Hey, It's Moscow. People Disappear All the Time.

 

There's been some speculation that Putin's decision to invade Ukraine has little to do with Kiev and much to do with threats at home in the Kremlin.

There's a pattern here whether it's invading Ukraine and seizing Crimea or helping an old reliable put down a democracy uprising in Belarus or crushing Chechnya or exchanging artillery barrages with Georgia in 2008. Every now and then Putin has to flex his muscles, sort of like the tail wagging the dog.

So far the invasion hasn't gone entirely Putin's way. That could be a problem for Vlad at home.

The war, it seems, is not very popular with the folks at home. There have even been mass protests resulting in hundreds of arrests. 

The big setback has been Russia's flagging economy.  The already weak ruble has dropped a further 30 per cent.  Back in 2012 the ruble was worth about 25 cents, USD. Today it's less than a penny.  The central bank's lending rate has jumped to 20 per cent.  Foreign corporations are packing up and getting out. The European Union's flirtation with Russia has taken a big hit.

By cutting off Russian banks from the Swift payments system, not only is the country’s industrial base losing access to foreign currency but Russian citizens’ individual credit card transactions are blocked.

Combined with freezing most of Russia’s foreign exchange reserves, the EU has made a political decision to force a deep recession on the Russian economy, with the hurt and pain that will be felt by Europeans as a result becoming a political irrelevance. Sacred cow No 1 slain.

But so much more has followed. The EU will ask states to grant asylum to Ukrainian refugees for up to three years, using a legal instrument that exists but which has never been triggered. Countries who have baulked at taking in refugees have opened up their borders. So much for sacred cow No 2.

EU officials say they expect Ukraine’s application for EU membership “imminently”. There is an expectation that the process of accession will be sped up. Croatia was the last country to join the EU in 2013 and there has been little appetite to open up again. Sacred cow No 3 is on its way out.

Then there is the EU’s arrival on the scene as a funder of lethal weaponry for a nation at war, a “quantum leap” beyond anything we have seen”, said Jacob Kirkegaard, senior fellow at the German Marshall Fund.

In Germany, the chancellor, Olaf Scholz, abandoned the country’s postwar approach to conflict by announcing €100bn (£83.7bn) Sondervermögen (special assets) to rearm.

Since Ostpolitik, the normalisation of relations between then West Germany and the east, policy has been predicated upon Russia being a status quo power, not an imperialist one. Berlin’s mercantilist approach had to go, along with sacred cow No 4.

Meanwhile, BP is dumping its 20 per cent interest in Russian oil giant, Rosneft, which could be a 25 billion dollar write off.  Even the Nordstream 2 pipeline is in peril.

When the Swiss freeze your assets you're in deep kimchee.

The Globe reports that the Institute of International Finance predicts that Russia will default on its global debt obligations and could sustain a double digit economic contraction.

Putin has caused massive and lasting damage to his country's already weak economy. That could be his undoing.