A two-hour online summit between Russian President Vladimir Putin and US President Joe Biden failed to result in any breakthrough and did not address Russia’s key demand for a Nato guarantee of no more expansion towards Russia’s borders on December 7.
In the run-up to the meeting Putin reiterated that increased military support for Ukraine from its Western partners was a “red line” for the Kremlin and insisted that the US-led alliance provide “legal guarantees” that Ukraine would not be admitted to the alliance or receive more US arms.
The conversation also touched on several other issues on the agenda since their last summit in Geneva over the summer, including arms control proposals, cybersecurity and the sanctions on Iran.
The rapid escalation of tensions has plunged relations between Russia and the West to new lows and has only been exacerbated by a gas supply crisis in Europe as the winter draws in. Russia has responded to the decaying geopolitical situation by building up its relations with non-aligned countries such as China and India. In the same week as the Putin-Biden summit, Putin made his second trip outside Russia since the pandemic started in order to sign off on major arms and energy deals with India, and Russian naval forces have just concluded an exercise with China in the Sea of Japan for the first time ever.
The White House readout from the meeting was very brief and indicated that Biden had once again laid out his position, raising objections to Russia’s military build-up near the Ukrainian border, but the statement said nothing about the substantive issues raised by Putin on Nato expansion and his demand for commitments to end it.
“President Joseph R. Biden, Jr. held a secure video call today with President Vladimir Putin of Russia to discuss a range of issues on the US-Russia agenda. President Biden voiced the deep concerns of the United States and our European Allies about Russia’s escalation of forces surrounding Ukraine and made clear that the US and our Allies would respond with strong economic and other measures in the event of military escalation. President Biden reiterated his support for Ukraine’s sovereignty and territorial integrity and called for de-escalation and a return to diplomacy. The two presidents tasked their teams to follow up, and the US will do so in close co-ordination with allies and partners. The presidents also discussed the US-Russia dialogue on Strategic Stability, a separate dialogue on ransomware, as well as joint work on regional issues such as Iran,” the White Statement read.
The Kremlin raised eyes by releasing no statement after the meeting as of the time of writing, where usually the Russian side is much faster than the US side in releasing their read-out.
Red Lines and a Nato guarantee
The meeting comes at a time of high tensions between Russia and the West. The US has been releasing a series of intelligence reports saying that Russia is building up large forces near Ukraine that could threaten to invade. The Kremlin has denied that it is threatening anyone and also pointed out that those troop deployments it has made are all inside Russia, where it is entitled to place troops anywhere it likes. However, the growing talk to war triggered a stand-off and Putin has issued a series of statements laying out Russia’s own “red lines” that Nato and the West should not cross, including admitting Ukraine to Nato or supplying it with weapons and missiles without Nato membership being approved.
Putin’s overreaching demand is for Nato to offer Russia “legally binding” guarantees that Ukraine will not join Nato – de facto and de jure – as like a mirror image of the Cuban missile crisis, Moscow cannot tolerate Nato missiles on its border in what has been described as a “giant unsinkable aircraft carrier parked on its border.”
One way this could be done is for a new pan-European security deal to be thrashed out. The Russian Foreign Ministry already proposed exactly this deal in a fair specific framework proposal released by the Russian Foreign Ministry in 2009 that was presented in Brussels by then-president Dmitry Medvedev, but was rejected out of hand. However, no mention of any negotiation or new security arrangement was mention in the White House release.
Putin’s demand that Nato offer guarantees that Ukraine will never join was never something that Biden could consent to, as Nato is a military alliance with many members that would all have a vote, and the US president has no mandate to make those sorts of promises.
In comments before the meeting Biden said he would not accept anyone’s red lines and was not prepared to be pushed around by Russia.
"I don’t accept anybody’s red lines," he told reporters on December 4 when asked to comment on statements that Moscow considers Nato’s infrastructure nearing the Russian borders and the deployment of strike systems in Ukraine as red lines.
At the same time, US Secretary of State Antony Blinken was playing good cop to Biden’s tough cop, telling reporters on the same day that the US didn't want a conflict and desired “most stable relations” with Russia, repeating the message that was given ahead of the first summit in Geneva on June 16.
