Russian intellectuals and politicians felt they were fireproof, with think-tankers devoting panels to the idea that Russia’s commodity-driven economy had ‘decoupled’ from the West. This optimism in global growth prospects was not uniquely Russian. Prior to the crash in 2008, most analysts had a rosy view of future GDP potential. Western analysts shared this enthusiasm for the Russian market – from the creators of the BRIC brand at Goldman Sachs to the director of Deutsche Bank in Moscow, who believed Russia had made ‘a macro-economic breakthrough’.67
The intensity of this mood was understandable. It was not at all unique, but fostered by a fast connecting new global superclass for whom Davos had replaced the United Nations General Assembly as the true gathering of power-brokers. In Brussels, elites felt sure of themselves as an emerging ‘normative superpower’, and in Washington the ‘project for a new American century’ seemed realistic. There was a widespread belief propounded by the US economist Ben Bernanke that the global economy had entered a ‘great moderation’, and some analysts argued that economist Milton Friedman had been right to argue it was ‘depression proof’.68
What marked out Moscow was that this was the first time since the late 1970s that the Russian elite had tasted success, rising influence and an economic boom. In this pre-crash world that treated GDP as a synonym for power, and saw Western banks as the pinnacle of efficiency and good forecasting, the delirious excitement of the Kremlin courtiers could be forgiven. They were presented with data that suggested that by growing at merely 3.9 per cent a year, in nominal GDP terms Russia would overtake Italy in 2018, France in 2024, Britain in 2027 and Germany in 2028.69
Economic self-confidence dovetailed with a change in self-perception as a foreign policy actor. Moscow identified with the BRIC countries and began to see itself as a rising power. In Europe it became increasingly revisionist. The foreign policy debate in Moscow started to dwell on a supposed long-term decline of the West, and how to restore Russian influence in former Soviet states. Russian diplomats like to talk about how they felt like poor cousins or unwanted guests with Western counterparts under Yeltsin or during Putin’s first few years. Their behaviour changed markedly during his second term.
Russia was no longer intent on ‘joining the West on its own terms’, but striking out as an ‘independent’, ‘sovereign’ player in international affairs. The establishment spoke increasingly about the coming end of the American ‘unipolar’ world. Sergei Lavrov, the Russian foreign minister, began to let slip that he felt the West had seen its day. In 2007, at the Munich Security Conference, Putin felt strong enough to start openly challenging it. He accused the US of having ‘overstepped its national borders in every way’.70 Dry and confident, Putin’s demeanour unnerved American officials. After the ‘Munich speech’, the normally sanguine Defense Secretary Robert Gates exclaimed, ‘One Cold War was quite enough.’71
As Putin’s reputation rose domestically he ceased to be treated like a conventional politician. Influential players called on him to ‘follow Roosevelt’ and alter the constitution to run for a third term, whilst commentators discussed whether he should be considered a great man of history.72 Behind the Kremlin walls, the idea began to circulate that he might rule forever. Even Moscow’s democratic aristocrats such as Mikhail Gorbachev publicly credited Putin with having ‘pulled Russia out of chaos and earned a place in history’, which had enabled Russia to enjoy ‘a resurgence’.73
Inevitably, Putin began to change. His Western guests first picked up on this shift. Jonathan Powell, the chief of staff to Tony Blair, recalls how both he and the prime minister were touched on their first visit to Russia when Putin pointed out the shabby block of flats he had grown up in as a child, whilst driving away from a state function at a tsarist palace in St Petersburg. As Powell wrote in his memoirs:
Each time Tony visited him in his dacha he had acquired more grooms for his horse and lived in greater luxury. Angela Merkel described a joint German–Russian cabinet meeting in Siberia in 2006. She said that she had found it difficult to convince Putin that cabinet ministers should be treated with respect rather than contempt. For Putin hubris resulted partly from the trappings of office and partly from the price of oil.74
Power loves to build, because rulers die but architecture remains. Putin’s Moscow began the biggest construction project since Brezhnev’s 1980 Olympic games – Moscow City. These gigantic skyscrapers, the tallest in Europe, with names such as ‘Imperia’, ‘City of Capitals’, ‘Federation’, ‘Russia’ or ‘Eurasia’ were launched in quick succession between 2003 and 2007 with the intention of creating a ‘global financial centre’ for over 200,000 people to work in or visit at any one time. These sub-utopian glass fragments of a BRIC dream were seductive to Muscovites. They call them the teeth, or the claws, pushing up like fangs at the city’s edge. To the drunken financiers in rooftop bars, they smiled like a Cheshire Cat over the Kremlin. Yet the new mood did not calm everyone. A popular political joke in Moscow in 2007 had Putin discussing with Medvedev the issues of the day.
‘We have won the right to host the 2014 winter Olympics, the economy is booming, the oil price is rising, the poverty rate amongst your subjects has fallen from 30 per cent to 13 per cent and we have even won the Eurovision song contest in your honour,’ says Medvedev. Putin nods approvingly thinking of tasks left for the government to accomplish, before announcing, ‘This means it is now time to win World War Three.’
The Short Cold War
The coloured revolutions in Ukraine, Georgia and Kyrgyzstan coincided with the oil boom and Russia paying off its international debts. This gave the Kremlin the confidence and resources to strike back. Russian foreign policy became increasingly aggressive. Kremlin ideologues began to argue for an ‘Eastern European Union’ to counterbalance a ‘declining European Union’.75 The Kremlin began to support ‘counter-Orange revolutionaries’ in Ukraine, Georgia and Kyrgyzstan and set up a network of think-tanks to promote its policies.
Russian-backed political agitation rose throughout the region. Moscow even launched cyber-attacks on Estonia and used gas cut-offs on Ukraine to force its agenda. In Europe, Russia courted a special relationship with Germany and Italy to undermine a common Western front and played divide and rule inside the EU. Globally, there were attempts to derail Western projects at the UN Security Council; investment in closer partnerships with China to counter America; demands that the US withdraw from Central Asia, including attempts to bribe Kyrgyz leaders to remove an American base and increased ties with US foes in Venezuela, Iran and Syria.
Many began to fear a new Cold War. They say that history repeats itself, first as tragedy then as farce. This observation applies to what happened between Russia and the West in 2007–8 during the ‘short Cold War’. The Cold War itself was a global struggle played out on almost every possible level – from culture, industry, space races, to proxy-wars and the arms race. The short Cold War was a much-reduced affair. Between 2007–8 the Russian establishment came to believe it was a strategic imperative to prevent NATO membership for Georgia and Ukraine. More importantly, it thought it now had the resources to defeat NATO expansion, where under Yeltsin and in Putin’s first term it had been forced to swallow it.