Winners and losers as Ukraine crisis eases toward its end

As stock markets moved sharply higher Tuesday, investors took note of the withdrawal of Russian troops from Ukraine's border a day before their maneuvers were to be over, and Monday's largely unreported statement by Russia's Foreign Minister on Russia's limited demand that the February 21 agreement between Russia and Ukraine be enforced and its ousted president returned to power. Now we have the latest, with Obama ceding to Angela Merkel "mediation" of this crisis, as presaged in my Monday article, and Russia meeting with NATO. (Wouldn't it be interesting if Russia were invited to join NATO?)

The bottomline today is that the Ukrainian crisis could be largely over by the next week. And that Putin, far from being the dunce made of him by the West, appears smarter than most recognize. His strategies are just starting. Russia may well return to its Soviet preeminence that he so misses, but in an economic, modern way.

If the crisis is over quickly, choosing winners and losers is important and could affect elections in a number of countries.

Coming off as silly and far more dangerous, the Republicans squandered their opportunity to fall in step with President Obama and have shaken up independents willing to consider voting for them this Fall.

Whatever their excuse, Republicans are the most vocal opponents of a reduction in the size of the Army, contending that events like that in Ukraine can be stopped through a huge US military ground force. In opposing Obama, these Republicans now appear the least rational of all, and most likely to end up fouling up foreign policy.

Clearly, such a force was not needed nor was it rational to raise US power in a conflict like the one in Ukraine. Indeed, this was a largely European matter, with all countries most affected in Europe, not "across the pond," as Putin put it in somewhat dated terminology.

Obama now appears far more capable than he appeared only a week ago. Watch for the polls to show that his popularity has at least bumped up and Republicans begin to fall, perhaps precipitously.

While this will be a win for Obama, Putin also wins. Unlike the crazy man the West says he is, he has laid out his case for the invasion of Crimea and has de-escalated the conflict just when it looked like it would go into a new phase in Ukraine. Putin's decision is likely to mean his military's assessment of the capability of the Ukrainian military was that it would not be easy to win quickly if resistance occurred without substantial capitulation or surrender before the conflict began. Just a look at the recently posted pictures of Putin with his military leaders strongly suggests this decision. But, taken in conjunction with the strategic importance of Ukraine and recent revelations concerning Russia's economic plans, it also means that his invasion had other objectives. Among those likely accomplished and sought by Putin's invasion are the following.

1. Ukraine, given its importance to Russia and the EU (especially Germany given its huge petroleum and natural gas relationship), will see more common discussion among the major players. While the US could gain in the short term due to its growing exports of these and other products, the long-term is far better served by stability in these and other natural resources markets.

2. Russia will no longer be treated as a bully, but instead as a partner. The objectives Obama sought to accomplish by fostering communications between the countries may not be set until 2016 with a new president given the apparent animosity between Putin and Obama. Yet, it is possible that both recognize the importance of cooperation more, and the need to let the EU lead in this relationship, making the changes more permanent and useful in the future.

3. The US provision of $1 billion to Ukraine (not the guarantee, but certainly a gift) should move the US to require more control in the legislature over the use of money allocations, rather than leaving this up to any president. The idea that $1 billion can be gifted to a foreign power without any say by one person is (or should be) anathema to any budgetary or democratic concept still alive here. This is yet another example of the power of the presidency that will be cut back in the future by specific legal means, including future legislation. In turn, less influence in the world through unrestricted expenditures giving the US little or nothing in return means that both the US and Russia win.

4. The balance of power in all matters European, for Russia is in Europe, will rest more and more in Europe, not the US. Making this first step in this direction will gradually rid the US of the idea that it must step up in any crisis. The US is neither in the position to lead here, nor in many other places. The public will gradually make this transition, leaving Republicans apart from Senator Paul and others who are more isolationist, appear left in a long-ago Cold War.

5. Putin has accomplished his goal of making Russia relevant again. As suggested by an article in Bloomberg Markets appearing in Bloomberg's website, Putin's goal is being pursued in a Soviet manner.

"Sechin’s back-to-the-future fascination with his country’s communist past is something he shares with Putin, who, soon after coming to power in 1999, restored the music (though not the lyrics) of the Soviet-era national anthem and later described the collapse of the USSR as the greatest geopolitical catastrophe of the 20th century."

With Ukraine mirroring Hungary in 1956 in some if not many ways, we can look at the invasion as a first return to influence. The difference will be that the influence will be exercised in a modern way. Do not look for any more troop invasions. They will not be needed. 

There are many other objectives within reach. These are a good start.