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1. Western financial warfare and Russia’s de-dollarization strategy: How sanctions on Russia might reshape the global financial system

Author:
Maria Shagina
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
Since 2014, Russia’s de-dollarization plan has been guided by security and geopolitical considerations. By dumping the US dollar from its foreign currency reserves, Russia diverted from the traditional approach where liquidity and the credibility of the issuer determine the choice of currency. In 2022, Russia has doubled down on its efforts to de-dollarize the economy. What started as de-dollarization in 2014, transformed into full-blown rouble-ization in 2022. Following the dynamic of an emerging multipolar world order, the global financial system is also gravitating towards fragmentation and currency multipolarity. The overuse of sanctions could strengthen revisionist countries’ desire to increasingly conduct their trade in non-dollar currencies in an attempt to avoid US oversight. If current trends continue, the de-dollarization effort could gain ground and undermine the primacy of the US dollar.
Topic:
Monetary Policy, Sanctions, Finance, and Conflict
Political Geography:
Russia, Europe, and Global Focus

2. Russia’s domestic politics have become part of the West’s Russia policy: The stakes are rising when Navalny returns to Russia

Author:
Jussi Lassila
Publication Date:
01-2021
Content Type:
Commentary and Analysis
Institution:
Finnish Institute of International Affairs
Abstract:
Among the most signifcant events in Russia in 2020 were the Covid-19 pandemic, reactions to the protests in Belarus, and the poisoning of top opposition politician Aleksey Navalny. Te frst two were clearly events of international signifcance, but so was the medical treatment given to Navalny, frst in Omsk and then in Berlin, after he suffered from symptoms of poisoning dur- ing a flight from Tomsk in Siberia to Moscow in August. In December, a joint study by the investigative journalist groups Bellingcat and The Insider, along with CNN, Der Spiegel and Naval- ny’s FBK Foundation, showed that it was difficult to find more con- clusive evidence of the Kremlin’s involvement in the assassination attempt by a chemical weapons- related poisoning group under the FSB that had been following Na- valny for years. This kind of op- eration would hardly have been possible without the blessing of high-level intelligence. Te ques- tion of whether the FSB leader- ship was proactive in resolving the “Navalny problem” or whether the order came from the Kremlin is irrelevant. Te revealed pattern confrms the long-standing trend of the strengthened role of the se- curity services, especially the FSB, in Russian politics. It is consistent with Putin’s approach to political processes being increasingly seen as issues of national security. Navalny’s self-confidence and style in the revelation videos related to the investigation, receiving ap- proximately 45 million views in less than a month, underscore the extent to which the FSB failed. The target did not die or become paralyzed, but recovered relatively quickly and bounced back, playing for higher and more radical stakes than before. Navalny’s role and reputation as the Kremlin’s most prominent critic has been based on the political pressure on the Kremlin generated by expos- ing elite corruption. While the will- ingness of citizens to see Navalny as an alternative to Putin varies consid- erably – with the majority indifer- ent to politics as a whole – Navalny’s numerous revelations have created an alternative to Russia’s ofcial re- ality, the political potential of which the regime obviously fears.
Topic:
Security, Foreign Policy, Conflict, Regionalism, and Domestic Policy
Political Geography:
Russia and Europe

3. EU Strategic Autonomy in the Shadow of Geopolitical Rivalry: A View from Moscow

Author:
Sergey Utkin
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
The EU is determined to maintain the transatlantic bond, while Russia tends to interpret the EU’s strategic autonomy precisely as autonomy from the US. The Western unity effort is significantly strengthened by the poor state of the EU’s relations with Russia. Russia is ready to pay lip service to the idea of a more capable EU, but instead it sees opportunities in areas where bilateral cooperation with member states is possible. The EU-wide consensus is doomed to remain critical vis-à-vis Russia for the foreseeable future. The EU will increasingly focus on gaining autonomy from Russia, primarily in the energy field and in terms of hard security deterrence. The EU-Russia geopolitical tension, centred on the common neighbourhood, is long-term and might cause as yet unseen damage to the relationship if it is not handled carefully.
Topic:
Security, Regional Cooperation, European Union, Conflict, Regionalism, Autonomy, Rivalry, and Strategic Interests
Political Geography:
Russia and Europe

