Donald Trump’s America is threatening the nuclear peace

Hostility to multilateralism means the forces that contained proliferation are dissipating

Philip Stephens

web_Nuclear proliferation returns
© Ingram Pinn


This year marks the 75th anniversary of the bombing of Hiroshima and Nagasaki. And it has been 50 years since the Nuclear Non-Proliferation Treaty set out to halt the spread of the deadliest weapon mankind has devised.

The anniversaries might have been a moment to take some comfort that the horror of August 1945 has never been repeated. Instead, the pillars of restraint are crumbling. We are heading for a nuclear free-for-all.

The fading of memories has had the perilous effect of making the nuclear threat seem almost fanciful. Forget weapons of mass destruction — the future of conflict, strategic fashion now has it, lies in weapons of mass disruption in the realms of cyber space and artificial intelligence. Arms control pacts belong to the cobwebbed cupboards of the cold war.

Donald Trump says that the US will never permit Iran to acquire the bomb. Even as the US president threatens the Tehran regime, his administration is dismantling the international architecture that has kept the nuclear peace.

Washington’s repudiation of the great power deal to halt Iran’s nuclear programme, the so-called JCPOA, has been followed by its withdrawal from the Intermediate-Range Nuclear Forces Treaty, which for three decades barred the US and Russia from deploying short- and intermediate-range missiles.

The New Strategic Arms Reduction Treaty, limiting strategic nuclear forces, expires in 2021. Mr Trump has told Russian President Vladimir Putin he has no interest in replacing it.

In 1963, US President John F Kennedy predicted that within a decade or so some 30 states could have nuclear weapons, compared with the five that then had or were close to acquiring a capacity to use them. His list included allies as well as adversaries — Japan, Sweden, and West Germany, as well as East Germany, Poland and Czechoslovakia. In the event, there are now nine nuclear states — the original five plus Israel, India, Pakistan and North Korea.Kennedy and his successors in the White House immediately set about confounding his prediction.

Months before his assassination, he agreed with Soviet President Nikita Khrushchev the partial nuclear test ban treaty. Halting nuclear proliferation, and later agreeing limits with Moscow on the production and deployment of nuclear missiles and bombs, were henceforth at the core of America’s defence strategy.

The 1970 NPT was followed by the Anti-Ballistic Missile Treaty and then by the Strategic Arms Limitation Treaty. Salt, as the latter was known, would later become Start — imposing cuts in, rather than limits on, the number of weapons. By the mid-1990s, Kennedy’s initial deal with Khrushchev had become the multilateral Comprehensive Nuclear Test Ban Treaty, now signed by more than 180 states.

Washington paid attention to the concerns of allies. If US presidents worried about the then West Germany acquiring the bomb — and they worried about it a lot — the answer was to offer a nuclear guarantee. “Extended deterrence” gave members of the Atlantic alliance a place under the American nuclear umbrella.

The same assurances were given to Japan and the Republic of Korea through bilateral defence treaties. None of these arrangements were perfect — witness the defiance of India, Pakistan, Israel and most recently North Korea. Some of the agreements were corrupted by sustained cheating by the Russian side for which it has not properly been held to account.

But the essential architecture delivered both a measure of strategic stability and predictability in relations between the superpowers and a disincentive for anyone who might want to join the club. This was the framework under which South Africa, Ukraine, Kazakhstan and Belarus willingly dismantled their nuclear arsenals during the early 1990s.

Mr Trump says that his administration does not believe in multilateralism. His America First policy does not allow for treaties that constrain US national power. Nor, for that matter, is he ready to offer solid guarantees to allies. So the forces that contained, if not prevented, proliferation are dissipating.

The signatories to the NPT have scheduled a review to mark its 50th anniversary. The idea was to strengthen its provisions. In the absence of American engagement, the effort is doomed.Instead, both the US and Russia are modernising their arsenals. China has been given a get-out-of-jail card to remain entirely opaque about its nuclear forces and to reject any limits on their expansion.

Channels of communication between the US and Russia to avoid accidents or miscalculations have been closed. Pakistan is adding to its nuclear stockpile and North Korea may well resume missile testing. Iran is enriching more uranium and will soon be within touching distance of a usable nuclear bomb.

America’s friends are making their own calculations about whether extended deterrence any longer has real meaning. There is no reason to expect a great rush to the nuclear labs, but think five or 10 years ahead.

When French President Emmanuel Macron talks about a “European” deterrent, independent of the US, he is playing to the private fears of many US allies. Japan or South Korea may need less than a year to build a bomb.

