A Ukrainian soldier in France speaks about writing and recovery

A Ukrainian soldier in France speaks about writing and recovery

Post By World culture, defence, Europe, Features, France, interview, literature, military, Paris, Russia, Ukraine, Volodymyr Zelensky, War

Ahead of the second anniversary of Russia’s full-scale war against Ukraine, Ukrainian soldier and author Oleksandr “Teren” Budko spoke to FRANCE 24 about his path to recovery after losing both legs, his approach to writing and his patriotism.

On a recent evening at the Ukrainian Cultural Institute in France, Oleksandr “Teren” Budko stood with his interpreter before a large audience of Ukrainians and other nationalities. Blond and with a boyish face, the 27-year-old Ukrainian soldier was on the French leg of his European book tour for “Story of a Stubborn Man”. The autobiography interspersed with memories from the front lines recounts his road from civilian to soldier and then to battle-scarred veteran.

Budko began writing the book in October 2022, just two months after losing both legs after a shell landed near him in a trench during the counteroffensive for the city of Kharkiv. “I found inspiration for my writing on the front lines,” he said. Even before the injury, he had been publishing short texts accompanied by pictures of him and his buddies in combat gear as they worked to repel the Russian enemy.

Athletically built and wearing a quilted blue shirt and shorts that showed his prosthetics, Budko was as comfortable as a stand-up comedian in front of a crowd. “There is no truth in the leg,” he said, repeating a Ukrainian proverb that suggests a person who has walked a lot cannot tell the truth because they are tired.

Appreciation for a war hero

Yet he wanted to get as close to the truth as possible while writing his book. He wanted to capture the voices of his comrades and the sights and the sounds of what he experienced in eastern Ukraine. He would try to write, but then get stuck with month-long bouts of writer’s block. A trip to Florida, where he went to get fitted with sports prosthetics so he could participate in the Invictus Games, finally changed something in him. “I was there under the sun, I swam in the sea in Miami, I ate at McDonald’s – and this gave me the perfect circumstances to write this book,” he said.

Thousands of miles away from Ukraine, he revisited his prior experience as a Ukrainian soldier. His days were filled with rehabilitation but, at night, he would write. Like plunging into the nearly clear waters off the Atlantic coast, he immersed himself in his memories of fighting the war and typed them up on a computer.

“Some of the people I wrote about in the book are dead, and that’s why it was so hard to write the text,” said Budko. Luckily, many people in the book did survive, “including my comrade Artem”, he said, nodding toward a young man in a wheelchair sitting in the front row. The audience responded with lengthy applause in appreciation of the two young men for their sacrifice – and for coming home alive.

Memories from the war

Budko agreed to an interview the next day to talk about what led him to fight in the war and his memories from that time. After a visit to Paris‘s Carnavalet Museum, with its elaborate displays dedicated to the French Revolution and the Declaration of the Rights of Man and the Citizen, the young man in a black hoodie settled at a kebab restaurant on the Rue des Rosiers, an eclectic street in the Marais neighbourhood of central Paris. He was accompanied by his editor and a lively group of young Ukrainians who, judging by their level of excitement, appeared to be visiting the French capital for the first time.

Sitting with his back against the wall, a bit apart from the group, Budko suddenly seemed less like a comedian and more like a wise old man. “I wrote this book for civilians and for people who had never seen war, so they could understand what happens on the front lines,” he said.

Through his interpreter, Budko said he was in Kyiv when the war began on February 24, 2022. “I signed up as a volunteer because I wanted to defend my country from the enemy and help it gain independence,” he said.

Although he had never held a weapon before in his life, he joined the Carpathian Sich 49th Infantry Battalion, a battalion of the Ukrainian Ground Forces established in May 2022. After some training and taking part in the defence of the capital Kyiv, Budko was deployed to northeastern Ukraine near Izium.

Most people in the battalion were volunteers who accepted the consequences of their choice, remembered Budko. “Of course Bakhmut and Avdiivka exist (two besieged cities known for scenes of the most ferocious violence of the war), but the life of a soldier is not only about fighting,” he added.

Budko recalled one moment when he ate a slice of foie gras for breakfast: “For me, it was a sign I was still alive,” he said. Despite being trained as killing machines, Budko said he and his fellow volunteers continued civilian life to the best of their ability, preparing traditional meals like borscht, a red beetroot soup, and taking the time to enjoy them with each other. This also meant saving abandoned cats and dogs and evacuating elderly people from zones that had become too perilous for them to stay.

An invincible optimism

From the trenches, the soldiers watched Ukrainian President Volodymyr Zelensky’s speeches and followed news reports on military support from abroad. “We were interested in how the war was going to end, but of course the weapons situation was important too, because without weapons it was going to be impossible to end the war,” said Budko. “Despite the many weapons given, it was never enough.”

