WHAT S AHEAD FOR RUSSIA AND THE WEST? FOUR SCENARIOS

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1 EUROPE POLICY PAPER 3/2015 WHAT S AHEAD FOR RUSSIA AND THE WEST? FOUR SCENARIOS JOERG FORBRIG

2 2015 The German Marshall Fund of the United States. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission in writing from the German Marshall Fund of the United States (GMF). Please direct inquiries to: The German Marshall Fund of the United States 1744 R Street, NW Washington, DC T F E info@gmfus.org This publication can be downloaded for free at The views expressed in GMF publications and commentary are the views of the author alone. About the Europe Program The Europe Program aims to enhance understanding of the challenges facing the European Union and the potential implications for the transatlantic relationship. Analysis, research, and policy recommendations are designed to understand the dichotomy of disintegration and deepening of the EU and to help improve the political, economic, financial, and social stability of the EU and its member states. In 2015, the Europe Program focuses on integration and disintegration in the EU, the deepening of the euro area, the changing role of Germany in Europe and the world, as well as challenges in the EU s neighborhood. About GMF The German Marshall Fund of the United States (GMF) strengthens transatlantic cooperation on regional, national, and global challenges and opportunities in the spirit of the Marshall Plan. GMF contributes research and analysis and convenes leaders on transatlantic issues relevant to policymakers. GMF offers rising leaders opportunities to develop their skills and networks through transatlantic exchange, and supports civil society in the Balkans and Black Sea regions by fostering democratic initiatives, rule of law, and regional cooperation. Founded in 1972 as a non-partisan, non-profit organization through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has offices in Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, and Warsaw. GMF also has smaller representations in Bratislava, Turin, and Stockholm. On the cover: German Chancellor Angela Merkel (L) looks on as Russian President Vladimir Putin (2-L) speaks toward Prime Minister David Cameron (2-R) and U.S. President Barack Obama (R) as they attend a working meeting of G8 leaders during the G8 summit at Lough Erne, Northern Ireland, Britain, June 18, STEFAN ROUSSEAU/POOL/epa/Corbis

3 What s Ahead for Russia and the West? Four Scenarios Europe Policy Paper June 2015 by Joerg Forbrig 1 The Issue and Policy Priorities Introduction The Key Dimension: Regime Cohesion in Russia vs. European and Transatlantic Unity. 3 Russia and the West: Four Basic Scenarios Rethinking Western Policy: Caveats and Recommendations Joerg Forbrig is transatlantic fellow for Central and Eastern Europe, and director of the Fund for Belarus Democracy, at The German Marshall Fund of the United States in Berlin.

4 1 The Issue and Policy Priorities The Issue Over a year into the ever-worsening Ukraine crisis, there is little doubt that an optimistic era in Russian-Western relations has ended. The post-1989 vision of a Europe that was whole, free, and at peace had long suffered setbacks and disappointments, but when Russia annexed Crimea and the Kremlin waged war in Eastern Ukraine, the post-cold War order was buried. While this is now acknowledged by most, few in Europe or the United States have taken a closer look at the potential new contours of the European order, and especially of the changing relationship between the West and Russia that lies at its heart. For the latter, several scenarios are conceivable even if these have no claim to precision. They can, however, indicate longer-term trajectories that can endow Western debate and policymaking on Russia with much needed strategic foresight. Conceivable scenarios are all based on different degrees of regime cohesion in Russia, and of unity among European and transatlantic partners. Ensuring stability of the political, economic, and social system created and led by Vladimir Putin in Russia is arguably the key driver behind the confrontation imposed by the Kremlin on the West, whose ability to respond is clearly a function of the unity it can muster between the United States and EU. High or low cohesiveness between the two sides in this contest suggests four broad scenarios, or trajectories for Russian-Western relations: standoff, Western decline, Russian decline, or chaos. Each of these constellations appears possible in the mid-term. More importantly, however, they allow for a closer look at the factors shaping individual trajectories, and not least the policy options that present themselves to the West in the short run and that principally shape relationships with Russia in the long run. Policy Priorities These scenarios underline the key importance of Western unity. In order to withstand Russia s assault, a clearer-than-ever commitment is needed to the norms underlying the European order as it has developed over the last decades. Ongoing and future violations of these principles by Russia must be punished much more resolutely and quickly than has occurred so far, while a constant effort must be made to rein in countries that are, for various reasons, at risk of breaking out of Western unity. Secondly, European resilience to Russian meddling must be boosted. Systematic measures are needed to decrease the vulnerability of Western countries, and that of Russia s neighbors, to the economic and energy pressures, political meddling, propaganda, and military threats launched by the Kremlin. In so doing, thirdly, EU-NATO complementarity and vision is critical. The EU and NATO must build much stronger complementarity and coordination than has been the case to date, acknowledging the necessity of jointly countering the combined hard and soft security threats that constitute hybrid warfare. Ideally, the EU and NATO would not limit themselves to their current membership but provide necessary assistance, as well as membership perspectives, to their Eastern neighbors. Fourthly, the United States must re-engage in Europe. Understanding that it is the end recipient of the Russian challenge, which is designed to curtail U.S. leadership in global affairs, Washington should reprioritize Russia, re-engage with its European allies, and strengthen its presence as a key guarantor of security in Europe. Finally, in Europe, German leadership is indispensable. Central to cohesion among EU members, Berlin will have to take the concerns of those EU members and neighbors that are particularly exposed to Russian pressures more seriously, formulate its position accordingly and unambiguously, and increase its political, financial, and military commitments to securing the EU and NATO s eastern flank. Few in Europe or the United States have taken a closer look at the potential new contours of the European order. What s Ahead for Russia and the West? 1