"I think when they speak, the President will lay out "…our strong desire for greater predictability and stability in the relationship," Blinken told the press, but added a stinger. "In the case of Ukraine, if Russia decides to pursue a confrontation course, if it renews its aggression, there will be very serious consequences, and not just from us but from other countries as well in Europe," he said during the Reuters Next online forum.
Nato feedback loop confusion
One of the core points of conflict between the two sides is their disagreement over what Nato is. Nato has no intention of taking aggressive actions against Russia, Blinken said, as it is a “defensive alliance.”
"It is not an alliance aimed at Russia. It’s not an alliance that is going to commit acts of aggression against Russia," Blinken continued. "The only aggression that we’ve seen in this space in recent years, unfortunately, has been from Russia – first Georgia and then Ukraine. So I think this is a very misplaced way of looking at things.”
Putin doesn't see it like that, and earlier said that Moscow will view the deployment of missile strike systems, hypersonic missiles and MK-41 launchers in Ukraine as red lines.
The Kremlin equates Nato with the US, which dominates the forum, and sees it only as diplomatic window dressing for US military aggression and its “constant wars.” Putin’s lack of regard for Nato led the Kremlin to break off diplomatic relations with Nato entirely in October, deeming it irrelevant to Russia’s interests. Analysts point out that the Kremlin doesn't like dealing with multinational organisations and prefers to conduct its foreign relations on a bilateral basis, where it has more opportunity for deal-making and winning concessions.
These opposing points of view threaten to create a negative feedback loop that will lead both sides into a conflict, and the December 7 summit was an attempt to short-circuit that.
"The only threat of aggression that currently exists is renewed Russian aggression against Ukraine. That’s what we very much want to make sure doesn’t happen," Blinken added. In his opinion, Moscow’s actions "have precipitated Nato shoring up its own defences and its own defences closer to Russia – exactly what President Putin says he wants to prevent.”
Going into the meeting, the agenda was clearly going to be dominated by the situation along the Russia-Ukraine border. However, lying behind the immediate clash is Russia's long-term concern with Nato forces moving closer to Russia's borders. It appears that Putin has reached the point where he feels Russia is strong enough to push back and force a conversation on a new strategic relation with the West that better reflects Russia's security concerns.
"The agenda is obvious. It will be an important contact as a follow-up to the Geneva talks. The progress in the implementation of the Geneva agreements will be touched upon," Kremlin Aide Yuri Ushakov said before the meeting started. "They will be talking about bilateral affairs, pressing international issues, including Afghanistan, Iran, the intra-Ukrainian crisis and Libya. Syria may be touched upon, if the conversation goes that way.”
The Russian presidential aide added that the leaders would also discuss "progress in the dialogue on strategic stability", or arms controls.
"The implementation of our idea to hold a summit of the permanent members of the UN Security Council will certainly be touched upon," Ushakov added.
"This is our proposal on the need to hold joint work with colleagues, with leading countries on reaching corresponding legal accords that would rule out any further eastward expansion by Nato and the deployment of weapon systems that directly threaten us on the territory of states bordering on Russia, including Ukraine," he said.
According to Putin’s aide, Moscow urgently needs assurances that Nato would not expand in the eastward direction.
"It is a very old issue. Both the Soviet Union and Russia were given verbal assurances that Nato's military structures would not advance eastward. However, it turned out that those verbal assurances were worthless, although those statements were documented somehow, and there are records of the corresponding conversations," the Kremlin aide said referring to the verbal promises given by multiple Western leaders to Mikhail Gorbachev that there would be no Nato expansion, which are documented here.
Putin has mentioned these broken promises multiple times, most famously during his Munich Security Conference speech in 2007, where he warned that Russia would push back eventually if such expansion continued.
"Given the current tense situation, there is an urgent need for us to be provided with appropriate guarantees, as it cannot go on like this," Ushakov emphasised. "It is hard to say what form this document will take; the main thing is that they must be written agreements.”
