Putin’s henchmen know this from their own experience. Russia’s rulers have been buying up Europe for years. They have grand mansions and luxury apartments from London’s West End to the French Riviera. Their children study in British private schools and Swiss finishing schools (Swiss finishing schools). And their money is kept in Austrian banks and Commonwealth tax havens.
The inner circle of the Putin regime is no longer afraid of the European elite. Once, they viewed all its representatives as MI6 agents. Now they are wiser. They know full well how fawningly compliant Western aristocrats and tycoons become when the subject turns to their billions. In Russian eyes, they have now become hypocrites – the very members of the European power elite who help them hide their wealth.
There was a time when Russia’s powerful listened when European embassies condemned the rampant corruption in Russian state companies. Now, no longer. Because they know full well that these same European bankers, business people and lawyers will happily serve them to deposit the fruits of corruption in safe places somewhere in the Netherlands Antilles or the British Virgin Islands. This is not about large sums of money. It is about very large sums of money. According to estimates by Putin’s own Central Bank, two-thirds of the 56 billion dollars that were taken out of Russia in 2012 was money linked to illicit activities – to crimes such as kickbacks, the drug trade and tax fraud. And this is money for which the elegant English bankers in London roll out the red carpet.
Behind the decline of Europe, Russia sees the weakness of America. The Kremlin does not believe that European countries, with the sole exception of Germany, are truly independent of the USA. In their eyes, they are vassal states that Washington could now force (just as it forced them during the Cold War) to end their dirty deals with the Kremlin. Seeing Spain, Italy, Greece and Portugal outbidding one another in a race to see who will be Russia’s best business partner in the European Union (in exchange for silence on human rights issues), Russia concludes that US control over Europe is slowly fading.
In Moscow, Russia hears weakness in the voice of the US embassy. Once, the Kremlin feared that any Russian military adventure beyond its borders could trigger painful economic sanctions: an export ban on key parts for its oil industry (key parts for its oil industry) or even a denial of access to the Western banking sector. Those days are gone. Russia sees that America’s attention is focused on other things; Putin’s Ukrainian gambit came as a shock to the US foreign policy establishment. They would rather talk about China or participate in Israeli-Palestinian peace talks. Russia sees that America is vulnerable: in Afghanistan, in Syria and on the Iran issue, the USA desperately needs Russian support to continue its supplies, host peace conferences or implement sanctions.
Moscow is not nervous. Russia’s elites have exposed themselves on an incredibly vast scale – everything they hold dear is now locked up in European real estate and bank accounts. In theory, this makes them highly vulnerable. By launching large-scale money laundering investigations and introducing visa bans, the EU could cut them off from their wealth. Yet time and again, European governments have shown resistance to legislative initiatives that resemble even remotely the Magnitsky Act passed by the Americans, which has been used by the USA to deny entry to several criminal Russian officials. All of this has reinforced Putin’s conviction – a strong conviction – that European elites are more interested in making money than in defending their principles. Evidence is not hard to find. When Russian special forces reached the outskirts of Tbilisi in 2008, there were announcements and loud words, but no one even squeaked about the Russian billions. When Russian opposition figures were tried in show trials, the European Union expressed its deep concern in letters, but again, not a word about the Russian billions.
The Kremlin believes that it now knows Europe’s dirty secret. The Kremlin believes that it has completely “decoded” the European elite. The grim men who run Putin’s Russia view the European elite as being like the politicians of the late USSR. In the 80s, the USSR talked about international Marxism, even though they no longer believed in it. Now, Brussels (or so Russia thinks) talks about human rights, but no longer believes in them. Europe is actually run by an elite that is driven by the morality of hedge funds (hedge funds): make as much money as possible and stash it offshore. The Kremlin sees confirmation of this in former leaders of Great Britain, France and Germany. Tony Blair now gives advice to the dictatorship of Kazakhstan on how to improve its image in the West. Nicolas Sarkozy has considered starting a hedge fund with money from the absolute monarchy of Qatar. And Gerhard Schröder chairs the shareholders’ committee of Nord Stream – a corporation whose main shareholder is Gazprom and which owns a gas pipeline stretching along the Baltic Sea, connecting Russia to Germany.