Writing the book also allowed Budko to relive some of the moments from “one of the best times of my life”, he said. The adventure, the camaraderie and the moments of peace, such as when he would lie down on the ground with a book, seem to have left Budko with a sense of nostalgia devoid of any bitterness. But today he preferred not to talk about the day he suffered the injury that caused him to lose both legs: “There is no trauma, but I’ve told the story too many times.”

Budko said he has always been endowed with an invincible optimism. He said what changed after the injury is that he “became braver and more open to people”.

Thinking back to his time in the service, the young man recalled the discovery of a small kobzar (a Ukrainian bard) figurine he made one day while digging trenches in the Kharkiv region. The statue was more confirmation that the lands were Ukrainian, he said, because kobzars never existed in Russia. It further convinced him of his role in preserving Ukrainian territorial integrity.

Ahead of the second anniversary of Russia’s full-scale invasion of Ukraine on February 24, 2022, Budko likened the war to a “David against Goliath” struggle and voiced a warning about the existential nature of the threat: “The less support Ukraine gets, the closer the enemy gets to other European countries.”

With this in mind, his goal today is to “contribute to the Western population’s understanding of the war, and encourage them to support us so that they can help obtain a Ukrainian victory as soon as possible”.

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Two years after Russia’s invasion, Ukraine reorients its strategy to focus on defence

Post By World defence, Europe, Features, military, Russia, Russian military, Ukraine, Ukraine war analysis, USA, Volodymyr Zelensky

Two years after Russia invaded Ukraine on February 24, 2022, the lack of troops and ammunition and the depth of Russia’s field fortifications are forcing Kyiv to adopt a more defensive strategy. As it waits for more Western support, the Ukrainian army is holding out for better days.

Is “defend now, attack better later” Ukraine’s best shot? Two years after Russian forces invaded its territory, Ukraine has officially adopted a new strategy focused on defence. Ukrainian President Volodymyr Zelensky admitted that the situation on the front lines was “extremely difficult” in his daily address on February 19.

Since the failure of Kyiv’s summer counteroffensive, which cost Valerii Zaluzhnyi his position as commander-in-chief of Ukraine’s armed forces, it is no longer time for major manoeuvres aimed at finding a breech in the Russian strategy, according to high-ranking Ukrainian sources. “We changed from an offensive to a defensive operation,” admitted the country’s new army chief, General Oleksandr Syrsky, in an interview with German channel ZDF broadcast on February 13.

It is hard to imagine any other option for the Ukrainian army. For months it has been up against an imposing Russian defensive line of trenches, concrete cones and minefields stretching 15 to 20km deep, preventing any armoured vehicle from piercing through.

“After regaining some of the territories that had been captured by the Russians, the summer of 2023 marked a turning point in the conflict. The deep Russian defensive lines exhausted the Ukrainian counteroffensive. The Russians still have gaps and command problems, but they learn quickly and their ability to adapt should never be underestimated,” says Guillaume Lasconjarias, a military historian and lecturer at France’s Sorbonne University.

In the Ukrainian battlefield, the massive use of drones is also having a serious impact on offensive operations. . With these “eyes” positioned all along the front line by both sides, the battlefield has now become “transparent”, rendering obsolete the element of surprise so dear to military strategists.

“To concentrate efforts in one point is less and less possible. Instead, we are now seeing strategies based on multiple ‘stabbing’ motions. But in the end, this leads to exhaustion,” says Lasconjarias.

Ammo crisis

As a result, the front line is deadlocked and neither side seems able to bend their opponent. “As in World War I, we have reached such a technological level that we find ourselves at a dead end,” Zaluzhnyi admitted back in November 2023 in an interview published in British weekly The Economist.

“We must also take into account the recent change of leadership within the Ukrainian armed forces. A change of leadership requires the armed forces to take a moment to reorganise and reorient their structure and actions so they can be in line with the plans of the new chief of staff. Returning to a more defensive strategy in the short term may help to achieve this reorganisation,” says Nicolo Fasola, a specialist in Russian military issues at the University of Bologna.

The alarming shortage of ammunition is also forcing Kyiv to adopt a more cautious stance. In this static warfare, hundreds of thousands of shells are fired by each army every month. However, the blocking of aid by the US Congress and the delays in deliveries promised by Europe are severely handicapping Ukraine’s capacities.

According to military experts, the “fire ratio” – which measures the difference in the rate of artillery fire between enemies – is currently one to ten in favour of Russia.

