Ukraine's uncertain future: JPMorgan warns of Russian sway

According to the centre, Europe is beginning to run out of weapons, Ukraine of soldiers, and the United States of patience, and therefore Ukrainian President Volodymyr Zelensky will likely be forced to accept an agreement with Russia this year. This will halt the fighting but will not result in a comprehensive peace arrangement.

At its current rate of gain, Russia will control all of Ukraine in about…118 years. So Putin will aim to cut a deal that is favourable to his overall goal to eventually control Kyiv, states JPMorgan Chase.

The durability of this agreement will depend on whether Putin will be satisfied with concessions from Ukraine and the West, and on the strength of commitments in the security sphere. These two factors are interconnected: the weaker the security guarantees Ukraine receives, the greater concessions it will have to make, such as agreeing to neutrality, demilitarisation, disarmament, or territorial loss.

JPMorgan Chase envisages four possible scenarios, with the probability of the best one for Ukraine estimated at just 15 per cent. In this option, the country would find itself in a situation similar to South Korea: Ukraine would not join NATO or regain all its territory, but a small number of European troops would be stationed in the country with American guarantees of military and intelligence support. Meanwhile, 80 per cent of the territory still controlled by Kyiv would embark on a path of greater stability, prosperity, and democracy.

Only a slightly worse scenario, similar to the situation in Israel, envisions lasting military and economic support without a significant presence of foreign military forces. Its chance, according to JPMorgan Chase, is 20 per cent. In this case, Ukraine would be able to defend itself and modernise militarily. Nonetheless, it would continually face the threat of renewed war. Putin would have to gain economic benefits, including the lifting of sanctions, as well as strengthened relations with the US.

Not overly favourable for Ukraine, but the most likely, according to JPMorgan Chase, scenario (50 per cent chance) would mean a situation similar to that in Georgia. "In the absence of both foreign troops and strong military support, Ukraine will experience ongoing instability, stunted growth and recovery, waning foreign support over time, and the effective derailment of its Western integration (i.e., EU and NATO membership), with gradual drift back into Russia’s orbit," the forecast reads.

The worst scenario would mean a situation similar to Belarus. In this version, whose probability JPMorgan Chase estimates at 15 per cent, the United States would leave Ukraine to fend for itself, and Europe would not take decisive action. Meanwhile, Putin would maintain maximalist demands, requiring the capitulation of Ukraine and its transformation into a vassal state. "In this scenario, Russia will have effectively won the war, divided the West, and irrevocably upended the post-World War II world order," JPMorgan Chase assesses.