Normandy Four restart
One of the things that Putin did not put on his shopping list was to include the US in the so-called Normandy Four talks, the official format for negotiations between Russia and Ukraine that have been moderated by France and Germany.
There was a first attempt to broker peace, after Ukrainian President Volodymyr Zelenskiy took office in 2019, with talks in Paris in December that year when the Russian and Ukrainian presidents met in the flesh for the first time. However, targets set at the meeting were missed and a second meeting mooted for the following April never happened.
In the meantime, analysts believe that Putin has totally given up on the Normandy format to resolve the problems with Ukraine and likewise the Minsk II process has come to a dead end, where all the deadlines set in that agreement have also been missed. Another goal of the December 7 summit was to force the US to take responsibility for pushing Ukraine into adhering to the Minsk protocols, say analysts.
There has been some speculation that the US would ask to be included to make a Normandy Five, but Russian presidential spokesman Dmitry Peskov poured cold water on that idea ahead of the summit.
Peskov said the Normandy Four group’s effectiveness had been "rather low" because of Kyiv’s reluctance to implement the Minsk Agreements and that Biden “is unlikely to receive such an offer from President Putin. It is a self-sufficient platform.”
However, the Normandy talks may be revived. The leaders of the UK, the US, France and Germany discussed the relations between Russia and Ukraine and supported the resumption of the talks in the Normandy format, the Elysee Palace said in a statement on the morning of the summit.
"On Monday, December 6, the French President [Emmanuel Macron] held talks with the heads of state and government of the [Nato] Quint format (France, Germany, Italy, the UK and the US) ...the sides addressed tensions between Russia and Ukraine, expressed their determination to respect the Ukrainian sovereignty and the commitment to work for the sake of peace and security in Europe. All the sides reiterated the need to resume negotiations between Russia and Ukraine as part of the Normandy Format under the auspices of France and Germany," according to the communique.
A key voice was added to the calls to restart the Normand Four talks, that of the new German Chancellor Olaf Scholz, who said believes that the Normandy format should “once again become an effective instrument for resolving the crisis in eastern Ukraine" on the day of the summit. He added that Germany had the goal for Ukraine to remain a transit country for gas and will strive for this in the future.
Outgoing Chancellor Angela Merkel has been a key figure in the peace talks, but now it appears that Scholz will simply step into her shoes and Germany policy to the Russia-Ukraine conflict will remain unchanged.
Prior to the French statement, Russian Foreign Minister Sergei Lavrov had held the door open to restarting the Normandy format meetings, saying Russia was ready to resume mediation in an effort to settle the Ukrainian conflict.
Biden has also been using the tensions to forge a closer alliance between Washington and Brussels in order to present a united front against Russian aggression.
Biden made the point of calling the top EU leaders before his meeting with Putin to co-ordinate their position. He also called Zelenskiy in Kyiv to discuss the upcoming meeting. One of Biden’s goals has been to repair the damage done to trans-Atlantic relations by Trump and to re-establish America’s role as the “leader of the free world.” And the Ukraine-Russia tensions have proved a very effective vehicle for that end.
“It’s encouraging to see the West align behind Biden going into the summit – both Western governments, and interestingly the Western media with spot-on editorials from the FT, Bloomberg, WAPO and even the Finnish and Swedish press,” said Tim Ash, senior sovereign strategist at BlueBay Asset Management, in an emailed note. “The overwhelming message is the West cannot bow to bullying from Putin, and we need to stand by Ukraine, not sell it down the river.”
Biden had few carrots to offer Putin but the US administration furnished him with a few new sticks ahead of the meeting. In the days before the summit the US announced a string of potential new “harsh” sanctions if Russia attacks Ukraine, without giving any details.
According to a CNN report the day before the summit, the latest sanctions would allegedly apply to Russian President Vladimir Putin’s inner circle, as well as Russian energy producers. It has not been ruled out that Russia could be disconnected from the SWIFT international payment system or that US investors would be banned from buying Russian debt.
"This is not news, but rather a continuation of the media hysteria that we have witnessed recently,” Russian presidential spokesman Dmitry Peskov said dismissing the news.