The sheer craziness in all this is that, as Kennedy well understood, no one has more than the US to lose from a nuclear free-for-all.

The Two Dark Sides of COVID-19

Historically, tragedies such as the ongoing COVID-19 epidemic have sometimes led to important changes. The probable source of the new coronavirus – so-called wet markets, at which live animals are sold and slaughtered before customers' eyes – should be banned not only in China, but worldwide.

Peter Singer , Paola Cavalieri

singer180_David WongSouth China Morning Post via Getty Images_chinawetmarketchickens


PRINCETON – The apocalyptic images of the locked-down Chinese city of Wuhan have reached us all. The world is holding its breath over the spread of the new coronavirus, COVID-19, and governments are taking or preparing drastic measures that will necessarily sacrifice individual rights and freedoms for the general Good.

Some focus their anger on China’s initial lack of transparency about the outbreak. The philosopher Slavoj Žižek has spoken of “the racist paranoia” at work in the obsession with COVID-19 when there are many worse infectious diseases from which thousands die every day.

Those prone to conspiracy theories believe that the virus is a biological weapon aimed at China’s economy. Few mention, let alone confront, the underlying cause of the epidemic.

Both the 2003 SARS (Severe Acute Respiratory Syndrome) epidemic and the current one can be traced to China’s “wet markets” – open-air markets where animals are bought live and then slaughtered on the spot for the customers. Until late December 2019, everyone affected by the virus had some link to Wuhan’s Huanan Market.

At China’s wet markets, many different animals are sold and killed to be eaten: wolf cubs, snakes, turtles, guinea pigs, rats, otters, badgers, and civets. Similar markets exist in many Asian countries, including Japan, Vietnam, and the Philippines.

In tropical and subtropical areas of the planet, wet markets sell live mammals, poultry, fish, and reptiles, crammed together and sharing their breath, their blood, and their excrement. As US National Public Radio journalist Jason Beaubien recently reported: “Live fish in open tubs splash water all over the floor.

The countertops of the stalls are red with blood as fish are gutted and filleted right in front of the customers' eyes. Live turtles and crustaceans climb over each other in boxes. Melting ice adds to the slush on the floor. There’s lots of water, blood, fish scales, and chicken guts.” Wet markets, indeed.

Scientists tell us that keeping different animals in close, prolonged proximity with one another and with people creates an unhealthy environment that is the probable source of the mutation that enabled COVID-19 to infect humans. More precisely, in such an environment, a coronavirus long present in some animals underwent rapid mutation as it changed from nonhuman host to nonhuman host, and ultimately gained the ability to bind to human cell receptors, thus adapting to the human host.

This evidence prompted China, on January 26, to impose a temporary ban on wildlife animal trade. It is not the first time that such a measure has been introduced in response to an epidemic. Following the SARS outbreak China prohibited the breeding, transport, and sale of civets and other wild animals, but the ban was lifted six months later.

Today, many voices are calling for a permanent shutdown of “wildlife markets.” Zhou Jinfeng, head of China’s Biodiversity Conservation and Green Development Foundation, has urged that “illegal wildlife trafficking” be banned indefinitely and has indicated that the National People’s Congress is discussing a bill to outlaw trade in protected species.

Focusing on protected species, however, is a ploy to divert public attention away from the appalling circumstances in which animals in wet markets are forced to live and die. What the world really needs is a permanent ban on wet markets.

For the animals, wet markets are hell on earth. Thousands of sentient, palpitating beings endure hours of suffering and anguish before being brutally butchered. This is just one small part of the suffering that humans systematically inflict on animals in every country – in factory farms, laboratories, and the entertainment industry.

If we stop to reflect on what we are doing – and mostly we do not – we are prone to justify it by appealing to the alleged superiority of our species, in much the same way that white people used to appeal to the alleged superiority of their race to justify their subjection of “inferior” humans.

But at this moment, when vital human interests so clearly run parallel to the interests of nonhuman animals, this small part of the suffering we inflict on animals offers us the opportunity for a change of attitudes toward members of non-human species.

To achieve a ban on wet markets, we will have to overcome some specific cultural preferences, as well as resistance linked to the fact that a ban would cause economic hardship to those who make their living from the markets. But, even without giving nonhuman animals the moral consideration they deserve, these localized concerns are decisively outweighed by the calamitous impact that ever more frequent global epidemics (and perhaps pandemics) will have.

