Russia's growing power is based on buying influence while Nato is stuck in the Cold War,
writes Fraser Nelson in an oped from London
It's easy to laugh at Vladimir Putin, to dismiss him as a Cold Warrior trapped in the 1980s. His nostalgia for the old Soviet Union, his fondness for ballistic missile testing and denouncing Nato in speeches seem to underline the image of an old KGB agent who can't bring himself to admit that the war is over.
At first, his behaviour just seemed odd. When he annexed Crimea, it seemed more sinister. But now, we ought to consider a third possibility: that we're the ones stuck in the past. That Putin is fighting a war of the future - and winning.
In the old days, Russians built and maintained an empire by sending tanks over borders. This was the Cold War that my wife's parents knew: they ended up fleeing Prague after dodging Russian bullets a few too many times. When that war ended, Nato was expanded to make sure it couldn't happen again.
The United Nations has rules based on the inviolability of borders. So, for example, if Russia invaded Cyprus to give its navy access to the Mediterranean then everyone - Uncle Sam included - would come riding to the rescue.
But Putin, now, would do nothing so gauche as to invade. He cuts deals instead: this week, he agreed a euros 2.5 billion loan for Cyprus. In return Russian navy vessels will be able to dock in its ports. This will lead to the extraordinary situation of Cyprus becoming a military hub for both Britain and Russia. We still have bases there - when budgets allow, RAF Tornados fly off to bomb Isil positions in Iraq. Their base abuts the Port of Limassol - so soon, British and Russian servicemen may be separated only by the colony of pink flamingos that divide Cypriot and British territory in Akrotiri.
It's quite a coup for the Kremlin. Cyprus was British until 1960; now it has been absorbed into Putin's new empire. It's not an empire that Nato, with its Cold War mindset, would recognise; it's not one that can be described by colouring in nations on a map. This is an empire of influence - far cheaper to acquire, harder to spot and easier to maintain. It doesn't cost much for Russia to provide 80 per cent of foreign investment into Cyprus, but with investment comes gratitude. Cyprus, an EU member, opposes sanctions on Russia - making the hard task of a common EU foreign policy that little bit harder.
The Cold War involved puppet leaders and an old-style empire that was so expensive to maintain that it eventually brought down the Soviet Union. Putin doesn't have puppets, but he does have buddies - politicians, usually in need of loans who want to shake things up. Take Marine Le Pen. She was in Russia last autumn and soon afterwards her National Front secured a euros 9 million loan from the First Czech Russian bank. She is still leading the polls for the French presidential election - if she wins, she'd be a powerful ally for the Kremlin.
Putin is growing quite good at spotting winners. He has long admired Syriza, the far-Left Greek party which was calling for withdrawal from Nato two years ago. It was given support and encouragement from Moscow and now their alliance is on full display. The Russian ambassador to Athens was one of the first visitors received by Alexis Tsipras upon his recent election. His energy minister, Panagiotis Lafazanis, has announced that "we have no differences with Russia and the Russian people".
Needless to say, Greece has joined Cyprus in condemning arms sanctions on Russia.
Putin's careful empire-building continues across Europe: the leaders of Germany's AfD were entertained by Russian officials last November; those of Austria's far-Right Freedom Party were in Moscow last year. Milos Zeman's campaign to be president of the Czech Republic was bankrolled by Lukoil. He won, and now dismisses the Ukraine crisis as a "civil war". Jobbik, now the third-largest party in Hungary, has been denouncing the United States as the "deformed offspring of Europe".
It's not that the Putin has put such ideas into people's heads; his strategy is to encourage the troublemakers. A fractious, weakened Europe is better than a united Nato.
Outside Europe, Putin's empire of friends is expanding all the time. He is warming up old friendships: five years ago, he called off the sale of air-defence missiles to Iran after American and Israeli protests.
This week, it emerged, the deal is back on the table. He was in Egypt this month to meet President Sisi and was given not just a red-carpet welcome but also an AK-47 upon arrival at Cairo airport. The choice of gift was a sign of the arms deals that are sure to follow - and with arms sales, of course, comes influence.
The final piece of this is Putin's energy empire, and the power he exerts over millions. Again, this week, has been reminding everyone how he can turn off the taps - threatening to cut the gas to Ukraine unless he's given a massive downpayment by Kiev, and muttering about the terrible "genocide" that would be created. And while the European Union is coming up with a grand plan to wean itself off the Kremlin's energy, it would take a decade or more to implement.
The last time Russia played hardball, America played back. This time, Barack Obama has concluded that while the Ukraine crisis may be a problem for Europe, it's not really one for America - so we're left to deal with this ourselves. But even Britain, one of the more hawkish countries, is trying to pretend that this isn't happening. David Cameron is good at minting strong words, but Britain's determination to play a role resolving the world's disputes is undermined by our ever-declining defence budget.
All this suits Putin perfectly. He can now pose as the leader of an indefatigable superpower. "No one should have the illusion that they can gain military superiority over Russia," he boasted recently.
Its army isn't so impressive - but, as Putin has discovered, it's not the size of an army that matters but willingness to use it. And if he were to make a move on Latvia, he wouldn't send tanks. A group of well-funded Russian-speaking Latvians would pop up, declaring they are discriminated against by a wicked, CIA-funded government. There would be a provocation of some kind, and they'd beg Russia for "protection". Mysterious men in balaclavas would emerge, and Putin would deny all knowledge.
Then what would we do? Nato has no real protocol: the alliance is dismally out-of-date and has been hopelessly late in responding even to the conventional trouble in Ukraine. Its members have no budget for entanglement. Cameron can give promises on spending for health, schools, foreign aid - but cannot commit to the basic Nato requirement of spending 2 per cent of GDP on defence. For the first time in years, the RAF is having to escort Russian fighters out of the English Channel as Putin tweaks our tail. Yet even now, we still can't commit to defence spending. Our strategy is to hope Mr Putin gets bored, and kindly goes away.
Recently, a British diplomat was quoted saying that Putin's new empire of influence is "something we and others are certainly looking at". That's good to know. But this is something that Putin has been looking at, and acting on, for years. He has changed the rules of the game, while we have been playing the old one.