagmire, because the Chinese capital controls stop it from becoming a more attractive alternative, and the Yuan replace the Dollar, on the other hand Beijing cannot give up the financial controls, because they are crucial to the economic model and would make the country much, much more vulnerable to the west. And there are obviously, well publicized currently, other aspects of the Chinese financial market, make it less attractive and more high risk, which is and will be a likely permanent push factor.

It's why a couple of months ago, Chinese authorities met for this reason with representatives of all large foreign and domestic banks operating in China, but when they told them to reduce exposure to the west in preparation of sanctions over Taiwan, the unanimous answer was "Sorry it's impossible, it would require totally changing our entire economic model":

https://www.ft.com/content/45d5fcac-3e6d-420a-ac78-4b439e24b5de

“No one on site could think of a good solution to the problem,” said another person briefed on the meeting. “China’s banking system isn’t prepared for a freeze of its dollar assets or exclusion from the Swift messaging system as the US has done to Russia.”

When one official asked Chinese bankers if they could diversify into more yen or euro-backed assets, they replied that the idea was not practical.

Of course as pointed out in the article, it goes both ways: Considering how painful economic war is proving for the west against Russia, doing it to China would be completely impossible, so China can allow exposure as it is essentially "too big to sanction". Although China is probably the only western adversary in this position.

[urutzizu]

https://www.theguardian.com/travel/2022/aug/10/eu-under-pressure-to-ban-russian-tourists-from-europe

Major debate in the EU to ban Russian citizens from short stay visas. Will be discussed at next sanctions package at the end of the month. Poland, Baltics, Czechia, Finland have already done this, but because Schengen visas issued by any MS are valid everywhere in EU, it only works if common EU decision is taken. It is clear that despite the suspension of flights, many Russians are still entering the EU for short stays via Istanbul: In July Germany alone issued 5484 tourist visas for Russian citizens, considerably more than in the last year. The excuse that this is dissidents/emigrants is clearly bullsh**t, because they only valid for 90days and cannot be converted in country to immigrant visas. It is Russians having fun at Eiffel tower and St. Marks square while their country genocides.

When the first sanctions package after the Invasion was announced and visa facilitation for Russian officials was ended, the EU went to great lengths to stress that ordinary Russian citizens ability to travel was not being affected. There has definitely been a sea change in mentality here as officials have come around to the view to the member states that actually border Russia and know the country best: it is not just a Putin problem and it is legitimate to ask ordinary Russians share in the pain of the aggression/genocide the vast majority of them support.

[urutzizu]

https://www.washingtonpost.com/national-security/interactive/2022/ukraine-road-to-war/

Washington Post exclusive (paywall) on the months preceding the Invasion. A short summary:

- Biden admin was privately fully convinced in Oktober 2021 already that Russia was going to invade (publicly they kept insisting that they thought Putin had not made a decision)
- Invasion plan almost exactly as it panned out was known already then in detail
- Biden’s advisers were confident Ukraine would put up a fight, but had severe concens about Zelensky's abilities and were convinced that Kyiv would eventually fall
- Germany and France were dismissive and Ukrainians were sceptical about US warnings, not helped by US withholding details from Ukraine due to fears about Ukrainian intelligence being infested with Russian moles. Only on Feb. 18-20 (four days before) did US share detailed intelligence with Ukraine and they became fully convinced
- two camps dug in between US/UK/Eastern Europe who thought invasion was inevitable and talks with Russia meaningless and only helpful to call Russia's bluff, and Paris/Berlin who believed US intelligence was faulty due to Iraq/not seeing fall of Kabul regime
- In preparation US quietly increased force posture in Europe from 74,000 to 100,000 troops. (Publicly only far smaller movements were announced) and established a direct communication line from Ukrainian military to U.S. European Command.
- January 12, 2022, CIA Director William Burns traveled to Kiev to warn Zelensky personally about Russian plans and for the first time that Russian special forces planned on capturing/killing him personally in first hours. In the end, Zelensky decided not to release information about the Russian attack or a general mobilisation, or move for personal safety  in order not to cause public panic. He believed that this path would lead to defeat.
- U.S. intel was bewildered by the failure of communication within the Russian military about the imminent Invasion, however only very few thought Russia’s plans might actually fail

[urutzizu]

https://mobile.twitter.com/DmytroKuleba/status/1573221116113461249

Starting to feel like there is beginning to be a real shift here among Russia's Asian partners. Hours after Russia announced further escalation through mobilisation and annexation referendums, China's foreign ministry called for a cease-fire and respect for the principle of territorial integrity. Putin forced to openly acknowledge Xi's "questions and concerns" about the Invasion. Modi's looking Putin in the eye in Samarkand and telling him that "now is not the time for war". Certainly not some moral awakening, but they are, I think, getting uncomfortable that Russia's increasingly desperate and self-destructive aggression is actually undermining and risking the multipolar world order that they want.