STRATEGIC ENVIRONMENT  Union, even if long-term challenges remain, especially about the future viability of the Russian model. For the first time since 2013, the FIS situation report is therefore once again focussing on developments in Russia. The Russian leadership controls the state via a vast apparatus of government agencies vested with extensive powers to control the domestic situation, the economy and society. This apparatus is mostly led by close associates of the president with a proven personal loyalty to Putin. With this power apparatus consolidated internally and with a robust economy, which has continued to ensure the state’s financing despite the international financial crisis, the collapse of oil prices and the imposition of sanctions, the Russian leadership is now working to restore the historically and ideologically deeply-rooted Russian sphere of influence in Eastern Europe, from the Baltic Sea to the Black Sea. Growing Russian pressure in this area has already led to military escalation twice in recent years: in 2008 in Georgia and in 2014 in Ukraine, wars that have extended a chain of de facto Russian military outposts in parts of Ukraine, Moldova and Georgia. Russia's leverage in Europe is not limited to military instruments. it also includes economic influence by legal and criminal means and professionalised propaganda campaigns as well as attacks in cyberspace. This exertion of Russian influence extends far beyond Eastern Europe. Europe, preoccupied with its many and varied problems and once again thinking in increasingly national or even subnational categories, is struggling to deal with this pressure and to find common European and 16 SI TUATIO N R E P O RT 2018 | F I S international answers. In all probability, relations with Russia have not yet reached their lowest point. American-Russian relations remain at a dangerously low level. Based on the trend in recent years, further polarisation and militarisation as well as the establishment of new demarcation lines across Europe must be reckoned with, a process that – before it can possibly have a stabilising effect – carries a considerable risk of conflicts arising in areas where Western and Russian interests have not been demarcated. After the end of the Cold War, the armed forces of European states greatly reduced their national and alliance defence capabilities. In parallel, the US also cut its military presence in Europe significantly. While Russia's military resurgence is now already well advanced, corresponding measures by the West have so far failed to keep pace with this development. In an escalating crisis, Russia could therefore use military means to create facts on the ground along the Eastern border of NATO without the West currently being in a position to prevent it. The establishment of the status quo ante would then only be possible by further escalating the conflict. Although the FIS does not currently consider it likely that the situation will evolve along these lines, the risk that interstate conflicts will again be resolved by military means has increased in Europe, too. The conflict with Russia is not a temporary phenomenon, but a change with lasting effects in Switzerland's strategic environment. A crisis in this area between East and West – whether above or below the threshold of war – could, without much advance warning, become a ma-