Reports are swirling that Russia is massing troops on the Ukrainian border and is about to invade – again. 

This is not the first time breathless reports have warned that war is about to break out. The image of hundreds of tanks lined up at a new Russian military base on the outskirts of Kamensk-Shakhtinsky in Russia's Rostov Oblast close to the Ukrainian border has been widely circulated on social media and TV shows. It has been used as proof that Russian forces are building up, ready to invade. However, the image is from Google Earth and from October 13, over a month before the clash between Russian and Ukrainian navy on Sea of Azov. It has already snowed in Rostov and there is no snow in the image. 

Before I dive into this I should say at the outset I remain extremely sceptical of the idea that Russia would ever invade Ukraine, let alone now. There are many reasons to believe this. To save time let me just list some of the points made against invasion recently and we can leave the debate over each for another time:

• It's winter and it's a really bad idea to start a war in the east in winter;
• Invading Ukraine would bring down extreme punitive sanctions on Russia – far worse than the current regime – which it can ill afford;
• Moreover new and even more stringent sanctions would undermine the Kremlin’s efforts to lift the current sanctions when the will in Europe to keep them in place is clearly weakening;
• An attack would prompt the US to rapidly increase its military supplies of lethal weapons to Ukraine that would lead to dramatic escalation of the military conflict;
• An invasion could lead to a military response by the US/EU/Nato in support of Ukraine (albeit highly unlikely);
• Russia can ill afford the cost in human life and money, which would have political and budgetary repercussions at home;
• Russia could occupy Ukraine quickly, but it could not defend it for any length of time if counter attacked nor secure it against a prolonged guerrilla counter offensive;
• Plus Russia would never “win the peace” amongst the locals, who have already ousted two presidents with popular uprisings; and
• The destruction an invasion would cause would only escalate the cost of reconstructing the economy to massive proportions, if an invasion were successful – just the annexation of Crimea has already proven a drain on the budget.

You can take issue with some or all of these points, but in sum they make an invasion look very unappealing. And looking at the details a little harder, it seems the Ukrainian administration itself is not expecting an invasion either, analysts at East West Institute (OSW) argued in a paper last week.

Martial law was imposed on the 10 regions that lie on the border with Russia on November 25, but the authorities have done nothing to militarily prepare these regions for invasion. There have been no troop movements and no shoring up of local defences.

Tellingly the text of the presidential decree that imposed martial law, “excluded the proposal to mobilise the reserve forces, which proves that the Armed Forces of Ukraine are not assuming that Russia will start any full-scale military actions in the near future,” OSW analysts Tadeusz Iwański, Sławomir Matuszak and Piotr Żochowski concluded in their report entitled “Martial law in ten regions of Ukraine,” released on November 28.

“According to the law, a partial mobilisation may be declared by the president of Ukraine according to the assessment of risk. The law does not formulate specific tasks for the other departments responsible for national security, and is limited to general recommendations to take steps to defend the security and the interests of the state. The State Service for Emergency Situations, responsible for rescue operations and civil defence, has been placed on full alert,” OSW analysts added.

The OSW view is backed up by scepticism amongst other commentators.

“The Cabinet of Ministers only approved a plan for martial law, without an official resolution to complement the president’s decree with actions,” according to Ukrainian military expert Ivan Aparshyn, as cited by Concorde Capital in a note. Moreover, no decisions have been made to invest in or reinforce the nation’s defences, nor have any measures been taken to put the economy on a war footing.

Ukraine has called up some reservists, but President Petro Poroshenko said explicitly there would be no mass mobilisation, and he has not taken any other large scale military action of note.

Poroshenko has already been accused of “wagging the dog” by lawmaker and opposition leader Serhiy Leshchenko. Now others are warning Poroshenko is also guilty of “crying wolf”.

“Parliament’s decision to approve martial law was strictly political, without any intention to change the daily functioning of the government and people’s daily lives, particularly in the urban centres. The cabinet is merely reflecting the parliament’s intentions. Moreover, numerous cabinet members don’t support the president’s policies, including PM Volodymyr Groysman,” Zenon Zawada of Concorde Capital said in a note. 

“It’s dangerous for President Poroshenko to politicise something as serious as martial law. Without following up with the necessary measures, he runs the risk of the public not taking the Russian military threat seriously, and not being prepared, whenever the need for martial law might truly emerge. In this sense, the attempt to rally the public around him ahead of the March presidential elections might backfire if he’s further exposed for manipulating the war, and public consciousness about the war, for his own political ends.”

The Rada deputies have also been sceptical about Poroshenko’s motives and blocked the most stringent version of the decree imposing martial law.

Originally Poroshenko called for 60 days of martial law, but as the constitution bans any sort of electioneering under the conditions of martial law and official election campaigning is slated to start on December 31, that would have meant the presidential election would have to be postponed for at least a month. In the end the compromise was to settle on 30 days – a decision taken for political, not military, reasons.

The text of the decree also gives the president extraordinary powers to seize companies and assets, ban demonstrations and rallies, close media and arrest anyone at will. However, following the Rada debate Poroshenko had to promise publicly he would not use any of these powers.

Russia is being aggressive

None of this is to excuse Russia’s behaviour. The cause of the naval clash between Russian and Ukrainian ships on the Sea of Azov on November 25 remains disputed. bne IntelliNews had argued that it could have been a cynical provocation, engineered by Poroshenko to boost his flagging ratings ahead of the March 31 presidential elections. Currently the president is trailing frontrunner opposition leader, former prime minister and head of Batkivshchyna (Fatherland) party Yulia Tymoshenko by ten points and is on course to lose the elections.

Nevertheless, it is clear that Russia annexed the Crimea in 2014, that it is backing separatist rebels in Donbas and both has regular troops on the ground and is supporting them with tanks and artillery supplies. More recently the naval authorities in the Kerch straits have effectively blockaded the Sea of Azov, where the two big ports on the Ukrainian coast are economically important for Ukraine’s export business. On December 6 there were reports that some 104 ships were waiting to pass through the straits and that no ships had arrived at Ukraine’s ports for over a week.

But Russia’s aggression in Ukraine does not contradict the possibility that Poroshenko is attempting to manipulate the tensions for his own political gain – and if that is true he is playing with fire.

As for the satellite images of Russian tanks lined up along the border that have fuelled the reports of an imminent invasion, these sorts of images were regularly released in the initial hot phase following the annexation of Crimea and the subsequent escalation of fighting in Donbas, and despite the hysterical reporting an invasion never appeared.

In London investors are already conscious there has been quite a bit of wolf calling in the past.

One investment banker and Russia veteran said in a note to clients last week: “The Daily Mail says there are tanks lined up just across the border [with Ukraine] so it must be true… The incriminating satellite images have been released by the Ukrainians who, of course, have a vested interest in alarmism and their veracity has, even more predictably, been denied by the Russians. At this stage, it would be utter madness on behalf of the latter to make an incursion across the frontier, without justification because Western sanctions would come quicker than you can say "Smocking Gun"… There is a risk of an escalation in the conflict but at this stage it is not elevated and Russian fund managers have learned down the years to be phlegmatic. Hold your nerves on the longs.”