Mark Galeotti of New York University -

There is a new orthodoxy in some western quarters about how “masterful” Russian tactics have been over Ukraine. To be sure, Moscow demonstrated a deftly ruthless hand in spreading chaos in the east. But as week of anarchy and impasse follows week, it is worth noting that this may prove something of a Pyrrhic victory. Perhaps the best hope for peace is to be found in the fact that the status quo is in no one’s interests.

Certainly not Kyiv’s. Although Donetsk and Luhansk received extensive government subsidies, they represent the heart of the country’s industrial base. Considering that its economy was already in a bad shape, a rump Ukraine to which the east is lost would face formidable challenges in trying to stay economically afloat.

How long would the EU be willing to bankroll it? This is especially considering that Ukraine’s energy debt to Russia and its continuing need for its gas means that in effect, Brussels would be subsidizing Moscow.

The longer the conflict continues, the harder it is for Kyiv to maintain its legitimacy and credibility. It also increases the tendency already seen with the rise of the National Guard – many of whom are ultra-nationalists hurriedly sworn into service and given guns and the most basic of training – and local forces such as the militia bankrolled by oligarch Igor Kolomoisky, governor of Dnipropetrovsk region. The danger is that the conflict devolves into a struggle of warlord versus warlord, with Kyiv relegated to onlooker and cheerleader.

But even if Kyiv looks as if it might be able to re-impose its control over the east through military means – which looks unlikely at the moment – the odds are that Moscow would simply up the ante in response. It could increase the deniable assistance it provides the rebels or decide it has no option but to intervene directly, “responding to requests for assistance.” After all, Putin has placed too much political capital into his Ukrainian adventure to be able to accept anything that he cannot at least plausibly spin as a win.

However, we shouldn’t assume that Moscow is not uncomfortable, too. This is not just a question of Western sanctions although – jokey bluster aside – many within the elite are genuinely concerned about their scope to travel and trade abroad.

More generally, what was presumably envisaged as a quick and dirty piece of political-military blackmail, akin to starting a fire and standing with one foot on the hose, is proving more dirty than quick. The Kremlin appears genuinely to have believed that Kyiv would come quickly to terms. Whether through determination or disorganization, they did not, and now the newly-inaugurated Ukrainian president Petro Poroshenko must work in a political environment saturated with nationalist rhetoric and often unrealistic expectations.

The big mo

Meanwhile, the insurgency in eastern Ukraine has acquired its own momentum. Strongmen are building their own pocket fiefdoms. Some of these are simply gangsters seizing the opportunity to turn underworld coercive power into political authority. Indeed, we are beginning to see signs of eastern militias turning on one another.

Thus, Moscow faces the daunting prospect of civil war on its own border. Furthermore, many of the Russians who have chosen to go fight come from the more unappetizing nationalist extremes. The irony is that while Putin has been stoking Russian imperial sentiments of late, as a source of legitimacy if and when the economy worsens, he has carefully not allowed this to assume the character of racist xenophobia. His is a nationalism of the Russian state, not an ethnic one.

This is a subtlety likely to be lost on many of the Russian “war tourists.” Instead, the conflict is arming and empowering – amongst, to be sure, a range of adventurers with less toxic beliefs – extremists whose racist ideals are problematic to say the least to the Kremlin. After all, it is deeply aware that perhaps 20% of its population is non-ethnic-Russian, and it has to work with non-ethnic-Russian elites across the country. Some day, these people will come home, and they are unlikely to check their guns or their beliefs at the border when they do.

Talk of allowing or encouraging the east to become some new de facto statelet or statelets under Russian dominion and protection, like Transdnistria, South Ossetia or Abkhazia, also understate the difficulties this would bring Moscow. Supporting such a large and industrialized pseudo-state would be a great financial imposition, not least as Kyiv would presumably block its borders and the West bring sanctions to bear on those who traded with it.

Many Ukrainian defence plants on which Russia relies, such the transport airframes of Kyiv’s Antonov, would be closed to them. Others in the east, such as Zaporizhzhya’s Motor Sich, would require extensive support from the Russian budget.

Perhaps worst of all from Moscow’s perspective, the West would likely feel it had no option but to extend even greater aid to Kyiv, out of both embarrassment and common sense – the EU hardly wants a failed state on its doorstep. Gaining the east (at considerable cost) would also definitely lose western Ukraine.

Private armies

Are the oligarchs benefiting if they are getting to raise private armies? Hardly; the point of being an oligarch in somewhere like Ukraine is that you can concentrate on making and enjoying money. Your bribes and gifts, campaign contributions and exhortations to your workers to vote the “right” way are all intended to ensure that you have a compliant government that protects your interests and stays out of your affairs.

Kolomoisky has made his choice and is sinking his own assets into making up for the shortfall in the government’s security apparatus. Viktor Pinchuk, an early defector from former president Viktor Yanukovych’s side, has seen his businesses badly hit by retaliatory sanctions from Russia, previously his main market. Rinat Akhmetov has been more circumspect, but ultimately had to side with Kyiv in May. Although he would hardly be a pauper if his businesses in the east were expropriated, there are voices calling for such a move.

At present, it is too early to say what the chances of peace in the near term may be. President Poroshenko has been publicly bullish about his country’s future in Europe rather than as a Russian satellite, but he has also talked up the need for peace. It remains to be seen how much real flexibility he will show in private negotiations, how far his rhetoric is to establish a strong position from which to be haggled down, or else to reassure the west Ukrainian nationalist constituency.

Nonetheless, although reaching any deal will be extraordinarily hard in the short term, the outcome of not being able to do so will be a great deal harder on everyone in the long. It is in no one's interests, not Kyiv's, not Moscow's, not Akhmetov's nor even Donetsk's, for this to continue indefinitely.

Mark Galeotti is Professor of Global Affairs at the SCPS Center for Global Affairs, New York University, who writes the blog "In Moscow's Shadows"