5 2 Introduction Western policy and public debate is yet to fully appreciate the extent and likely longevity of the Russian challenge. More than a year after the Ukraine crisis erupted and evolved through Russia s annexation of Crimea, its ever-less veiled war in Eastern Ukraine, and its ever-more open and broad confrontation with the West, strategic debate in the United States and, even more so, in Europe remains surprisingly short term. Western policy and public debate is yet to fully appreciate the extent and likely longevity of the Russian challenge that has been so rapidly unfolding before Europe and the West broadly. It was natural that initial discussions were reactive. They were marked by surprise and even shock at the shattering of long-held hopes and views on Russia, tried to come to terms with an emerging new reality, focused on Ukraine as the immediate problem at hand, and devoted themselves primarily to specific policy tools, from negotiations to sanctions to military support. In so doing, policy debate and decision-making in the West have largely been driven by events, ceding agency mostly to the Kremlin, instead of charting and pursuing their own course and strategy. A shift is needed in order to move the debate in a direction that is more strategic and forwardleaning. This requires a more systematic analysis of the domestic determinants of external action, for both Russia and the West. A good look is necessary at the impact, potential, and manifestation, of Russian influences on the internal cohesion and room to maneuver of the West, and vice versa. Policy options for additional and refined instruments to effectively influence Russian decisions and actions are needed, as are further measures to curtail the Kremlin s reach into Western countries. There are several key questions. What constitutes success or failure of Western action vis-à-vis Russia? What desirable and undesirable outcomes may result from individual policy options? And which formats are conceivable for a future relationship with Russia? Scenario exercises are a useful instrument for forward-looking policy consideration. They allow for the examination of different courses of developments, the impact of particular factors, outcomes of individual policy choices and actions, and conceivable resulting constellations. What is important to stress, however, is that modelling scenarios does not attempt to predict specific courses of events or to advocate certain course of action. It is merely a tool to help sharpen the analysis of both drivers and costs and benefits of conceivable developments. The scenarios examined here are derived from one central dimension. Internal political cohesiveness the cohesion of the Russian regime on one hand and the unity of European and transatlantic partners on the other will be critical to shaping the future relationship between Russia and the West, in that it determines the ability to act by either side. This suggests four broad constellations for Russian-Western relations that are subsequently detailed. Against this background, several caveats are discussed that have a bearing on Western policy choices, before a number of broad recommendations are offered for rethinking Western strategies and policies vis-àvis a revisionist and aggressive Russia. As central elements, a revised Western approach to Russia will have to include a conscious strengthening of European and transatlantic unity and systematic efforts at bolstering European resilience to Russian meddling. 2 The German Marshall Fund of the United States

