Nearly a year after Russia invaded Ukraine, it’s hard to imagine Vladimir Putin winning the war. But a lasting peace is also not in sight. Europe shows that it is doomed to an arms race and further economic disengagement from its neighbor, which may continue even if the Russian president leaves office. However, the price of additional defense spending, loss of business and restoration of Ukraine is much higher than the Russian victory.

The most likely scenario is that neither Russia nor Ukraine will prevail on the battlefield, and there will be no formal peace agreement for a long time to come. After all, it will either be the surrender of Ukrainian territory, which it itself cannot accept, or Russia will surrender all the territory it seized, including Crimea, which Putin will not do. This means that the two sides will either continue to fight, or there will be a “frozen” conflict, as between North and South Korea. Any of these outcomes will be costly not only for Ukraine, but also for the rest of Europe. The Kremlin, whose budget deficit widened to $25 billion in January, will soon find itself unable to shield ordinary Russians from these spending. The population will pay higher taxes, lower welfare costs, or inflation. Meanwhile, Putin will throw more young soldiers into the fight. As a result, the leakage of scientific and technological potential, which began a year ago, will continue. Ukraine will bear the brunt of the conflict in terms of loss of life, damaged buildings and economic hardship. The EU and the UK will also share some of the burden, as it has already been urged to find an alternative to Russian gas. Although natural gas futures prices for next winter are down from last year’s peak, they are still four times higher than they were two years ago. This caused inflation and undermined the competitiveness of the industry.

The other big question, finally, is what happens if Putin dies or becomes childless. There are four prevailing scenarios: a) Russia makes a democratic transition like West Germany did after the war, b) cuts off from the rest of the world like North Korea, c) organizes to take back the territory when it gets stronger, or d) dissolves.