Great Game Theory: A European Peace
In the aftermath of the surreal hazing of the Ukrainian president in the Oval Office and his impolitic attempt to defend himself, Polish Prime Minister Donald Tusk summed up the situation well: “500 million Europeans are asking 300 million Americans to save them from 140 million Russians…” Friedrich Merz, the incoming German Chancellor used the metaphor of children being kicked out of their parent’s house and disinherited. My personal favorite was from a British writer Richard Vinen: “We are like adult children who live with their parents, sulking and complaining but assuming that someone else will do the laundry.”
So it’s worth asking the question: What would happen if Europe was forced do its own laundry and go it alone against Russia?
Between frozen Russia assets in the West, about $300bn, most of which is in the European system; Norway offering to tap its enormous sovereign wealth fund, at $1.8tr, the world’s largest; and Germany considering removing its debt-brake in the face of an existential crisis, Europe has the money to rearm. It’s defense stocks are soaring, as are the fortunes of satellite companies like Paris-based Eutelsat – which jumoed 70% yesterday – are Finnish microsatellite firm Iceye are both moving in as an alternative to Starlink.
If Europe can act decisively (big if) and quickly (bigger if), the outcome would be pretty predictable. It wouldn’t even take a united Europe: The UK, France, the Baltic States and Germany (the hold-out) could force the situation. Russia has the advantage over Ukraine, but only just. After the initial surprise attack, it has made very few gains against the local almost-an-army, and its vaunted Black Sea fleet was neutralized by the defender’s non-navy. A European army - possibly even its mere presence – would go along way to neutralizing Moscow. Mind, European troops couldn’t kick the Russians entirely out - they’ve become the monkey grass of Crimea – but it would force them to the table. Not because Trump wants it, but Xi Jinping does.
China is essentially keeping the Russian economy afloat, and Moscow knows it, so has leverage. It can’t have Russia nuking the last of the world’s rich markets currently absorbing China’s hyperactive manufacturing. Africa, Central Asia or Latin America hasn’t got that kind of economic heft. Europe may have been pushing back on Chinese manufacturing, but if Beijing gets them out of this current mess, the EU will welcome China with open arms.
This gives Beijing pretty much everything it wants: A whole lot of influence without any heavy lifting. It becomes the arbiter of peace and the savior of Europe in the face of Russian aggression and American betrayal. Beijing secures markets and resources, makes loans and investments in Europe to successfully peel the bloc away from the US. China then essentially dominates the entire Eurasian landmass, including the Middle East, plus Africa.
That leaves the wild card of Latin America. As things stand, that’s an easy win for Beijing, it is selling (dubious) economic development and market access while Washington throwing tariff’s around and making bombastic threats to send troops to Mexico and Panama. For its part, Russia becomes as Beijing’s brutal enforcer, and gets to play great power. It will start to plot against China, sure, but that a generation away.
The rebuilding of Europe after World War II was a gold-mine for the US. If Ukraine can secure a peace, rebuilding it will make a fortune for someone. American capital will be involved, to be sure, but Washington won’t be in the driver’s seat. We won’t be doing Europe’s laundry anymore, but we won;t have any leverage either. That will go to China, which, I thought was the main problem.
