Ukraine Update 1 March, 2022 (Evening)

-The war in Ukraine has the potential to unleash the largest refugee crisis Europe has faced since World War II. The European Union estimates as many as four million Ukrainians could potentially flee their homeland between now and the end of the war. Even then, assuming a Russian victory, that number could increase considerably. EU rules and restrictions on refugees are being lifted and Brussel promises that EU member-states will welcome Ukrainians with open arms. Eastern European countries are absorbing the first wave of refugees. As of 7 AM, 1 March, 2022, EST Poland had taken in 377,000 refugees. Hungary had taken 89,561, Moldova 65,391, Slovakia 54,304 and Romania 38,461. These numbers are undoubtedly obsolete by now, yet the vast scale of the exodus is apparent. It’s only going to become worse as time goes on. Despite the EU’s assurances, the potential for a once-in-a-century refugee crisis exists.

-The Ukrainian military intelligence believes Russia is preparing a pretext that will justify the introduction of Belarusian troops into the conflict. The role of the Belarussian military in this conflict is one of those points which pundits and journalists have been batting around since the shooting started. Belarus has a role to play in this war, one undoubtedly orchestrated by Vladimir Putin. When the time is right, the exact role will become known. According to intelligence estimates by the Ukrainians there are 300 Belarussian tanks and accompanying infantry massed at the Ukrainian border. Minsk has played the role of good cop to Moscow’s bad cop, even orchestrating the first round of negotiations between Ukraine and Russia. That will change at some point, however.

-Parting thought for the evening. Tonight, US President Joe Biden will give his State of the Union address in Washington. He will tout his goal for the US and all of its allies to be on the same page regarding economic sanctions. The sanctions now impacting Russia have been fierce and there are additional salvoes being prepared for delivery. But what happens if economic sanctions alone cannot do the job? The US and its allies have put all their eggs in a single basket. If it is not enough, what will be the next step?

Turkey Plays the Refugee Card

Turkey Syria Migrants

Turkey has “opened the doors” for thousands of Syrian refugees encamped on Turkish soil to now travel freely to Europe. Turkish President Recep Tayip Erdogan claims 18,000 refugees have already crossed Turkish borders into Europe. According to him another 30,000 are expected to cross in the coming days. Violent clashes on the Hellenic-Turkish frontier between Greek police and migrants have occurred and the situation there is expected to deteriorate in the coming days as more Syrian refugees make for Europe.

This move comes just days after 33 Turkish troops were killed in a Syrian air attack in Idlib. In response Turkey has been striking Syrian government targets, urging Russia to remain out of its present conflict with the Syrian government, and attempting to build a strong base of international support for future actions in Syria. This is where the refugee issue comes into play. Turkey claims the European Union has not lived up to the terms of its deal with Turkey which had kept over 3 million Syrian refugees hosted in Turkey and unable to leave for Europe. According to the Turkish government, the EU has not helped Turkey house and feed the refugees, or help to stem the tide of refugees flowing from Syria into Turkey.

Erdogan is attempting to play the refugee card now and exchange it for EU support. In effect, he’s looking for a simple exchange of favors. He will shut off the refugee stream as long as Europe hops on the bandwagon and supports what is expected to be an enlarged Turkish military and political offensive in Syria. In other words, a quid pro quo. Turkey’s move with the refugees has been labeled blackmail by many political analysts and observers. Close, but not entirely accurate. Turkey’s playing of the refugee card is more a textbook example of Realpolitik. This move was based on political and practical considerations, not moral principles or ideology. To dress it down to a layman’s term, Realpolitik can best be summed up as ‘fucking your buddy.’

Turkey Considers Sending Troops to Libya

8567463452453

Earlier this week Turkish President Recep Tayyip Erdogan hinted that his government is considering the possibility of sending troops to Libya to prevent Russian-supported forces from capturing Tripoli. Erdogan was quick to point out that such an intervention would not occur unless the UN-recognized Libyan government requested it.

Erdogan’s comments indicate just how much the position of the Government of National Accord (GNA) has deteriorated. Forces under the control of militia leader Khalifa Haftar, heavily backed by Russian weapons, and advisers, have tightened their siege of Libya. Haftar is publicly claiming his forces will be inside of Tripoli by the end of the year, a realistic probability given the present situation on the ground.

Libya, at the moment, keenly represents the mishmash of competing interests, and actions by powers in the region. In the past three months Russia has thrown its lot in behind Haftar, contributing a considerable number of mercenaries, and equipment. These moves has enabled Haftar’s forces to successfully resume the drive on the Libyan capital. Government forces opposing them are reaching the breaking point. If they are unable to prevent Haftar’s troops from entering Tripoli, it will likely mean the collapse of the GNA. Libya could once again descend into a long period of fighting between militias opposed to Haftar, and his forces. This turmoil will inevitably bring on a fresh exodus of refugees looking to escape the fighting. The most likely destination of these people is Europe, a scenario the European Union can hardly afford.

Russia is not the only nation backing Haftar. Egypt, the United Arab Emirates, and Saudi Arabia have provided weapons, and material support in the hopes Haftar and his authoritarian style can restore stability to Libya. The US, and other Western powers have publicly supported the Tripoli government and UN efforts in Libya, but very little military support has been provided, on the surface at least. Behind the scenes is another matter entirely.  Earlier this week the US claimed a Russian air defense system was responsible for bringing down an American UAV in Libya.

Turkey’s support for the GNA is partly due to the continuing rivalry between it and the Saudi-led bloc. It has become the major provider of military hardware for the Tripoli government, though its motivations are not confined to Ankara’s desire to counter the Saudis. There is an economic element as well. Just days ago Turkey signed a deal with the GNA giving Ankara drilling, pipeline, and maritime rights over a wide area of the Mediterranean between the two nations. That particular move has set off a firestorm in Greece, and across Europe, however, it has not deterred Erdogan. For better or worse, Turkish involvement in Libya appears ready to escalate now that the survival of the GNA is directly tied to Turkish economic and geopolitical fortunes in the region.

The Argentine Headache

976857467.jpg

Argentina is on the brink of a financial crisis once again. Current leader Mauricio Macri’s loss to  left-wing opponent Alberto Fernandez in the primary election has caused a swarm of financial repercussions. The S&P Merval, Argentina’s main stock market plunged 48% on Monday. It was then second largest drop of any major stock index since 1950. The Argentine peso dropped 15% versus the US dollar on Monday as well. These losses extended on Tuesday. The wide margin of Macri’s loss is what triggered the financial earthquake. Investors were expecting him to be defeated, yet not to the extent that he was.

Now the future appears uncertain. The looming probability of a sovereign default on the country’s IMF loans is sending investors scrambling for cover. The emerging political scenario is causing concern around South America and beyond. Should the Peronists return to power, Argentina will once again be ruled by a leftist government. Brazil’s right-wing President Jair Bolsonaro is publicly warning of a possible Argentine refugee crisis affecting his country in the future. Brazil is already contending with waves of Venezuelan immigrants streaming into the northern region of the country, fleeing the economic and political crises in their homeland. The possibility of a second refugee crisis at Brazil’s southern border is unpalatable to say the least.

After the downturn in global markets yesterday stemming from global recession fears, it would appear that the Argentine headache will add to the increasing concerns among investors about the health of the global economy, as well as the growing influence that the geopolitical climate has on markets and national economies this summer.