Finance: Research, Policy and Anecdotes

The following contains strong political opinions. Reader discretion advised!

February 2022 will be marked in the history books as the start of a new conflict, or at least as the start of a new phase in a conflict.  But, make no mistake – this is NOT a conflict between Russia and Ukraine, between Russia and NATO or between East and West – it is a conflict between democracy and authoritarianism. NATO did not expand to Eastern Europe to threaten Russia, but was joined by Central and Eastern European countries whose democratically elected government decided to join a defence alliance.   NATO does not threaten Russia - or any other country for this matter.  The hope that Russia will turn into a normal country has turned into realisation that it has rather turned into an authoritarian kleptocracy. It is Vladimir Putin who is afraid of democratically elected governments in neighbouring countries showcasing to Russian people that democratic societies are better off. That’s why he attacked Georgia in 2008 and Ukraine in 2014. And that is why he has supported authoritarian politicians and movements across the globe – the Leave campaign in the UK, Donald Trump in the US and Jean Marie Le Pen in France.

The best evidence that this is not about East vs. West are the people in Europe and the US who speak up in favour of Putin and his thugs. They are both on the left and the right of the political spectrum, on the extremes or beyond the extremes of the democratic groupings. In Germany, politicians of right-wing AfD and left-wing Die Linke have joined forces in defending Putin’s aggression. In the UK, it is both the Corbyn-wing of Labour and Nigel Farage who speak up for Putin.  What ties them together is their hatred of democratic and transparent politics that has underpinned peace and prosperity in Europe over the past 75 years.

In hindsight it is easy to say that the West has been asleep with the threat becoming stronger and stronger over the past 15 years. The US has receded from its role as superpower, starting with President Obama leaving Syria to Russia and ending with President Biden withdrawing from Afghanistan. In between a US president who admired Putin and other strongmen and who often gave the impression that he somehow was on the payroll of Putin.

In hindsight it is easy to conclude that the line in the sand should have been drawn earlier; the more important it is to stand up now – the decision of the German government to suspend Nord Stream 2 is a first important step. One can only hope that the British government follows up and turns off the London money-laundering machine for Russian oligarchs – though given the deep penetration of the Tory party with Russian money, I am somewhat sceptical.

As in the 1980s, there are those who call for appeasement. They were wrong then and they are wrong now.  As in 1938 one cannot appease dictators; one has to stand up to them! Democratic societies need dissent and I respect anyone’s right to disagree with me on the right strategy towards Putin.  But strong democracies also need to defend themselves from being undermined by authoritarians.  Putin has been successful in getting Trump elected and the UK leaving the European Union. He has infiltrated the political establishment across Europe, ranging from the former German chancellor Schroeder to former Italian prime minister Silvio Berlusconi. Cutting off the Russian money stream into European politics and societies will be critical to counter this new threat.  Cutting off Russian money will be costly for the West but it is a price we have to pay to defend democracy!

Overview