The European Union is close to reaching an agreement on banning the import of Russian oil. Some Eastern-European member states, particularly Hungary, are trying to obtain exemptions or delays on the implementation of the ban. All in all, however, it seems likely that many if not all EU members will soon agree to ban Russian crude oil completely within the next six months, while refined oil would be phased out by the end of 2022.
The ban is only the latest EU disciplinary economic measure which the bloc has levelled against Russia. On February 24, the starting day of the Russian invasion of Ukraine, European Commission President Ursula von der Leyden announced “massive” sanctions beyond those already implemented after the Russian seizure of Crimea in 2014. If the EU were to reach an agreement on the latest addition, these sanctions will come to target the Russian petroleum industry next to technological transfers, Russian banks, and Russian assets.
The expansion of the EU sanctions follow on the heels of Germany’s surprise move to freeze the approval process of Nord Stream 2 on February 22. This announcement, made even before the invasion had started, further jeopardized the operationalization of the natural gas pipeline between Russia and Germany, construction on which was already finished in the summer of 2021.
The EU ban of Russian oil and Germany’s policy of energy independence from Moscow demonstrate to what lengths the Europeans are willing to go to put pressure on Putin, even if the sanctions will likely hit ordinary Russians and Europeans the hardest. But will they at all be effective? And is there a better and morally superior alternative? The answer, respectively, is no and yes—as students of the Cold War should know.
Sanctions Are Counterproductive
Commercial and financial penalties as a tool of foreign policy arose in earnest after World War I. The “Great War,” and especially its Wilsonian endgame, entrenched the neoliberal—as opposed to classical liberal—vision of global interventionism. When the League of Nations, the world government that was meant to sprout forward from this ideology, was faced with war-weary western publics, however, economic sanctions started to emerge as an alternative to “humanitarian” warfare. Ever since, sanctions have functioned as a surrogate for military intervention whenever war is deemed undesirable.
If they would have been alive to see them, nineteenth-century liberals would criticize sanctions on the basis that they, like tariffs and other trade barriers, increase the likelihood of international conflict, whereas free trade fosters peace as it raises the costs of war for the would-be belligerents. Indeed, libertarians like Ron Paul, as the political descendants of the classical liberals, have long argued that economic sanctions are an “act of war” on the basis that they are a stepping stone towards war.
Political scientists, on the other hand, hasten to differentiate economic sanctions from trade wars (which are essentially apolitical) and economic warfare (which principally targets an enemy’s military instead of its economy). Economic sanctions, like economic warfare, are aimed at coercing the target government to change its political behavior, but without resorting to arms. The global conflict over Ukraine is thus a good example, as Russia’s detractor nations are not willing to go beyond sanctions and arms shipments by putting NATO troops on the ground or installing a no-fly zone over Ukrainian airspace.
All the more important to be sure that sanctions are effective foreign policy tools, then, given that ordinary Russians and Europeans are the ones who suffer the hardest from trade restrictions and resulting price inflation. However, upon close inspection of all economic sanctions in the half-century between the 1930s and the 1980s, studies have shown that only about 5% of them turned out to have had its desired political effect.
Moreover, in line with Ron Paul’s thinking, economic sanctions, like protectionism, increase the risk of war, as the post-Cold War record shows. In both Iraq and Libya, sanctions have paved the way for war; in Syria they preceded the arming and training of the rebels; in Iran they have only ever increased tensions unnecessarily; and in North Korea, finally, the implementation of sanctions after the regime’s first nuclear tests in 2006 failed to prevent further nuclear and ballistic missile tests.
Sanctions are not only counterproductive in the sense that they don’t produce the desired political effect and often fail to prevent military escalation. They also disempower the citizenry they are supposed to induce to rise up. Instead, they strengthen the grip of the target regime. From the Allied blockade on Germany during World War I to the UN sanctions on Iraq in the 1990s, even the most far-reaching sanctions with the most devastating humanitarian consequences have failed to provoke a regime change. Indeed, the handful of sanctions in the 20th century that can be called successful have to do with trivial bilateral conflicts and have thus not prevented the outbreak of major military conflicts.
Having learnt nothing, many Western foreign policy architects hope that the latest round of sanctions will result in Putin’s overthrow, whether they admit it openly or not. Yet, for those who have heard about the rallying-around-the-flag-effect, it does not need to surprise that Putin’s approval ratings soared from 70% to 80% since the invasion. It is precisely because of NATO’s eastern expansion, Western regime change operations, and sanctions that he succeeds—regretfully—in painting Russia as the victim and legitimizing the war at home.
Europe’s Forgotten Cold War Victory
The German shelving of Nord Stream 2 is increasingly seen as a radical departure from the decades-old policy of Ostpolitik, Germany’s stalwart Cold War method of trade with the East. On the diplomatic front, a similar trend has taken hold towards the Ukraine crisis. In 2014, the EU already allowed itself to be rolled over by U.S. Assistant Secretary of State for European Affairs Victoria Nuland, who by-passed the more prudent Europeans and was caught hand-picking the post-revolution Ukrainian cabinet and sending then-Vice President Joe Biden over for an “atta-boy” in order to “glue” the coup together. Now, following in the footsteps of Washington once again, U.K. Prime Minister Boris Johnson is reported to have “urged against negotiations” during his April trip to Kyiv.
