The Many Layers of Attrition

New readers should know that my Substack posts are dedicated to surveillance of matters related to a central premise, and that premise, put at its simplest, is that the collective West, made ever more desperate and ruthless because of its unsustainable debt load, is attempting to beat back the multiple forces of multipolarity. It is currently doing this on three main fronts: against Russia over the proxy excuse of defending Ukraine; against Iran over the proxy excuse of defending Israel; against China over the proxy excuse of defending Taiwan. But there is no limit to the number of fronts that the West will entertain.

Wars of Attrition, West and East

We can acknowledge both that Ukrainian resistance to Russia’s SMO has been far more intense than many expected, and, at the same time, that the Ukrainian army is fast losing territory east of the Dnieper and that evidence of Ukrainian courage, endurance and resilience notwithstanding there is also evidence of demoralization, desertion (95,000 cases for far, and showing a sharp increase in 2024 over 2023), poor or corrupt leadership, insufficient care of troops, horrible conditions, and flight.

Yet, we have also seen recent reports of new concentrations of Ukrainian troops, and more plans to attack Russian territory (especially in the Bryansk, Belgorod, Chernikov and Sumy regions).

In addition, there are dependable indications that the Ukrainian RADA, under pressure from Washington, will pass the bill to lower the age of conscription to 18 years. Ominously, General Syrsky has been talking about the need for a prohibition on movement out of Ukraine by young men as young as 16 or 17.

It is envisaged that this will pave the way to a mobilization of a new army that could number up to 500,000, much of which could be ready for combat by May, if we accept the very low bar that Ukraine sets for being able to say that any recruit has actually been meaningfully “trained.”

For every report of an expectation of dialog after the inauguration of Trump there is a report of planned US/EU escalation that will prolong the war indefinitely. For the overall geopolitical goal, as veteran and former military analyst Brian Berletic never tires of reminding us, is to over-extend Russia and in that way to defeat it through gradualist attrition in a mirror-image of the attritional strategy that has brought Russia in sight of the Dnieper and the whole of Ukraine close to collapse.

It does not really need Russia to take over Pokrovsk or any other of the cities which it has recently or is poised to enter, but simply to surround them, take control of their supply routes, and then head westwards, fast, without expectation of meeting any further Ukrainian military fortifications to speak of, until Russian forces reach the Dnieper. What Russia will then do is a billion dollar question.

Russia’s attritional approach, therefore, has been effective in Ukraine; that of the collective West, so far, much less effective. But the game is not over until the fat lady sings, so to speak. The West’s attritional strategy, on the other hand, has arguably worked in Syria, where Russia was forced to give up on its mission of helping sustain the Assad government in order to focus on its prime goal in Ukraine. We have to see whether something similar could come about as a result of US and Israeli aggression towards Iran on the eve of the signing of the Russian-Iranian strategic partnership agreement. I am inclined to think that Russia will stay invested with Iran.

The Russia-Iran Strategic Partnership

For a starter, Iran is a much larger, more powerful, militarily stronger country than was Assad’s Syria, and an important buffer between Russia and the Western meddling in an increasingly fractious Middle East. The fact that four weeks ago Sullivan and Biden were examining the options for US bombing Iran’s nuclear facilities, or worse, suggests that Israel is actually not strong enough to achieve this goal by itself. A combined US-Israel attack on Iran - which, let us be clear, would have no authentic, justifiable cause other than the propping up of a hegemonic civilization in decline - is far more likely to press Russia towards World War Three than was Assad’s Syria.

In the meantime, it still remains unclear whether Russia has lost as much as at first seemed in Syria, in geopolitical terms, given that the new Turkish-HTS government needs the presence of Russia and a cordial relationship with Iran in order to fight off what increasingly looks like will turn out to be an opposing US-Kurdish-Israeli incubus on the indigenous peoples of Syria.

