America Is Too Broke to Rescue Ukraine

The real contest between Russia and the West involves economics, not military might.
Barack Obama concludes a press conference announcing sanctions on Russian and Ukrainian officials over the crisis in Crimea. (Reuters/Kevin Lamarque)

If only America were fighting more wars, Russia would never have taken Crimea. That’s basically the argument John McCain made last Friday in The New York Times. “For five years,” he complained, “Americans have been told that ‘the tide of war is receding’.… In Afghanistan and Iraq, military decisions have appeared driven more by a desire to withdraw than to succeed.” As a result, “Obama has made America look weak,” which emboldened Vladimir Putin to invade Ukraine.

I have no earthly idea what McCain means by ‘succeeding’ in Afghanistan and Iraq, but we can be pretty sure that in addition to claiming more American lives, it would require a lot more American money. Iraq and Afghanistan, according to a 2013 report by Linda Bilmes, a public policy lecturer at Harvard’s Kennedy School of Government, are the most expensive wars in U.S. history, costing the U.S. between $4 and $6 trillion when you factor in medical care. For Ukraine’s sake, McCain believes, that number needs to go up.

There’s an irony here. If America and Europe have failed to adequately defend Ukraine, it’s not for lack of guns. It’s for lack of money. Over the last year, the real contest between Russia and the West hasn’t been a military one (after all, even McCain knows that risking war over Ukraine is insane). It’s been economic. In part because of two wars that have drained America’s coffers, and in part because of a financial crisis that has weakened the West economically, the United States and Europe have been dramatically outbid.

The current Ukrainian crisis has its roots in Vladimir Putin’s desire to build a “Eurasian Union”—an economic zone comprising as many former Soviet republics as possible—that re-establishes Russian regional dominance. Putin badly wants Ukraine to join the bloc. But that desire has collided with the European Union’s bid to get Ukraine to sign a free-trade agreement linking it to the West. (EU rules, perhaps unwisely, made doing both impossible). 

Last March, then-Ukrainian President Viktor Yanukovych pledged to work toward an EU agreement. Then, in mid-November, he abruptly stopped doing so, sparking the pro-European protests that eventually toppled him. For Yanukovych, the EU deal—although popular with the Ukrainian public—carried serious risks. For starters, it would have infuriated Putin. Secondly, it would have required him to release his jailed political foe, Yulia Tymoshenko. Thirdly, bringing Ukraine into compliance with EU regulations would have proved costly. As part of the negotiation, Yanukovych asked for €20 billion in aid. But the EU, struggling with its own severe economic woes, offered less than one-thirtieth that amount: a mere €610 million. The United States, which now speaks gravely about defending Ukraine from Russian aggression, at the time gave Kiev barely any foreign assistance at all.

Then, in mid-December, Russia made its own offer. It pledged to buy $15 billion worth of Ukrainian debt and to discount the price of Russian gas sold to Ukraine by one-third, which amounted to another $7 billion in savings. This money, Putin added, would not entail any “increase, decrease, or freezing of any social standards, pensions, subsidies, or salaries”—a swipe at the IMF-imposed austerity measures that would likely have accompanied an EU deal.

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Peter Beinart is a contributing editor at The Atlantic and National Journal, an associate professor of journalism and political science at the City University of New York, and a senior fellow at the New America Foundation.

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