1. Europe and Russia: Power, Dependency, and the Illusion of Choice
This article is part of the “New G2 Global Order” series, which examines how energy, finance, technology, and governance are restructuring global power.
Key Thesis
Europe’s confrontation with Russia is not primarily a contest of values or alliances, but a structural crisis rooted in energy dependence and industrial fragmentation. Russia retains resource power but lacks the demographic, technological, and industrial depth to convert it into durable autonomy. In this system, strategic choice is constrained on all sides: where energy sovereignty and industrial capacity are absent, geopolitical ambition becomes performative rather than decisive.
Preface
Europe stands at a historic crossroads, driven by Russia’s invasion of Ukraine and the collapse of post–Cold War certainties. *¹ The war has devastated Ukraine and exposed the limits of institutions and treaties designed to protect peace, revealing how fragile the international order is in the face of modern security crises. NATO’s expansion and the enduring US–Russia rivalry have simultaneously defined and destabilised Europe’s security landscape.
As Russia turns east and the United States prioritises strategic competition with China, the European Union faces an urgent task: to help reform the international system before it is sidelined by new power blocs.
At the core of the crisis lies the question of NATO’s continued expansion and the long shadow of US–Russia confrontation, which have framed European security for decades. The war in Ukraine is not just a clash over territory; it is a proxy struggle between competing visions of global order. While Western governments frame Russia’s actions as violations of sovereignty and international law, some international relations scholars argue that Russian aggression is also rooted in longstanding security concerns and a desire to reclaim influence lost after the Cold War. Any lasting peace will have to engage not only with legal principles but also with historical grievances and perceived encirclement.
Russia’s strategic pivot toward the East—deepening economic and political ties with China and the broader Eurasian region—reflects both a response to Western sanctions and a quest for renewed status. Its war machine may only be at the beginning of a longer cycle, but this reorientation carries serious risks. By distancing itself from Europe and aligning more closely with China, Russia risks becoming the junior partner in an emerging Eurasian bloc. That dynamic could ultimately threaten Russia’s own sovereignty and long-term strategic autonomy, as its economic and security dependencies on Beijing grow. Both Russia and China face profound demographic and structural challenges: India has already surpassed China in population, China’s population may halve by the end of the century, and new regional powers are rising across Asia.
As the United States’ transition from energy scarcity to energy abundance reveals the constraints of power built on infrastructure and industrial alignment, Europe’s confrontation with Russia exposes the inverse condition: strategic ambition constrained by persistent energy dependence and fragmented industrial capacity. In both cases, power exists, but its durability is determined less by political intent or alliance commitments than by the material systems that sustain it.
In this context, the Ukraine war increasingly resembles a US-led proxy conflict with China—one with no real winners, and with Europe caught in the middle.
The centre of gravity in the global economy is shifting eastward, driven by rapid innovation and expanding markets. Unless Europe adapts, it risks further economic damage, shrinking geopolitical influence, and a slow slide into political irrelevance. In a world being reshaped by powerful new alliances, only a genuinely united Europe can defend its interests, retain global relevance, and take its place as a strategic actor rather than a bystander in the new international order.
Yet beneath these geopolitical confrontations lies a more decisive layer of power: control over energy, industrial capacity, and strategic supply chains. Without addressing these material foundations, Europe’s calls for reform risk remaining declarative rather than decisive.
Dual Hegemony and Europe’s Shrinking Space
The rise of a dual hegemony—between the US and China—poses not only a strategic challenge to Russia, but an existential one to the EU and much of the rest of the world. As both powers consolidate their influence, Europe and Russia alike risk being marginalised and excluded from critical decisions shaping the global order.
The conflict in Ukraine has exposed deep rifts in Europe’s relationship with Washington, revealing both the strength and the limits of the transatlantic alliance. As the US increasingly focuses on China and leverages its new energy independence to pursue unilateral interests, Europe must confront an uncomfortable reality: its growing dependence on American military power, energy, and technology. This dependency risks undermining Europe’s innovation capacity, its clean energy transition, and the regeneration and reindustrialisation of its economy—even as it speaks the language of “strategic autonomy”.