6 3 The Key Dimension: Regime Cohesion in Russia vs. European and Transatlantic Unity The ability of any political actor, whether an individual government or an alliance thereof, to act effectively is determined by the extent of legitimacy, elite consensus, and broader social support that it can generate from within as well as the material resources it has at its disposal. Neither Russia nor the Western community is exempt from this rule, although the quality, extent, and foundations of their respective internal cohesion differ considerably. What is more, the cohesiveness both of the Russian regime and of the Western community has undergone a significant evolution that started well before, and has been amplified by, the Ukraine crisis. In Russia, a principal shift in the mechanics of power has taken place over the last years. The first two terms of Vladimir Putin s rule ( ) were primarily devoted to political, economic, and social stabilization at home. The president did so in an authoritarian manner that was decried by many in Russia and beyond, but he managed to bring a degree of stability to Russia that was welcomed by many. In so doing, he benefited from a quadrupling of the oil price that provided Russia with unprecedented revenues, enabling the government in Moscow to hand out a steady stream of benefits to both elites and citizens-at-large. The only price to be paid by Russians was political acquiescence with the ever-more autocratic rule in their country. With Putin s return to the presidency in 2012, foreign policy was placed center-stage, positing that Russia must finally reassert itself as a global power, claim its own sphere of influence, and shed the constraints imposed by Western-dominated institutions. In this spirit, the Russian regime has effectively reintroduced a state ideology, consisting of a revisionist approach to the post-cold War order in Europe, a denial of the independence and inviolability of its former satellites, a sense of civilizational superiority of the Russian Orthodox and Eurasian space over an allegedly decaying West, and the unique role for Russia to confront the United States and its European allies. In taking to ideology, Putin has effectively moved his power base from the material to the immaterial: if earlier on, his social contract with both elites and Russians-at-large was based growing prosperity, it now rests on a putative historical mission that everyone is to subscribe to, or else be considered a traitor. This new deal, however, requires Russia to permanently seek and win confrontation, whether by proxy or directly, politically or militarily, with the West. The West, meanwhile, has gone through successive crises that have undermined European and Western unity and solidarity. The European Union has long struggled to overcome governance deficits and to devise policies that are conducive to growth. Some countries, like Greece, continue to fight the consequences of sovereign debt and banking crises while others, like Hungary, witness democratic backsliding and authoritarian tendencies. With the United Kingdom, a key member even threatens to leave the bloc. Momentum for further enlargement, once a driver for pacification, development, and democratization on the continent, has effectively come to a standstill. Euroskeptic and xenophobic parties appear to be on a steady rise in almost all EU member states and put a damper on a possible deepening of EU integration, which was once a key driver advancing the European project. Ties with the United States have been badly damaged over a decade of contentious interventions, from Afghanistan to Libya, scandals over secret CIA prisons and NSA surveillance, and a heated debate over the Transatlantic Trade and Investment Partnership that only fueled anti-u.s. sentiments among many Europeans. Adding to this growing rift was the withdrawal, real or perceived, of U.S. engagement from Europe and Washington s shift of attention to other world regions. As a result of strained transatlantic ties and seemingly This new deal requires Russia to permanently seek and win confrontation, whether by proxy or directly, politically or militarily, with the West. What s Ahead for Russia and the West? 3

7 The West has appeared to be in decline and its institutions, first and foremost the EU and NATO, to be end-of-line models. endless challenges to the European project, the West has indeed appeared to be in decline and its institutions, first and foremost the EU and NATO, to be end-of-line models. On the surface, it may have seemed that historical scales had tipped away from the West and toward (re-)emerging global players such as Russia. And this appearance may well have made Putin believe his assault on the European order would go unchallenged. To him, Ukraine provided the perfect occasion to exploit the weakness of the West and to boost the standing and stability of his own regime. Put differently, the issue of cohesion was present at the outset of the crisis. What is more, however, cohesion has been central ever since. On one hand, it is at the core of Western sanctions imposed in response to Russian actions in Ukraine. These are, in effect, an attempt to test and strain the cohesiveness of the Russian regime. By punishing individuals through visa bans and asset freezes, by excluding Russia from prestigious clubs such as the G7, and by imposing economic sanctions against Russian businesses, the West hopes to drive up the political and material costs of Kremlin adventurism and to sow doubt and discontent over the Kremlin s actions among elites and society. The short and long-term effects of Western sanctions remain hotly disputed, but they clearly are intended to weaken cohesion on the Russian side. More obviously, and unexpectedly, sanctions have had a positive effect on Western unity. Especially among Europeans, reluctance and outright opposition to imposing sanctions against Russia was strong from the outset. It is only owing to permanent coalition-building within the EU and to considerable patience in the United States, which has more than once delayed unilateral measures to make sure of being in lockstep with Europe, that successive punitive measures were rolled out against Moscow. Although achieving the necessary unanimity within the EU, and consensus across the Atlantic, remains an uphill struggle, sanctions against Russia have become an important marker of Western unity. On the other hand, undermining Western unity has become an important target for Russia. Over the last year, it has come as a shocking revelation to many that several EU countries are vulnerable to Russian influence and manipulation. European reliance on energy imports from Russia has been highlighted again, as have Moscow s efforts to use lucrative business deals, from arms to pipelines, to buy the acquiescence of individual EU capitals. Extremist parties on the right and left have been shown to have links with, and at times funding from, Moscow, while a massive Russian propaganda campaign swept across Europe to sow doubt in both European media and governments and the partnership with the United States. Direct military threats were addressed to the EU and NATO s Eastern-most members, while the Russian army has been posturing along NATO s borders with an intensity unseen since the Cold War. In short, Russia no less than the West has understood that chipping away at the other side s cohesion, and bolstering one s own, will be critical in this contest. 4 The German Marshall Fund of the United States

