Russia’s Unwinnable War (I)

The proposition that Russia cannot win the war in Ukraine is not merely a political slogan or a statement of moral conviction. It is a conclusion grounded in macroeconomics, institutional design and the enduring realities of European political economy. Once one accepts that Ukraine is sustained not by a single patron but by the aggregate resources of the world’s largest free-trade bloc, together with a constellation of allied European states, the war’s eventual direction appears plain. Russia, although vast in territory and endowed with considerable natural resources, is attempting to prevail against an adversary backed by more wealth, deeper markets, superior access to capital and far more diversified industrial and technological bases. In wars of attrition, finance is seldom the sole determinant of victory, but it is invariably a necessary condition. In Ukraine, Russia lacks that condition in perpetuity.

The European Union’s collective economy, the second largest in the world, dwarfs Russia’s by an order of magnitude. Even now, amidst sluggish growth and domestic political turbulence, the Union retains a combined GDP exceeding €17 trillion. It has the world’s largest internal market, a customs union granting frictionless trade across twenty-seven member states, and a regulatory environment that facilitates long-term capital mobilisation. Russia, by contrast, possesses an economy roughly the size of Spain’s, highly dependent upon hydrocarbons and vulnerable to the cyclical volatility of global commodity markets. She may sustain limited bursts of military spending, particularly when wartime command economics override conventional fiscal prudence, but she cannot outspend a continental bloc whose resources are almost ten times greater and whose capital markets operate on a scale to which she has no equivalent.

The structure of the European Union further entrenches this imbalance. Unlike traditional alliances, which rely upon variable political will and fluctuating budgetary allocations, the Union’s treaties bind member states into a framework of shared financial obligations. European mechanisms such as the Multiannual Financial Framework, the European Peace Facility and the fledgling structures of joint borrowing, provide channels for sustained, predictable support. Because the Union is not a single treasury but an integrated market with partial fiscal capacity, she can support Ukraine in ways that diffuse the burden across a large economic base with minimal individual sacrifice. When one considers that the Union’s assistance is supplemented by the United Kingdom, Norway, Switzerland and other non-EU European states, Russia’s financial dilemma becomes yet more stark: she is at war not with one state, but with nearly the whole of Europe, which itself remains one of the most affluent regions of the world.

Moreover, Europe’s wealth is not static. It is embedded in institutions that iterate across decades, continually generating further economic mass. The single market’s freedoms of goods, services, people and capital ensure that European industry adapts to shocks with alacrity. Although Russia has attempted to portray herself as immune to sanctions through internal substitution and deepened ties with China and Iran, these measures lack the structural stabilisers enjoyed by Western economies. Europe can raise capital by issuing debt in mature markets, drawing upon deep pools of private investment and pension wealth which are begging for investment opportunities. Russia, constrained by sanctions and reliant upon a narrow range of buyers for her hydrocarbons, must finance her war primarily from domestic reserves and the forced redirection of industrial output. She has already run large fiscal deficits and resorted to monetary measures that erode long-term stability.

In a prolonged conflict, Europe enjoys yet another advantage: her ability to coordinate. The Union has been criticised for cumbersome procedures and slow decision-making, but in wartime these characteristics function differently. Once a political consensus is reached, the Union’s bureaucratic machinery can produce enormous flows of funding, procurement and training that operate steadily over time. Russia’s system, centralised around the will of the presidency, allows rapid short-term decisions but struggles with sustainable resource management. Corruption, opacity and inefficiency consume substantial portions of her military budget. Europe, by contrast, possesses audit mechanisms, procurement oversight and the capacity for multi-year programme planning. These are dull instruments in peacetime, but in war they become pillars of resilience.

Ukraine’s endurance since 2022 provides empirical evidence of this asymmetry. No middle-income state could fight a major war for years without an external economic base orders of magnitude larger than itself. Ukraine’s capacity to replace equipment, repair infrastructure, pay salaries, support civilians and maintain currency stability derives almost entirely from European and allied financial commitments. Importantly, these commitments have become institutionalised; what began as emergency assistance has graduated into long-term budgeting. Russia cannot extinguish such support through battlefield manoeuvres, propaganda, or coercive energy diplomacy. The Union’s decision to sever dependence upon Russian hydrocarbons has already deprived Moscow of a principal source of leverage. Once Europe had accepted the cost of replacing Russian gas, she removed the principal economic weapon that Russia might have deployed to fracture European unity.

Another dimension is technological. No matter how rapidly Russia attempts to mobilise her defence industry, she cannot replicate the technological depth of Europe’s combined industrial base. Whether the domain is air defence, precision munitions, communications, cyber capabilities or drone innovation, Europe can draw upon decades of commercial research, dual-use production and open scientific collaboration. Russia’s military industry, reliant upon imported components even for basic systems, is structurally limited. Sanctions have choked access to high-end semiconductor machinery and specialised materials. Europe’s public-private ecosystems give her an inherent advantage: she can scale production across multiple countries, diversify supply chains and finance research at levels Russia cannot match. Even where Europe has been slow to ramp up ammunition production, the long-term trajectory is clear: a wealthy continent can always expand industrial output once political necessity demands it.

Some argue that Russia, with her larger population and authoritarian capacity for mobilisation, might still outlast Europe’s political will. But political will in Europe is not a finite substance. It is moulded by institutions, repeated decisions and the perception of what is at stake. The European Union now sees the Ukrainian war as a defining conflict that shapes the continent’s security architecture for generations. Once a threat is understood in existential terms, democracies do not capitulate; they reorganise. The shift towards multi-year defence investment, the rearmament of Central and Eastern Europe, and the Union’s movement towards a defence industrial policy all demonstrate that Europe has crossed a psychological threshold. Russia, by contrast, must manage an increasingly brittle social contract. Her economy is heavily militarised, labour shortages are acute and the benefits of the war are not widely shared. Europe, meanwhile, disperses the costs across many states, each absorbing only a fraction of the overall burden.

One must also consider the nature of victory. Russia can devastate Ukrainian cities and occupy territory temporarily. She can impose suffering, destroy infrastructure and brutalise populations. But none of these acts constitute victory in a war of this nature. Victory requires the imposition of a durable political settlement in which Ukraine acquiesces to Russia’s strategic demands. That outcome is impossible so long as Ukraine retains the economic backing of Europe. Moscow cannot coerce the surrender of a state whose public administration, currency, military salaries and reconstruction are underwritten by the world’s most affluent free-trade bloc. Even if Russia were to gain battlefield advantages, the Union can indefinitely replenish Ukrainian capacity at a scale Russia cannot match. The asymmetry is systemic, not transient.

Finally, time works against Russia. Europe’s sanctions are cumulative; their effects compound annually. Russian dependence upon shadow fleets, intermediaries and discounted hydrocarbon sales erodes state revenues. Foreign direct investment has collapsed. High-technology industries are hollowing out. Human capital flight continues. Europe, on the other hand, absorbs shocks and reforms. The war has accelerated Europe’s strategic awakening, deepened fiscal coordination and stimulated investment in defence industries. The longer the conflict continues, the more entrenched Ukraine’s integration with Europe becomes, and the more isolated Russia’s economy grows.

Hence the hypothesis that Russia can never win the war in Ukraine is not a prediction based upon optimism. It is the logical consequence of a structural financial imbalance that cannot be reversed. Russia is fighting not merely Ukraine; she is fighting the economic mass of an entire continent. No state of Russia’s size and composition can outlast a coalition of that weight. The war’s end may be distant and its suffering immense, but the conclusion remains constant: against the world’s largest free-trade bloc, Russia’s victory is not merely improbable. It is impossible.