“Even if it seemed to even out last summer, the volume of fire has always been in favour of the Russians. In the Russian-Soviet military tradition, artillery is an extremely important factor in shaping the battlefield. Faced with this large and diversified artillery, the Ukrainians have more precise cannons, such as the French Caesar or the American M777. But they have two problems: they have to move more often to avoid destruction, and they can fire back only when they know they are going to hit the target because of their lack of ammunition,” explains Guillaume Lasconjarias.

“Ukraine’s resources are becoming more limited,” adds Fasola. “It should also be stressed that most of the sophisticated equipment supplied to Kyiv has not been used effectively. It is illusory to think that the Ukrainian armed forces, which could not be trained in an in-depth way, could use these resources as efficiently as a Western army.”

Preserving Ukrainian national unity

The recent withdrawal from the eastern town of Avdiivka illustrates Kyiv’s new defensive posture. After months of fierce fighting, the Ukrainian General Staff made the difficult choice of a tactical withdrawal. If it offered a symbolic victory to the Kremlin, this decision also preserved the lives of thousands of Ukrainian soldiers. This decision is in stark contrast to the all-out tactics seen during the bloody battle of Bakhmut, a town in the Donbas region that fell into Russian hands in May 2023.

Along with flagging stocks of ammunition, dwindling manpower is another of the Ukrainian army’s major problems. According to a declassified document sent to the US Congress, Kyiv has suffered losses estimated at 70,000 dead and 120,000 wounded in two years. Russian losses are estimated at 315,000 dead or wounded.

In addition to the losses, the exhaustion of Ukrainian soldiers, some of whom have been deployed since the start of hostilities, means that rotations will also be necessary over the coming months.

“The real challenge for 2024 is for Ukraine to be able to regain some of the flexibility of its deployed brigades, which are now exhausted. It will also be necessary in order to mobilise newcomers, train them, equip them and take them to the front. This raises the question of the public’s ongoing acceptance of the conflict,” says Lasconjarias.

Watch moreIn Spain, Ukrainian civilians prepare for battle at a training centre near Madrid

A draft law wants to solve this problem. The controversial bill aimed at facilitating mobilisation was given the thumbs-up by the Ukrainian parliament on its first reading in early February. But the text has also triggered a lively public debate at a time when the stalemate in the war, the stagnation of the front and the uncertainty hanging over Western support have naturally affected the morale of both the troops and the population. Zelensky will have to work his way out of this down phase to preserve the national unity, which has so often been praised by his Western partners.

“From a military point of view, it seems impossible to avoid some form of conscription extension, but its political cost will be high,” says Fasola. “It also raises the problem of troop management, because if people are recruited by force or against their will, there are two possibilities: either you treat your troops as Russia does, meaning with no regard for their dignity and free will, or you end up with people who don’t want to fight or follow orders, which is very problematic for military strategy and effectiveness.”

‘War of attrition slowly but steadily in Russia’s favour’

While waiting to rebuild its offensive potential, the Ukrainian army will be trying over the coming months to inflict as many losses as possible on its Russian enemy while conserving its troops and ammunition. Beyond just holding out in a defensive posture, Ukraine is likely to continue its in-depth attacks against logistical infrastructures, particularly in the Russian border regions of Bryansk and Belgorod and in the annexed Crimean Peninsula in the hope of weakening Russia’s military system.

Kyiv’s official objective remains unchanged: to reconquer the territories annexed or occupied by Russia since 2014, which represents 18 percent of Ukraine’s territory.

According to analysts, only increased Western support could enable General Syrsky’s troops to move forward again. Such a scenario is far from certain, especially from the US: Democrats and Republicans are tearing each other apart in Congress over the question, and former president Donald Trump, who is hostile to continued US aid, is leading polls ahead of November’s US presidential election.

Moscow and Kyiv are “racing to rebuild their offensive capacities. If further Western funds are not released, if Russia gains the upper hand in one way or another, Moscow will have the opportunity to make further progress,” Andrea Kendall-Taylor, a researcher at the Washington-based Center for New American Security, told AFP. “The dynamic has changed,” says the analyst, stressing that “from Putin’s point of view, 2024 is a crucial year”.

According to the experts interviewed by FRANCE 24, Russia should be able to continue supplying the front line with troops and equipment throughout the year, but to no gain or advantage, at least in the short term. “The front line is not likely to change radically. Over the next few months, Russia will continue to gradually erode Ukrainian control of the front line, which will nevertheless be very costly for Moscow,” predicts Fasola. “I expect the war to continue in the same way as it is today, as a war of attrition that is unfolding slightly, slowly, but steadily in Russia’s favour.”

This story has been adapted from its original in French.

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‘People don’t want to talk about war’: Taiwan civil defence battles invasion risk denial

Post By World Asia / Pacific, China, defence, Features, guns, invasion, Taiwan

from our special correspondent in Taiwan – Emerging civil defence groups in Taiwan have vowed to make the island’s population better prepared for a potential attack by Chinese troops. Two years after the Russian invasion of Ukraine prompted an unprecedented grassroots mobilisation in favour of civil resilience, a large number of Taiwanese are still afraid that the act of preparing for war could in itself raise the risk of an attack. FRANCE 24 reports.