8 4 Russia and the West: Four Basic Scenarios The confrontation that Russia is seeking with the West will be critically shaped by the degrees to which both sides are able to maintain their cohesion and unity. It may indeed be a race for time, with either side hoping that its own efforts to undermine the cohesion of the other come to fruition before its own ranks break apart. And while the outcome of this contest remains completely open, this basic fault line can serve to model a number of scenarios for the further evolution of relations between the West and Russia. On this basis, four constellations can be conceived of depending on whether cohesion of the Russian regime on one hand and unity among transatlantic and European partners on the other are high or low. These generic scenarios are visualized in Figure Standoff: Cohesion Prevails in Russia as Does Unity in the West This first scenario effectively reflects the status quo. With its actions over the last year, from invading Ukraine to nosing NATO borders to undermining the Iran Figure 1 agreements, Russia has made its challenge to the West unmistakably clear. Its elegant takeover of Crimea has boosted the standing of Putin among Russians, tensions within the apparatus or criticism from the beleaguered opposition have remained manageable, the political and especially economic costs incurred have so far been absorbed, and state propaganda permanently feeds a nationalist frenzy of a Russian return to its erstwhile position in the world. relationship but eventually regained its composure. Its responses to the evolving Ukraine crisis a mix of punitive measures and offers to negotiate solutions may not have been what many in Ukraine and in the West wished for but they were still unexpectedly unified and strong. At the same time, European countries have become acutely aware of the many vulnerabilities they have vis-àvis Russia. Whether through business ties or energy supplies, media presence or political parties, the West has realized that the Kremlin employs a vast set of tools to manipulate European politics and societies from within. In a gradual response, EU countries are now developing strategies to limit these disruptive Russian influences. With cohesion prevailing on either side, a protracted war of attrition is indicated. In this standoff, Russia can be expected to be proactive and to regularly seek the offensive, as its internal cohesion fully rests on engaging the external enemy, which is how the Kremlin portrays the The West, in turn, was initially surprised at Russia s breaking out of what seemed to be a difficult but still broadly cooperative What s Ahead for Russia and the West? 5

