Sunday, March 2, 2014

The Ukraine Crisis: Europe versus Russia, and parallels to 1914

In a previous article about the now rapidly-escalating, ten-day old Ukraine crisis I asked:

"What on earth are the EU doing so conspicuously supporting a government of uncertain designs and unstable character, that was brought to power with the help of a fascist militia? It looks for all the world that the EU has seriously lost the plot"

The reasons for such marked support for the "revolutionaries" of the Euromaidan at first don't seem obvious. While the fascist-style extremists who supported the forceful change of government are in a clear minority, their existence is beyond doubt. And while the fact that Yanokovich government was deeply corrupt and used bullets to suppress dissent in its final days is also beyond doubt, it still leaves the EU and the USA in a very uncomfortable place politically.

European emotions

So, why did the EU come out so strongly in the opposition's favour?

For all the talk of Ukraine being a "European nation", the reality is that the territory as it exists today is on a clear cultural divide between East and West. For historical reasons, the north and west are largely Ukrainian-speaking, with the south and east Russian-speaking; the former looks to the west, the latter to the east. This divide goes back hundreds of years, and I don't need to go into the details. Since independence, this divide has been political as well as cultural, with the national elections see-sawing between Russian-speaking and Ukrainian-speaking victors.

The many EU and Western pronouncements in favour of the Ukrainian opposition's desire to be a "European nation" sound more emotional than rational, certainly when you look at facts on the ground. It is this lack of rationalism to the political reality that has made the new Kiev government's ardent Western support so dangerous. Regardless of the supposed support for the Ukrainian-speakers of Ukraine for their country to side with Europe, this ignores the contrary wishes of their Russian-speaking compatriots; in other words, it is rule by majoritarianism rather than by considered consent. It also smacks of Western hubris, but I'll come to that point in a moment.

The EU has been expanding to the east for the last decade. I wrote before about Russia's perception of Western encirclement; paranoid or not, this is the psychology that exists in the mind of many Russians. Bringing in the former-Communist Eastern Europe and Baltic States into the EU may have seemed like a natural progression of the EU to gather together all historic "European nations" into an economic club, but such hazy and emotional ideas are not the stuff of hard-headed and sensible politics.

In the same way the founding of the Euro currency was based as much (if not more) on emotional ideas as economic reality; the price of that "emotionalism" is being felt in Southern Europe now. The Euro as a currency was implemented without the proper checks being put in place on all its member states. It was implemented as a piece of European hubris, at a time of emotional idealism.
So the EU's support for bringing Ukraine into the fold smacks of the same type of emotional hubris; European policy decisions based on emotion than on rationalism. We've been there before, but more about that later.

Economic "lebenstraum"

There is another important point to mention; an economic motivation for European support for Ukraine. Apart from the emotional arguments, having a Western-oriented Ukraine fast-tracked into signing EU treaties (and the eventual aim of joining the EU fully), introduces large economic and labour-market opportunities to Europe.

The admission of the group of East European countries (Poland in particular) into the EU provided a boon for business; a pool of cheap labour from these new member states enabled European businesses to bring down labour costs, allowing them to save a great deal on salary overheads. I've mentioned this point about "UK PLC": how Britain's establishment and business sector in instinctively pro-Europe because it saves them so much money on labour costs.

This point is true across all of the EU. In this way, the financial crisis, on top of the free movement of low-wage East Europeans across the EU, massively brought down costs to the large employers. A larger pool of unemployment is therefore economically useful (provided it doesn't affect productivity), as it allows employers to dictate terms.
After bringing in Poland (itself with a population the size of Spain), Ukraine would be the final step in this process, with a population even bigger than Poland; with the European east providing a seemingly limitless supply of cheap labour for the rich corporations of the West.

No wonder some commentators compare corporations to fascists; seen in this light, Eastern Europe and the EU's "drive to the east" (once fantasised about by Kaiser Wilhelm's Germany) is seen in similar terms to the Nazis.
To the Russians, this is a very old tale, being re-hashed for the 21st century.