Any new sanctions imposed following a Russian attack on Ukraine will be co-ordinated between the US and the EU, officials said at the start of this week.
These sanction proposals follow on from more new sanctions introduced to a US defence spending bill in November by US Senate Foreign Relations chairman Bob Menendez, which would be triggered should Russia "escalate" its conflict with Ukraine, and would bring down a “cascade” of harsh measures.
Amongst the options on the table are to cut Russia off from the international messaging service SWIFT, which would make it impossible for Russia to make international payments. Another option is the mooted ban on US investors holding or trading the Russian Ministry of Finance ruble-denominated OFZ treasury bills, which make up a key source of funding for the Russian government. A soft version of these sanctions would be to ban US investors from participating in primary bond auction, which has already been imposed on Russia’s sovereign Eurobond issues, but the really damaging version would be to ban them from buying the bonds on the secondary market, effectively making it impossible for US investor to hold the bonds at all.
However, with an all-time record $600bn-plus in reserves – enough to pay off Russia’s entire external and public debt, and still have $100bn left over – more sanctions on Russia will have a limited impact. In the new three-year budget Putin announced that caps on spending from Russia’s rainy day National Welfare Fund (NWF) would actually be increased, so the Kremlin intends to accumulate even more money that will effectively make the country sanction-proof. At this point there are few additional sanctions the West can impose that would do Russia any real economic harm, without boomeranging back and inflicting equal pain on the West.
“The West does not have much stick, though, given it’s clear that the West is not willing to intervene to defend Ukraine – although it will supply arms to Ukraine to let it defend itself. And reluctance to cut off SWIFT underlines the imperative from the West of not disrupting Russian energy supplies to the West,” said BlueBay Asset Management's Ash.
Sova Capital pointed out that any sanctions on Russian energy company’s ability to raise capital from the international capital markets is already limited, as most of Russia’s biggest companies have deleveraged following the 2008 crisis and don't make much use of debt.
“If the US takes action, we think a likely “easy” sanction to put in place would be to extend Directive 2 [that targets international bond issues] to companies not already subject to this directive. This could appear in the US as a tough measure against Russian energy companies while not really having much of an impact on their operations,” Sova Capital said in a note. “As a reminder, Lukoil is near net cash and only uses debt for M&A, and potentially being subject to Directive 2 could require a slight shift in strategy, although it would not be detrimental to the company’s business.”
Sova Capital goes on to point out that when very harsh sanctions were imposed on Russian aluminium producer Rusal in 2018 it caused such chaos on the international metals market – aluminium prices soared 40% in a day – that those sanctions were eventually withdrawn; the only sanctions imposed since 2014 that have subsequently been withdrawn again.
Back in the States, US politicians have been calling for even more extreme measures. Senate Republican leader Mitch McConnell said on December 6 that Biden should supply Ukraine with “whatever weapons they think they need” to defend themselves from a potential Russian invasion.”
The Obama administration avoided sending Ukraine any weapons at all, afraid that more arms would escalate the fighting and could suck the US into a proxy war with Russia fought on Ukrainian soil. Former US president Donald Trump reversed that policy and began providing Ukraine with more advanced weapons like the “tank-busting” Javelin missiles, which the Kremlin has seen as a provocation. The US has provided Ukraine with a total of $4.6bn in military and non-military assistance. The US government almost doubled its aid to Ukraine this year, sending $400mn in military aid and unloading 80 tonnes of arms and ammo in Ukraine in November alone, according to local reports.
“Back during the Cold War, one of the things that both parties did successfully was to try to arm those who were sympathetic with us,” McConnell said. “And even though Ukraine is not part of Nato, all of our Nato allies are completely freaked out” with the Russian troops on the border of Ukraine.
Talking tough on Russia has become a staple of US domestic politics, where the two parties use it to score points against the other party over and beyond genuine concerns with Russian aggression in Europe. At the same time, the US energy lobby is keen to see sanctions on Russia’s Nord Stream 2 pipeline in order to boost sales of US LNG to its partners across the Atlantic.
