Almost two weeks have passed since Russia invaded Ukraine, and so far, Russia has achieved limited success in southern Ukraine. However, Russia has suffered significant losses in the north and east, and its offensive has stalled.
The Western countries have responded to the invasion with tough sanctions that threaten to pull the rug out from under the Russian economy. The NATO and EU member states have provided arms assistance to Ukraine. Those weapons are suitable for both regular and guerrilla warfare.
Authorities in Russia have tightened controls, forcing several of the country’s last free media outlets to cease operations. State media are waging a fierce propaganda campaign to convince the public that the so-called “special military operation” is going according to plan and that Russian soldiers are welcome in Ukraine.
Still, a substantial portion of Russians are unhappy. More than 4,000 people were arrested Sunday, demonstrating against the war in several Russian cities. But the big question is how Russia’s increasingly authoritarian president and his inner circle will respond to the backlash. Here are seven possible scenarios for how the Ukraine war will continue.
Quick Russian victory
Russia’s military still has extensive resources despite the setbacks and logistical problems. Therefore, one cannot rule out that Russia will get its offensive under control and bring Ukraine to its knees in the coming weeks.
So far, Ukraine’s military has proven far more effective than many experts feared before the war. The high fighting morale of the Ukrainians also evens out the balance of power, mainly since the fighting morale of the invading Russian forces appears to be low.
Still, Russia has a massive advantage in terms of heavy equipment – and so it is possible that sooner or later, Russia will succeed in knocking out Ukrainian defenses.
It is unclear what would happen after that. Ukrainian people seem united in their opposition to Russia, and occupation would be costly and unsustainable in the long run. A Russian puppet government would hardly make it easier to cooperate with the state apparatus and the population.
The nuclear threat will lead to Chinese support for the West
If the West imposes new sanctions to resolve the conflict in a civilized manner and China supports this, this could force Russia to cease hostilities. The Russian political system would continue, but its economy would freeze.
If this occurs, the supply of raw materials will likely cease, creating disruptions and hindering trade. It also will pose a challenge to the growth of the global economy, which may slow or stop altogether. Russia will enter a systemic financial and economic decline, leading to a new refugee crisis in Europe. Europe will also have to adjust to a new military doctrine.
Energy market pressures will continue, and the financial markets will be in uncharted waters due to systemic instability and the unpredictability of Russian markets. Investors will be looking for high-quality, time-tested investment instruments that offer them security in their portfolios. Also, alternate payments such as cryptocurrencies may see new success as they benefit from the decoupling of some banks from the SWIFT system.
The War Expands
Since Russia has deployed most of its forces and, by all appearances, is bogged down in several areas, President Putin and his inner circle may prefer to escalate the conflict rather than admit defeat. Perhaps the most likely escalation is for Russia to persuade or force Belarusian leader Alexander Lukashenko to send his military across the border.
So far, the Belarus military has stayed out of the war. Unconfirmed reports suggest that this is at least partly because there is a risk that a large proportion of soldiers and junior officers would refuse or even switch sides.
However, if the need for reinforcements increases, Lukashenko might be forced to take the risk anyway. In this case, the war would quickly turn into a regional conflict.
A worse scenario would be for NATO to be drawn into the conflict in one way or another. Both Russia and the U.S. have opened a so-called hotline between their forces to prevent this from happening due to mistakes or misinterpretations. Yet, the security situation in Europe is extremely tense, so a significant war, unfortunately, cannot be completely ruled out.
It is also unclear what Putin will do if it turns out that the war in Ukraine has failed and the Russian economy cannot cope with the sanctions imposed by the West. For years, Mr Putin’s strategy has been to try to force the West to de-escalate through escalation. But now, this approach is no longer working.
Putin backs down
When the situation becomes untenable for Russia, Putin and his closest advisers may back down rather than risk their position of power. But the big question is how this can happen without the Russian president losing face and admitting defeat.
So far, that possibility also seems remote since Russia has shown no signs of backing down from its pre-invasion demands. Nor are the West and Ukraine likely to agree to a solution that could be interpreted as if Russia had won by invading its neighbor.
A further unclear question is what exactly the West is asking Russia to do in exchange for easing sanctions. If there’s no clear way out of the sanctions, there is no real reason for Russia to back down – but, by the same token, nobody in the West trusts Putin’s word anymore.
Low-intensity, long-term conflict
In that case, the military operations would come to a standstill, and the Russian attack would drag on for months. The most important consequence will be that the number of civilian and military casualties will increase day by day.
Public discontent in Russia is expected to grow despite the costs of a protracted military operation. The sanctions against Russia will also increase, which will add to the discontent among the population. While another armed conflict is unlikely, Nordic countries will join NATO. What’s more, stagflation (economic stagnation and high inflation) could loom over Europe.
Financial markets will primarily fight international stagflation. The real interest rates will remain in negative territory, and the investors should focus on stocks and bonds. Still, mainly they will try to appreciate their assets, most likely in emerging markets. Secure and, above all, liquid investments such as cash and precious metals will be popular.
Ukraine falls, Russia wins
When Putin succeeds in conquering Ukraine and overthrowing Ukrainian President Zelensky, good times are not ahead for Europe. Ukraine will open the door for Russia to make further inroads into Europe, especially into the Baltic states and Poland. Such an approach would bring additional security risks.
Simultaneously, Vincent Mortier of Amundi believes it is very likely that a civil war will break out in either Ukraine or Russia. This would occur in response to resistance by Russians or Ukrainians to the current regime. Civil war would cause many casualties, and Russia would further test the patience of the North Atlantic Alliance and very likely cross an imaginary red line.
Then China could also intervene in the conflict to demonstrate its position in this new world order. Therefore, the financial markets would look for the safest assets and divest themselves of liquid assets, particularly loans and capital. As a consequence of the ongoing European conflict, the Euro would weaken, the markets would remain volatile, and the energy prices would remain high.
The palace coup in Moscow
Should the situation become untenable for Russia and Putin continues to refuse to back down, a schism could develop within the Kremlin leadership.
Authoritarian leaders and dictators rely on the security apparatus and sufficient popular support. With widespread support waning, the leader becomes increasingly dependent on the police, security services and military.
Generals must be satisfied in order to avert the threat of a coup d’état-but at the same time, this generally increases corruption and thus discontent in the streets. In turn, it increases the leader’s dependence on the military to put down a rebellion.
An explanation for the weakness of the Russian armed forces during the war is that the generals stole funds that should have been used to modernize the Russian military. According to unconfirmed reports, inexpensive Chinese products were bought instead of expensive military equipment – and the rest of the money disappeared.
That corruption depends on the current power system to persist. When the situation becomes untenable, someone or some of Putin’s inner circle might try to sacrifice the president in order to save their own position of power (and access to lucrative contracts). While such a coup seems unlikely today, the possibility cannot be ruled out.
Just what a coup would entail is uncertain, though one thing is sure. Members of the inner circle are no friends of democracy and have shown little regard for human rights during their years in power.