One more point to mention, which is relevant to this expansion: what happened to Turkey? If Ukraine, why not bring in Turkey?

Turkey's bid to enter the EU was never popular with the "big two", France and Germany. The main reason was said to be cultural: Turkey was a Muslim country, so would be difficult to fit in with "Christian" Europe. Another reason was its size, with a population the same as Germany's, it would act as huge counter-weight to Franco-German dominance (though now the dominance is clearly just German); this was also a reason why Britain was a big fan of Turkey's entry to the EU.

There is another, very economic, reason why Turkey's bid has floundered. Turkey's economy is strong, in many ways modeled on that of Germany's. Turkey has a strong manufacturing sector of its own, and while its own workforce, like Ukraine's, would bring down costs to European employers if they entered the EU labour market, Turkey's large manufacturing-sector economy would be a clear rival to Germany and (to a lesser extent) France, not to mention Italy. This would be very bad news for the big European corporations.

Ukraine is a good candidate for EU in the long-term because all it really has to offer is its own workforce; its factories cannot hope to compete with Europe. This explains why the EU and the IMF are so interested in dividing up Ukraine's assets like a post-war victor. By contrast, Turkey's economy could be a real rival. So it is also for this (very economic) reason why the EU is shining on Ukraine's European future, while forgetting about its one-time plans for Turkey.

Parallels to 1914

Europe's siding with the new Kiev government in then, on one hand emotional, and on the other economic, but in both ways is a sign of dangerous hubris.

The expansion of the EU in the last decade has therefore seen a sort of "Balkanisation" of Eastern Europe into pro-European and pro-Russian camps. On the Russian side, there is only Belarus and Ukraine left; the rest are all firmly in the European economic camp. In the years leading up to the First World War (and especially following the Balkan Wars of 1912-13), the Balkans was divided up into camps supporting either Russia or Austria. So the parallels are there to see.

Putin's recent desire for a "Eurasian customs union" to rival the EU makes sense when seen in this light. It is a way to hold on to his remaining allies. So Ukraine's decision to side with Moscow and not Brussels in December was pivotal.

What's often forgotten about the "July Crisis" following Franz Ferdinand's assassination is that no-one truly wanted a European war. The alliances in place were purely defensive in character, and in the diplomatic period between Franz Ferdinand's death in late June an the outbreak of European war in early August, no-one in the European capitals thought that a general conflagration was a serious possibility. Everyone thought that everyone else was bluffing. Because crises in the years prior to that had never led to a serious escalation, everyone believed it would be equally impossible this time around.

While Russia (and to a lesser extent, France) have a lot of the blame for escalating the crisis beyond being a war between only Austria and Serbia, it has always been Germany that has received the most blame historically.

Coming back to the present day, we can see that Russia's military annexation of the Crimea is Putin's reply to the pro-European opposition taking power in Kiev. Russia's military seem to be on the verge of an invasion of Ukraine proper. As Putin considers the government in Kiev to be usurpers, he feels he has the right on his side; furthermore, he clearly believes that the West will do nothing.

Here we are back again to the dangerous game of bluff that led to the First World War. Because the West did nothing against his war against Georgia in 2008, Putin believes the same will be true now. While it is easy to understand why he would think that, Ukraine is not Georgia, for a number of reasons.
As said before, the Europeans feel they have some kind of stake (emotional and economic) in Ukraine's future; the USA also has a stake in the Ukraine crisis, both politically and strategically. Furthermore, Russia has thwarted American plans over Syria and other issues in recent years, so the mood in Washington seems like one of "thus far, and no further". That doesn't bode well for a quick resolution.

For Russia and Putin, Ukraine really is a "line in the sand" issue. Now that Ukraine has issued a mobilisation of its forces, it has also cited an agreement from 1994 that Russia and the USA signed to protect Ukraine's territorial integrity and her nuclear assets, imploring for Western support.

This sounds ominously like when the different European powers cited various alliance treaties, leading to war.

The reaction of Europe and the USA will be key. It was emotionalism and calling each other's bluff that led to war a hundred years ago. It looks like those in power have yet to learn those lessons.

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