NATO Falls Apart - The Game

My long term commitments have shifted a bit recently. so I found myself with a bit of time on my hands. This is a rarity that doesn't happen too often. However, it does occur from time to time, so I always have in mind a list of things that I would like to do if the tempo weren't so pressing. High on my list of things to do was to revisit The Belarussian Right Hook (more details). To recap, the premise of the game was to consider the possibility that Russia could use the cover of joint exercises in Belarus to launch an operation to tidy matters away in Ukraine.

When we played the game before, we generated some interesting results, but I was left dissatisfied with the game on a number of levels. I felt that the Russian forces grouped around Brest in Belarus at the start of the game should have been deployed at an earlier stage, and I also felt that the Russian reinforcements from the Central and Far Eastern Military Regions ought to have been brought into the game a lot sooner. This version of the game encompassed both of those features. The Russian 20th Army Corps, located in Belarus, was tasked to be the first Russian unit to move. The reinforcements from the Central and Far Eastern Military Regions were permitted to enter the game in Turn 1 (in the first three days), if the Russian player had sufficient movement allowance to effect that.

We retained the complications of the Blue Team player - a complicated structure involving NATO members, EU members who are not members of NATO, and Ukraine and Moldova, who are neither members of NATO nor the EU. We added the complication that elements of the EU Nordic Battlegroup - essentially Sweden and Finland - could only enter the game via the ports of Riga or Tallinn, if they were not under Russian control. We retained the rules regarding Belarus - for it to be on the winning side, regardless of who that might be. And we kept the rule that the nuclear threshold would not be passed.

The purpose of the game was to produce a timeline that we could use in our sequence of nested games. We will publish that timeline in a future post, including reactions from around the world to give us a global perspective to unfolding events in Europe.

Did we achieve something useful? It's hard to answer that question, but we did achieve an interesting result - by D+21, three weeks after the first Russian incursion into Ukraine, NATO imploded. The sequence of events were a lukewarm response to the initial Russian incursion into Ukraine. This encouraged Russia to undertake a Blitzkrieg in the Baltic States. Riga and Tallinn were occupied within three days. The European NATO forces were committed piecemeal, relying heavily on German leadership. First the German, and then the Polish armies were defeated in the field, and NATO couldn't survive the political fallout resulting from those defeats. Russian forces occupied Vilnius, and at that point we called a halt to the game. 

The game provided us with some hard questions that we will explore in a future post. For now, we can place a marker that three avenues of approach suggest themselves. First, how fragile is NATO politically? In the game, NATO fell apart through political squabbling. When things started to go badly, the less committed nations started to weaken their contributions to the collective effort. Second, at what point should NATO become involved? There is an argument that had NATO become involved when the Russian 20th Army Corps besieged Lviv, the blitzkrieg into the Baltic States would have been much harder to achieve. If either Riga or Tallinn had not fallen, then Sweden and Finland could have become involved. Third, just how corrosive is the European skimping on defence spending? How far has the desire for budgetary savings impaired the effectiveness of the European NATO armed forces? We shall look at these questions at greater depth in a future post.

This is one future that we hope not to happen. It suggests a number of courses of action that we can take in the present to avoid that future. It is of some comfort that some of those measures seem to have been taken, but that is a different story for another day.

Stephen Aguilar-Millan

© The European Futures Observatory 2021

What happens when generation rent ages?

We are all growing older. We are growing older as individuals (people always have) and we are growing older as a society. What is different about the current trend towards ageing is that it is becoming a societal as well as an individual feature. As a societal feature, it contains all sorts of problems that we haven't encountered before and for which the welfare state is ill prepared. The welfare state is poorly prepared on two counts - for the volume of numbers of aged people in the near future and for the novel situations that they will bring with them.

Let's deal with the novel situations first because they are likely to be more pressing. In the UK, the number of private rental tenants aged between 45 and 64 has doubled in the past two decades. In the next ten years or so, many in this cohort will reach state retirement age. Their personal financial circumstances when they reach retirement age, are likely to be of concern. In its construction, the welfare state rested upon two assumptions. First, that elderly renters would occupy social housing rather than the private rental market. Second, that the private rental market would be used mainly by younger renters prior to them getting on to the housing ladder. These two assumptions can now be called into question.

To begin with, there has been a dramatic decline in the social housing rental market since 1980. Starting with the sale of the council housing stock and exacerbated by the reduction in social housing new builds, the stock of available social housing has fallen considerably in recent decades. From about 5 million units in 1980, the social housing stock has fallen to between 1.5 and 2 million units today. In the same period, the population of the UK has risen from about 56 million in 1980 to about 65 million today. There are far fewer units of social housing to accommodate many more people. Just as the population started the ageing process, the number of units of social housing has fallen, forcing larger numbers of elderly people into the private rented sector.

In the private rented sector, this ageing population of private renters are competing with increasing numbers of younger renters. In the two decades from 2000 to 2020, the number of 25 to 34 year olds privately renting has increased by two and a half times. The average age of the first time buyer in the UK has risen from 26 in 1980 to 31 today. This is all having an impact on the private rented sector. Housing is scarce and expensive. This trend is one seen across Europe and North America, not just the UK.

If these core assumptions of the welfare state no longer hold, then they have a consequential impact on other aspects of the welfare state. The way in which the actuarial profession structure their forecasts of how much is needed in retirement assume a pathway where a person buys a house on mortgage, which has been repaid by retirement. The core assumption is that the retiree has zero housing costs. On this basis, Royal London calculated in 2018 that a retiree would need a pension pot of £260,000 to maintain a median salary. If rental costs are added to the retiree's needs, then a pension pot of £445,000 would be needed. Britons are currently nowhere near the smaller figure, let alone the larger one.

This suggests a future in which the older private renters could clock up significant rent arrears, face eviction from housing, and could fall back on the state for assistance. The social infrastructure, outside of the adult care sector, just isn't there. The situation is worsened by the prospect of the other feature of societal ageing - the sheer volume of numbers of old people needing assistance at the same time. Not only will the state face an intractable problem surrounding the housing of the elderly it will also face the question of placating larger numbers of articulate and older citizens who are ready to exercise their vote.

All of this suggests a future in which there will be a much larger role for the state than we are accustomed to. Greater levels of financial assistance will be needed for housing, healthcare and adult social care. Not only will the levels of assistance be greater, but also the numbers requiring assistance will be much higher too. How this will all be paid for is anyone's guess. It does suggest a fundamental restructuring of the welfare state is likely this decade. So, what happens when generation rent ages? Public spending goes through the roof! (Pun intended).

Stephen Aguilar-Millan

© The European Futures Observatory 2021