The point is that we can never lose sight of the fact that Ukraine is being used as a proxy by the collective West for its contest with Russia. The West can afford to “lose” a front with Russia temporarily if this is necessary to pursue its goals against its even more substantial challenger, China, at a time when China is experiencing (relative) economic contraction. In this broader scenario, Russia could transition from hors d’oeuvre to desert.

As to whether the West - either the US in partnership with NATO and the EU (the two entities now seem inseparable) or NATO and the EU just by themselves - will continue to “extend Russia,” (note, a strategy which does not actually require the West to “win” in Ukraine), much depends on money, as always. Trump has been saying the US is wasting its money on Ukraine and should focus more on China, and perhaps on Iran as well. The EU and the European members of NATO as a whole, though not all of them, claim that they can find the money, and that some of this money will take the form of European “feet on the ground” in Ukraine to compensate for the weakness of the Ukrainian army.

The Never-Ending Allure of Frozen Russian Assets

A recent article from Intellinews by Ben Aris and reposted by Natylie Baldwin here: (Aris), revises and updates the issue of whether, when and how, precisely, Europe can get its hands on at least the interest payable on $300 billion’s worth of Russian assets frozen in European Central Banks. This is a source that might well make the continuation of the war more palatable at least to political leaders. European populations no so much, judging by the weakness of the Macron presidency in France, and the growing, Musk-supported AfD in Germany.

I do not however, agreee with Aris’ contention that only 10% of US support has actually been channelled through to Ukraine, as Zelenskiy claims. This runs in the face of evidence from many other sources and also likely confuses the channelling of money direct to Kiev with the proportion of all US “aid” for Ukraine that is intended all along for diversion to the US armaments industries to pay for the weapons that are then sent to Ukraine. This does, however, raise the question of the speed of production of weapons that are being paid for by the US taxpayer. It is quite probable that some of this production takes place on the presumption that the necessary funds will be voted by Congress or allowed by the White House, but it also seems very probable that some weapons will not show up on the battlefield before one party or other (almost certainly Russia) is “victorious,” or, at least, before a peace deal of sorts has been struck.

Washington has leglized the use of interest on $5bn of Russian assets on the war, even though Trump is expected to end or to significantly reduce the US commitment to supporting the war. And Washington wants Europe to put its own frozen Russian assets to similar purpose. This is unprecedented: even the reserves of Iraq and Afghanistan, still (!!) held by the US Central Bank, have never been purloined in this way.

In May, the EU approved the use of profits from the frozen assets—approximately €3bn annually—with 90% allocated to military aid for Ukraine and the rest reserved for humanitarian purposes.

The essential problem that this manouver addresses, as just indicated, is the expectation that US funding will dry up. Recently re-appointed US Speaker of the House Mike Johnson has refused to bring to the floor of the House a Biden Administration proposal to add a fresh $24bn of funding for Ukraine to a congressional spending bill for 2025.

Europe has pledged a total of €241bn in support of Ukraine since the start of the war in 2022, but has only delivered half of this amount (€125bn). The continent is slipping into recession, unable to afford a conflict that consumes $100 billion each year. Just to stay afloat, Ukraine needs $40 billion a year, but is likely only to have $22 billion a year available for the next two years. Germany has cut its allocation for Ukraine in half from €8bn to €4bn in 2024, with commitments falling to €500mn in the following two years. France has cut its allocation for Ukraine from €4bn to €3bn in October and will struggle even to meet that. A $50bn G7 loan to Ukraine is snarled in red tape so that it will be split into three tranches paid out over three years, with the first tranche of $22bn due in the first quarter of next year.

The appointment of former Estonian Prime Minister Kaja Kallas, a Russia hawk, as the EU foreign policy chief, has secured the issue of seizing and diverting seized Russian assets back on to the agenda. Kallas has little power to force the confiscations policy:

“The European Commission (EC) has the mandate to set EU trade policy, but foreign policy remains the prerogative of the member states. Several EU countries are not keen on the idea, led by the conservative Germany and Belgium, which would find themselves in the front line. Given all EU decisions have to be unanimous, getting permission to confiscate the CBR’s money will be very hard.