It looks like an assault rifle but sounds rather like a toy. There is a world of difference between the clanking sound of the M4 carbine airsoft replica and the explosive boom of a real firearm. But that doesn’t prevent some clients at the Camp 66 airsoft shooting range in Taipei from dressing in tactical clothing to get a stronger feel of modern warfare. Due to severe legal restrictions on gun practice and ownership, airsoft clubs are the only way for Taiwanese civilians to get some technical skills that, they hope, could prove useful in the event of a Chinese invasion.

“I started airsoft shooting because I’ve heard since my childhood that training in Taiwan’s army isn’t good enough,” says Bill Huang, a 19-year-old mechanical engineering student wearing a “Taipei city police” tactical vest. He began practicing airsoft shooting during the summer of 2022, a few months after the Russian invasion of Ukraine sparked a revival of interest in civil defence in Taiwan.

“I believe skills from airsoft training would be useful for civil defence because airsoft guns operate just like real guns. If one day the government gives me a gun or any other rifle, I will be able to use them and defend my country,” Huang said.

Bill Huang (R) and his friend Brian pose at the Camp 66 airsoft shooting range. © Mehdi Chebil, FRANCE 24

He came to the Camp 66 shooting range with a friend who looks like he parachuted in from a war zone, with his military helmet complete with tactical communication headset and a replica of the M4 carbine that is standard issue in the US military.

When his “assault rifle” gets jammed, a former US Marine working as weapons instructor at Camp 66 is here to help.

“These are definitely not firearms. But the replicas are very faithful to the original models, and it allows people to get used to load, unload, and manipulate them,” says Richard Limon. “Most important, it teaches them to handle firearms carefully.”

Retired US Marine Richard Lemon checks an airsoft replica at the Camp 66 range. © Mehdi Chebil, FRANCE 24

Taiwan didn’t get a “wake-up call” moment like Ukraine had in 2014, when Russia seized Crimea and sent troops to back separatists in Donbas. The country has nothing similar to the Territorial Defence Forces trained by Kyiv shortly before the 2022 invasion.

Taiwan’s old civil defence scheme, which reportedly has hundreds of thousands of volunteers in existing crisis response teams, is facing “systemic failure” because of budget and training issues, according to analysts.

The overhaul of civil defence was not an issue in the campaign for the January 13 presidential election, which has focused more on domestic social and economic issues rather than cross-Strait relations. Despite different rhetoric, all three candidates – as well as an overwhelming majority of Taiwanese – are in favour of broadly maintaining the status quo in the island’s thorny relations with China.

Tony Lu poses with an AK-47 airsoft replica at Camp 66. He's known across Taiwan for having fought in Ukraine's international legion in 2022. He is now urging his fellow countrymen to get prepared in case of a Chinese invasion. — Tony Lu poses with an AK-47 airsoft replica at Camp 66. He’s known across Taiwan for having fought in Ukraine’s international legion in 2022. He is now urging his fellow countrymen to get prepared in case of a Chinese invasion. © Mehdi Chebil, FRANCE 24

The recent surge of interest in civil defence preparedness came from a bottom-up movement, not a government initiative.

“Most participants in civil defence activities I met were frustrated by the lack of reaction from the Taiwanese government after the recent Chinese incursions,” says Wen Liu, a scholar at Academia Sinica‘s Institute of Ethnology who recently took part in some 50 civil defence workshops and interviewed dozens of participants for her research paper.

Getting prepared for a Chinese invasion

The legal framework preventing citizens from getting their hands on firearms is not the main issue, according to Liu. She points instead to the government’s reluctance to name its potential enemy across the Strait and frame the conflict as “Taiwanese against Chinese” because of historical reasons.

The island has lived under self-rule for 70 years since supporters of the Chinese nationalist party, the Kuomintang, fled there after losing to the Communist party in the civil war. Taiwan’s constitution still refers to itself as the “Republic of China”.

Liu notes that it’s only in June 2023 that Taiwanese authorities released an updated civil defence booklet with a section on how to tell the difference between Chinese and Taiwanese soldiers based on their uniforms, camouflage and insignia.

Close-up picture of Taiwanese firing airsoft guns at the Camp 66 range. © Mehdi Chebil, FRANCE 24

“A lot of people in Taiwan have become accustomed to Chinese intimidation and don’t even want to talk about it. Since there was no invasion in the last 70 years, they believe that nothing will happen if they carry on as usual,” says Liu. To them, building a strong civil defence aimed at countering a Chinese invasion could be seen as provoking escalation with Beijing.