In Russia, they are certain that there will be no economic counter-attack from the West. They believe that Europeans will not touch the money of the Russian oligarchs. They believe that Americans will not punish the Russian oligarchs by blocking their access to banks. Russia is certain that a military counter-attack is out of the question entirely. From the USA, they only expect political gestures. Cancel the G8? So what? Therefore, Putin is not afraid of the West; he can focus on his most important task in Russia: staying in power. When Putin announced his intention to return to the presidency at the end of 2011, the main nagging question was – why? The regime had no story of its own to offer. What did Putin hope to achieve by taking this step? To multiply his wealth? Dmitry Medvedev, the puppet president whom Putin sidelined, had at least cultivated a story of Russia’s modernisation. What else, if not a craving for power, made Putin return? The Kremlin’s political technologists had no ideology to offer.
In December 2011, Moscow was shaken by mass protests. More than 100,000 people gathered not far from the Kremlin, demanding that Russia be governed differently. The protesters were driven off the streets, but the regime’s problem of self-justification remained. Putin had presented himself to Russians as the man who would stabilise the country and provide rising incomes after the chaos of the 90s. But for Russians, who were afraid not of chaos but of economic stagnation, it was not exactly clear what this “stability” might mean.
And then, the grand propaganda campaign, known as the “Eurasian Union”, appears on stage. That is the name of the new, vague formation that Putin wants to create from former Soviet republics. The first steps towards it are a customs union with Belarus and Kazakhstan, to which Putin hoped to also add Ukraine under Viktor Yanukovych. This is not just about an empire; this is about using the empire to cover up the grotesque scale of corruption and to justify the regime’s existence.
Russia would have gladly swallowed Ukraine whole, but the show must go on. Russia’s TV news broadcasts need hymns of praise to Putin every evening. In Russian politics, what matters is propaganda, not substance. And the real substance of Russian politics is siphoning billions of dollars out of the country and hiding them in Western tropical tax havens, for which it needs constant PR and constant Putinist drama to keep it all hidden from the eyes of the Russian people. Are you outraged by the Kremlin’s billion-dollar luxury plane fleet? Are you angry that a third of the 51-billion-dollar budget for the Sochi Olympic Games disappeared in “kickbacks”? Forget about it! Russia is marching forward again.
That is exactly why Crimea is an ideal card for Putin. Crimea is not South Ossetia. It is not a remote mountain village inhabited by some dubious little nation that the Russians have never heard of. Crimea is the heart of Russian romanticism. It is the only part of the ancient world that Russia ever conquered. That is precisely why the aristocracy of Tsarist Russia loved it so much. Crimea symbolised the dreams of 18th and 19th-century Russia to conquer Constantinople and liberate Greek Orthodox Christians from the Muslim yoke. Crimea became a playground for imperial ambitions. In poetry and palaces, it was celebrated as a diamond in the Russian crown.
Crimea is the only lost land that Russians truly mourn. The reason for this is tourism. The Soviet Union continued to maintain the Tsarist myth and turned the peninsula into a giant holiday destination, full of workers’ sanatoriums and pioneer camps. Unlike Russian cities, say, in Northern Kazakhstan, Crimea is a place where Russians have actually been. Even now, one million Russians holiday in Crimea every year. It is not simply a peninsula; it is simultaneously Russia’s membership of the Club Med (a club for Mediterranean countries) and imperial romanticism. Vladimir Putin knows this. He knows that millions of Russians will cheer for him as a hero if he regains Crimea. He knows that European bureaucrats will issue a sharp statement in the media and then return to business as usual, helping the Russian elite buy houses in London and palaces in France. He knows full well that the USA is no longer capable of forcing Europe to trade differently. He knows full well that the USA is incapable of anything more than theatrical military manoeuvres.
That is why Vladimir Putin has just invaded Crimea. He believes he has nothing to lose.
Article first published in 2014