“In the meantime, many EU members remain resolutely against a confiscation. Valerie Urbain, CEO of Belgium-based Euroclear, which holds €190bn of the assets, has been particularly outspoken: “We cannot end up in a situation where assets are confiscated and then a few years later Russia comes and demands them back, when the assets are no longer there. If assets are confiscated, then liabilities must also be transferred,” she said in a recent interview with Bloomberg…

“Bankers are also not keen on the idea as they anticipate years of very expensive lawsuits from Russian entities. The problem is that the decision to seize the CBR’s funds is political, however, its assets in Europe are protected by the same strong property rights as other assets in Europe and so are vulnerable to lawsuits. They want part of the funds, if they are seized, to be put aside to fund the anticipated wave of Russian lawsuits that will tie up the courts for years.

“This is one of the objections to the confiscations: either Euroclear will lose in court and be on the hook to repay €190bn it no longer has, or the courts will be pushed to uphold a political decision and massively undermine trust in Europe’s financial system that could lead to massive capital flight. The share of the US dollar in sovereign reserve funds has already fallen to a 40 year low, thanks to the White House’s decision to weaponize its currency via sanctions that has undermined trust in the dollar.

“Another problem is the Kremlin is threatening to launch cases in Russian courts and seize billions of dollars in Russian accounts that belong to Western firms. As bne IntelliNews reported, only 9% of western companies have left the Russian market and they still owned significant assets in Russia.

“A decree signed by Vladimir Putin in May enables the use of foreign-owned assets in Russia to compensate for damages caused by Western sanctions”.

Much of the rest of the Aris article talks about the relevance of confiscated funds for the reconstruction of Ukraine once the war ends. Naturally, everything depends on whether Russia will force a conclusion to the war on its own terms or whether there will be a negotiated agreement. If there is an agreement, then that is the mechanism that will have to address the issue of reparations payable by all parties to the war. Furthermore, much of the damage caused by the war will have occurred on territory that Russia has integrated into the Russian Federation, territory that it is unlikely Russia will ever relinquish, and for whose reconstruction Russia itself will take responsibility.

The “Threat” of China: Economic Development

For NZZ, Sandra Weiss (Weiss) details China’s new port in Chancay, Peru, that offers a window into the scale of the commercial competitive challenge that China’s Belt and Road initiative poses to US hegemony in Latin America and elsewhere.

“The port It will be 60 meters deep, perfect for ships up to 400 meters long, which transport 18,000 standard containers and are as big as China's hunger for raw materials. Such ships are too big for the new locks of the Panama Canal, through which XXL freighters cannot pass. The port's owner and operator is the state-owned COSCO, the fourth largest shipping company in the world, which is investing around $3.5 billion in Chancay…

“According to tracking by the Council on Foreign Relations, Chinese state-owned companies own shares in around 100 ports in 64 countries around the world, on all oceans and continents except Antarctica. They already handle 90% of their trade via this dense network. And China itself is home to eight of the 10 largest container ports in the world.

Chancay, in which China holds a 67% ownership stake, could play an important role, acting as a central trading hub between Asia and South America. It offers a route for China into the markets of Latin America, while the area will provide China with gas, fishmeal and minerals, not to mention raw materials that are important for the energy transition, such as copper and lithium. China’s COSCO has negotiated exclusivity and monopoly control. Chancay will reduce the speed of Asian-LatAm trade by 10 days.

NED = END

Kit Klarenberg at Global Delinquents comments on the removal of the National Endowment for Democracy’s grant database from the web. This has been a primary source of insight into the work of NED in destabilizing governments and societies around the world. Klarenberg’s piece provides a useful, critical history of the NED. You may find it here: Klarenberg.