“The most important thing with emerging civil defence groups is that they strengthen the people’s psychological awareness. It also shows international allies that Taiwanese are not split over their will to resist,” adds the researcher.

The locals’ willingness to take up arms against a Chinese invasion is especially scrutinised by Washington, whose military help would be crucial to repel a large-scale attack.

Portrait of Taiwanese scholar Wen Liu, an assistant research professor at Academia Sinica. © Mehdi Chebil, FRANCE 24

It remains anyone’s guess what the attitude of the wider Taiwanese population would be in the event of an invasion by China. Public surveys on that sensitive issue are considered unreliable. Researchers interviewed by FRANCE 24 said the 2022 craze for civil defence training was now going flat or even going down, but there is no solid data on the subject.

Civil defence attracts younger people

A spokesperson for the Kuma Academy, one of the main NGOs organising classes about first aid, cognitive warfare, executing evacuation orders, and the like, said the group had “reached out” to 500,000 people, but didn’t provide a monthly breakdown. The group aims to train 3 million people – more than 10 percent of Taiwan’s population.

Airsoft clubs and new activist groups like the Kuma Academy have attracted mostly young Taiwanese, according to T.H. Schee, a tech entrepreneur and expert in crisis response.

“Most are in their 20s or early 30s. They are the age group more likely to openly prepare to resist a Chinese invasion. This is very different from the existing disaster reaction groups, where most volunteers are over 50 years old. The older generation doesn’t like to name enemies because they know that politics and governments can change – that one day even your own government could be your enemy,” says Schee.

TH Schee prepares to train in the 4SC CrossFit room he recently opened in Taipei. The poor physical conditions of many Taiwanese young people could hinder civil resilience, according to him. © Mehdi Chebil, FRANCE 24

Drawing on his own experience coordinating rescue efforts following the 1999 earthquake and the 2009 typhoon, he argues that both emerging groups and existing disaster reaction organisations should work together for the sake of civil resilience.

“You can’t protect your neighbourhood only by yourself (…) A key aspect of civil defence is to know what person in your local group can do what. Such knowledge and the maintenance of communication would be indispensable to avoid chaos and manage a proper resistance movement in case of an invasion,” he says.

Another challenge for Taiwan’s civil defence is the population’s general physical condition, which he sees as fairly poor.

Taiwanese people attend a CrossFit class in Taipei on October 4, 2023. © Mehdi Chebil, FRANCE 24

“Practicing airsoft shooting or first-aid training can be effective for psychological preparedness, but I’m afraid some young people would not last a day or two if a war breaks out, because they are not fit enough. I know that not everyone in Taiwan needs to be a soldier, that would not be practical,” says Schee.

“But if we manage to have 5 or 6 percent of the population who are really in good shape, die-hard prepared people, that could change the course of the war.”

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Germany hikes Ukraine military support, but is its defence-spending tilt tenable?

Post By World defence, Europe, Features, Germany, military, Ukraine war analysis

Germany, already Europe’s biggest supporter of Ukraine, has unveiled plans to double its military aid to Kyiv for 2024, while continuing to invest in its armed forces in order to become “the backbone of European defence”. It’s a strategy shift Berlin hopes to maintain over the long term, but counting on public support in a difficult economic context might make it hard to sustain.

As the Ukraine war grinds on, and with the Israel -Hamas war grabbing international attention, many Ukrainians fear that their existential struggle against Russia will be overlooked. The looming 2024 US election campaign is doing nothing to assuage their anxieties. But Kyiv can count on the support of Germany, which is set to double its military aid to Ukraine.

In an interview with German broadcaster ARD, Defence Minister Boris Pistorius said the move sent a “strong signal to Ukraine that we will not leave them in the lurch”.

The Ukraine military aid hike from €4 billion to €8 billion would mean Germany’s annual budget allocation would be enough to last Ukraine the entire year, noted Pistorius. The budget boost, he told ARD, was a response to this year’s experience, “which showed that planned amounts were quickly exhausted” by Ukraine’s major military needs.

The €8 billion military aid announcement was a marked shift from Germany’s infamous “5,000 protective helmets” offering just weeks before Moscow launched its full-scale invasion of Ukraine last year. It was a clear sign of a change in German policy, which was once considered a weak link in the Western response to Russian aggression due to its dependence on cheap Russian energy and its postwar commitment to pacifism.

From weak link to ‘backbone’ of European defence

Back in January 2022, when Ukraine, faced with an imminent invasion, turned to NATO for military help, the US and UK immediately agreed to provide Kyiv with defensive weapons.

When Germany, Europe’s largest economy, offered just 5,000 protective helmets, it was the subject of much scorn across Ukraine, prompting Kyiv’s mayor to publicly ask if the next delivery would be pillows.

