NATO’s Response Heats Up – To Lukewarm

NATO’s response to Russian aggression is getting warmer, but it is nowhere near hot enough.

At a NATO meeting in Wales next week, the alliance is expected to proceed with a plan to base troops in eastern European nations bordering Russia. This is a direct response to Russian behavior in Ukraine, and Moscow’s military planners won’t be at all pleased.

Of course, their displeasure is not doing anything to halt Russian assaults on its neighbor, at least so far. Yesterday, news broke that Russia had sent tanks, artillery and infantry into a previously unbreached portion of eastern Ukraine’s border. Ukrainian and Western military officials described it as a stealth invasion, according to The New York Times. Russia has continued to deny that it is intervening militarily in the country.

NATO’s pledge to move forces into proximity with Russia is the Western alliance’s most forceful response yet to the all-too-clear threat coming from Vladimir Putin’s Russia. It is good news, but it isn’t good enough. Not nearly.

First, the new deployments are unlikely to be called “permanent” bases. That choice is an apparent sop to the Russians, in the likely-misguided belief that the prospect of one day removing these bases will encourage Putin and his Kremlin cronies to stop their aggression toward their neighbors. In reality, it would be more useful to develop these as long-term installations under the label of “permanent,” though of course nothing in this world is truly permanent. Still, treating them that way would convey the message that Russian military intervention has already carried a substantial strategic cost, and that NATO is not prepared to give Russia a rebate merely for reverting to normal civilized behavior.

The second problem is the obvious division within NATO itself. While Poland and the three Baltic states clamor for an expanded alliance presence, with the support of the U.S. and the U.K., the usual self-interest drives the characteristically mercantilist calculations of the French, Italians and Spanish. Meanwhile, the Germans have been trying, as usual, to straddle the issue to protect their commercial interests in Russia. This pocketbook focus is liable to persist in considerable measure, right up until the first Russian troops arrive in Warsaw, if not points west. To her credit, German Chancellor Angela Merkel seems to recognize the threat and appears to be trying to lead her countrymen to a rational response, but it has been slow going.

Worst of all is France’s apparent determination to deliver power-projecting Mistral-class warships to the same Russian Navy that is enforcing the seizure of Crimea and which would be a direct threat to Baltic and Scandinavian coasts. The fact that this sale has not at least been suspended, if not scrapped, in the wake of the MH17 shoot-down and the continued Russian incursions in Ukraine is inexcusable. France clearly feels that commercial interests in Britain and Germany have not stepped up to carry a similar burden. That point of view has some merit. But Britain and Germany are not training Russian sailors to operate warships that can deliver 16 helicopters, 60 tanks and armored personnel carriers, and hundreds of troops at a time to the shores of NATO allies.

Russia is now, clearly, the greatest military threat confronting the alliance. France can’t have it both ways; it is either a NATO ally or a neutral party wearing alliance colors whenever it feels the home team is winning.

Even genuine neutrals Finland and Sweden have moved closer to NATO in response to the Russian threat. Yet they don’t have NATO’s Article 5 guarantee of mutual defense. France does. The remaining NATO countries, and particularly Germany, should make clear to France that delivering the Mistrals in current circumstances is just not an option. If the French choose to go their own way, nobody can stop them, but they should understand that they will truly be going it alone.

The risk, as usual, is that the latest NATO move will be seen as an endpoint in itself, even if it does not arrive in greatly watered-down form. The real endpoint should be to help Russia decide that its future lies in adopting and conforming to the modern norms of civilized behavior rather than reverting to Soviet habits of the past. It won’t happen under Putin, and maybe not even after he is gone. But we won’t get any closer until NATO not only takes the steps that are expected next week, but builds on them.

About Larry M. Elkin 551 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

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