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Could this mean peace in our time? Positive sounds about a possible ceasefire in Ukraine sparked a surge in global stock markets, particularly in Europe. Oil prices took a dive, and ructions in the bond markets intensified. A Russian announcement that its military was cutting back activity around Kyiv and Chernihiv in the north of Ukraine to concentrate on the Donbas in the east sounded like a sign of progress.
However, the market reflex within hours was looking overdone. Western reaction was skeptical; an offer to stop hitting you in quite so many places is not exactly magnanimous, after all.
And any deal is unlikely to do much to salve the economic damage. Sparing lives should take priority over the economy, and even arguably over weighty matters of sovereignty and the integrity of borders. That said, there are reasons not to get too excited about this peace process, or about any settlement that it might produce.
The first problem, unavoidably, is a parallel with World War II. When you compare someone to Hitler in an argument, it’s generally a sign that you’ve lost. Otherwise, you wouldn’t resort to hyperbole.
But comparisons to Neville Chamberlain, the British prime minister who reached an agreement in 1938 that allowed Hitler to take Sudetenland, the German-speaking region of Czechoslovakia, might be in order. After proclaiming “peace in our time,†Chamberlain had to declare war on Germany within a year, after Hitler annexed the rest
of Czechoslovakia and invaded Poland. There are arguments that history’s judgment on him has been too harsh, but no leader wants to invite comparisons to Chamberlain.
The similarities between the emerging deal over Ukraine and the one that Chamberlain struck in Munich are obvious. Russia appears to want to cement control over Donetsk and Luhansk and Crimea; as this map shows, that would involve peeling away from Ukraine the regions with the most ethnic Russians.
The map comes from a fascinating economic analysis of Ukraine and how its economy has shifted over the last decade, produced by Frank Neffke, Matte Hartog, and Yang Li of the Growth Lab at the Harvard Kennedy School. It tracks, in raw economic terms, the shifts in Ukraine — and suggests both why carving it up might have some logic, and also why it will be difficult to maintain economic pressure on Russia in any event.
Meanwhile, the effect of Euromaidan in 2014, when Ukraine ejected a pro-Russian president in what has variously been described as a colour revolution or a CIA-backed coup, is clear from the balance of Ukraine’s exports.
—Bloomberg