9 The shocking discovery of the last year was the extent, cunning, and strategic intent with which Russia has been exploiting these strains. West. Russian pressure will continue, using all means from economic to military, on those of its neighbors who remain outside of Western institutions. Moscow will seek to puncture Western institutions, whether by directly threatening countries that are most exposed militarily, such as the Baltic states and Scandinavian countries, or by enticing those economically weakest, such as Cyprus or Greece. Elsewhere in the world, Russia will continue its efforts to build new alliances from Asia to Latin America. This multipronged approach is geared toward permanently testing the resolve, ability, and standing of Western institutions, first and foremost the EU and NATO. The West, in turn, will likely be more reactive and defensive. Compared to Russia s single actor advantage, determination, and escalation dominance, Western agency is constrained in a number of respects. Its decision-making is consensual, requiring lengthy negotiations among states and viewpoints. Its political measures, such as sanctions, require solid evidence to be considered legal. Electoral cycles in individual countries limit Western decision-making no less than crises elsewhere in the world that may take priority. As a result, and rather than deciding on an offensive strategy that would bring to bear its vast economic and military superiority, the West will continuously be tempted to settle for a minimum. Its focus will be on increasing its own resilience, limited largely to the space encompassed by the EU and NATO, and to reduce the multiple vulnerabilities among many European countries to Russian influences. Beyond that space, especially regarding Ukraine and the other countries of the Eastern neighborhood, the West will remain half-hearted and without the commitment and assistance needed to fully integrate further neighbors of Russia into its own institutions. It will likely only respond to particularly egregious actions by the Kremlin, such as further aggression in Ukraine or elsewhere, with additional sanctions but be mindful to avoid any situation that risks direct confrontation with Russia. The hope on both sides is that cohesion of the other will wither first and change the situation to one of the following two scenarios. 2. Western Decline: European and Transatlantic Unity Breaks Apart Degrees of diversity and occasional disagreements have long been a natural, although mostly manageable, part of the European and transatlantic communities. The last years have seen a considerable aggravation of fissures and tension, as disputes from the Iraq war to the surveillance affair have fueled anti-americanism, while the eurozone crisis, migration, and other policy challenges have given rise to a host of ever more vocal Euroskeptic parties. Perhaps more than ever before, the European project and partnership with the United States are questioned by many. The shocking discovery of the last year, however, was the extent, cunning, and strategic intent with which Russia has been exploiting these strains. It has built inroads into nearly all EU countries, whether through investments in politics, propaganda to manipulate publics, lobbying firms to influence legislation, armies of lawyers to challenge EU policies, business ties, and, above all, its substantial energy supplies to Europe. These inroads have long served to turn public debate and political decision-making in Russia s favor. Increasingly, they now seem to be employed to paralyze the EU, to sow doubt and frustration among societies, to establish protégé political actors, and to drive wedges among European countries, governments, and peoples. Russia may well succeed in doing so. A litmus test will be whether or not the EU musters the consensus needed to extend political and economic 6 The German Marshall Fund of the United States

10 sanctions imposed against Russia. If, now or later, Europeans fail to agree on this question, this will establish a dangerous precedent with a number of effects. It will make any resolute EU response to future Russian aggression against any of its neighbors nearly impossible to achieve. It will render a common EU foreign policy an ultimate illusion, failing as it does in the face of Europe s gravest external challenge and in its nearest neighborhood, and throw the bloc back into introversion. It will forsake transatlantic unity, given that the United States is unlikely to relax pressures on Russia. And in so doing, whether on this particular occasion or a future one, European disunity will issue a carte blanche to Russia to pursue its revisionist policies and aggression against other states. Even worse, such a Russian triumph over the EU will only embolden the Kremlin to also test the other key Western institution: NATO. Moscow has already intensified its posturing over the last year massively, using all of its military capabilities and some of its hybrid warfare innovations. Despite NATO s recent assurance initiatives, the Baltic states remain particularly exposed geographically, socially, and politically to Russian attempts to expose NATO weakness. These arguably consist of a poor preparedness to ensure the territorial defense of its Eastern periphery, a lack of clarity towards situations of hybrid warfare, poor material ability after two decades of defense cuts, and, most importantly, weak political will and public support in a fragmented Europe to abide by Article 5 obligations. 1 To puncture those treaty commitments and to effectively neuter NATO is certainly the ultimate prize for the Kremlin. 1 As a recent poll by the Pew Research Center found only 38 percent of Germans, 40 percent of Italians, 47 percent of French, 48 percent of Poles and Spaniards, and 49 percent of British supported the use of military force by their country to defend a NATO ally that finds itself attacked by Russia; see Pew Research Center, NATO Publics Blame Russia for Ukrainian Crisis, but Reluctant to Provide Military Aid, June The end result, which Russia is likely aiming for, is to paralyze and fragment both the EU and NATO. In its immediate neighborhood, this will give Moscow a free hand to reestablish its hegemony over former satellites, and to build the regional sphere of influence that it believes it needs to qualify as a global power. A less integrated and principled Europe will provide fertile ground for advancing Russian political and economic interests in a traditional divide-and-conquer manner. And vis-à-vis the United States, Russia will feel that it levels the playing field, stripping the United States of its European allies and questioning its global leadership. 3. Russian Decline: The Cohesion of Putin s Regime Weakens Alternatively, European and transatlantic unity may continue to hold while Putin s government comes under pressure. Russia has long faced formidable structural problems, dysfunctionalities, and centrifugal tendencies, ranging from the challenge of controlling and integrating a vast territory to abysmal demographic trends, from its excessive dependency on oil and gas exports to the kleptocracy of its public administration, and from an outsized military and security apparatus to the rising cost of Russia s ambitions for Eurasian integration. As long as revenues from energy exports were plentiful, as in the 2000s, these problems could be masked with money. But declining revenues, especially after a sharp and lasting drop in oil prices, have exposed the weaknesses. To make matters worse, the introduction of Western sanctions, designed to put a check on the Russian government s aggression against Ukraine, is taking a serious toll on the Kremlin s resource base. Currency reserves have already declined sharply, as the government has had to compensate an economy that has found itself partially cut off The end result, which Russia is likely aiming for, is to paralyze and fragment both the EU and NATO. What s Ahead for Russia and the West? 7

