After the Summits: An Update on the Russia-Ukraine War

Panelists discuss developments in Russia’s war in Ukraine following the recent Trump-Putin summit in Alaska and the subsequent meeting with President Zelenskyy and European leaders in Washington.

This event is part of the Council’s Special Initiative on Securing Ukraine’s Future which provides timely, informed analysis and practical policy recommendations for U.S. policymakers and the American public.

SESTANOVICH: Thank you very much, Anne. I’m Steve Sestanovich. I’m a senior fellow here at the Council. Glad all of you were able to join us for a discussion of what was an extraordinary pair of summits barely ten days ago. People have—analysts have been reaching for superlatives, saying, you know, this is something kind of virtually unprecedented in the recent diplomatic history. When the CFR meetings folks proposed that we do a session on this, they said, well, maybe it would be good to wait until the dust settles. We are going to find out today whether the dust is settling, and in what way, and to what effect, and to whose advantage.

We have the benefit of a terrific panel.

Catherine Belton covers Russia for the Washington Post. She’s joining us today from London—or, you were yesterday, Catherine. You’re still in London?

BELTON: Yes.

SESTANOVICH: Many of you will know her from her terrific book, Putin’s People. If you don’t, you should get it.

Laura Cooper, who has worked at the Pentagon for a long time where she handled Russian and Eurasian affairs, most recently as deputy assistant secretary of defense, she’s now at long last able to speak entirely for herself.

And Max Boot, our own CFR senior fellow and my colleague—author of many excellent books, most recently a biography of Ronald Reagan.

I want to try to get through as much as we can—cover as much territory as we can in an initial conversation with the panelists. We’ll then open up for a discussion with the many people who have joined the call. It seems to me we ought to try to understand the diplomatic aftermath, what’s left, if anything, of the diplomatic process that President Trump said he was trying to initiate. We should take up, if we can, the military situation on the ground—which will be, of course, very relevant if we think the diplomatic process is played out. We’ll also want to understand a bit about the domestic politics and the major players. And maybe, if we have time, we can get people to speculate about what the right policy will be—although, being very clever analysts, they are bound to insinuate the suggestions of that into their comments as we go along.

Catherine, I want to start with you because Russia is one of the major players. And also was seen by many to have been the kind of big victor, at least at the start of the process. You know, that that smirk on Putin’s face was unmistakable, and read by many as a sign that he thought he was going to get his way with Donald Trump. Tell us what you know, since you’re about the closest thing we’ve got on this panel to, you know, a Kremlin insider—or, at least, someone with great access to Kremlin insiders. Tell us what you know about the Russian calculations that went into this summit, the way in which they read it in the immediate aftermath, the way in which they saw it after the Washington meetings, and maybe how they see it now. All of that, quickly. (Laughs.)

BELTON: Well, I think, yes, I mean, of course, landing there in Alaska, in Anchorage, and being greeted with the red carpet, and the flyby, and the enormous handshake, and the back slapping, and the ride in the presidential limousine, of course that looked like an enormous win for Putin. He was brought out of isolation. He wasn’t facing handcuffs. He was getting his hand shaken by the president of the United States. So for that alone, it was a triumph. But in the calculations, from what we’ve heard from kind of former Kremlin officials, at least one Kremlin insider, I think they were hoping at least for a little bit more. As ever, Russia hopes for the maximalism.

And we heard, of course, from Dmitry Peskov, when he was on the plane, that they expected the summit to last for six to seven hours. They didn’t get that. They wheeled out all kinds of economic deals and hopes for talks on nuclear arms control. And none of that really happened. Or at least if it did, any progress on that was cut short. So Putin, you know, he had this moment of triumph when he was greeted in such spectacular fashion by Donald Trump. But he didn’t get everything that he wanted, because I think what they really wanted—they were counting on ignorance within the Trump team, they were counting on misunderstandings of what was meant, for instance, by Russia being ready to provide security guarantees, that they could bounce Trump into agreeing completely with Putin’s vision of the war, that Ukraine should be forced to concede Donbas, and that, supposedly, Russia was ready to make this huge concession in the form of security guarantees, in which they failed to mention that they would be the fox guarding the henhouse, so to speak.

So, you know, I think they really hoped that this would slip by and that Trump would say, yes, we’ve agreed. But they didn’t get that, of course. You got Trump looking sort of quite deflated after the talks, which lasted only three-and-a-bit hours. And you had Trump saying there’s no deal until there’s a deal. There were some economic discussions, but they were certainly not as far-reaching as Putin hoped. And this really opened the way for Ukraine and the European leaders to then come in and help shape what the Trump administration’s thinking should be on what real security guarantees for Ukraine would be, and not just one that Russia has a right of veto over.

SESTANOVICH: A perfect segue to the question that I want to put to Laura, which is: How much did the Washington meetings accomplish? Where do they leave the Ukrainians? What are their—what’s their kind of diplomatic must-do list? And what does this mean the process—that Secretary of State Rubio is apparently overseeing—to create security guarantees? Is this anything real?

COOPER: Well, I think security guarantees really is, you know, the word of the day. But it’s a term that actually has less and less meaning the more it is unpacked. So I think the Ukrainians, what they got out of that White House meeting with the Europeans was really a sense of unity and a sense of solidarity, and changing of the story from all the kind of glory that was heaped on Putin the Friday before. But they didn’t get anything substantial or concrete. So the Europeans are earnestly trying to come up with what they’re calling security guarantees. And the centerpiece that we keep hearing little snippets about are these—this multinational force.