Martin Williams, a Hong Kong-based writer specializing in conservation and the environment, puts it well: “As long as such markets exist, the likelihood of other new diseases emerging will remain. Surely, it is time for China to close down these markets. In one fell swoop, it would be making progress on animal rights and nature conservation, while reducing the risk of a ‘made in China’ disease harming people worldwide.”

But we would go further. Historically, tragedies have sometimes led to important changes. Markets at which live animals are sold and slaughtered should be banned not only in China, but all over the world.


Peter Singer is Professor of Bioethics at Princeton University and founder of the non-profit organization The Life You Can Save. His books include Animal Liberation, Practical Ethics, The Ethics of What We Eat (with Jim Mason), Rethinking Life and Death, The Point of View of the Universe, co-authored with Katarzyna de Lazari-Radek, The Most Good You Can Do, Famine, Affluence, and Morality, One World Now, Ethics in the Real World, and Utilitarianism: A Very Short Introduction, also with Katarzyna de Lazari-Radek. In 2013, he was named the world's third "most influential contemporary thinker" by the Gottlieb Duttweiler Institute.


Paola Cavalieri, an independent researcher based in Italy, is the author, most recently, of Philosophy and the Politics of Animal Liberation.

Global Recession Is Now Certain, Sparked By Deep China Recession

by: James A. Kostohryz
 

Summary
 
- China's economy is experiencing a severe economic recession which, in a best case scenario, will last at least two quarters.

- A global recession is certain to be sparked by China's deep recession and it will last at least two quarters in a best case scenario.

- The rapid and widespread international contagion of COVID-19 will deepen the global recession further, to an extent that is highly uncertain, making the timing of recovery highly difficult to forecast.

- The degree of incompetence, on the part of Wall Street economists and strategists that is currently being demonstrated by their failure to gauge the severity and extent of the global economic damage caused by the COVID-19 fallout, is astounding.
 
    
In my article published one month ago I warned my readers and my subscribers about the fact that Wall Street consensus - highly influenced by the opinions of bulge-bracket economists and strategists - was severely miscalculating the actual and potential economic impacts of the COVID-19 outbreak in China.
 
I also issued a warning about the correlative risk of severe global economic disruptions sparked by the severe economic downturn in China. Finally, I warned that due to the specific characteristics of the COVID-19 virus, it was quite likely that the disease would spread on a global scale, thereby magnifying damage to the global economy.
 
In this follow-up article to that prior piece ("Coronavirus Poses A Serious Threat To The Chinese Economy and Your Portfolio") I will update readers on my views, focusing on the economic impacts of developments related to COVID-19 in China and the rest of the world.
 
A Recession in China is Now Certain
 
The majority of Wall Street economists and strategists are still forecasting that developments related to COVID-19 will merely cause a slowdown the growth of China’s GDP growth in the first quarter.
 
Furthermore, the majority of Wall Street economists and strategists are still forecasting that China will experience a “V-shaped” economic recovery beginning in the second quarter and that GDP growth for full-year 2020 will merely decelerate by about 0.50% or so.

This state of affairs represents the most blatant and severe case of incompetence on the part of Wall Street economists and strategists that I have ever experienced in my 25+ year career in trading and investing – a situation that is even more embarrassing than their inability to foresee the financial crisis (when it was already inevitable) in 2007-2008.
 
Consider the following facts about China’s economy:
 
1. 50% of China’s workforce is idled. Roughly 50% (plus or minus 10%) of China’s workers are not back to work. The first cause of this is that less than one-third of China’s migrant workers are back to work. This means that roughly 25% of China’s total workforce is completely idle/unemployed.
 
An additional 25% of China’s workforce is not able to work for one or more of the following reasons:
 
A) Residential restrictions and other local and national restrictions on movement of the population.
 
B) Voluntary restraint. Many Chinese simply are refusing to go back to work or re-open business due to fear of infection, avoidance of actual or potential quarantines, or a variety of other reasons associated with the COVIC-19 crisis.
 
C) Mass layoffs and involuntary unemployment. Layoffs are massive in businesses in all sizes and in virtually all types of industries in the private sector. However, layoffs in the small business sector are particularly massive.
 
2. Small business devastated. Small and medium-sized firms in China – which generate about 60% of GDP and 80% of employment – have been absolutely devastated. Numerous surveys indicate that roughly 60%-70% of Chinese small businesses are completely shut down. For example, according to official data released on Thursday, production has only resumed at 32.8% of China’s small and medium-sized firms, as of Wednesday. And even small and medium-sized firms that are open for business, are operating at well below their normal capacity.
 