The stakes for Europe are immense. Economic stagnation, demographic decline, and political fragmentation threaten to marginalise its influence in a world defined by rapid technological and geopolitical transformation. Without urgent reform—a genuinely multipolar system with robust mechanisms for conflict resolution—Europe risks being relegated to the sidelines of global decision-making.
The EU is, in theory, uniquely positioned to help shape a more balanced order. Yet internal divisions—its lack of a common defence and foreign policy, the rise of nationalist politics, and diverging strategic cultures—undermine its capacity to act as a coherent geopolitical actor.
Russia’s Red Lines
Russia’s red lines, from Moscow’s own perspective, have less to do with Ukraine’s potential accession to the EU than with NATO’s continued eastward expansion. A critical turning point, in this reading, was the US withdrawal from the Anti-Ballistic Missile Treaty in 2002, which removed a key pillar of strategic stability. In the absence of updated nuclear non-proliferation and arms-control agreements, NATO continued to expand its presence along Russia’s western frontier in Europe and the Black Sea. Ukraine came to be seen in Moscow as “the last straw”—a final crossing of red lines.
Russia responded with a sustained military build-up: first the annexation of Crimea in 2014, then the full-scale invasion of Ukraine in 2022.
Eugenio Bregolat, former Spanish Ambassador to China (1987–2013) and Russia (1992–1997), emphasises how NATO’s choices appeared from Moscow’s vantage point. He recalls that at the NATO Bucharest summit in 2008:
“Germany and France had to accept the American willingness to open the door to Ukraine and Georgia, despite Merkel’s opposition to the immediate opening of accession procedures, saying ‘Moscow would interpret that as a declaration of war’. She and Sarkozy did not dare to exercise the veto right they theoretically possessed. The American yoke has undoubtedly been much softer than the Soviet one, but a yoke nonetheless. NATO countries have limited sovereignty.”
Bregolat continues:
“At Yalta and Potsdam, the USA and Russia, the two victors of WW2, divided Europe into two zones of influence. American hegemony was much softer than Soviet hegemony. First, because the capitalist economic system created wealth, while the Stalinist planned economy generated misery. And the US never invaded NATO countries in the way that the USSR did with Hungary or Czechoslovakia. But, dependent on American protection, Europe was, by definition, a protectorate. Great Britain and France had to liquidate their colonial empires” — largely handing over their spheres of influence to the USA or encouraging independence while binding these states politically and economically to Washington, as Britain had done earlier under Prime Minister Canning with the decline of the Spanish and Ottoman empires.
From this perspective, Europe has functioned as a kind of vassal state of the United States for over eighty years.
European leaders such as former German Chancellor Angela Merkel, however, have disputed the cruder versions of this “vassal” narrative, highlighting Europe’s efforts to maintain relative autonomy through strategic partnerships, industrial strength, and diplomacy. They argue that while American influence is substantial, European states have sought a more balanced transatlantic relationship, asserting their sovereignty and their role in global governance through institutions like the EU.
What is clear is that peace in Ukraine will be impossible to negotiate without addressing the NATO question. The war is, in effect, a proxy confrontation between the US and Russia. NATO has pursued a containment strategy aimed at limiting Russia’s reach in Eastern Europe, the Black Sea, and the Baltic, restricting its access to traditional maritime corridors to the Mediterranean. Conflicts in the Middle East can also be read, at least partly, as attempts to constrain Russia’s regional influence. As former UK Prime Minister Boris Johnson bluntly put it—cited by Jeffrey Sachs—this is “a war to preserve Western hegemony.”