Chinese Olympic Games
One of the levers that Putin has over the US in the December 7 talks is Biden’s stated goal of walking back tensions with Russia so that he can concentrate more fully on the “China Problem.” Both the military and diplomatic corps of Beijing and Moscow have been working more closely together in recent years and any sanctions or support of military action by the US in Ukraine is likely to drive China and Russia more closely together.
On the day before Biden and Putin were talking, the US announced it might boycott the 2022 Winter Olympics in China. Also on the same day, the Kremlin announced that Putin would make his third foreign trip to Beijing in February to attend the Olympics as Beijing and Moscow increasingly choreograph their diplomatic ties to counter the US.
A US-led diplomatic boycott of the 2022 Winter Olympics in Beijing announced on December 6 is "a senseless desecration of the sacred Olympic spirit" that would harm athletes, Liu Mingche, counsellor of the Chinese Embassy to Russia, said on December 7. "The so-called boycott [of the Olympics by the US] damages the interests of athletes and fans of winter sports, and it is a senseless desecration of the sacred Olympic spirit," he stressed.
"China is banking on Putin’s trip to the Beijing Winter Olympics in February 2022, and is looking forward to the visit’s contribution to enhancing friendship with Russia," Chinese Ambassador to Moscow Zhang Hanhui told a press conference dedicated to Olympic Winter Games Beijing 2022. White House Press Secretary Jen Psaki explained that the reason behind the boycott demand, which will not preclude US athletes from competing, is China’s alleged mass repressions of ethnic Uyghurs in the Xinjiang Uygur Autonomous Region.
"I hope that [Russian President Vladimir] Putin’s visit to the Winter Olympics in China will be successful and contribute to strengthening friendship," Zhang said in a co-ordinated message with his colleague.
The US also boycotted the Sochi Winter Olympics in protest against Russia’s “anti-gay” laws in 2014. On that occasion Chinese President Xi Jinping pointedly travelled to Russia to attend the opening ceremony, standing next to Putin.
Russia and China have also been conducting an increasing number of joint naval exercises to highlight their combined power in the east, where talk of an invasion of Taiwan by China has resurfaced.
Russia and China held their first ever joint naval drills, the “Joint Sea” drills, in the Sea of Japan in October and practised how to operate together and destroy floating enemy mines with artillery fire, the Russian defence ministry said in a statement. The war games are part of naval co-operation drills between the two countries which run from October 14-17 and involve warships and support vessels from Russia's Pacific Fleet, including minesweepers and a submarine.
“The Chinese and Russian armed forces have become each other’s most important foreign exercise partner. Since the mid-2000s, China and Russia have conducted an increasingly frequent number and more diverse range of Sino-Russian bilateral and multilateral military exercises. These have included a long-standing series of land drills and, somewhat later, novel maritime manoeuvres. Recent years have also seen joint aviation patrols in the Asia-Pacific region, Chinese participation in Russia’s annual strategic exercises, and command post exercises simulating combined missile defence tasks,” the Centre for Strategic and International Studies said in a paper in July.
The two countries have also practised “peace missions” within the framework of the Chinese-led Shanghai Cooperation Organisation (SCO) in recent years, made up of six members: China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. And in July 2017 naval exercises took place in the Baltic Sea, where the PLA Navy warships participated in manoeuvres in the Baltic Sea for the first time ever.
India arms deals
Separately, while relations between Russia and India are not as tight as with China, Russia has been working hard to build up an alliance of emerging markets under the auspices of the BRICS organisation, which is not aligned with the US and its North Atlantic allies.
Putin arrived in New Delhi on December 6 – only his second trip outside Russia since the pandemic began – to meet with Prime Minister Narendra Modi and closed a raft of military, energy and economic co-operation deals before rushing back to Moscow to meet Biden online.
Russia has long been a key arms supplier to India, which is looking to modernise its armed forces, and one of their most high-profile current contracts is for the long-range S-400 ground-to-air missile defence system. Another deal was signed for India to produce the famed Kalashnikov rifles under licence.
India has remained studiously neutral in the clash between the US and the Russia-China alliance.