Data on the disruption to small and medium sized businesses abound. For example, according to one recent survey of Beijing restaurants, 69% of restaurants are completely closed. The remaining 31% are operating at below 50% of capacity, on average. Overall restaurant revenues are down by more than 80%. Auto sales have collapsed by over 80% in the first three weeks in February. Movie theater sales, a reasonably good proxy of going on with retail commerce at China’s shopping malls, are down by over 90%.
3. Supply chain disruptions. Even businesses that are able to operate with minimal staffing are hobbled due to shortage of inputs from suppliers.
 
4. Consumption economy is paralyzed. Private consumption directly contributes just under 40% of China’s GDP – and indirectly contributes much more due to its impact on investment expenditure. Due to various restrictions on the movement of people, the consumption patterns of people in China have been extremely disrupted and curtailed. Even more important than the official restrictions, due to fears of contagion, Chinese citizens are staying at home and refusing to frequent public places such as shopping centers, shops and restaurants.
 
This situation will only become normalized after people feel no fear of contracting COVID-19.
 
Even in a best-case scenario, this will not happen until the end of June.
 
And this is only a very partial list of the problems facing the Chinese economy.
 
Now, let us do some simple arithmetic, taking into account only the known facts about the disruptions in the Chinese economy :
  • January’s GDP in China experienced a huge contraction due to severely curtailed consumption during the Chinese New Year season and other disruptions which were already affecting the economy at that time.
  • Regarding February, we know from a variety of statistics (some of which I cited above) that during the course of the entire month, about half of China’s economy was completely paralyzed due to the idling of roughly half of its workers. Furthermore, the non-idled part of the economy was operating way below capacity. This suggests a year-over-year contraction of at least 50% in Chinese GDP.
  • In forecasting March, even if we assume an optimistic scenario in which China’s economy get’s its operating supply rates (particularly labor) back to 100% in a linear fashion by April 30 (two months), this still implies a contraction in China’s GDP of over 30% in the month of March.
So, just doing very simple arithmetic, there is no way that the contraction in China’s GDP in the first’s quarter of 2020 - if it were properly measured - will be any less than -20%.
Surely, China’s official statistics will not report this sort of a dramatic figure. But this will nonetheless be the reality, which will be experienced by China’s economy and which will deal a mighty blow to the entire global economy.
 
This is the economic reality which Wall Street economists and strategists should ultimately care about, which will be fully reflected by many national and international indicators of global economic growth (which China’s government cannot manipulate). And it is the reality which will be reflected in a severe decline in corporate earnings reported by companies all over the world.
 
How about full-year 2020 GDP? Economists and strategists are virtually all talking about a quick V-shaped recovery. However, basic economic theory and economic history shows that economic shocks of this magnitude do not tend to produce V-shaped recoveries.
 
These types of massive economic shocks tend to produce severe second and third-order effects in subsequent quarters. This is particularly true if there are high levels of indebtedness, speculative activity, and macro/micro economic imbalances as exist in China. Fiscal and monetary stimulus can only partly counteract such a profound shock - and with a lag.
 
The knock-on effects from the first quarter shock (even assuming the virus and disruptive efforts to contain it totally disappear by March 31) will extend recessionary conditions in China at least through the second quarter, in the best-case scenario.
 
In addition, there are other issues to keep in mind. First, on the supply-side, there is no reasonable scenario where China’s economy will be operating at full capacity for the entire second quarter. In a best-case scenario, it will take at least until the end of June to get back to full employment and a full normalization of business supply chains.
 
Second, on the demand side, given the highly contagious characteristics of #COVID-19 and people’s fear of contagion, there is no reasonable scenario by which China’s consumption patterns will be normalized before the end of June.
 
Given the availability of the aforementioned facts and elementary inferences, the fact that most Wall Street economists and strategists are still talking about a mere slowdown in China’s GDP growth in the first quarter and a v-shaped recovery from the second quarter onward is absolutely mind-boggling.
 
Current Wall Street consensus regarding the Chinese economy is the most shocking example I have ever witnessed of generalized and systemic professional incompetence.
 
Global Recession Is Certain
 
A deep decline in China’s GDP, by itself, would certainly be enough to trigger a global recession - generally defined as global GDP growth of less than 2.0%, for at least two quarters during 2020.
 