4. The Eastern Mediterranean conflict: From Turkey-Greece confrontation to regional power struggles

Author:
Toni Alaranta
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
For several decades, the Eastern Mediterranean confict consisted of a three-part struggle over territorial wa- ters, sovereignty and exclusionary national narratives between Turkey, Greece, and the Republic of Cyprus. Its origins can be traced as far back as the Greek War of Independence in the 1830s, the Lausanne Peace Trea- ty determining the current borders of the Republic of Turkey in 1923, and the failed bicommunal federal state established in Cyprus in 1960. Regarding the Cyprus confict, the best – but ultimately lost – opportunity to resolve the issue was the 2004 Annan Plan for a bicom- munal federal state. Today, the Eastern Mediterranean confict is a multi-level and multi-actor power strug- gle that is unlikely to wane any time soon. In addition to Turkey, Greece, and Cyprus, it also includes actors such as France, Italy, Libya, Egypt, and the United Arab Emirates. Tis Briefng Paper frst identifes the main actors involved, and then proceeds to analyze the key de- terminants of the confict. Te paper concludes that tension in the Eastern Mediterranean will continue in the foreseeable future. A full military confrontation is unlikely, however, as NATO can provide a necessary platform for a Greece-Turkey de-escalation. Tis is likely to prevent an actual war, but will not be enough to produce any lasting solution in the increasingly confict-ridden Eastern Mediterranean regional power struggle.
Topic:
Security, Conflict, Regionalism, and Rivalry
Political Geography:
Europe, Turkey, and Greece

5. EU-China Investment Agreement: the EU’s Balancing Act between Values and Economic Interests

Author:
Saila Turtiainen
Publication Date:
03-2021
Content Type:
Commentary and Analysis
Institution:
Finnish Institute of International Affairs
Abstract:
The ratification process for the EU’s new investment agreement with China is expected to be very difficult. Although the aim is to improve EU-China relations, the process of getting the agreement approved in the EU will end up causing further tensions with China as the EU tries to strike a balance between promoting its values and economic interests.
Topic:
International Cooperation, International Trade and Finance, European Union, Conflict, and Economic Cooperation
Political Geography:
China, Europe, and Asia

6. Russia's Redefined View on Strategic Stability: A Security Dilemma in Northern Europe?

Author:
Jyri Lavikainen
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Te concept of strategic stability has traditionally been associated with a stable nuclear relationship between leading nuclear powers, the US and USSR/Russia. Teir last commonly agreed defnition of the concept in 1990 formed the basis of the START negotiations, defning strategic stability as a nuclear relationship, where neither side has an incentive to attempt a disarming strike. In 2016, Russia and China suggested replacing the concept of strategic stability with ‘global strategic stability’ by arguing that the conventional defnition of strategic stability as a military category concerning only nuclear weapons was outdated.1 Instead, they seek to redefne strategic stability as a concept con- cerning the state of great-power relations, with both political and military categories, the military category being the focus of analysis in this paper.
Topic:
Military Strategy, Conflict, Strategic Stability, Rivalry, and Strategic Interests
Political Geography:
Russia, China, Europe, and Asia

7. Turkey’s relations with the US and the EU at the beginning of the Biden presidency: Prospects for change?

Author:
Toni Alaranta
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
US-Turkey ties are strained because of conflicting interests in Syria and on a more fundamental level due to Turkey’s different interpretation of the ongoing global power shift, and its concurrent search for strategic autonomy and cooperation with Russia and China. EU-Turkey ties have long been dysfunctional, with the EU focusing on maintaining the refugee deal, while Turkey has become increasingly authoritarian and aggressive in its external relations, resulting in a permanent ‘wait-and-see’ approach by the EU. While the US and the EU have recently agreed that they should synchronize their stance on Turkey, both are also characterized by an increasingly feverish internal debate about how best to respond to Turkey’s behaviour. A genuine fresh start in Turkey-West relations is somewhat illusionary as most of the underlying problems are more likely increasing rather than decreasing, pointing to a more permanent dual-track policy of cooperation and containment, both by the US and the EU.
Topic:
Diplomacy, International Cooperation, European Union, Leadership, Conflict, and Transition
Political Geography:
Europe, Turkey, North America, and United States of America

8. Three decades of Russian Policy in the European Part of the Post-Soviet Space: Swimming Against the Current

Author:
Arkady Moshes and Ryhor Nizhnikau
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The successful pursuit of Russia’s great-power status and its recognition by the West imply the preservation of pre-eminent positions, above all in the European part of the post-Soviet space. Since Vladimir Putin’s rise to power, the Kremlin has been making a consistent effort to reverse the earlier trend towards the weakening of Russia’s regional stance. One of the implications of this policy was the shift of the Russian-Western competition in the “common neighbourhood” towards an open stand-off after Russia’s annexation of Crimea in 2014. Russian regional policy has run counter to structural changes that could not be counter-balanced through activism, whether enticing or coercive. As a result, 30 years since the dissolution of the USSR, Russia’s regional influence as well as its attraction as a societal role model and a security provider are continuing to erode. Russia has regional clout, which is nonetheless hardly growing over time. More and more often, Moscow is encountering difficulties in achieving its goals. While post-Soviet states resist Russia’s assertiveness, non-Western players pose new challenges to its posture.
Topic:
Security, Foreign Policy, Diplomacy, International Cooperation, Military Strategy, Conflict, Peace, and Post-Soviet Space
Political Geography:
Russia, Europe, and Post-Soviet Europe