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1 November 2023

Countries can bear the West’s sanctions – but not its moralising

Even Australia pulled out of trade talks with the EU because it could not subject itself to European finger-wagging.

By Wolfgang Münchau

Here is an impossible triangle for the West. It can finance two simultaneous proxy wars. Janet Yellen, the US Treasury secretary, was right to say, on 16 October, that America could “certainly” afford to support Ukraine and Israel. The West can also place financial sanctions on other countries to impose its will on them. And it can assert its moral leadership over the rest of the world. But it cannot do all three of these things at once. I would argue that it cannot even do two.

In a recent TV interview, the former French prime minister Dominique de Villepin said that Hamas has laid a trap for the West, “one of maximum horror, of maximum cruelty”. It is a trap that could lead to escalation, he said, but also to the end of Western leadership, something we have taken for granted for generations.

He is right about this. Vladimir Putin has inadvertently laid a similar trap with his invasion of Ukraine last year, in triggering the West to impose maximal economic sanctions. The West is also imposing sanctions on China – targeting Huawei, semiconductors and, soon, electric cars. These restrictions have brought Russia and China closer together, and left many non-aligned countries, such as Brazil and India, wary of following the West’s lead. The sanctions also drove EU countries that were dependent on Russian gas into recession.

Chinese news media and European conspiracy theorists portray Western leaders as evil plotters who are out to force their will on others. I actually think the opposite is the case. The West is acting out of a sense of moral superiority. It is the missionary zeal of the crusader that leads to actions that are deeply immoral. When the US applies secondary financial sanctions to countries to make them comply with American policy, it ends up defying the democratic rights of those countries. It also fosters resentment over the moral standards that the US is imposing on them.

The EU is starting to do the same, by integrating its values into trade agreements. The planned EU trade deal with South America’s common market (Mercosur) is going nowhere because the EU wants the Mercosur countries to apply European standards to protect their own rainforests. Australia has just pulled out of trade talks with the EU because Canberra could not subject itself to European finger-wagging.

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[See also: What Putin learned from Hitler]

Western support for Ukraine, too, is a morality tale. As the Prussian military theorist Carl von Clausewitz reminded us: never enter a war – or a proxy war, for that matter – without a strategy for maintaining political support throughout. And never enter one without an exit strategy. What has been the exit strategy in Ukraine, other than the unrealistic notion of total victory? What is the exit strategy in the Middle East?

De Villepin’s great claim to fame was his intervention at the UN Security Council in February 2003, when he, then France’s foreign minister, urged the US not to invade Iraq as the UN weapons inspections had not been conclusive. Back then, the US and its allies instead chose to breach international law and invade Iraq based on false evidence. When we complain about Russia’s breaches of international law, the rest of the world, the Global South included, sees us as hypocrites.

For the EU especially, the two proxy wars are a disaster on many levels. Putin’s aggression initially united the EU, but this unity is frail. Viktor Orbán and Robert Fico, the prime ministers of Hungary and Slovakia respectively, are now starting to extract a price for their support for Ukraine aid. The Israel-Hamas war, meanwhile, has divided Europeans right from the start. These divisions run within political parties, especially the left, and across countries.

What I worry about most for the long term is the cumulative impact of political decisions since the start of the lockdowns in 2020. After the fall of communism in 1989 and 1990, the West adjusted its economic model to one of globalisation. Technical innovations in global supply chains, combined with a liberalisation of trade and investment, created a new world economic model. China’s breathtaking economic development was dependent on savings surpluses that were absorbed by the West. Europe was among the main beneficiaries – and no European country ended up more globally interconnected than Germany.

The geopolitical fragmentation now taking place will erode these connections and dependencies, with huge long-term economic consequences for the West.

After Russia invaded Ukraine, the West’s first collective act was to freeze Russian assets. The dominant role of the dollar, and to a lesser extent the euro, enabled this. But it came at a cost. The sanctions accelerated other countries’ efforts to build payment systems and strike trade deals among themselves, deliberately circumventing the Western financial infrastructure.

Sanctions are potent in the same way as a nuclear bomb is potent: there is no scenario in which you can use it and enjoy your victory afterwards. The irony is that the sanctions were not even very effective: Russia’s growth this year exceeded that of most advanced Western economies. The sanctions also failed to prevent Putin from waging war. A politically and financially exhausted West is now in danger of having to settle for an outcome in Ukraine many will see as a bitter disappointment.

A case can be made for Western military support for Ukraine on the grounds that a Russian annexation would be a disaster for European security. But the cheerleading, the moral outrage and the whatever-it-takes approach to foreign policy are impossible to bear. Worse, they are self-defeating.

[See also: Europe has made itself vulnerable by outsourcing its security]

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This article appears in the 01 Nov 2023 issue of the New Statesman, Labour Revolts