However, this outcome is even more obvious due to the following factors:
 
1. Japan’s economy, the third largest in the world, was already contracting at an annualized rate of more than -4.0% in the fourth quarter of 2019, prior to experiencing any of the impacts of COVID-19 on its economy. Due to knock-on effects from China, combined with Japan’s own troubles with a potential COVID-19 outbreak, Japan’s GDP is certain to contract even more deeply during the first and second quarters of 2020.
 
2. Major COVID-19 outbreaks in South Korea, Italy and other countries are certain to trigger contractions in GDP growth in those nations during the first half of 2020.
 
3. Manufacturing activity, in every major country in the world will experience severe contractions in production due to the major supply chain disruptions in China and potentially various other nations. Manufacturing will also suffer from the severe shock to demand -particularly demand for durable goods and capital goods. This will most severely impact major economies highly dependent on global manufacturing supply chains (e.g. Germany and Mexico).
 
4. Developing nations tend to be highly vulnerable to shocks emanating from major economies (e.g. China and Japan). This is particularly true of commodity exporting nations in Latin America and Africa. This is also true of nations - the nations in Southeast Asia being a prime example - whose economies are highly intertwined with the global manufacturing economy, and China’s economy in particular.

5. Countries with large financial vulnerabilities, such as India and Turkey, will experience severe economic difficulties as the global financial system seizes up and risk appetite vanishes.
 
Virtually no Wall Street global economist or strategist that I am aware of is forecasting a global recession for the entire first half of 2020 – despite the fact that, at this point, this is virtually an inevitable certainty, given all that I have pointed out above.
 
The only interesting question that economists and strategists should be asking, at this point, is whether and to what extent the deep global recession in the first half of 2020 will extend into the second half of 2020.
 
While the global economy is literally in the midst of a severe free fall, virtually all Wall Street economists and strategists are still insisting that the impact of the global COVID-19 crisis will be minor for full-year 2020 and are merely tinkering with their global growth forecasts for full-year 2020 - typically reducing them by only 10 or 20 basis points.
 
Given all of the facts and elementary inferences referenced above, Wall Street economists and strategists are collectively displaying breathtaking incompetence.
 
Conclusion
 
The global economic crisis triggered by the COVID-19 outbreak in China, and the subsequent global spread of the virus, is placing the professional incompetence of most Wall Street economists and strategists on full display.
 
A few months from now, it will be clear that the vast majority of Wall Street head economists and head strategists deserve to get fired, or at least demoted. If a head global economist and/or strategist is not able to forecast a major economic crisis when this eventuality has already become as obvious as it is now, then it is pretty clear that they are professionally incompetent.
 
Today, more than ever, individual investors require specialized knowledge, skill and experience to help the navigate massive market risks and massive market opportunities over the course of the next 12 months which will be characterized both by a severe global recession and a difficult-to-forecast economic recovery filled with potential pitfalls.

The Future of the Eurasian Economic Union

By: Ekaterina Zolotova


2020 marks the five-year anniversary of the Eurasian Economic Union, the regional grouping meant to do everything from eliminating trade barriers and technical regulation to enhancing cooperation in any number of economic sectors.

Although it comprises Kazakhstan, Kyrgyzstan, Armenia and Belarus, Russia is the union’s primary architect and its chief beneficiary, especially as a means to give Russia much of the regional influence it has lost since the end of the Soviet Union.

The EEU originated as a customs union created by Russia in 2015 and initially included Kazakhstan and Belarus. Dedicated to bringing economic integration to Eurasia, they resolved to coordinate their policies on trade, tariffs and taxes as well as in the energy, industrial, transportation and agriculture sectors.

The freedom of movement of goods, services, capital and labor and coordinated economic policies appealed to Armenia and Kyrgyzstan, which were looking for ways to boost their economies, so they joined the union later.

And though greater trade among the union’s members generally helped them all, Russia was always the hub. It has better trade and economic relations with the union’s constituent parts than they have with each other – not to mention a stronger and more developed economy. About 40 percent of Kazakh imports and 24 percent of Kyrgyz imports come from Russia, and Russia is Armenia’s and Belarus’ top trade partner.

So far, the EEU has failed to achieve its economic objectives. Trade turnover inside the union and with non-members decreased because of the fluctuation in oil prices, the weakening of the Russian ruble, and the sanctions the West has levied against Moscow.

Immediately after the creation of the EEU, mutual trade within the organization fell by 7 percent to $42 billion in 2016 compared to $45.6 billion in 2015.