11 The West will have to live with a Russian regime that is unwilling and unable to reform from within but willing and able to stem its breakdown by all means. from global financial markets. Foreign investment came to a standstill after the annexation of Crimea. Production of oil and gas has peaked and started to decline given a lack of technology and investment, and key European markets are diversifying away from Russian energy. Although in the short term, the Russian government has succeeded in stabilizing the economic situation, especially the ruble and inflation rates, Russia is in for a long economic agony. First and foremost, the Kremlin will naturally try to avert any rapid economic deterioration without, however, addressing the underlying structural problems or making political concessions to the West. It touts import replacement and a pivot to Asia for alternative partners and sources of funding and revenues through its propaganda. There may be some relief in the form of Chinese loans and contracts, however, their scope and scale remains far behind the revenues, consumer products, and technologies, for which Russia has long been dependent on the West. As a result, Russia s economic modernization is effectively halted, while growing interaction with China squanders Russia s wealth. At home, the resulting competition for resources will increase tensions within the government apparatus and ruling elite. Judging by decisions so far, and much in line with its aggressive politics and rhetoric, the Putin administration clearly prioritizes boosting the capacities of Russia s military and security apparatus over investments in the social welfare system or economic modernization. This may well prompt a response among some of the losers from this reallocation, especially technocrats in the apparatus, and in the urban middle class that feels the pinch of the changed political and economic environment. The next-possible occasion to voice their discontent politically and publicly is the Duma election in late 2016 and, if it indeed generates momentum, such a political project of modernizers may well take aim at the 2018 presidential elections. Indications are that System Putin will be able to handle this impulse, whether by marginalization, suppression, or absorption. However, structural challenges and crises will only become more frequent and aggravated over time. Prolonged economic stagnation will fuel infighting among key parts of the state apparatus, put into question elite loyalties, and lead Russia s peripheries to question their relationship to the political center. And in order to postpone, if not prevent, its eventual implosion, the Kremlin will need to use ever-harsher internal crackdowns to suppress, and ever-more desperate external conflicts to release, growing internal tensions. Thus, for a significant period of time, the West will have to live with a Russian regime that is unwilling and unable to reform from within but willing and able to stem its breakdown by all means. Ironically, the West will equally seek to delay, rather than hasten, the inevitable. Intimidated by the prospect of chaos in Russia, and absent a strategy and vision for a democratic Russia in Europe, the West will be tempted to moderate its pressures, and perhaps even lend direct support whenever a Russian implosion may seem imminent. Once that moment arrives, however, the West will face many of the same questions that arose with the fall of the Iron Curtain and the disintegration of the Soviet bloc. No less now than back then, its successful handling of the situation will depend on Western strength and strategy but above all, on its unity. 4. Chaos: Cohesion Folds in Russia and in the West Arguably the worst of the cases presented here, a final scenario would see internal cohesion wither both in Russia and among Western countries. Likely as a result of a longer standoff, both sides will feel increasingly worn down politically 8 The German Marshall Fund of the United States