And so the debate keeps revolving around, you know, what is this force? What is the mission of this force? What is the composition in terms of countries? And, most importantly, will the U.S. serve as, what the Europeans are calling, a backstop to this force? Because the sense is that, you know, this force will be intended to deter future Russian aggression. But no one is very clear on whether Putin would actually be deterred by a force that doesn’t include the U.S. And that term, “guarantees,” also is really, really loaded. In addition to the misunderstanding, I think, on the American side about what Russia really meant by it—which is basically a veto over Ukraine’s security arrangements—there’s also this Article 5 connotation.

And we heard the really confusing term from Witkoff of Article 5-like. Unclear what that really means. But here, the Ukrainians really deserve some clarity. They’re still looking for NATO membership, although Ukrainians now discount that as a likely possibility in at least the near future. And that comes with a real security guarantee. Everybody knows what that is. But in this case, it’s really unclear what this force would do. I would—I would recommend that for the force piece of it, really detailed and careful planning take place among allies. And keep it kind of quiet and out of the limelight, because a lot of political support will be needed for any such force. And countries need to be able to muster that support.

I think they need to flesh out the maritime domain. We’ve always seen how Russia has harassed Ukrainian shipping in the Black Sea. So what’s the role of a force in the maritime domain? We need to flesh out the air domain. We’ve heard, you know, words from President Trump that we would be participating in the air domain. But when you hear it from Americans, it sounds a lot more like logistical support than it does like air policing. So that needs to be fleshed out.

But here’s the most important thing. The most important thing is for the allies to work together to figure out what kind of security assistance they can provide so that Ukraine’s future force—so that their force today and their future force can be equipped with what they need. Today they need more assistance to compel Russia to agree to a ceasefire. And then in the future, they’re going to need that assistance to build out their future force as a deterrent to Russian aggression. At the end of the day, it’s the Ukrainians who will be on those front lines. So I think we need to really flesh out security assistance plans at this point.

SESTANOVICH: I’m really glad Laura did, just as I said the speakers would, which is to inveigle recommendations into their—(laughs)—into their analyses.

Max, I want to turn to you, because Laura has provided an extremely ambitious to-do list of things that the administration has got to address, find a view of, make a choice, and put—exercise influence, so as to move the major players forward, including the Russians. From what you see, how does the American policy process look here? Is this something that one could compare to other presidencies? You know, you’ve written about these, shall we say, often chaotic policy process in the Reagan administration. But this seems to be an unusually, sort of, loose way of coming up with decisions, and of trying to influence other governments. Is the United States equipped right now to deal with a complicated problem of this kind?

BOOT: No. Next question. I mean, I would say—(laughs)—you know, I would not apply the words “policy process” to whatever the hell the Trump administration is doing here. The word that comes to mind is “chaos.” Another word that comes to mind is “dysfunction.” I think in some ways the last month—and other analysts, I think that the metaphor that they use, which I think is pretty accurate, is this is kind of like going on a merry-go-round. There’s like, a lot of noise, a lot of excitement. But at the end of the ride, you’re back exactly where you began. You haven’t actually gone anywhere.

And the reason we went on this little merry-go-round ride, I think, was because Steve Witkoff, who is Trump’s special envoy to everybody, gives every impression that he doesn’t know what the hell he’s doing. And he came back from his meeting with Putin in Moscow, which Putin asked for, because Putin was actually looking kind of worried about Trump’s threat to impose sanctions. That is not something, you know, Putin wants to see, given the precarious state of the Russian economy right now. So he called Witkoff to Moscow. And Witkoff came out of Moscow suggesting that Putin was making some kind of concessions.

Well, a month later it’s pretty damn obvious there are no concessions. Putin wants exactly what he wanted when he launched this invasion in 2022. He even wants the same thing he wanted when his envoys met with the Ukrainians in Turkey at the beginning of June, which is this maximalist agenda—the upshot of which is that Ukraine becomes a Russian colony. That is what Putin wants. He is not making concessions on land, even to have a ceasefire. He’s demanding that the Ukrainians turn over the unoccupied parts of Donetsk, where they have a very strong fortress network that the Russians haven’t been able to take in ten years. So Putin wants to achieve at the negotiating table what he can’t win on the battlefield.

Then Steve Witkoff suggested, oh, Putin might be willing to accept Article 5 guarantees for Ukraine. Guess what? As Catherine and Laura have been pointing out, you got to be pretty far along on the Stoli to believe that, because in fact, as Putin and Lavrov and everybody else have made pretty clear, their idea of security guarantees is Russia gets to veto any security for Ukraine. So that’s clearly off the table. And finally, at the end of his meeting with the Europeans, Trump said, oh, I’m going to arrange a meeting between President Zelensky and Putin. And Putin is very willing to do that, except, it turns out, actually, no, Putin is not willing to do that, because he doesn’t view President Zelensky as the legitimate leader of a real country.

So nothing whatsoever has been achieved in the last month. And the only question now is, is Trump ever, ever, ever going to make good on his threat that Russia will face very severe consequences for not agreeing to a ceasefire. Because it’s very obvious Putin is not agreeing to a ceasefire. So the question is, what are the consequences? Now, India has faced some consequences. India currently has 50 percent tariffs with the United States. But there is a whole lot of other things that could be done to create a lot more pressure on Russia.

