Prediction 4 – There Is A Ceasefire in The Ukraine-Russia War
Over the coming Winter months, the potential for ground fighting in Eastern Ukraine is very limited, meaning that Russia is able to consolidate and fortify its position. The idea that Russia intended to occupy the whole of Ukraine, was always absurd. It was never capable of doing that, which Putin and his military clearly knew, and nor did they have any reason to want to do that. They can, however, consolidate control over those majority Russian areas, as they did in 2008 in Abkhazia and South Ossetia, and that provides the template for Russia in other ethnic Russian majority regions. In the meantime, Russia can continue applying considerable pressure to Ukraine and NATO, by its air campaign against Ukrainian infrastructure, and military command and control. The costs of that to Russia are fairly minimal, but they are substantial to a bankrupt Ukraine, and increasingly costly to NATO/EU that not only is sending billions of Dollars of military equipment that has had little effect, but is having to continually pour billions of Dollars into the black hole that is the Ukrainian economy.
At the same time, the economic sanctions applied by NATO/EU/G7 have been counter-productive. Just about the only currency that rose against the US Dollar, over the last year, was the Russian Rouble! At the start of February, the Dollar stood at 140 Roubles, and today stands at just over 70 Roubles, a rise in the Rouble of 100% against the Dollar, or a fall of 50% in the Dollar against the Rouble, whereas the Dollar has risen by around 20% against all other countries.
The reason for that is that those sanctions resulted in the global price of oil and gas, and of food, rising sharply, and Russia was able to continue to sell its oil and gas, but, now, at these much higher prices, bringing a bonanza to Russian foreign earnings. The same is now happening with the attempts of the EU to impose a price cap on Russian energy sales, especially at time when China has lifted its lockdowns, and its economy is likely to surge by around 20%, causing it to suck in all of the energy, food and primary products it can get its hands on. Primary product prices are expected to rise by as much as 40% in the coming year.
Meanwhile, the EU, which paid astronomical prices for gas to build up its stocks in previous months, is seeing them run down, at a time when prices have fallen. With colder weather, as with the so called weather bomb that hit North America, still to hit Europe, over the coming Winter months – Europe has only just entered Winter (21st December) – it has imposed a huge burden on itself, as a result of its boycott of Russian oil and gas. Workers across Europe are already on the march against the consequences of that, as manifest in soaring inflation, whilst governments attempt to hold back wages, resulting in a fall in real wages. Millions of workers are on strike to prevent that, and if states attempt to impose closures, due to energy shortages, they will face the same kind of rebellion that the Chinese Stalinists faced in trying to impose further lockdowns with the idiotic zero-Covid pretence. Europe will be led to turn to cheap Russian oil and gas to prevent that.
The US/NATO clearly understood that risk of the EU being led into a rapprochement with Russia, which is why it blew up the Nordstream pipelines to try to physically prevent that supply being re-established. The EU has other widening divisions with the US, as illustrated by Macron's railing at the economic war also being waged by US imperialism against the EU, via the economic nationalism of Biden's Inflation Reduction Act. Meanwhile, that US economic nationalism also impacts the US economy adversely, with lower growth and higher costs, adding to its inflationary problems. For months prior to the midterm elections, Biden drained the US Strategic Petroleum Reserve to dangerously low levels, to try to reduce petrol prices, but now it faces high diesel prices for home heating, and it faces having to rebuild the SPR at global oil prices that look set to rise to around $120.
The conditions are set for Russia to simply consolidate its position in Eastern Ukraine, as that becomes increasingly easy to defend, whilst Ukraine has no chance of winning it back, and is simply sucked into a meat grinder that drains its human, financial and material resources, as well as those of NATO/EU. Ultimately, capitalism/imperialism is concerned with those material facts, not with moral crusades. US/NATO imperialism clearly thought that Russia could be sucked into a war in Ukraine – as described in Blairite, former NATO Secretary General, George Robertson's comment that they “goaded Russia into attacking Ukraine” - that they would quickly be forced to withdraw from, thereby, seriously weakening it. They clearly believed that the kind of impact that US sanctions had on Iran, Iraq and elsewhere, would be replicated in respect of Russia, but that proved false, and backfired on them, in fact, driving Russia and China closer together, as well as a wider group of economies increasingly separating itself from dependence on US imperialism, if not actively hostile to it.
With no quick win for US/NATO imperialism, and with workers in Europe and North America striking in their millions, and set to take to the streets to oppose cuts in their living standards from rising inflation, and proposals for fiscal austerity, it is western social-democracy that could be wrecked by its war aims in Ukraine, not Russia. So, it is likely that the EU will be first to seek to pull away from continued support for Zelensky's war in Ukraine, and to press him to sue for peace. In those conditions, US/NATO imperialism will also be led to cut its losses, and regroup. Ukraine has already said it is seeking peace negotiations in February at the UN. The conditions they have set out are clearly absurd, because it would leave nothing to negotiate, and so are obviously opening positions, but it indicates the direction of travel, as they recognise the reality of the situation they are in.
A peace deal, and restoration of cheap Russian energy to Europe, together with the opening up of China, and the economic boom resulting from it, will create wholly different conditions in Europe, in the year ahead.
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