“Military aid to Ukraine gave rise to a particularly difficult debate in Germany, for both historical and economic reasons,” noted Éric-André Martin from the Paris-based French Institute of International Relations (IFRI). “Not only is it the country’s policy not to supply arms to a country at war, but German officials were also very uncomfortable with the idea of opposing Russia, which supplied them with 50% of their gas.”

A year after the helmet affair, Christine Lambrecht from Chancellor Olaf Scholz’s Social Democratic Party (SPD) resigned as Germany’s defence minister. Her New Year’s Eve address, when she said the Russian invasion gave her the chance for “many encounters with great and interesting people” was one gaffe too many, undermining Germany’s credibility on the international stage.

Then came the controversy surrounding the delivery of German Leopard 2 tanks to Ukraine. Just as Kyiv was putting up a valiant offensive against its giant invader, Germany not only refused to supply the much-needed tanks, it opposed re-exporting tanks purchased by its allies to Ukraine.

Finally, after Scholz visited Washington and convinced US President Joe Biden to send American Abrams tanks, the German chancellor yielded to pressure. In a January 25, 2023 speech to parliament, Scholz announced that Germany would be sending Leopard 2 tanks to Ukraine.

“Germany was not the only European country afraid of adding fuel to the fire by delivering advanced military equipment to Ukraine to fight Russia. But it is true that for a long time it was particularly cautious,” said Gaspard Schnitzler, research director at the French Institute for International and Strategic Affairs (IRIS).

“This difficulty in making decisions is linked to Germany’s political configuration,” said Schnitzler, noting that Scholz’s governing coalition includes three political parties “with very different perspectives, to a policy of drastic export controls, and also to the German constitution, adopted after the Second World War to avoid a concentration of power. Decisions are taken collegially, and therefore take longer to reach, which was difficult for its partners to understand. But it can also be argued that once they are made, they are more definitive.”

Almost two years after the start of the war, Germany has gradually emerged as Kyiv’s leading military supporter in Europe. According to the Kiel Institute’s Ukraine support tracker, Berlin has committed over €17.1 billion in military aid to Ukraine since January 24, 2022. This is certainly not on a par with Washington’s €42 billion, but it is more than twice the UK’s investment (7 billion) and 34 times that of France.

This investment has increased considerably over the past year, with the delivery of Leopard 2 tanks, Gepard air defence systems and shells.

“Today, Germany wants to be exemplary in its support for Ukraine, to make up for its hesitations at the start of the war, but also its policy of economic openness towards Russia. The signing of the Nord Stream II gas pipeline after the [2014] annexation of Crimea was very badly received by Ukraine, the Baltic States and Poland,” explained Schnitzler.

Bundeswehr on the rise

For Germany, this massive support for Ukraine is first and foremost a question of national security. Realising the scale of the threat to its own security posed by Russia’s conquest of Ukraine, Berlin began a radical military rearmament shift soon after the war erupted, breaking with decades of underinvestment.

After a February 2022 announcement of a special fund of €100 billion over five years to modernise the Bundeswehr, the German armed forces, Berlin adopted its first-ever “National Security Strategy” in June. On November 9, Pistorius unveiled his defence policy guidelines, promising to make Germany “the backbone of deterrence and collective defence in Europe”.

“The amount announced may seem very substantial, but it’s important to understand that this is above all a catch-up investment,” stressed Martin.

“Germany was well below NATO’s commitments, which set defence spending at 2% of GDP. It was something of a freeloader in its contribution to European defence. In the name of budgetary stability, it shifted the burden to other members of the Alliance, and in particular the US, which led to sharp tensions with Donald Trump,” Martin added.

With this strategic turnaround, Berlin intends to transform its defence policy for the long term. The aim is to reassure the US, and to offer a hierarchical military framework within NATO into which European countries with fewer resources can integrate their battalions.

A change of gear in times of crisis

According to Pistorius, Germany’s status as Europe’s largest economy gives it a special “responsibility” to defend the bloc, which it now intends to assume.

However, this ambitious transformation comes at a time of economic turbulence. Germany, which had based its energy strategy on supplies of cheap Russian gas, is in the front line of the inflationary crisis that has hit the continent since the outbreak of the Ukraine war and the introduction of sanctions against Moscow.

“The country relied on Russian energy to implement its transition to renewables. Now it has to source its energy elsewhere, and at a much higher cost. Add to this the slow pace of industrial transition, as Germany has invested little in electric vehicles, and its automotive sector is losing competitiveness to the Chinese,” explained Martin.

Against this backdrop, at the beginning of October, the IMF revised its forecasts for the German economy’s contraction, now predicting a drop in GDP of -0.5% versus the previous -0.3% for 2023, by far the worst annual performance of the bloc’s economies.

