Inching Toward Peace — What a Deal Might Look Like
Author: Greg Valliere
March 10, 2022
THE KEY ISSUE is how Vladimir Putin can save face after a humiliating defeat. His demoralized troops are bogged down, his economy faces a devastating Depression, and ordinary Russians and oligarchs want the war to end. Putin can still inflict horrific damage to civilians, which would simply make Russia an even greater pariah.
VOLODYMYR ZELENSKY, on the other hand, is so beloved by Ukrainians that he has negotiating flexibility — even if that means abandoning his country’s desire for NATO membership. Zelensky has hinted this week that Ukraine could accept a neutral status (perhaps something like Finland).
SO PUTIN WILL HAVE TO FABRICATE A STORY that this “special military operation” has resulted in a victory — an iron-clad agreement that Ukraine will never join NATO. And Putin will claim that he has protected Russians in regions of eastern Ukraine, which will become Russian satellites.
IS THAT TOO MUCH FOR ZELENSKY TO ACCEPT? He wants to save his people and he’s likely to accept concessions. Is that enough for Putin? Furious at his inept Army, Putin could double down with chemical weapons or cyberterrorism or even tactical nuclear weapons.
THE DETAILS WILL BE DAUNTING: Russia will have to withdraw, and there will have to be a deal to ease the enormous sanctions imposed by the United States and the West. It could take a year or longer before there’s any restoration of normal trade relations or provisions like the re-admittance of Russia to the SWIFT protocols.
BOTTOM LINE: Ukrainian soldiers are willing to die for their country; Putin’s soldiers are not willing to die for him. Putin cannot win this war, he cannot occupy all of a country where he is despised. So he could spin a withdrawal as a victory, or he could preside over the collapse of his economy and more military defeats. The path toward peace will unfold this spring.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2022 AGF Management Limited. All rights reserved.