In subsequent years, bilateral trade began to grow, but the growth rate slowed to 2.3 percent in 2019, compared to 11 percent in 2018 and with 26 percent in 2017.

And there is still no sign of the free movement of goods, services, labor and capital. Is there any reason to believe a new five-years strategy, which is currently under discussion, will be more successful?





The answer lies partly in the fact that the union’s biggest problem is the different goals and objectives of its members. Belarus, Kazakhstan, Kyrgyzstan and Armenia are looking to improve their economies; Russia is looking to improve its global standing by enhancing its regional influence.

Tethering Central Asia to the Russian economy is helpful in this regard, but unlike in the Soviet era, its members have other economic options (dependent though they still may be on Russia today).

One option, of course, is China, which has successfully strengthened its trade and economic relationships with Central Asian countries. Trade today is 65 times higher with the region than it was in 1995. China has surpassed Russia as the top trade partner for some countries and has become a much more important one to states such as Kazakhstan and Kyrgyzstan. More than anything, former Soviet satellites need to improve their economies, and China has money to spend – so much so that it’s difficult for Russia to keep pace.

Still, Russia still has a leg up in the region. It can regulate, to some degree, the Chinese money that comes in through the customs union. But more than that, the benefits are such that EEU members want to be a part of it, so long as they don’t surrender too much of their sovereignty. The absence of trade barriers and the free movement of factors of production, correctly implemented, should be generally good for these countries.

They can be used as transit zones for access to new markets, which are extremely useful for young economies of the region that want to diversify their foreign trade. Having a common energy sphere could give them access to European oil and natural gas and thus help stabilize their economies. These are just a few of the reasons they voluntarily joined the union.

The economic benefits aside, every country has other reasons to be a member of the EEU. Armenia, for example, had hoped that if it joined the union then Moscow would take its side in the Nagorno-Karabakh conflict. (So far, it hasn’t.

Moscow continues to sell weapons to Azerbaijan.) Kazakhstan and Kyrgyzstan had hoped to use their memberships, not to mention their proximity to Russia and its markets, to attract highly qualified foreign specialists and to obtain raw materials and financial and technological opportunities to stabilize and industrialize their economies. For Kyrgyzstan and Armenia, a single labor market could reduce unemployment – and thus ease social tension at home.

Belarus had been counting on a single oil and gas market in 2021–24 and common pricing principles.
Though the union can stake its claim on a handful of success stories – it created a common labor market and immigration has been simplified – none of its members have gotten all they wanted.

Today, only 49 sectors, and only 50 percent of the total volume of services, are integrated into a single market. There are still 14 exceptions, 38 restrictions and 19 trade barriers. The creation of the EEU electricity market has been postponed until the beginning of 2025. In some instances, the EEU has done more harm to integration than good.

Kyrgyzstan, for example, has accused Kazakhstan of imposing restrictions on the passage of transit goods, while Kazakhstan has accused Kyrgyzstan of not sufficiently engaging in customs administration.

This has left EEU members wondering if the benefits are worth the costs, which has in turn led to what Belarusian President Alexander Lukashenko called “coerced integration” by Russia. It’s no secret that since the beginning of the year, Russia has halted oil supplies to Belarus amid price negotiations.

Russia will continue to make every effort to postpone conversations about changes in trade in the near future. It's willing to engage in political cooperation and to support projects in education, medicine and the digital economy – measures that will only increase Russia's own clout (by, for example, increasing the use of the Russian ruble for trade), but full economic cooperation, including the creation of a common energy market, can present a challenge to the stability of the Russian economy.

First of all, it will no longer be possible to hold back financial assistance or large-scale investments.

Although Russia managed to generate additional funds for the union in 2019, Moscow has prioritized helping its own slowing economy over the EEU's. (The government isn’t especially interested in flooding its markets with foreign goods either, especially when it is stubbornly trying to pursue an import substitution policy.)

Second, Russia isn’t ready to merge its energy market. Though it has made progress toward weaning itself off its dependence on oil exports, it’s still interested in making money off them until certain measures come into effect.

Last, the economic benefits afforded by the EEU are Russia’s trump card. If Moscow settles trade issues now, it loses leverage in the future. The promise of better perks is the best chance it has to lure former Soviet satellites back into its orbit and away from the European Union, China and the U.S.

In other words, many of the reasons why Russia is unwilling to make economic concessions to EEU members are the same things that make Russia unable to make them. It doesn’t bode well for the next five years.