I think the Nato talks story is actually very simple. Russia doesn't want any Nato troops, weapons or exercises in Ukraine in the same way that JFK didn't want Soviet missiles in Cuba. Ukraine’s border faces the European part of Russia where 80% of its population live and that is home to most of its millionki, the large cities with over one million inhabitants. With missile flight times of around 5 mins to hit these cities, including Moscow, missiles in Ukraine are anathema to the Kremlin and Putin will simply not accept even the possibility of their being deployed there.

Everyone has been focused on the “no Nato expansion” demand in Article 6 the Russian Foreign Ministry’s eight point list, but actually I believe the really important article in the MFA’s list is Article 3: “we agree we are not enemies.”

At first glance this seems a little odd. No one has been calling Russia the enemy. It is usually treated more like some badly behaved, but very large, errant teenager that needs to be cajoled into learning better manners.

But actually the Article strikes to the heart of the problem. Nato may be conceived as a defensive alliance, but designed to defend against what? Russia obviously. What is making the Kremlin nervous is that Nato is a regional security deal where Russia has been excluded. That de facto makes Russia the enemy – something that the Kremlin disagrees with, but something that the West’s policies since 2003 and the withdrawal from the ABM treaty in 2003 have only reinforced in Putin’s mind – and not without reason. The Cold War mentality is alive and well.

What Putin is asking for is a new inclusive security treaty that includes Russia in the security arrangements, albeit with a special status and arrangements that acknowledge the bad relations. Without a deal like this Russia’s only way of responding to things that Nato does that it doesn't like is to move troops around – as it has been doing. A new deal would create a diplomatic mechanism for these tensions.

I have been trying to think positively about how to solve the current impasse. You could argue that the Nato Council is the appropriate mechanism and already exists, but as I just said, Nato by design excludes Russia and Nato’s very raison d'être implies Russia is the enemy.

Rather than argue about the Nato expansion Article 6 issue, I think we would be better served by focusing on Article 3 and accepting Russia’s request that we not be enemies. I understand that this is problematic thanks to things like election interference and the annexation of Crimea, but I also think that many of these things were the unintended consequences of a long string of bad policy mistakes on the side of the West. Commentators often point out that most of Putin’s moves tend to be reactions to Western policies rather than pre-emptive. The problem with Putin is that he is not afraid to act boldly but at the same time he is also locked into exactly the same Cold War mentality as his opponents, so the whole thing becomes a self-fulfilling prophecy based on a negative feedback loop.

Why talk about Nato at all? Why not start with accepting Article 3 and building a new security deal that would include guarantees for Ukraine’s security as well as that for Moldova, Georgia, the Balkans and everyone else that is nervous? Then you’d negate the need for Ukraine’s Nato membership completely and dodge that bullet. Bottom line this is what Putin wants: security – in the same way as Ukraine wants security. We all want security so we can go back to work and complete the transition to prosperous capitalist states.

Could we accept Russia as a “non-enemy” (which clearly is far away from “friend”)? The main difference between this Cold War and the previous one is that in the last one Russia/USSR clearly was the enemy as the East/West clash was an ideological clash of capitalism vs communism. Both sides were bent on each other’s domination. This time round we are both on the same side: we are both capitalist.

Despite the constant complaints and application of labels like “Putin’s Russia” and “kleptocracy”, as bne IntelliNews keeps pointing out, Planet Business is actually working really well, as I highlighted again recently in a podcast with bne IntelliNews columnist and leading Russia-commentator Mark Galeotti.

I have also long argued that the best way to deal with Russia is to allow it to prosper. Following eight years of a boom that started when Putin took over, 2008 was the high water market of Russian liberalism. Economist Sergei Guriev, who went on to become the chief economist for the European Bank for Reconstruction and Development (EBRD), wrote a totally liberal and market-oriented economic plan for then-president Dmitry Medvedev, including a radical privatisation programme, and Guriev told me later that Medvedev presented it at St Petersburg International Economic Forum (SPIEF) that year almost completely untouched. The crisis that started only a few months later in September wrecked that effort in what to me is one of the greatest unacknowledged tragedies of the post-Soviet period.

The better the Russian economy is doing the less important the government becomes and the more the Russian people themselves will hold the government to account. And the proximity that comes with business relations is the best way to change people’s minds. That’s how the gay and civil rights movements made their progress: by working with bigoted people everyday, who became more tolerant as they got to know individuals, as I argued in an op ed “The 50-year fight for gay rights.”

I’ve become very pessimistic in the last week as I watched the Nato talks unfold. I don't see any real understanding of the Russian position or any willingness to go beyond the “Russia is our enemy” mentality.

This is a golden opportunity to set up a new post-Cold War security infrastructure that could bring the clashes to an end and could also lead to Russia’s withdrawal from Donbas. As we have argued, the only reason Russia is there is to keep Ukraine out of Nato.

Putin forced these talks on us, not we on him. He is clearly willing to negotiate and has shown himself willing to make concessions in the past. Everyone wants a more secure Europe and if Nato really is purely defensive then why not do a new inclusive deal with Russia if that improves security?

Does Nato really have any objections to banning military exercises near Russia’s border? Russia has already offered to apply the same ban to itself. The upshot of that would immediately be to de-escalate tensions on Ukraine’s border and make a repeat of the troop build-ups difficult. Do we really think Russia is about to attack the West? No one who has lived or worked in Moscow believes that. Do we really need to deploy missiles close to Russia if we are not going to attack, especially after Russia has agreed to limit the same missile deployments as it has in the MFA’s list? And why not go back to making the OSCE and the Nato Council real co-ordinating bodies so we have a diplomatic channel for resolving the inevitable disputes and fears? As I have said, currently the only mechanism available in these disputes is for Russia (and us) to move troops and ships about as we saw in April and again in October on the Ukrainian border as well as the Nato naval exercises in the Black Sea that ran for most of last year.

These Nato talks will fail. Russia has agreed to wait ten days from the end of talks for a US written response to its demands. The Kremlin has made it plain that if the US rejects its key demand on Nato expansion limits then it will resort to “military/technical” means. We have made it abundantly clear that we don't believe an invasion of Ukraine is on the cards for many reasons, but I’m certain Putin has thought this through very carefully and will spring some very nasty surprises on the West as soon as the start of February if the talks are a bust. I’m afraid we are rapidly headed into a new Cold War standoff. I hope I'm wrong. 

This article first appeared as the blurb in bne IntelliNews’ EDITOR’S PICKS, a daily email digest of the best articles from the last 24 hours delivered free to your inbox. Click here to see the back issues and to sign up.