There’s a lot of sanctions. The sanctions have been eroding all year because the Trump administration has not put any new sanctions on Russia. And so Russia is able to evade sanctions. We need more sanctions. We need heavier sanctions. We need to hammer the Russian economy while they—and provide Ukraine with all the munitions they can possibly need to hammer the Russian armed forces on the battlefield. And then, and only then, when Putin finally understands he is not going to win at gunpoint his objectives in Ukraine, will he be willing to negotiate in earnest. But, sadly, we are not there yet.

SESTANOVICH: Max, you set up my next question for Catherine perfectly, because your suggestion is the Russians are actually experiencing a certain kind of economic pressure. That’s what led them to call Witkoff in the first place. And the Ukrainians are doing what they can to increase that pressure. We’ve all read that the Russian refining capacity for oil has been cut by 13 percent by Ukrainian missile attacks. I’ve been told by someone in the intelligence community that actually the government believes that number is 17 percent, and possibly increasing. So, Catherine, can you tell us a little bit about how you think internal pressures of this sort, both on the Russian war machine directly and on the economy more generally, are affecting Russian calculations. And whether that means they might actually be willing to contemplate more far-reaching accommodation of Western objectives here.

BELTON: Yeah. I mean, Max is quite right. I mean, obviously we heard also—my colleagues and I heard from one Kremlin insider that in the weeks when Trump was actually issuing his ultimatum about tougher sanctions that alarm bells were going off in the Kremlin. We’d had this unusually downbeat forum in Saint Petersburg in June where one after one all the Russian state officials from the very highest levels at the top state banks, Herman Gref, the head of VTB, Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs, were all sounding the warning bell about the economy. They were saying, look, the economy’s overcooling now. Alexander Shokhin even said, most companies are now in a pre-default situation. You had Elvira Nabiullina, the central bank chief, saying that we’ve exhausted the resources that we had.

So you had this backdrop, and Trump finally saying that he was going to hit Russia harder with tougher sanctions if it didn’t agree really did trigger that process to get Witkoff pulled into the Kremlin, at least feign some kind of pretense of being ready to negotiate in order to avoid these tougher economic consequences. But I’ve been talking with some quite senior financial officials in the last couple of days. And even though Putin has bought himself time, and he staved off sanctions for now, they’re worried, one, about the impact of the higher tariffs on India. And even without that, even without tougher sanctions, the Russian economy is running out of steam. We saw just today the Russian Finance Minister Anton Siluanov, he was in a meeting with Putin. He said, look, we’ve had to lower the economic outlook by this—for this year by one percentage point already. We’re only going to grow by 1.5 percent.

And this is a big fall in the boom of recent years. And there are real worries about recession now. And the finance official that I was talking to was basically saying we’re at a fork in the road. We’re at a crossroads. We have to decide, are we going to continue the war and basically kill off the civilian economy which is already quietly dying? OK, the war machine will keep going for a while because we’ll pump money into it. Or do we start cutting military spending, which means that essentially we’re signing up for a peace agreement? And he said, a key sign of which way the wind is blowing is going to come in the second half of September, when the finance ministry issues its budget forecast. If there’s a cut to defense spending, that means that Russia is ready to do the jaw-jaw rather than war-war, and try and negotiate some kind of a peace agreement.

Again, Russia could change its mind and issue a new law to increase that spending. But the pressure is there. And we hear it too from Putin’s closest allies who, even in October last year, you had Sergey Chemezov, the head of Russia’s biggest arms conglomerate, Rosoboronexport, start speaking about, you know, how our companies are facing bankruptcies. Interest rates are too high. And they’re not going to be lowered in any time in the near future, unless Putin starts reigning in the wartime spending. So he is facing these pressures, even if Trump hadn’t thrown away the biggest card he has, which is to levy tougher sanctions.

SESTANOVICH: Laura, I want to turn to you, because what—people who make this analysis, as Catherine has, of Russian economic difficulties, often pair it by saying, yeah, but they think they’re winning the war. And so how does the—sort of, how does that balance what one should think about the Russian position? You know, we’ve had what looked like a kind of Russian breakthrough, at least week or so ago. We had just today acknowledgement by the Ukrainians that the Russians have moved forward in Dniper Petrosk. There is a kind of anxiety among Ukrainians about the military outlook, and a sense that they too are facing increasing stress and may not be able to keep going here. What’s your sense about the balance of—you know, on the military—on the front, as well as the way in which they can compensate for those difficulties with longer-range strikes?

COOPER: OK. So starting kind of with the broader war, I do think it’s important that—even though, you know, certainly we focus on the ground forces and it’s—you know, it’s incredibly important to look at the land dimension—right now, Russia is actually firing twice the number of missiles and drones at Ukraine than it did the year before. So basically, if you look at from January until now, and you look at the same period of time last year, what you see is double those air strikes. So the toll that it’s taking on the Ukrainian population is kind of a constant, constant drumbeat of airstrikes.

And I think that is important to mention, but it’s also something that I think—with the right kind of pressure from President Trump—it actually—it could be diminished. So I think that’s really, really important. Because the civilian casualty toll is way up. The Ukrainians are losing more civilians this year than they were at any other point since that very, very beginning of the war in, like, March of ’22. So we don’t want to lose sight of that. And we don’t lose sight of how, again, the right kind of pressure from the president of the United States may make a difference in that dynamic.

So looking at the battlefield itself, you know, the—I would frequently get these battlefield updates from Ukrainian officials, military officials. And one of the things that they often said at the beginning of the battlefield update was, the situation is difficult but under control. And, I mean, they would just say this again and again. And I think that that would be accurate to how they would view the battlefield right now, from a military perspective. It is difficult. There are moments where Russian forces are able to go behind Ukrainian lines. And that’s, in large measure, because Ukraine is suffering by not having enough infantry forces. Everybody wants to go and, you know, be a drone warrior. And so they’re really struggling on the infantry.

