Ukraine: The Price of Surrender

The economics of peace: what incentive does Russia have to agree a deal with Donald Trump? And what would a bad deal cost Ukraine and Europe?

Photo by Max Kukurudziak on Unsplash

It is extraordinary to think that we could be just three weeks away from a surrender by the West to Russia. This is a scenario that has seemed almost unimaginable all my adult life. We do not, of course, know exactly what Donald Trump has in mind for the peace deal that he says he intends to negotiate with Vladimir Putin “within 24 hours” of winning the US presidential election on November 5. But we can be confident that it looks nothing like the 5-point plan for victory that Volodomyr Zelensky laid out before the Ukrainian parliament this week and presented to a summit of European Union leaders on Thursday.

As Phillips O’Brien, Professor of Strategic Studies at the University of St. Andrews, noted in his latest Substack post, the Ukrainian president “is not asking for anything special that is not on offer for every other democratic European state”. What he wants is an invitation to join Nato, albeit with membership to follow at a later date, the weapons needed to destroy Russia’s offensive forces including in Russia itself, a non-nuclear deterrence on Ukrainian territory, and a strategic partnership to protect and develop Ukraine’s critical resources.

Perhaps Trump will surprise everyone with an approach tough enough to deliver a deal that allows Ukraine to claim some kind of victory even if the price is some surrender of land. But so far there is no evidence to indicate that this is likely. Instead, senior Republicans have been waving the white flag. Mike Johnson, the House Speaker, says he has “no appetite” for providing more aid, while JD Vance, Trump’s vice presidential candidate, has suggested the Trump plan will be based on Ukraine’s neutrality, thereby conceding a key Russian demand. Meanwhile Hungary and Slovakia have said they would reject Ukrainian membership of Nato.

Obviously a key calculation underlying any peace negotiation is the state of the battlefield. Underlying much of the anxiety in the West at the moment is that he sense that Ukraine is struggling to maintain its defensive lines, let alone regain lost territory. I leave it to the military analysts to what extent recent setbacks are the result of tactical mistakes by military commanders, delays in mobilisation, inadequate supplies of weapons, or over-cautious restrictions by western allies on how weapons can be used and to what extent Kyiv might regain the battlefield initiative with more comprehensive military aid from the West.

But almost as important in an attritional war is the economic sphere, which gets much less attention. Russia is a relatively small economy, about the same size of Spain. How long can it sustain this campaign against a country backed by the economic might of America and Europe? What is its incentive to take a deal now? And what does Kyiv need from a deal to give it the best chance of a post-war recovery? What is the price of a bad deal for Ukraine, Europe and the West?