Meanwhile, the global powers backing Ukraine have largely run out of ammo, an indictment of the deindustrialisation of the West. In contrast, Russia, China, and even North Korea can quickly retool their active industrial bases to produce enormous amounts of the artillery shells needed to supply the war, much as the European powers did in the two world wars. We exported much of our manufacturing capacity abroad in the Nineties, and that which remains is high-tech and specialist.

The emergence of calls for peace, then, is unsurprising. There is simply nothing else for the West to do to continue to support Ukraine. The prospect of building yet another army for the Ukrainians is not on the cards, with the remaining military equipment being deployed to the Middle East. But this raises the obvious question: are the Russians interested in discussing peace at this moment?

Western media has recently been focused on noises coming out of the Kremlin that signify openness to peace talks, with particular attention being paid to a video yesterday of Vladimir Putin calling the war a “tragedy” and saying that “Russia has never refused peace talks with Ukraine.” The keyword here, however, is “never”. Putin is signalling that this has always been Russia’s position since the beginning of the war. This has ramifications for whether peace talks do actually emerge.

In the Ukrainian stronghold of Avdiivka, for instance, heavy fighting has been taking place for weeks. Despite many Western media sources highlighting Russian losses, the following map (from a Ukrainian source) shows clearly that the noose is tightening around the city. The Russians appear to be using the same tactics that they deployed in Bakhmut: surround the city, cut off supply lines, then move in and wipe out the defenders.

This raises the question of why the Russians would come to the negotiating table if they are advancing in key strategic areas. If the Ukrainian army is indeed weak and, as Western reports readily admit, is unlikely to be resupplied, why would the Russians not press on and capture as much territory as possible before negotiations? Such a prospect has not even begun to be discussed in the West.

Then there is the fallout from the war itself, which appears to have left European economies permanently weaker. This week, it was announced that the energy price cap in Britain would be raised once more. Across Europe, similarly increasing costs are eviscerating the continent’s manufacturing base, which cannot compete on the world stage with such high prices.

Or take Britain’s ongoing fiscal crisis. The Government debt-to-GDP ratio is now close to 100%. The latest numbers for October 2023 show borrowing of £14.9 billion, higher than last year’s £10.5 billion. Many of Britain’s fiscal problems can be traced to the Energy Price Guarantee (EPG) required after the sanctions and counter-sanctions drove energy prices sky-high. The EPG could end up costing the Government up to £38 billion.

With their exclusive focus on military outcomes rather than looking at the broader geoeconomic issues, Western leaders still appear to think of geopolitics as if it were 1823 instead of 2023 — and so their power on the world stage ebbs away before our eyes. Now that the military option has been expended, Western leaders desire peace, but they have put themselves in a position of weakness, where it may be more difficult than they think to secure

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Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics

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