12 and economically, and questions emerge as to the rationale behind their respective behavior. Given their democratic nature and described vulnerabilities to Russian meddling, unity may well break down first in the West, followed over time by a weakening Russian regime, whose foreign policy adventures increasingly fail to compensate for its domestic weakness. Such a collapse on both sides, however, will have dramatic consequences for the entire Euroatlantic and Eurasian space, and globally. It will effectively end seven decades of expanding and deepening Western integration that resulted in what is the single-most advanced model of international cooperation seen to date. To be sure, the central institutions reflecting that integration, the EU and NATO, will likely remain but become less significant. The EU loses any meaning and ambition in the foreign policy arena, sees a loosening of its internal depth of integration, and abstains from any further enlargement in the Balkans and in the Eastern neighborhood. NATO will have proven ineffective in guaranteeing the territorial inviolability of its members, thus depriving Western integration of the key security dimension. In so doing, the West will cease to be a credible and effective actor that can project a vision of a cooperative world order, whether in its immediate vicinity or further afield. Nowhere will this lack of an able West be felt more strongly than in Eurasia. Absent the positive effects emanating from the West for Russian modernization and stabilization, whether they are acknowledged by the Kremlin or not, Russia will not be able to stem its decline and sink into economic and political upheaval. Its direct neighbors, all dependent on the erstwhile hegemon politically, economically, and socially, will become massively destabilized, with civil strife and poverty unleashing migrant flows to Europe. The first Western countries to experience the ripple effects of an Eastern Europe sinking into chaos will be the EU and NATO s eastern-most members, many of them already fragile polities, economies, and societies. Unable to absorb these pressures by themselves, they will turn to an EU whose capacity to assist, as well as political will and sense of solidarity, are greatly weakened. Seven decades of expanding and deepening Western integration... resulted in what is the singlemost advanced model of international cooperation seen to date. What s Ahead for Russia and the West? 9

13 5 Rethinking Western Policy: Caveats and Recommendations The fact that the strength and survival of Putin s regime in Russia is now fully dependent on confronting the West effectively precludes any positive scenario for their mutual relationship. None of these scenarios is bright. They all defy the many hopes and efforts invested by the West in the transformation of Europe, and Russia, over the last quarter-century. Yet each of these trajectories seems possible. This only highlights the extent to which the West and Russia find themselves at a principal junction, and it speaks to the critical long-term consequences of any political decisions made, by the West and by Russia, in the short term. In considering its policy options, the West would be well-advised to bear in mind a number of caveats. First of all, the fact that the strength and survival of Putin s regime in Russia is now fully dependent on confronting the West effectively precludes any positive scenario for their mutual relationship. As hard as it may seem to accept for consensus and compromise-oriented Western politics and publics, there is no middle ground when one side is openly challenging the entire European order, its rule-based and cooperative nature, key principles, and institutions. If either side in this contest was to make serious concessions, it would undermine its own foundations. Nowhere is this more obvious than on the question of accommodation. Repeatedly over the last year, seasoned Western policy experts have called for a new grand bargain with Russia. Whatever its exact form and content, however, such an accommodation is fraught with existential risks for both sides. For the Russian leadership, the concessions necessary for such an accord would run counter to its ideologized claim to superiority and challenge to the West; they might be read as a weakness the Kremlin can ill-afford. For the West, concessions would almost certainly have to compromise key Western principles and values, such as the inviolability and sovereignty of European states, to meet Russian geopolitical demands. Thus diametrically opposed, neither side can really afford accommodation without the risk of ushering in its own decline before the other side. In this situation, and as counterintuitive as it may sound, the current standoff is the least bad option. It is preferable to any alternative, as it is the only trajectory that keeps the West intact as a key global player and advocate of a rule-based and cooperative international order, without confronting Europe with the repercussions of Russian collapse. When the current regime in Russia eventually lapses, the consequences and uncertainties will be comparable to those of the breakdown of the Soviet Union. This potential fallout, in order to be managed, will require a united and capable Western community and institutions. Ideally, therefore, the West would use the standoff to prepare itself for the eventual collapse of the Russian regime; at a minimum, it must make sure to get through this likely protracted stalemate undivided and able. Sustaining the unity this status quo requires will not come easy to the West. Even worse, by its very nature, it is at a comparable disadvantage to Russia. After all, what is at stake for Putin and his inner and wider circle is their personal and political survival, and that of their fortunes. By contrast, the stakes for Western leaders are much lower and their temptation to break Western ranks much higher. They find themselves subject to pressures from political opponents who, typically from the fringes, present anti-u.s., Euroskeptic, and often outright pro-russian views. Economic interests and energy dependencies undermine principled positions no less than fear of conflict, Russian propaganda, or wooing, all instruments the Kremlin has shown to use so effectively. Finally, there is the risk that Western unity, which is as important in this new reality as it is hard to maintain, will be reduced to lowest-common denominator positions. Over the course of the last year, more resolute responses to Russian actions in 10 The German Marshall Fund of the United States