Although they now seem to be giving up on trade and diplomacy as strategies for peace, the West Europeans spearheaded these policies during the era of détente in the 1960s and 1970s. Much recent European scholarship on the Cold War has highlighted Western Europe’s idiosyncratic détente strategy. Whereas both superpowers perceived détente as mostly just a military phenomenon necessitated by mutual assured destruction, the West Europeans had a much more optimistic view on peaceful co-existence. The more Western goods and ideas were allowed to penetrate the Iron Curtain, they reasoned, the quicker the East European communist regimes would lose their power base.
To give just one example, the West Germans and Soviets in the mid-1970s reached a multibillion dollar agreement for the construction of the Yamal natural gas pipeline, which is still in operation today. The West Europeans were not afraid that such trade agreements would give the Kremlin some kind of stranglehold over their economies. Indeed, as Willy Brandt told Harvard students as early as 1962, peaceful co-existence “is not just synonymous with the status quo, but instead is a competition which communism is bound to lose.” Moreover, the project was perceived as a symbolic step towards reconciliation between two nations that had fought one of the bloodiest battles in the history of warfare in the Battle of Stalingrad during World War II.
The West Europeans also resisted American pressure for sanctions on Moscow during the Polish Crisis of 1980-1981. “Why should we punish ourselves with sanctions,” French Foreign Minister Claude Cheysson declared, “just because there are developments in Eastern Europe that one cannot accept.” Likewise, successive U.S. administrations tried to kill the Yamal pipeline. Ultimately, however, Ronald Reagan had to cave in, and gas finally started flowing in the late 1990s.
The dispute over Nord Stream 2 is remarkably reminiscent of the West-East conflict over the Yamal pipeline. The Trump administration slapped sanctions on participants in the construction of the pipeline, thereby forcing more than a dozen European companies to back off from the project. Like Reagan, Biden eventually had to let go of the absurd notion of sanctioning America’s NATO allies in May 2021, a couple of months after which construction on the pipeline’s first section was finished. Since then, the Germans have been determined to turn on the oil tap—up until February of this year, when Chancellor Olaf Scholz declared Germany’s new policy of energy independence from Moscow. German President Frank-Walter Steinmeier, like Scholz a member of the Social-Democratic Party that spearheaded Ostpolitik during the Cold War, in April declared that clinging on to Nord Stream 2 “was clearly a mistake.”
This symbolic pronouncement, together with German military spending increases not seen since World War II, demonstrate that the twin pillars of West European détente policy—trade and diplomacy—increasingly look like they are dead and buried.
The West Needs to Believe in Itself
The European-centered détente scholarship mentioned above has credited West European Cold War policy with the near-bloodless implosion of the communist regimes in Eastern Europe in 1989. As Oliver Bange and Poul Villaume have written in the introduction of The Long Détente, the West European insistence on diplomacy, trade and European re-integration made sure that détente survived throughout the 1980s, which “had a profound impact on the eventual outcome of the conflict between East and West and the quintessentially peaceful framework in which the ‘endgame’ was played.”
Unfortunately, the Reaganite myth that the backing of the mujahideen in Afghanistan and the military “outspending” of Moscow were more important than peaceful competition with communism in bringing down the Soviet Union survives in popular memory.
Likely, this has something to do with the lack of ideological underpinning of the West European strategy. Although peace through trade and diplomacy sounds an awful lot like what the classical liberals would have supported, the architects of European détente were actually social democrats like Willy Brandt, nationalists like Charles de Gaulle, and Christian democrats like Belgian Foreign Minister Pierre Harmel. Surprisingly, the so-called “liberal” parties of Western Europe—if they are even worthy of that label—were its most ardent opponents and leaned more to Washington’s hardline foreign and defense policy throughout the Cold War.
What we therefore need is a reappraisal of classical liberal values. The West needs to understand that free trade and limited government are superior to socialism, protectionism, authoritarianism, and interventionism. Capitalism does not need guns to back it up. The more relatively free societies in the West co-exist with imperial foreign policies, the more youth in the West and people in the rest of the world will slide to the left. That was true at the eclipse of colonialism in the 1960s and is still true today.
Why else would recent polls reveal that the world population views the United States—not the authoritarian regimes in Russia or China—as the biggest threat to democracy and world peace? When American presidents from Bill Clinton to George W. Bush to Joe Biden proudly paint themselves as the chief guardians of global democracy, the world sees the countless U.S.-engineered coup d’états and U.S. backing of autocratic regimes like Saudi Arabia. When the West claims to defend the “rules-based order” in reproaching Russia for its invasion of Ukraine, the world sees hypocrisy and remembers the Anglo-American invasion of Iraq. When Western governments pronounce their respect for freedom but crack down on dissenting citizens at home and sanction, combat and otherwise punish dissenting governments abroad, the world believes that capitalism is synonymous with oppression and imperialism.
If we want to restore trust with the Global South and actually succeed in promoting values of liberty, peace and prosperity, we need to turn inward first. The only way to reverse the trend is to repeal government intervention in the domestic economy, restore civil liberties, and to establish a foreign policy of free trade, non-interventionism, and diplomacy.