Europe and the New Multipolar Order
One of the Kremlin’s most influential strategists and close advisers to President Vladimir Putin, Dmitry Suslov, recently made this multipolar framing explicit. In an interview with Corriere della Sera on 16 October 2025, he argued that the war is not simply about Ukraine:
“Russia is not fighting to conquer territories, but for its place in the new multipolar world order. It is a war of civilizations and a systemic confrontation with the West. Ukraine is not the objective; it is the arena through which Russia reasserts itself as a global power, independent of Western norms and capable of dictating new geopolitical rules.”
As retired Lieutenant Colonel Jvan Ricciardella observed:
“Perhaps the most revealing aspect of Suslov’s statements is not about Ukraine or the U.S., but the European Union itself. By suggesting that the Kremlin prioritises normalising relations with Washington while ‘marginalising’ Brussels, Suslov confirms what many European policymakers fear: that Russia does not see the EU as a strategic actor, only as an appendage of U.S. policy.”
In other words, while Russia challenges the West, it still does not treat Europe as an autonomous centre of power. This is Europe’s central strategic problem.
Russia’s War Economy and Demographic Trap
Joeri Schasfoort, research analyst and macroeconomist, argues that after many failed predictions of imminent collapse, the Russian war economy has only just begun to show its full strength and is far more resilient than many in the West assume. Recent indicators suggest that Russia’s GDP growth has remained steady, driven largely by commodity exports, while military spending continues at high levels. Despite sanctions, trade with China and other non-Western partners has expanded, providing Moscow with a crucial economic buffer.
With its western border effectively blocked, Russia has refocused its economy on Eurasia and the Far East, pursuing deeper integration with China, especially through the Belt and Road Initiative. As a major exporter of agricultural products, mining output, energy and nuclear technology—together accounting for roughly three-quarters of its GDP—Russia finds ready demand for its exports in rapidly industrialising Asian economies. China now imports nearly 40 percent of Russian fossil fuel exports; India also buys substantial volumes. Russia has simultaneously extended its nuclear energy footprint in Southeast Asia.
As fuel exports become central to foreign policy, Russia takes on more of the characteristics of a petrostate: an economy heavily reliant on extraction and export, vulnerable to price swings, and prone to concentrated wealth, institutional weakness, and corruption. This makes sudden collapse unlikely in the near term—and makes it even less likely that the Kremlin will come to the negotiating table without substantial concessions.
Yet Russia’s reorientation does not resolve its structural vulnerabilities. Without significant state investment and a shift in economic priorities, it risks further population decline and regional imbalance. Large parts of its vast territory—particularly in the Far East—remain sparsely populated and underdeveloped, facing major infrastructural and climatic obstacles. Turning this immense space into a genuine engine of growth would require resources and administrative capacity Moscow does not currently possess, especially as war-related spending absorbs a growing share of the budget.
The West, for its part, largely ignores this massive frontier, just as it has overlooked other continents, to its long-term detriment—leaving the field open to China, which has framed engagement as an opportunity for trade and influence rather than dominance. As Schasfoort suggests, Western economic engagement—rather than isolation alone—could help change incentives in Moscow over time.
Demographically, Russia sits in a dangerous position. According to the UN World Population Prospects, its population is around 146–147 million and projected to decline further by 2050. The New Eurasian Strategies Centre, a Russian think tank, contests these figures and claims the “real” population may be closer to 200 million. Regardless of which number is closer to reality, Russia’s population density is extremely low relative to its 16 million square kilometres of territory—around 9–12 people per square kilometre—and heavily concentrated around Moscow and a handful of other centres. By comparison, Russia’s population is only a fraction of China’s or India’s (each around 1.4 billion).
Like China, Russia faces long-term structural problems: ageing, emigration, inequality, and a fragile industrial base. Militarily, it is running down stocks of precision missiles and, cut off from many Western components, has grown increasingly dependent on Chinese imports to sustain its military machine. China is now Russia’s largest oil customer and a vital source of foreign credit, as Western finance has dried up.