But, you know, these momentary pushes by Russia don’t really amount to anything substantial in terms of actual territorial gains. I mean, we keep hearing from military analysts in the West who point out—I mean, actually, this was from the U.K. Ministry of Defence. They pointed out that, you know, if Russia keeps going at the same pace that they are going at now, it would take them four-and-a-half years to capture the—you know, the oblasts that they keep talking about—Luhansk, Donetsk, Zaporizhzhia, Kherson. Four-and-a-half years. Of course, they would much prefer to just get it handed to them on a silver platter.

So it’s a slow, grinding war .And the long-range strike is something that, until now, we really haven’t seen the ability of the Ukrainians to really have the right mass. They’ve had precision. They’ve been able to hit with their long-range drones certain targets. But the big challenge, and it’s a big challenge for, you know, Western munitions as well, is getting enough quantity to really have that impact. And I think Operation Spider Web was our first glimpse of that. I think what they’re doing with the oil refineries, refining capacity, I think we’re starting to see it as well.

But that mass of production, whether it’s drones you’re talking about, or missiles, it really requires Western countries to invest in production. We have to invest in Ukrainian production. A lot of countries are doing this. The U.S. did this in a security assistance package over a year ago, to invest in, you know, over 800 million in Ukrainian drone production. Others can do the same. Investing in missile production is particularly important because the drones can only do so much in terms of their very limited payload. So this is something that, if we want to tip the balance, I think we can really help the Ukrainians. But by themselves, it probably is too much to have a big impact, even with their terrific long-range capability.

SESTANOVICH: Max, I want to turn to you for a last comment before we ask our listeners to put their questions. And I guess I should—this is a good moment for me to remind people that to ask a question, to get into the queue, you should click on the raise-hand icon. Because we’re coming to you next.

Here’s the question I want to put to you, which is to kind of pull back a little bit from all this. And say, if you look at the trend of this year, it’s U.S. disengagement. The president keeps saying, we may just wash our hands of this, you know, and give up. And that is sometimes thought of as just, you know, Trumpian rhetoric. But that’s actually the direction of what’s happening. You have a sort of gradual curtailment of Western—of American military assistance, even with a readiness to let the Europeans buy things. You have an increase in exactly the investment in Ukrainian defense industry that Laura talks about, but it’s from Europeans. You have the Europeans talking about security guarantees and a peacekeeping force. You have very little real influence on the situation being exercised by the United States. Are we seeing just—is this a sort of big shift in in American strategic interests, and a way in which the United States is actually—you know, here one should—maybe one should believe the rhetoric about a pivot to East Asia. You know, a real reduction in American commitment to and interest in European security?

BOOT: Well, the bad news is, you’re right. I think there has been a reduction in U.S. commitment to Ukraine. The good news is, there has been an increase in European commitment. And just in the last few days, Germany and Norway, among others, have announced very substantial aid packages for Ukraine, which are very important, to Laura’s point, because right now the crux of the conflict is not so much ramping up defense manufacturing in the West. It’s ramping up defense manufacturing in Ukraine. And the Ukrainians have shown themselves to be very adept at producing weapon systems, including something like 4.5 million drones that they’re planning to produce this year, compared to—

SESTANOVICH: Well, there’s this long-range strike missile that they’ve announced—

BOOT: The Flamingo, which I think is going to be very important. You know, similar to the U.S. Tomahawk. If they can produce it in quantity, it’s going to do a lot of damage to the Russian economy, among other things.

Now, it would be nice if there were more aid from the U.S., but I guess you can kind of look at it as a glass half empty, glass half full type of scenario. And I will say, it’s not as bad—it’s not the worst-case scenario. The worst-case scenario is what happened in February, when Trump and Zelensky had that godawful blow up in the Oval Office, and then Trump temporarily cut off all intelligence sharing and all support for Ukraine. If you were to extend that over, you know, an extended period, that would be very deleterious for Ukrainian security. But he hasn’t done that so far. And, by the way, there’s also a bit of good news, kind of unexpected because a lot of people, including me, feared that Trump might actually wind up pulling out of NATO in his second term. But right now, the European leaders have done a pretty good job of going on a charm offensive and keeping Trump more or less on side. And so now Trump speaks glowingly about NATO instead of, you know, muttering about a bunch of ingrates, et cetera, et cetera.

So, you know, and as Catherine says, he’s not—I mean, again, it’s half-full, half-empty. On the sanction side, the half-empty part is that he is not putting any new sanctions on Russia. And we really need to do that, even just to maintain sanctions at their current levels. But the half-full part, the good news is he’s not lifting sanctions either. And obviously Putin is hoping to, you know, con him with a bunch of talk about Russian investments, all this other stuff. And Trump has actually not gone for that. So I would say Trump is not doing as much to support Ukraine as the Biden administration did, for sure. But he’s not doing as little as I feared. And by the way, us talking—you know, Laura mentioned how dramatically the Russian strikes on—airstrikes on Ukraine have increased this year. What does that say about Trump’s frequent boast that Putin would have never invaded Ukraine if Trump were president? Well, if Putin is so afraid of Trump, why has he increased airstrikes on Ukraine so dramatically this year, even though Trump has called him out a few times?