“The special fund of €100 billion over five years to finance the army pales in comparison with Germany’s GDP of €4,000 billion. The same applies to the envelope dedicated to Ukraine support. But the difficulty is that for these investments to be effective, they must be sustained over time,” said Martin. “If the economic difficulties persist and have too heavy an impact on German households, the government could be forced to reassess its budgetary choices.”

“The Russian invasion has broken the taboo on the issue of national defence in Germany,” said Schnitzler. “The vast majority of Germans are in favour of supporting Ukraine, despite the cost, and are now aware of the importance of strengthening their army.”

Schnitzler nevertheless believes that, despite favourable public opinion, several questions about Berlin’s ability to maintain this policy persist.

“We’re still feeling our way around the financing of German rearmament. To be sustainable, these investments need to be gradually shifted to the defence budget, but for the time being everything is still based on the special €100 billion fund.

Finally, it’s hard to predict what will happen to this policy once the war in Ukraine is over. Once the immediate threat has been averted, it’s always harder to justify high levels of military spending to the public.

This article has been translated from the original in French.

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Israel Hamas war: The outcome the financial markets expect

Post By World defence, Investment, Israel Hamas war, oil prices, U.S. dollar, World economy

Energy and defence-related investments are set to yield in the next 12-18 months, according to analysts.

Weeks after Hamas’s devastating attack on Israel – provoking fierce retaliation by Israel that has prompted fears of a humanitarian disaster in Gaza – the immediate shock that the assault had on the markets appears to be wearing off.

Yet given the huge impact that instability in the Middle East can have on the global economy, a pressing concern for investors arises: which investments would be a safe option amid the potential for escalated conflicts in the region?

BCA Research, a global investment strategy firm, wagers the answer lies in oil and defence-related investment.

The reason, their research shows, is that the war between Israel and Hamas is likely to spill over from Gaza’s borders, prompting a significant oil shock – a forecast that seems ever more possible following reports that the US military struck Iran-backed militias in Syria, in a self-proclaimed act of self-defence.

BCA Research has put the probability of the conflict drawing in Hezbollah and other militant groups in Lebanon and Syria at 45% by mid-October.

Indeed, on Monday morning, the Israeli Defense Forces confirmed that they had struck targets in Syria and Lebanon, in what it called a “response to launches from those areas into Israel”.

Matt Gertken, chief geopolitical strategist at BCA Research, said that there’s even a significant risk that the fighting will extend to bring Iran openly into the fray too, even if it’s unlikely on balance.

“The United States does not want a full-scale confrontation with Iran. They don’t want to interrupt the oil flow,” he said. “The Iranians also share an interest with the US. But it’s still at a one-third probability. It’s still a very high risk for the global economy.”

How oil and defence investments could outperform

With a potential escalation of the war on the cards, there’s a high risk of a major spike in oil prices within the next 12 to 18 months, according to BCA Research.

The war in Gaza won’t be the sole cause, the firm says: Russia, still ensnared in Western sanctions stemming from its continued invasion of Ukraine, is also likely to cut oil production.

“Constraints on the supply chain could push oil prices up,” said Gertken.

But oil isn’t the only market tapped to soar in value – BCA Research has also put its bets on the defence sector.

The chief strategist noted that the US is increasing defence spending to protect its allies, and Europe is also allocating more funds to defence, which are promising signs of increased profits for investors.

Gertken warned however that defence and energy stocks “should be viewed relative to other cyclical equities (stocks whose price is affected by how the economy performs, ed.)”.

As the current global economic outlook, including the IMF’s own, suggests a slowing GDP growth for the upcoming year, the so-called cyclical stocks are facing a weaker performance compared to 2023.

“Within this category, however, energy and defence stocks are likely to outperform,” said Gertken.

What does the market expect?

As news from Israel and Gaza continues to unfold, investors have been edging towards safe haven investments, such as gold and US treasury bonds.

Yet the impact of the war on the global financial markets and oil prices has been moderate so far.

The lack of volatile changes in the oil market is the result of two opposing effects.

Osama Rizvi, energy and economic analyst for Primary Vision Network, said that oil prices were on the verge of decreasing (due to a slowing of the global economy that reduced the demand for oil) just before the Israel Hamas war began.

Many large investors are still taking this outlook into consideration: Major hedge funds and money managers are channelling swathes of investment away from oil.

In the previous week, they slashed half of their long-term investments in oil, cutting down their contracts to purchase oil, from about 398 million barrels to about 197 million.

“This was the fastest rate this happened in the previous decade,” Rizvi said.

At the same time, oil prices were also pushed up by investors who put their bets on an escalating war in the Middle East – which would consequently limit supply and drive up prices further.

