Introduction to Geopolitical Credibility
The concept of geopolitical credibility has been a topic of discussion, particularly in the context of Europe’s stance on the war between Ukraine and Russia. Christine Lagarde, President of the European Central Bank, recently emphasized the importance of Europe having geopolitical credibility. However, the European Central Bank’s actions, or lack thereof, have undermined this credibility.
Undermining Geopolitical Credibility
The ECB has been blocking the use of immobilized Russian central bank assets, which could have been used to support Ukraine in the war. This decision has been justified with weak arguments related to the rule of law. However, in the context of war, the rule is to be better armed and financed than the opponent. Europe has not met this requirement, funding Ukraine with only $100 billion per year over the past 3.5 years. In contrast, when Ukraine has been on the front foot, it has received financing at an annual rate closer to $150 billion.
Consequences of Inaction
The failure to provide sufficient funding has led to the war not being won, with Russia now on the front foot. This has exposed Europe to the vagaries and blackmail of external administrations. If the full $330 billion in immobilized Russian assets had been seized and used to buy equipment to help Ukraine win the war, Putin would likely have been defeated by now. Instead, Ukraine struggles to hold back Russian advances, and Europe faces an existential security threat.
The Security Crisis in Europe
The current situation has led to a security crisis in Europe, with the European Central Bank’s inaction being a significant contributing factor. The lack of support for Ukraine has emboldened Russia, and the consequences of a Russian victory would be severe. It would lead to tens of millions of Ukrainians moving west, bolstering far-right parties and stretching the social, economic, and political fabric of Europe.
Implications of a Russian Victory
A Russian victory in Ukraine would have several severe implications for Europe. The combination of the Russian and Ukrainian military-industrial complexes would pose an existential security threat to Europe. This would require Europe to massively increase defense spending, from 2% to 5% of GDP, leading to higher taxes, less growth, and more poverty. The confidence in the European project would be severely shaken, leading to a decline in the Euro and making Europe a less attractive investment destination.
Conclusion
In conclusion, the European Central Bank’s failure to utilize the immobilized Russian central bank assets has undermined Europe’s geopolitical credibility. The consequences of this inaction have been severe, leading to a security crisis in Europe and exposing the continent to significant threats. It is essential for Europe to reevaluate its stance and take decisive action to support Ukraine and defend its own security interests. The future of the European project depends on it, and the European Central Bank must take responsibility for its actions and work towards restoring the continent’s geopolitical credibility.