So, you know, I don’t want to be—I don’t want to be overly optimistic about the U.S., but I don’t want to be overly pessimistic either. The reality is, I think any objective analyst who’s looking at what the U.S. is doing is left in a state of confusion. And that’s not good, but it’s also not as bad as it could be because I would not say that Trump is following a consistent pro-Russian agenda. But nor is he following a consistent anti-Russian agenda. His policymaking is just very confusing and chaotic, and nobody really knows where the merry-go-round will stop, and where he will end up at the end of the day.

SESTANOVICH: Good. I think your suggestion that, you know, the administration’s policy amounts to kind of Biden-lite would be a rather stinging—(laughs)—summary, from the president’s point of view.

Look, we’re going to take some questions for the remainder of the hour. And if you want to direct them specifically to one speaker or the other, that would help us allow as many people to get questions asked as possible. Let’s take our first question.

OPERATOR: (Gives queuing instructions.)

We’ll take our first question from Serge Schmemann.

Q: Yeah. Good afternoon. A very interesting discussion.

I was—Max, in effect, answered part of my question about where this merry-go-round may finally end. And I was just hoping that either Laura or Catherine, or you Steve, would comment on what Trump may have gleaned from this meeting, from either of these meetings, either in Alaska or in Washington. Is there any sign that there was any change in his thinking? Or are we sort of condemned to keep watching for something to change?

SESTANOVICH: Laura, Catherine?

COOPER: I could just take a first crack. This is very kind of superficial, but I think part of the reaction probably was very superficial, in the sense that, you know, the president, you know, didn’t achieve what he wanted, theoretically, out of the Anchorage meeting. But, you know, he went on and on about how great a relationship he has with Putin. I find that a little hard to believe, since I think that, you know, a really great relationship means that, you know, the person that you’re working with actually does bend to—you know, to support you, or to, you know, change their position. But I don’t think it moved him in terms of his own sense of that personal relationship.

And then, from the—from the Oval meeting, I think the optics kind of tell you the story that he would have taken from that. That story of, you know, unity, solidarity, and, you know, who is the team? This is the team. This is the team of Ukraine, the team of Europe. And there was a deliberate effort to try to show, and the United States is on that team. So I think it would boil down to that, very simple.

SESTANOVICH: Catherine, any extra thought about?

BELTON: Yeah. I would just add that from the Russian perspective, there’s a lot of confusion as well. They don’t know—like, some of them are saying, we don’t know, you know, is all this switching around part of some clever strategy by Trump, or is it based on misunderstandings? So actually they really—a lot of them really don’t know and understand who is determining the strategy, and how—and that kind of air of unpredictability is perhaps keeping the Russians on edge too.

BOOK: I mean, I would just add very quickly, I’m pretty sure there is no grand strategy. President Trump is just very, very influenced by whoever he talks to last. And so he was, you know, sounding very pro-Putin in Alaska, and then he sounded less pro-Putin after meeting with the Europeans. And the question is, you know, what happens after his next phone call between Trump and Putin? I think we’re all kind of waiting to see what happens in two weeks, that mythical timeline that he’s once again put out there for deciding a policy on Russia. At the end of the day, it doesn’t matter what comes out of—what words come out of Trump’s mouth. What matters is, what is the U.S. going to do? Are we finally going to hammer Russia with tough sanctions or not? I think that is the critical issue.

SESTANOVICH: OK. Our next question.

OPERATOR: We’ll take our next question from Anatoly Chubais.

Q: Hi. Thank you, Stephen, for all the discussion, which was quite fruitful. And, if I may, I would give one very, very short comment and one very unpleasant question.

My comment is about the state of the Russian economy now. So I agree with Catherine Belton that there was a lot of complaints from the Russian business leaders, and from Herman Gref, Andrey Kostin, Alexander Shokhin, and others. That’s true. But for me, that’s absolutely typical for the situation when the central bank is fighting with inflation. The absolutely only way to get this kind of reaction if the Central Bank try to stabilize the macroeconomy, you always have the screaming and shouting from the business. And that’s what we have heard now.

But let’s follow not the screams, but the numbers. If you will, follow the monthly inflation of Russia, in January that was 1.3 percent. In June, it was 0.2 percent. And, as you know, the central bank interest rate was declined from 21 percent to 18 percent, which means that what we have—what we can see now in Russian economy, that’s the macroeconomic stabilization. Inflation went down. I’m sure it will. My forecast for the 2026, it will be about 5-6 percent annual inflation, comparing it with the 10 percent last year. So that’s the macroeconomic stabilization. And for me, the Russian macroeconomy is quite stable. And the Russian Stabilization Fund is enough for financing a budget deficit minimum for two years. Frankly, I see no budgetary problems or macroeconomic problems in Russian economy.

But the question. The question I want to ask, which is quite unpleasant, the other question about the forecast. I know that nobody like to give forecasts, but that’s—if possible, I want—I will not direct this specifically for one of the speakers, but maybe some of you will take this question. And I have very, very easy question. Do you believe till the end of this year, till the end of the 2025, we will have peace treaty, or at least ceasefire with Ukraine? Is it realistic or not? Thank you very much.

SESTANOVICH: Good. That’s a very precise timeline, with a, you know, meaningful test attached to it—a peace treaty this year. Max shakes his head. Anybody think this is doable?

BELTON: I would say it would depend on whether Trump is ready to impose tougher sanctions or not, because even though, as Anatoly Borisovich pointed out, inflation is starting to fall, but that’s having a deleterious impact on the economy. The high interest rates have meant that investment has dried up, non-payments are soaring. VTB, Russia’s second-biggest state bank, saw a massive drop in revenues of 49 percent over the first half of the year. Shokhin did say the companies are in a pre-default situation. There’s a lot of restructuring of debts going on. And we just don’t know what could trigger a credit crisis, particularly if the Indian sanctions kick in and there is sort of a greater drying up of revenue. So I would say the ball is in Trump’s court to answer that question on whether there can be a real ceasefire and peace agreement by the end of the year.

