US' Ukraine Policy Whiplash Benefits Moscow

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00:00Bloomberg Economics out with a new report. It notes that the U.S. Ukraine policy whiplash is

00:04benefiting Moscow. What do we know? So it's been quite the roller coaster for the last few days.

00:11What emerged last week was a plan that seemed to be negotiated between the U.S. and Russia,

00:15largely favorable to Moscow in terms of, for example, capping Ukraine's military,

00:21ensuring that it would never be a part of NATO in return for pretty ambiguous security guarantees.

00:26Since then, there's been a scramble by Ukraine and its European partners to engage Washington and try

00:31and alter those terms. And now it looks like at least nine of the points from that original 28-point

00:37peace plan have been adjusted or removed, including some of the ones that Ukraine felt crossed its

00:42red lines. And where things stand is finalizing those terms and then pitching them back to Moscow.

00:47But our assessment is that Russia is unlikely to receive in a positive way those altered terms

00:54based on how things have gone earlier this year in prior rounds of negotiations.

00:59Wait, so you know what I keep thinking? Who's calling the shots of a possible truce? Is it U.S.? Is

01:04it Europe? Is it Ukraine? Or is it President Putin of Russia? Or maybe a little bit of all of them?

01:12Or who even in Washington is involved in this? It seemed last week when this plan first emerged

01:17that some members of the President Trump's own administration weren't even entirely sure where

01:21this peace plan came from and whether it had been fully coordinated and agreed to by the U.S.

01:26side. But then it quickly moved from that to the U.S. setting an ultimatum on Ukraine to agree

01:30to it. And now we're renegotiating the terms of it. So it's been a lot of twists and turns here.

01:36But this isn't an entirely new story. This is something we've seen earlier this year. If you think

01:41back to August when President Trump met with President Putin and then immediately rushed into a summit

01:46with Ukraine and European allies, this feels very much like a familiar pattern and one I think is

01:52likely to produce the same outcome, which is no peace plan. Well, OK, so on that European allies,

01:57sort of another group here that we need to focus on, what do they want?

02:02I think European allies are primarily concerned about first making sure that this deal isn't so

02:06heavily weighted in Moscow's favor that, for example, it doesn't end up preserving peace for the long

02:12call. That, for example, it leaves Ukraine in a weakened position that could allow Moscow to just

02:17reconstitute its forces and reattack. That not only has implications for Ukraine security, but

02:22ultimately for Europe's. So that's going to be a major area of concern. Second major area of concern

02:27is one of the elements of that original peace plan was around the frozen Russian assets and how they

02:33would be leveraged and in particular how they might be leveraged to essentially pay the U.S. back for

02:37security commitments to Ukraine. That's something that Europeans have a stake in as well. And they

02:43would want to have a say in how those frozen assets are used, particularly as they're debating

02:47internally whether or not to use them to support Ukraine in the short to near term.

02:52Hey, Jenny, I want to move on to U.S. and China. But one last question. Is there still a feeling here in

02:58the United States and obviously elsewhere in Europe? I think Europe, it's a safe yes. But here in the U.S.

03:03said if if this is a much more favorable agreement to President Putin, that he may in another few

03:13years, you know, create another war and go after another land grab. I just wonder how much of that

03:19fear is still out there. I think that's certainly a concern among foreign policy analysts, especially

03:24having watched Putin play this playbook before we saw with Crimea back in 2014. He played out the peace

03:30process. He drew out negotiations and pretended to be genuinely interested in peace. And then he

03:36essentially snagged and pocketed the results of that peace process, reconstituted his forces and

03:42launched a full scale assault on Ukraine just years later. And I think certainly leaders in Europe and

03:47Ukraine, but also in the United States, many are concerned about the possibility of that happening

03:51again. So in terms of just thinking about possible endings for this, as we do get close to the fourth

03:57year of this conflict, what would an end look like that Russia would be OK with and Ukraine and Europe

04:04would be OK with? It's hard to see at this point a potential compromise position because Moscow seems

04:10to be betting on more battlefield gains and essentially seeing that time is on its side.

04:14It really doesn't have an incentive to negotiate for peace because it thinks it can just continue to

04:19win territory. The West's support for Ukraine will continue to dip. Ukraine will continue to have some

04:24the internal issues we're seeing, like with corruption scandals and losing political domestic unity.

04:30And it will just have to bide its time and continue to push for the offensive. I think what could

04:34change Moscow's calculus is stricter Western sanctions that bring some of its economic troubles

04:40more to the forefront. That might press it into a position where it realizes it's not a war that it

04:45can continue to afford.

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