Who Really Won the Cold War?

Since the fall of the Berlin Wall the West was under the illusion that it had won the Cold War.

The Western powers had defeated communism, brought down the Iron Curtain, freed the peoples living under Soviet influence, brought the dreaded Berlin Wall down and saw the disbandment of the Warsaw Pact. NATO, the West, the US and democratic Europe had won. Or so it seemed.

Yes, that is all true. Communism is a memory of the past, a bad memory too.  The other side lost, but judging from where Russia stands today, it does not exactly look like a loser. Russia today controls much, if not most of Europe’s gas, an essential element to keep things moving.

Could this showdown between Russia and the West have been avoided? Would things have been any different if relations had been better? Would the Russians have acted any different had the US and the EU acted more cordially towards the Russians? This is no doubt a question historians will be asking themselves for years to come.

In fact what happened is that at the fall of the Soviet Union the West continued to treat Russia as though it was the Soviet Union. Russia is not entirely without blame either, but it probably feels that it needs to act now as the elements permitting its expansion, mainly a weak leadership in Washington and Brussels, was unlikely to present itself that frequently.

But now is when the real problems begin as neither side wants to appear weak and backtrack on their positions. The West in fact feels frustrated by the lack of retaliatory actions it can take against Russia. As a military response is not the answer the other step left to the Western powers is to apply economic sanctions.

But will those really work without at the same time punishing some allies as well?  It will be very difficult to apply sanctions on Russia without hitting at Kazakhstan and Belarus, who share the Common Economic Space with Russia.

This threat also affects countries that are planning to join the CES and the Customs Union, such as Armenia, Kyrgyzstan and Tajikistan. The five former Soviet countries have retained economies that are closely associated with Russia’s and any sanctions slapped on Moscow are every likely to have immediate negative effect on them as well.

While the powers that be are still debating what action should be applied against Russia no one seems to have an exact idea as to how much harm the sanctions might cause versus how much will they help, Kazakhstan, for example, is highly worried that sanctions targeting Russian oil companies would hurt its oil production transiting through Russia. As it would also affect Kazakh gas exports.

It is hoped that a political breakthrough will occur and that logic will prevail and that the worst will be avoided.

But just the threat of sanctions may be enough to hurt Russia, for example, threats of financial punishment may be enough to scare some countries from joining up with Russia, such as Armenia. But on the other hand, say some analysts, it may well have the reverse affect and speed up countries like Armenia, despite the fact that Yerevan was clear in its position, saying that it would not change its mind about where it stands. Armenia is a special case because it very badly needs Russia’s support over the Nagorno-Karabakh region over which it is in dispute with Azerbaijan.

So no matter how you spin it, Russia seems to come out on top of the stack. Moscow may have lost its Soviet empire but it now holds more of a leash on Europe than it did with its tanks and missiles.

This piece is cross-posted from OilPrice.com with permission.