COOPER: So I agree on this point about, you know, if Trump engages—if Trump actually engages with sanctions, if he engages with security assistance, I believe that we can drive a ceasefire agreement at the end of the year. That said, that’s a ceasefire agreement. And, you know, Russia doesn’t have a great track record of adhering to ceasefire agreements. I do not believe that an actual full peace agreement—you know, something beyond just a truce—is in the cards for a very long time to come.

SESTANOVICH: Max, one sentence?

BOOT: Yeah, I just don’t see any evidence that there is any possibility of even a ceasefire by the end of the year, because I think Putin still thinks he’s making progress on the ground. But it’ll be interesting to see what happens if his latest offensive does not actually gain much ground, and if the—and if the U.S. doesn’t cut off Ukraine. Will he reassess in 2026? I think that’ll be interesting to see.

SESTANOVICH: I would say one thing to look for is, after switching from a ceasefire to a peace agreement at Alaska, does Trump go back to a ceasefire as a goal? Because that’s far more attainable and, you know, makes sense as a kind of near-term objective. A peace agreement, if he’s paying attention, he will see is not attainable in the foreseeable future. If he wants to go back to something that will enable him to claim success, he’s got to be going to an unconditional ceasefire instead, or a ceasefire with minimal conditions. And the question is, of course, what those conditions would be. Next question.

OPERATOR: We’ll take our next question from Jim O’Brien.

Q: Thanks.

Hey, Laura, you mentioned the importance of concentrated, long-range fires. Is the administration still slowing the delivery of U.S. equipment like ATACMS? And, Catherine, could you talk about the impact of sanctions measures that the Europeans might take on their own, such as more activity against the oil shadow fleet or the ban on Russian gas sales? Thanks. Great panel.

SESTANOVICH: Before I let the panelists answer, I’m going to suggest that future questioners give an institutional affiliation, if they want, because we’ve had some exceptionally—(laughs)—interesting questioners appear here, perhaps without proper introduction. Catherine and Laura, over to you to answer Jim O’Brien’s question.

COOPER: So I can start on the long range. Jim, great to hear from you.

So I can’t speak for what the administration is or is not doing right now in terms of, you know, specific security assistance approvals. So I’ll just have to set that aside. But the comment that I would offer, that I think is highly relevant, is that, again, it’s not just about a capability—whether it’s ATACMS, or Storm Shadow, or SCALP, or it’s, you know, a particular long-range drone that the Ukrainians produce. It’s also about quantity. And for any meaningful amount of quantity, for long range, we need a lot more production. We need it in Ukraine and we need it in the West. So any individual decision about one particular weapon system is not really a strategic decision, in my view, unless we have more production to go on.

SESTANOVICH: Catherine.

BELTON: I think the European sanctions are, of course, having a huge impact because, of course, the European Union is a much bigger trading partner with Russia than the U.S. is. But obviously Russia is also kind of targeting the U.S. in hope that they might be able to engage the U.S. on a partial lifting of sanctions, in hopes that that will then crack European unity as well. And they fear the U.S. a little bit more because the U.S. has the power to impose the secondary sanctions, because of its—you know, the dominance of the dollar in global markets.

So but I think, yeah, I mean, the game is to crack the unity. And if they’re able to engage Trump on these sort of broader discussions, on business deals, and some kind of a negotiation in return for a partial lifting of sanctions, then they really hope that European economies will crumble. I mean, again, it’s the—it’s the war of attrition. It’s the waiting game, which, you know, essentially, Russia’s own economy, as we’ve discussed, is not in a great state. But then the Russian officials would also turn around and say, look at Germany. Look at France. They’re facing these budget crises and political crises of their own. So they think that if there’s an opening, France and Germany would also—face pressure also to lift this proposed ban on Russian gas sales in 2027.

I mean, at the moment, you know, I think Gazprom is hoping to fight tooth and nail against that. I heard that they’re threatening kind of lawsuits and things if it does go ahead. But I wish them luck in pursuing that. But obviously the last standing pipeline for Gazprom into Europe is of great importance, because it’s their last big revenue stream—because we still don’t know whether China is paying anything at all for the gas that it’s receiving. (Laughs.)

BOOT: Can I just mention one thing very briefly, that we haven’t touched on yet which I think is very important, which is the roughly 300 billion (dollars) in Russian assets frozen in the West. And Phil Zelikow says that now about $50 billion of that is in dollar-denominated assets, which is under U.S. control. And so there is—if the U.S. and Europe would get our act together—and we don’t even need the Europeans to do it. We could do it ourselves, unilaterally. Japan has a bunch of that. Australia has, others, but it’s primarily the Europeans and the U.S.

If we turn over that money to the Ukrainians, that would be a devastating blow to the Russians. I mean, think about that. That is a lot of money. That is more aid than they’ve gotten—Ukraine has gotten so far, since the start of the war—$300 billion. That would allow Ukraine to turbocharge their defense industries. And it would make clear to Putin that Ukraine has basically limitless resources to keep on fighting. And that would really, really get his attention. And so it’s really puzzling to me, and dismaying, that the Biden administration didn’t move on this, the Trump administration is not moving on this, the Europeans are not moving on this. We have this weapon pointed at Putin’s head and we’re refusing to pull the trigger.