As Jeremy Shapiro of the European Council on Foreign Relations notes:
“This is perhaps why the Kremlin seems so uninterested in ending the war. A compromise peace would not expose a defeat on the battlefield but rather something far worse: the absence of any larger strategy… The Russian regime has no incentive to end the war or address that kind of economic reality. So it cannot afford to win the war, nor can it afford to lose.”
This logic of “frozen conflicts” allows Russia to maintain influence without the costs of outright victory or defeat.
For Europe, there is a paradox. A move toward rearmament could help regenerate parts of its ailing industrial base, particularly if it leads to a more integrated defence sector and new technological capabilities. But Europe also risks losing far more: becoming politically isolated, falling behind in the global race for innovation, and locking itself into a long-term confrontation that drains resources and undermines the very social model it seeks to defend.
In the long run, it is in neither Europe’s nor Russia’s interest to allow the US or China to exercise unchecked dominance. A global system defined by two antagonistic poles is far more dangerous than a genuinely multipolar, multilateral order grounded in shared institutions and negotiated spheres of responsibility.
Spheres of Security, Interest and Influence
The shift away from a US-led unipolar system toward a dual-hegemonic or multi-power order has profound implications. Jeffrey Sachs and John Mearsheimer, among others, have suggested rethinking global order in terms of Spheres of Security—with treaties and policies of military and nuclear containment serving as mutual deterrents. Within such a framework, NATO could continue to serve as Europe’s primary security umbrella under US leadership, while gradually supporting Europe’s transition toward greater defence autonomy.
These Spheres of Security would sit alongside more flexible Spheres of Interest and Spheres of Influence, in which actors like the EU, India, Brazil or the African Union would play a larger role as counterweights. Such an approach might help avoid what now looks like a carve-up of the world by the US, Russia and China alone.
Ukraine, Europe and the Way Forward
Ukraine was the Soviet Union’s industrial, energy and agricultural heartland—its “crown jewel”. One of the least discussed yet crucial points of friction between Russia and Ukraine is that Ukraine possesses large energy and rare mineral reserves, including some of Europe’s largest deposits of lithium and uranium. Many of the most valuable deposits are now in Russian-occupied territories. Unlocking this potential would require massive investment and infrastructure that Ukraine currently lacks.
Following the collapse of the USSR, Ukraine struggled with the transition to a market economy. Reliant on Soviet-era subsidies and integrated supply chains, it suffered rapid deindustrialisation and mass migration from rural to urban areas and abroad. Its population has fallen from about 49 million in the 1980s to around 32–35 million today. Even before the 2022 invasion, it was on a trajectory of severe demographic shrinkage; war has only intensified that trend. UN projections suggest that, without significant intervention, Ukraine’s population could fall to as low as 8–25 million by the end of the century—across a territory larger than many EU member states combined.
For Russia, its western flank, including Ukraine, will always be seen as part of its historic and cultural heartland. Even if its Spheres of Interest increasingly shift toward Asia, Russians will remain, in outlook and identity, more European than Asian. Europe and Russia therefore have more to gain from long-term coexistence and managed competition than from open-ended confrontation.
In a revised international system built on Spheres of Security, Interest and Influence—as Sachs and Mearsheimer propose—Europe could pursue its own sphere together with its neighbours. In such a scenario, Ukraine could join the EU or enter a close association agreement, but accept that it cannot be part of NATO or a forward-deployed Western security architecture. Its security would instead be guaranteed by a genuinely neutral UN-backed arrangement or a new multilaterally agreed framework.
Given Europe’s structural energy deficit, some form of political compromise will ultimately be needed—one that preserves Ukrainian sovereignty and self-determination while allowing the EU to help rebuild Ukraine’s economy and co-develop its industries, potentially in cooperation with Russia, which retains important technological and infrastructural know-how. This would not necessarily require full NATO integration, but a carefully designed partnership that aligns security, economic regeneration, and demographic stabilisation.