As for the next period, Rizvi suspects there will be no major surprises. Assuming the war stays confined to its current borders, he expects no more than a $3-4 rise in Brent oil prices.

However, if Iran enters the fray through a proxy war and seals off access to its 700,000 barrels of oil per year, there’s likely to be a $10 dollar jump, according to the analyst.

The third scenario is the most troubling: A full war involving major powers like the US, where Israel is in direct conflict with Iran.

“If that happens, according to Bloomberg economics, that has the potential to wipe out almost $1 trillion from the global GDP, essentially tipping the world economy into recession, and also the potential of oil prices to hit $150 or beyond that,” Rizvi said.

How this Middle East crisis differs from the others

Looking at previous crises in the Middle East, not everyone is convinced that the situation will truly escalate and put oil shocks on the cards.

However, there is a “major difference” now in geopolitics that makes the current war different from the ones that came before it, according to Gertken.

“I think probably the most underrated element of this conflict is that Iran has achieved nuclear breakout capacity. So it is a different Middle Eastern crisis this time around than in previous ones,” he said.

He explained that the underlying question from a strategic point of view is whether the US and Israel are willing to allow Iran to possess militant proxies or nuclear weapons that could impact the region.

“To put it simply, does Iran get to have nuclear weapons and Hezbollah, or do they only get to have one of those two things?,” Gertken said. “And that’s the reason why I think this is an important and dangerous juncture.”

How the global outlook is driving investors’ hands

Even if a potential conflict with Iran is contained, there’s still the looming possibility that the US economy will face recession in the next 12-18 months, according to BCA Research.

The firm expects headline or energy inflation to be too high to enable the US Federal Reserve (or Fed, the US central bank) to start cutting interest rates.

This, coupled with high energy prices, is squeezing demand and dragging the economy, Gertken explained.

One of the main indicators of whether the US is facing a recession – which Gertken expects to span from 2024 to early 2025 – is its unemployment rate.

“If the US unemployment rate starts rising over the next six months, the first thing it does is it tells investors that the US is going into a recession,” he said. “And we have a very high likelihood of Europe going into recession and we have a weak Chinese economy.”

Gertken also noted that the moment a possible recession takes place in the US can have a huge impact on the country’s election results and in turn global stability. He explained that a recession unfolding before the election would reduce the odds of the Democratic Party winning the re-election.

“What has the most impact for global stability is whether the US political party changes,” Gertken said.

What are the crisis-safe investments?

Rising geopolitical risks usually drive up the price of gold and the dollar – investors tend to almost automatically move their money into these assets because they’re prone to withstanding global crises.

Gold has long been resistant to geopolitical shocks and recently, in spite of the increase in real interest rates, it has remained relatively highly-priced.

Gertken said that one reason for this is that countries like Russia and China, who are positioning themselves for a trade confrontation with the US, are stocking up on gold.

“And that adds a tailwind,” he said.

Dollar investments could see temporary dips as the currency is trading inversely to oil, but fundamentally, they are considered to be a safe haven.

Currencies such as the Japanese yen and Swiss Franc are also solid choices in a crisis, as are US Treasury yields.

The bond market has recently seen a big sell-off but Gertken believes that these investments will start attracting more money flows.

“I think bonds can actually do fairly well because inflation is falling,” he explained. “I do think bonds are still havens and I think in particular developed market bonds, and the US would be included in that category.”

For investors, looking beyond the next 12 months, commodities could also bring good yields. Silver and copper, suggests Rizvi, are potentially good investments, adding that these two generally see increasing demand and rising prices when economies do well.

“Given the condition of the global economy, if one takes a position in copper, on the downward direction, that can give you good yields moving forward,” he said. “Because all of this (the current limited economic growth, ed.) will have to unwind at some point in 2024 or 2025 when the Fed starts to unwind their monetary policy.”

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How the Israeli-Hamas war affects financial investments

Post By World defence, Investment, Israel Hamas war, oil prices, U.S. dollar, World economy

Energy and defence-related investments are set to yield in the next 12-18 months, according to analysts.

BCA Research, a global investment strategy firm, wagers the answer lies in oil and defence-related investment.

The reason, their research shows, is that the war between Israel and Hamas is likely to spill over from Gaza’s borders in the next 12 months, prompting a significant oil shock – a forecast that seems ever more possible following reports that the US military struck Iran-backed militias in Syria, in a self-proclaimed act of self-defence.

BCA Research has put the probability of the conflict drawing in Hezbollah and other militant groups in Lebanon and Syria at 45%.

Matt Gertken, chief geopolitical strategist at the firm, said that there’s a significant risk that the fighting will extend to bring Iran openly into the fray too, even if it’s unlikely on balance.