SESTANOVICH: Great. Next question.

OPERATOR: We’ll take our next question from William Courtney.

Q: Thank you for the terrific discussion.

Sergey Lavrov has asserted a Russian veto over any security guarantees, but if guarantees are to work it will probably be more like the South Korean situation where the North Koreans have no voice over the multinational United Nations forces in South Korea, or any voice over the U.S. South Korean security guarantee treaty relationship. Do some Western leaders think that it’s worthwhile discussing the national security guarantees with Russia to give it some voice in this issue? Thank you.

COOPER: Well, I’ll just offer my two cents on that. I think that there was actually a good deal of surprise at how the security guarantee conversation arose out of the Anchorage meeting. And there was, you know, a sense that there probably wasn’t an understanding, on the U.S. side anyway, of this long-standing Russian position that they would—you know, they would be a guarantor. I think the model that you describe, the Korea armistice model, is actually a much more apt model for what is likely to be successful for Ukraine. And I’m hopeful that people will turn to that model.

BOOT: Yeah, just very quickly. I mean, I think, you know, there’s two gold standards of security guarantees for Ukraine, neither of which, unfortunately, is on the table. One gold standard is admitting Ukraine to NATO, so they have Article 5. The other gold standard is a U.S.-Ukraine mutual defense treaty, like the U.S.-Korea treaty, where we promise to come to Ukraine’s aid if they’re attacked. Either one of those would prevent future Russian aggression. Anything else, eh, maybe, maybe not. Very hard to know. Really depends on the specifics. And it’s unfortunate that the—that the two things that would be most effective are effectively off the table.

SESTANOVICH: One thing I would add to the question that Bill poses, which is what is the European attitude here? I’d refer people to some remarks that President Stubb of Finland made, because they’re interesting in substance. This is today. Interesting in substance, and also because President Trump seems to be very fond of him, since he, you know, played college golf in the United States, and may even be taller than Trump. He said today that he tells Trump that it is hopeless to negotiate—to try to negotiate with Putin. He said—he points out that Trump’s patience with Putin has run thin several times. And that whenever it runs thin, the result is more help for Ukraine.

And his conclusion here is that the United States needs to join in helping Ukraine to target Russian war infrastructure, the war machine. This is pretty tough talk for a European leader at a time when everyone has been saying, you know, well, the Europeans and the Ukrainians are extremely good at flattering the president. I think they are. Flattery is only one part of the rhetorical arsenal. The other is rather brisk talk about what needs to be done. And I think you heard a fair bit of that in the Oval Office. And you’re certainly hearing more of it now. Whether that produces the kind of effect on Trump that people want, we don’t know. But it suggests what European leadership attitudes clearly are.

We got a next question?

OPERATOR: We’ll take our next question from Rory MacFarquhar.

Q: Hi. Thank you very much. This has been a great panel.

I have a question for Max about the most confusing aspect of the situation, which is the U.S. policy process. If you were to listen to Trump and Vance, the Munich speech by Vance, Trump’s body language, obviously the first oval meeting with Zelensky, and then Alaska, you would think that he was clearly taking a side, that he was going to support Putin, that he had no love for Ukraine, didn’t really care about Europe, is exclusively focused on the China threat. And yet, that doesn’t seem to be where we keep landing. Every time it looks like Trump is going to pull the plug, is going to suspend security assistance, suspended intelligence sharing, it doesn’t happen. How do you understand what is constraining him on that side? What is keeping him supporting the Ukraine? Is he afraid of a Kabul-type domino collapse of Ukraine that would be on his watch? What do you understand is going on in his mind?

BOOT: Well, I think you answered your question. I think he is concerned about another Afghanistan. And he saw how that cratered President Biden’s approval ratings. And, of course, losing Ukraine would be about a thousand times more significant than losing Afghanistan. So I don’t think he wants to see that happen on his watch. And you’re right. I mean his policy process, so called, is bewildering, because, as I said before, it hasn’t—it hasn’t been the worst case, because I think the worst case would have been that he adopts the Putin peace plan as his own and tells Ukraine, you know, either you agree to all these massive concessions or the U.S. entirely pulls the plug on you.

He has not done that. There are times when he’s close to doing that, then he pulls back, but then he goes the other way. And there are times when he’s close to getting tough on Russia, and then he pulls back from that. So basically, I think he really wants to end this conflict. He really wants that Nobel Peace Prize. But I don’t think he really knows how to get there. And unfortunately, he’s not being helped by Steve Witkoff, who has no experience in international negotiations and gives every impression that he does not understand what Putin is saying to him when he talks to Putin. So I don’t have a lot of confidence or hope that this process, so called, will get anywhere.

SESTANOVICH: Great. Next question.

OPERATOR: We’ll take our next question from Cynthia Roberts.

Q: Thank you very much for this great conversation.

My quick question is primarily for Laura Cooper. If we accept that, despite the sanctions, Russia’s economy can weather through this storm, Anatoly Chubais makes this correct argument of macroeconomic stability, they could keep going for another year or two. My question is on the military side. They’ve been able to keep mass production going in a way that Ukraine has had more difficulty with. But their conduct of war leaves much to be desired. And, as you pointed out already, it would take them considerably more time than Putin wants to put to get to even occupying the territories they’ve already annexed. So do you see any signs of learning tactically, operationally, that would allow them to make one last big push to try and get the capitulation that Russia seeks? They’re not going to get it by bombing Ukraine. Bombing is a poor strategy for coercion. It’s going to have to be territorial conquest. So what’s your best assessment of this? Thank you.