14 Ukraine have been repeatedly delayed or watered down. Many on the Eastern flank of EU and NATO yearn for stronger-than-symbolic measures to boost their security against Russian pressures. Eastern neighbors, especially Georgia, Moldova, and Ukraine, wish to see stronger EU commitment and assistance. Yet in all these cases, readiness in many Western capitals to be proactive, determined, and visionary has been all too limited. Whatever its origin, this is an inhibition the West can hardly afford in the face of the very determined adversary that Russia has shown to be. With these caveats in mind, a number of recommendations can be derived for Western policy. 1. Reinforcing Western unity is paramount. In order to withstand Russia s assault on the West, it will be critical for the United States and its European allies to fortify their cohesiveness. This requires a clear commitment to the norms underlying the European order that has developed over the last decades. Ongoing and future violations of these principles by Russia must be punished much more resolutely and quickly than has been the case so far, both to limit the damage done and to weaken the culprit. This will also require continuously reining in wobblers and renegades among Western countries, tempted as they are to prioritize electoral cycles, economic interests, or Russian advances over principled positions. In so continuously reaffirming its key principles, however, the West will have to carefully weigh the strength of its possible responses against the risk of jeopardizing Western unity. When there is a conflict between force and cohesion, the latter has to take priority. 2. European resilience to Russian meddling must be boosted. The West needs to boost its own resilience, and that of Russia s neighbors, to the economic and energy pressures, political meddling, propaganda, and military threats launched by the Kremlin. Ongoing efforts, by individual countries as well as by the EU and NATO, have already borne some fruit in this critical field, such as the emerging EU energy union and systematic work on energy diversification or measures to boost military security through air policing and the enhanced rapid reaction force in NATO. These efforts need to be stepped up and expanded. The full regulatory arsenal at the disposal of the EU and its members, from the European Commission s anti-trust measures to anti-bribery laws, media regulations, corporate governance, and anti-terrorism measures in individual countries, must be employed to limit Russian interference. European business needs to be supported in its reorientation away from the Russian market. Outreach to the sizeable Russianspeaking communities across the EU is needed as much as far more generous political, economic, and, if need be, military assistance to Eastern neighbors. 3. EU-NATO complementarity and vision is critical. In enhancing its own security, the EU and NATO must build much stronger complementarity than they have to date. Faced with hybrid warfare, the combination of hard and soft security challenges affecting many aspects of European societies, a more conscious division of labor is imperative. Where NATO has capabilities to avert traditional hard security threats and increasingly cyber warfare, the EU has resources to counter soft security threats from energy to finance of the media. In employing these mechanisms jointly and strategically, the EU and NATO must not succumb to introversion. Instead of limiting themselves to their current membership, the West must act ambitiously and proactively with a view to the long-term integration of all of Europe, offering aid and perspectives of EU and NATO membership to Eastern neighbors. In order to withstand Russia s assault on the West, it will be critical for the United States and its European allies to fortify their cohesiveness. What s Ahead for Russia and the West? 11

15 4. The United States must re-engage in Europe. A particular responsibility for ensuring Western unity and for facing up to Russia rests with the United States and Germany. The former has to acknowledge that it is the ultimate addressee of Kremlin policy, whose end goal it is to curtail U.S. leadership in global affairs. Consequently, Washington should reprioritize Russia, reengage with its European allies, and strengthen its presence as a key guarantor of security in Europe. Its approach to Russia will be closely watched by emerging powers elsewhere in the world. Failure to act resolutely in, and with, Europe will only invite future challengers around the globe. 5. German leadership in Europe is indispensable. Germany, in turn, is central to cohesion among EU members. In so doing, Berlin will have to take more seriously the concerns of those EU members and neighbors that are particularly exposed to Russian pressures, and formulate its position accordingly and unambiguously. Enhanced shuttle diplomacy and focus on Russia as the EU s key foreign policy challenge will have to be ingredients of German leadership, as will stronger political, financial, and military commitments to securing the EU and NATO s Eastern flank. 12 The German Marshall Fund of the United States

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