Here’s some news from the periphery of the Russo-Ukrainian War.
First up: Russia is in default over debts because it’s been cut out of SWIFT.
Russia on Sunday defaulted on its foreign debt for the first time since 1918 after the grace period on its $100 million payment expired, according to reports.
The $100 million interest payment deadline due to be met by the Kremlin had initially been set to May 27 but a 30-day grace period was triggered after investors failed to receive coupon payments due on both dollar and euro-denominated bonds.
Russia said that it had sent the money to Euroclear Bank SA, a bank that would then distribute the payment to investors.
But that payments allegedly got stuck there amid increased sanctions from the West on Moscow, according to Bloomberg, meaning creditors did not receive it.
Euroclear told the BBC that it adheres to all sanctions.
The last time Russia defaulted on its foreign debt was in 1918 when the new communist leader Vladimir Lenin refused to pay the outstanding debts of the Russian Empire during the Bolshevik Revolution.
Peter Zeihan explains what this means for the international financial order:
Is there any sign of Russia’s economy cratering from the sanctions? Not yet:
But one big downside of Vlad’s Big Ukraine Adventure became concrete this week: Finland and Sweden got the greenlight to join NATO:
NATO formally invited Sweden and Finland to join the alliance Wednesday at a summit in Madrid, Spain, in the midst of security concerns due to the Russia-Ukraine war.
The announcement comes after Turkish president Recep Tayyip Erdogan lifted his veto after a weeks-long stalemate over the negotiations. The decision will now rely on final ratification from all 30 member states.
“The accession of Finland and Sweden will make them safer, NATO stronger, and the Euro-Atlantic area more secure. The security of Finland and Sweden is of direct importance to the Alliance, including during the accession process,” NATO said in a statement.
NATO Secretary General Jens Stoltenberg called the decision “historic,” and thanked the leaders for their agreement.
Turkey signed a memorandum with Finland and Sweden on Tuesday confirming Erdogan would support the nomination of the two Nordic countries into the alliance.
Remember that tangling with the Finns has not been a source of happiness for Russia. The Soviet Union may have gained some territory in the Winter War and the Continuation War, but the Finns tore them a new asshole in the process. For the entirety of post-World War II, the Soviet Union and Russia have relied on a neutral Finland (“Finlandization”) to secure their northernmost flank. With Finland joining NATO, they no longer have that luxury.
The Finns have a fair amount of German equipment (including Leopard 2 tanks) and American aircraft (including having F-35s on order). I imagine integrating their forces into the NATO command structure should be quite feasible.
Speaking of countries that Russia has not had much joy tangling with, Sweden has invaded Russia more than once.
Though Swedish armed forces are relatively small, they have, if anything, even more German tech, and their native-built Stridsvagn 122 tank is based on the Leopard 2. Their Archer mobile artillery system is arguably the best in the world.
Oh, and both Sweden and Finland have several nuclear power plants each. Both could develop nuclear weapons in fairly short order if they had to. And any Russian moves against the Baltic states would probably be enough to push them into doing it, Nonproliferation Treaty be damned.
Getting Finland and Sweden to join up with NATO is has a high probability of being a historical blunder that outweighs any Ukrainian territorial gains Russia might end up with.
Tags: Archer (artillery), F-35, Finland, Leopard 2, NATO, nuclear weapons, Peter Zeihan, Recep Tayyip Erdogan, Russia, Russo-Ukrainian War, Sweden, SWIFT, tanks, Turkey, Ukraine, Vladimir Putin
So technically Russia didn’t default? If I mail a check for my VISA bill, my bank gets it, but the bank where my money sits won’t cash it even though the money is sitting there, am I in default? I made a good faith effort to pay.
It’s a true sign of brilliance, this… Invade Ukraine in order to prevent it from joining NATO and having more border with NATO nations to defend, and then wind up with Sweden and Finland deciding that they’d really rather be in NATO than out, due to your invasion.
Can you say “Self-fulfilling prophecy”?
I said it years and years ago… Putin is going to go down in history as one of the absolute worst leaders in Russian history. He’s done nothing to address the real structural problems of Russia, nothing to fix the demographic decline, and has actually worsened the state of their industry, academics, and military.
You’re going to see this play out over the next few months. My guess is that they’re going to be lucky if they manage to hold onto Crimea, because from the indicators I’m seeing in Eastern Ukraine, the Russian Army ain’t got a whole lot more “give” in it. There are critical morale problems, the troops have figured out that they’re getting screwed, and the whole thing is very likely to wind up in a state of collapse before long. If Ukraine keeps eliminating Russian artillery ammo stocks the way they are, and manages to maintain a force-in-being, about all they’re going to have to do is start walking east. The Russians depend on artillery volume to win, and the Ukrainian efforts are forcing them to expend everything they have in short-term useless offensives, while spotting all the stocks they’ve brought into the combat area. As those stocks are eliminated? Poof, there goes the Russian ability to influence the battle.
This campaign, if it can be dignified by such a term, is going to go down in history as the biggest Russian military fiasco ever. And, when you consider their record, overall? That’s saying something; this is the same military culture that produced the Russo-Japanese War, the Winter War in Finland, and managed to somehow nearly lose WWII to a nation that wasn’t much more than a third their size. Those feats of incompetence are going to be dwarfed by this fiasco, when the histories are written about it.
I honestly wouldn’t be a bit surprised if Russia ceases to exist as the nation it is today; I rather suspect that there’s going to be a moment when all the ethnic divisions that have been plastered over for the last century or so are going to blow up, and like the simmering boil in Uzbekistan, the whole thing is going to go up in flames with the regions saying “F*CK YOU!!!” to the center in Moscow. How much longer they can keep feeding ethnic minorities into the furnace of Ukraine? No idea, but the apparent numbers of people actually showing up for the spring conscription is telling. I’m seeing numbers suggesting that realists are expecting only a third of the normal take, and many of those are not the cream of the crop.
Remains to be seen what actually happens, but there are a lot of indicators out there that Russia is in a really deep shithole of it’s own devising.
[…] Cuba’s sock puppet president tells Cubans to find the charms of summer heat BattleSwarm: Russia Defaults; Finland, Sweden Get Greenlight To Join NATO, also, Halifax Bank: “We’re Going To Shove Pronouns Down Your Throat. If You Don’t Like […]
[…] Hungary approving their membership. Sweden’s application is still under negotiation. As I noted previously, tangling with the Finns has not been a source of happiness for […]