COOPER: So, thank you. I think that it’s a bit of a misconception that Russia hasn’t learned from this war. Because they are. I mean, their military has been adapting, including, I would say, and particularly, in terms of technological innovation. I mean, they were way behind on drones. The Ukrainians were far ahead. And the Russians have really, you know, managed to catch up. And then their industrial complex is the thing that gives them the greatest advantage, because they can then take this technology and mass produce it. You know, they took the Shaheds from Iran, and now they’re producing these, these Gerans at a really fast clip.

On the battlefield—(laughs)—they have not learned anything that would give them the ability to do what we would call combined-arms maneuver, to really be able to advance significantly, you know, in terms of, you know, actual territorial conquest. You know, combined arms maneuver is something that NATO military has trained really hard on. It’s not a Soviet strength, I would say. (Laughs.) It’s not something that they—that they have inculcated in their forces.

And so the only scenarios that involve Russia really gaining a lot of territory are really dire and, I think, completely unlikely scenarios, of Ukrainian forces really collapsing. I think the Ukrainians have learned a lot in terms of establishing better defensive positions to be able to, you know, hold out against the Russians. And even though they have some real weaknesses in their infantry troops just in terms of quantity, overall they are more of a learning organization. And they have been able to compensate, in some cases, for lack of manpower with their strategy and their planning. So I’m really not forecasting any major gains by the Russians.

The other thing with the Russian forces, to keep in mind, I mean, they started out with, you know, kind of mixed quality forces at the lower levels. And I would argue, at the officer level as well. A lot of the officers who have stuck around, a lot of the senior leaders, like Gerasimov, who have stuck around, are not really that especially talented. And their ground forces, you know, their infantry, are increasingly comprised of, you know, very low-quality forces—a mixture of, you know, prisoners and, you know, not trained forces. So this also makes it really hard for them to push forward at any faster clip.

SESTANOVICH: We are almost out of time. I’m going to ask each of our panelists to comment on one thing that we haven’t really talked about, although there have been brief allusions to it, which is the administration’s embrace of something that I actually thought was extremely implausible. That is, taking this idea from the Graham-Blumenthal bill of trying to impose sanctions on countries that are purchasers of Russian energy. You know, this is—this is actually probably the single-biggest confrontation ongoing between the United States and any major power right now, is with India over Russian energy purchases. Do you think this is a sign that the—that the administration is prepared to listen more to the Congress, that it is prepared to use this kind of strategy—which obviously appeals to the president in a certain way. He’s a tariff man, as he always says. And is there some greater potential here, looking particularly at you, Catherine, to further alarm Russia as they think about what the next several months will be like?

BELTON: I think they are worried about it, very clearly. But I guess at the moment they hope that while China remains unaffected by these tariff increases, that perhaps China will pick up some of the slack if India does start reducing its oil purchases. That China could step in and buy, even though it might have to sell oil at an even lower price—which, of course, will hit budget revenues. Or they’ve been looking at a scenario in which, because India is reducing its purchases of Russian oil, they think that will create a shortfall on global markets, which is going to push the price up. Which will ultimately be politically unpalatable for the Trump administration. So they think he’ll do another TACO eventually. I don’t know. I guess we just have to see how it plays out. But I think—but certainly, they’re worried about it, even though they may pretend to be sanguine.

SESTANOVICH: One comment from Max or Laura on this, or any other topic, as we wrap up?

BOOT: I mean, I know that the—that the Graham-Blumenthal bill has gotten the most press, but there’s other sanctions legislation in Congress which I think is more targeted and could be more effective. But we’ll see with—I mean, it is interesting that Trump is willing to blow up the U.S.-India relationship, which I would not advise on general strategic grounds. But he’s apparently willing to do that. We’ll see if it actually results in pressure on Russia. Although, as Catherine pointed out, he’s not willing to impose those sanctions on China, because, of course, we have our own trade truce with China and that would—that truce would go up, you know, in smithereens if he did that. But, I mean, I would hope that he would use other sanctions authority, including a lot of sanctions authority he already has, to ratchet up the pressure on Russian banks, on the shadow fleet, various other Russian vulnerabilities. And, of course, to reiterate what I said earlier, turn over the damn money to the Ukrainian. The frozen Russian funds. That’s a no-brainer, to my mind.

SESTANOVICH: Laura, you get the last word.

COOPER: Oh, my goodness. The only thing I will—I will say that didn’t come up, that I wanted to mention, is critical minerals deal. Remember this thing? It had a lot of hoopla at the time. Well, guess what? It has a provision in it that if the U.S. provides security assistance to Ukraine, it counts as a capital investment in this. Which is another way—we’ve got the sovereign assets, we’ve got the critical minerals deal. This doesn’t have to break the bank. We can provide security assistance to Ukraine, not just wait for the Europeans to do so. That’s my last word. Thank you.

SESTANOVICH: A very senior Ukrainian political figure told me about the critical minerals deal. He said, we worked that so hard, we got into such improved shape, that it will either be totally great or totally meaningless.

On that note—(laughs)—I think we have to acknowledge that the dust has not settled on these summits. We have plenty of deadlines that we will have to mark as they go forward, the next two weeks, the remainder of the year, 2026. We’ve heard all of those timeframes mentioned by our speakers and by our questioners.

On that note, we will end our discussion, but promise you that we will keep returning to this question because it’s not going away. Thank you very much to all the panelists, all the questioners, and to our technical staff. Thanks.

(END)

This is an uncorrected transcript.