Russia has already refocused its economy on the East, but Europe cannot afford simply to “write off” Ukraine or Russia. Among Moscow’s red lines are issues of language, cultural identity, and the nature of local governance. Russians and Ukrainians have coexisted for centuries in a complex, often contested relationship. Many regions have historically been bilingual and multicultural. For any peace to hold, this reality must be acknowledged rather than suppressed.
If Ukraine is to regenerate economically, it will likely need to sit—at least economically—within both the EU’s and Russia’s spheres of influence, especially in remote regions that depend on cross-border ties for survival. The EU is in a position to provide financial support and institutional anchoring; Russia remains a cultural and economic reference point for many communities in the east and south. Facilitating economic integration across this vast region could serve Europe’s long-term interests in growth, stability, and security.
Security Umbrella and European Autonomy
Britain and France are two of the founding members of the UN Security Council, holding two of the five permanent seats with veto power. Yet the EU, with a population of roughly 450 million—larger than any other single permanent member—has no permanent seat of its own. This mismatch between institutional representation and demographic-economic weight is becoming increasingly untenable.
As global geopolitics undergoes rapid and unprecedented change, Europe must develop its own foreign and defence policy, distinct from but complementary to NATO, the US and the UK. It needs a long-term strategy that provides credible deterrence, protects its interests, and prevents future aggression—without being permanently absorbed into other powers’ hegemonic projects.
Mearsheimer warns that even if the new world order evolves toward Spheres of Security, Influence and Interest, the gradual withdrawal of the US from Europe will create a security vacuum. Left unaddressed, that vacuum could unleash nationalist and revisionist tendencies within Europe, undermining the EU from within. To prevent this, Europe must articulate and implement its own independent foreign and defence policies—for its survival and its status in the new order.
Within a redefined architecture of Spheres of Security, NATO would still play a role, but Europe would need to develop its own security apparatus, industrial base and decision-making structures under a broader, but not exclusive, US umbrella. Britain, for its part, will ultimately have to decide whether to settle into a primarily US-aligned trajectory or to rebuild a special partnership with the EU—akin to Norway’s relationship—while remaining anchored in NATO.
Across all these dynamics—war, demography, energy, and shifting alliances—the fundamental question persists:
Europe and Russia. Who holds the cards?
The answer, increasingly, is that neither does—unless both find a way to adapt to a rapidly changing world without surrendering either sovereignty or the possibility of coexistence.
*¹ Editor’s Note: This article forms part of a paired analytical series examining how energy systems, industrial capacity, and financial power shape strategic autonomy in the emerging global order. Read alongside Europe and Russia: Power, Dependency, and the Illusion of Choice, it explores the United States as a contrasting case — not of dependence, but of abundance constrained by infrastructure, industry, and monetary dynamics. Together, the two analyses argue that geopolitical power today is determined less by declared strategy than by the material foundations that sustain it.
References
Russia Expands Nuclear Energy Influence in Southeast Asia
Russia’s Strategic Pivot to Southeast Asia: Energy, Climate, and Geopolitics
Russia Pivots to Asian Markets with its Energy.
Russia’s Nuclear Technology Playbook for the Global South.
Ian Storey on Russia’s Turn to Southeast Asia
The Future of the Northern Sea Route - A “Golden Waterway” or a Niche Trade route
A Chinese Tributary? The Consequences of Moscow’s Increased Dependence on Beijing
Why Is the US Punishing India – But Not China – for Buying Russian Oil?
The Impact of Sanctions and Alliances on Russian Military Capabilities
Turning East: How Russia’s ambitions in Asia are confronted by reality
The dependence gap in Russia-China relations
Russia Is Losing the War—Just Not to Ukraine
Russia Expands Nuclear Energy Influence in Southeast Asia
Russia’s growing energy ties with China since the Ukraine war
#NATO #EU #UKRAINE WAR #RUSSIA #USA #SECURITY #WORLD ORDER #SPHERES OF INFLUENCE #Europe #UkraineWar #Geopolitics #Security #NATO #MultipolarOrder #EnergyGeopolitics #EUForeignPolicy #StrategicAutonomy