The Two Latest Strikes in the New Cold War

Greetings from Paris! My wife Marina and I had hoped that we could enjoy some “downtime” in the City of Light between three days of intensive conference sessions in London and the meeting on longer-term initiatives I have here later this week.

It’s not quite working out that way.

Here in Europe, I find myself more attuned to the impact of events much geographically closer than I did sitting back home on the East Coast

I feel like I’m back in the days of the Cold War. But even then, despite the pressure, there was a sense that the other side understood the rules surrounding a deadly game of chicken.

Today, the situation is actually less stable. Both sides think they can actually win a standoff in what is quickly shaping up as a deadly version of the board game Risk.

This morning, there are two pressing matters. Both are geopolitical, certain to contribute additional uncertainty to the global energy sector, and unfolding only a few hours’ flight from where I am writing this.

Here’s my take on the two European crises about to boil over…

An Old Flashpoint Reignites

As we await the beginning of the major annual Russian economic meeting and showcase in Saint Petersburg, new moves from Moscow are almost certain. They will up the ante in an already spiraling situation.

A disturbing theme has emerged over the past several days on Russian TV “discussion” shows. These are meant for domestic consumption inside the country but can be readily viewed here in Paris.

Calling them “discussion” shows is giving them some benefit of the doubt. These are largely orchestrated renditions of a dominant opinion. There is, of course, some nod to other views, but the resolution is never in doubt. There is a pre-ordained “line,” and it will be the dominant attitude shared by the audience and the participants.

Unlike the U.S. – where a Democrat in the White House is usually criticized on one cable news network while a Republican has the same fate on another – there is nothing on Russian TV opposed to the official line. Putin receives the lion’s share of media attention while opposition movements are treated like the plague.

As a result, the Kremlin will sometimes employ the broadcast discussions to initiate public support for impending actions. And that is not underway.

From almost nowhere, attention is now drawn to a particular section of Moldova. It also happens to be a matter I addressed some 20 years ago while pursuing another line of work. Then, I considered it a potential flashpoint of some consequence as the post-Soviet period began.

It is now quickly returning to that status again.

Troubles in Moldova

Transdniester is a breakaway region in eastern/northeastern Moldova. Located east of the Dniester River, it borders Ukraine to the east and the remainder of the former Soviet republic of Moldova to the west.

The majority of Moldovans are of Romanian ethnicity, with Romania – a member of both the European Union and NATO – further to the west.

Transdniester, however, is decidedly Russian in ethnicity. When the Soviet Union disintegrated in 1991 and Moldova became independent, this region immediately moved to become independent from the Moldovan government in the capital of Chisinau. It was then that Moscow moved to stabilize the situation.

Russian troops have been stationed as “peacekeepers” in Transdniester ever since. The local residents overwhelmingly want to be part of Russia, despite the two countries having no common border (Ukraine lies between).

These days, Moscow is complaining that Ukraine is not allowing it to resupply and cycle new troops into Transdniester, and the Kremlin is drumming up Russian popular support for another possible move to “rescue” Russians as they did with considerable domestic support in annexing Crimea at the beginning of the Ukrainian conflict.

How Russia Could Move on Transdniester

Here’s where my earlier work may come in. Eighteen years ago I authored a government report describing how Moscow would move on this recalcitrant region in Moldova. It does not require a march across the body of Ukraine.

Rather, as I described then, it requires two separate stages. First, a return of the Russian ethnic population of Crimea to Russia. That has been accomplished. Second, the annexation of a thin strip of land in southern Ukraine connecting Crimea to Transdniester.

Watch the current ongoing battle in eastern Ukraine. As the local rebels supported by Moscow move in a southwestern direction, they make the “southern corridor” strategy that much easier.

Why would the Kremlin even care?

First, it encloses Ukraine and makes Kiev’s policy options even more limited. Second, it now brings the Russian army squarely on NATO’s border, putting the rest of Moldova literally between a rock and a hard place.

This is a deadly game of chess in which the object is to apply renewed pressure to bear on an increasingly belligerent border.

Moscow Steps In on Greece

But that is only the first of two primary moves Moscow has in mind. The second involves Greece.

The leftist government in Athens and an increasingly frustrated euro zone seem cascading to an acrimonious divorce. The so-called “Grexit” – the Greek departure from the euro zone – looks likely as a Greek default on its IMF loan looms the end of this month and the sides are not talking. Even if there is a last minute reprieve (if there is one coming, we are likely to see indications before the end of this week), it will be a Band-Aid delay at best.

Now Moscow has been having increasing talks with Athens about providing financial assistance in the event the departure takes place. By so doing, Russia is moving to offset EU sanctions by profiting from the destabilization on the EU’s southern flank. Greece is the basket case now, but Italy (where with much fanfare Putin has recently initiated personal diplomacy), Spain, and Portugal are the next dominoes set again to weaken.

In major respects, the world is a very different place than the one in which I was walking two decades ago. Yet a seminal element remains intact. The bipolar war of nerves in Europe has never really left.

And the U.S.? Washington has apparently finalized plans to put long-term forward depots of heavy arms in the Baltics and Eastern Europe… closer to the renewed front and for the immediate rearming of Ukraine.

This is getting ugly… fast. Stay tuned as I report on these brewing geopolitical crises… and the best ways to profit from them.

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