Sweden’s membership in NATO is the last step in a change process overturning a Baltic security regime which has existed not since 1991, but since 1721. Before this, the Baltic Sea was a Swedish sea, Swedish peace reigned from the Gulf of Finland to Greifswald. Losing the Baltic…
…provinces to Peter the Great changed the security logic of both Sweden and Russia. For Sweden, preserving the Baltic as an open sea was key, a ‘mare liberum’. For Russia, the policy was ‘mare clasum’, the principle that only military vessels of literal states are allowed to…
…navigate the Baltic Sea. To counter this, Sweden always relied on mare liberum principles, meaning that British, French and later US presence was welcome. Russia, obviously, never welcomed this. In the Cold War, this conflict was translated into the logic of the Soviet-NATO…
…relationship. Sweden never abandoned its mare liberum policy. When Moscow spoke about the ‘Sea of Peace’, this was Soviet speak for mare clasum, ie minimising NATO presence in the region. It was the same issue with medium range missiles in the 80s and constant complaints about
US presence. We can expect Moscow to make critical remarks on today’s message. But I am not sure they really see how deep this historical change goes. Swedish policy did not really change today. What has fundamentally died is the Russian mare clasum dream, the idea of Russian…
…hegemony in the Baltic Sea. This process started 30 years ago, and today we had the final confirmation of its completion. Yes, Sweden’s policy of non-alignment is over, but the deeper strategic stakes have been and remained a constant since 1721.
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In the 90s, Yeltsin turned off the gas to Estonia, “to teach them a lesson in geopolitics”. Natural gas has been used by Moscow as a tool of influence and support for friendly neighbours, but also for intimidation. This history is the context of yesterday’s Nordstream attacks.
We will know better soon what happened yesterday, but the general lesson is this: NS1 and NS2 were never just about business for the Kremlin. Russia already had its network of pipelines across Ukraine and Belarus, which btw are still working fine, since the 70s. As Yeltsin said…
It was geopolitics. With NS1 completed, Putin could attack Ukraine in 2014, not having to fear the Ukrainians switching off the gas transit as retaliation. Now, Germany would always get its cheap gas, while giving Russia had a higher degree of freedom towards its neighbours.
Considering recent developments along the border of Ukraine, here are some findings from our paper on sanctions. Firstly, financial sanctions have had a strong effect on Russia's economy, where they were intended to impact. That is, on increasing interest rates.
As a result, credit expansion is limited, and costs for servicing government debt have increased. It matters little that Russia has low debt, if costs of servicing that debt is more and more expensive.
Secondly, we can measure the impact of threats to use sanctions. Our paper incorporates theories on deterrence, and argues that threats have impacted the markets with a similar magnitude as actual sanctions.
That means the US and the EU should now make a clear credible signal.