Sixty years ago the Berlin Airlift highlighted the menace of Stalin's Kremlin. Forty years ago Soviet tanks crushed both the Prague Spring and any remaining illusions about the Kremlin's grip on the captive nations. Twenty years ago we began dropping our guard, as totalitarianism withered under Mikhail Gorbachev. Now it is time to acknowledge the inconvenient truth. Russia is back: rich, powerful and hostile. Partnership is giving way to rivalry, with increasingly threatening overtones. The new Cold War has begun - but just as in the 1940s, we are alarmingly slow to notice it.

The loudest alarm signal is Russia's predictable yet mystifying presidential election on March 2. Predictable because everyone knows who will win: Dmitri Medvedev, Vladimir Putin's polite, lawyerly sidekick; mystifying because the meaning of that victory is so unclear. Will Mr Medvedev be a mere figurehead? Will he stand down and allow Mr Putin to return? What does his stint running Russia's energy giant, Gazprom, one of the world's most corrupt, incompetent and sinister companies, tell us about his plans for the future? What does his rise mean for the clans of crooks and spooks whose murky feuds have increased so sharply in past months? Once a dead art, Kremlinology is now a lively and useful discipline.

Politics in Russia is a matter of life and death. Mikhail Khodorkovsky, once Russia's richest man, is on prison hunger strike in protest against the ill-treatment of his aide Vasily Aleksanyan. Mr Aleksanyan is confined in a filthy mould-infested cell because he refuses to sign a bogus confession incriminating Mr Khodorkovsky. His judicial torture, including denial of medical care, which has blinded him, has been condemned by the European Court of Human Rights. It reads like something from Dostoyevsky, not a factual account of prison conditions in supposedly one of the world's top eight industrialised democracies.

That doesn't bother most Russians. Mr Putin is wildly popular; so is Mr Medvedev. Mr Khodorkovsky and other former “oligarchs” are seen as despicable emblems of the 1990s, a decade in which Russians feel they were swindled at home and humiliated abroad. Mr Putin has brought both stability and pride. For now, democracy has failed: most Russians say they agree that the media should be controlled and that the opposition should not be allowed to contend for power.

Those feelings are complex. They are partly the result of the state-controlled media's propaganda. They also truly represent tragic misunderstandings and missed opportunities in the Yeltsin years, when oil prices were low and Russian governments struggled with crippling foreign debts. Mr Putin has been lucky - with oil at nearly $100 a barrel, Russia is bound to prosper. Yet he too is a product of the 1990s, an unemployed ex-spy who became a top official in the Yeltsin Kremlin. His denunciations of that era neglect to mention its strengths: press freedom, and also economic reforms such as privatisation and price liberalisation from which Russia has hugely benefited.

Communism has gone, but in its place has come “sovereign democracy”, a potent cocktail of self-righteousness, nationalism and xenophobia that fuels the Kremlin's power grab abroad. In the “swing states” of Eastern Europe - Bulgaria, Latvia and Moldova - we are already losing the new Cold War. We have avoided catastrophe in Serbia by a hair's breadth. The great engines of EU and Nato expansion, which brought half a continent into our orbit after the collapse of communism, have stalled.

But it is not just “faraway countries of which we know nothing” that are at stake. Russia plays divide and rule with the West, ruthlessly using our democratic politics and open economies to undermine us. It has brazenly hired Gerhard Schröder, the former German chancellor, to promote its biggest energy project, Nord Stream. This is a hugely expensive and strategically vital gas pipeline on the Baltic seabed that will bypass Poland and deliver gas straight to Germany. Like a rich and powerful man who becomes pathetically dependent on heroin, Germany is mainlining on Russian energy. The new pipeline hooks up addict and pusher directly. Instead of urgently diversifying away from gas and to other suppliers, the Netherlands, Italy and Austria are following the same path.

Russia has cowed and muzzled the Organisation for Security and Co-operation in Europe, supposedly the Continent's main democracy-promoting and election-monitoring body. It has nobbled the Council of Europe, a talking shop that is supposed to be the custodian of human rights. The British Conservatives, in bizarre alliance with Mr Putin's United Russia party, came within a whisker of electing a former KGB man and Kremlin propagandist, Mikhail Margelov, to the presidency. At its summit in Bucharest in April, Nato's European members are all set to kowtow to Kremlin pressure and give a cold shoulder to Georgia's bid to move towards membership. The EU can not even summon the willpower to liberalise its internal energy markets, let alone counter the Kremlin's ruthless use of cheap energy deals and lucrative pipelines.

Our biggest weakness is money. During the old Cold War, doing business with the Soviet Union was a rare and highly suspicious activity. Now bankers, lawyers, consultants and spin-doctors (and even, it is whispered, politicians) flock to take 30 silver roubles for services rendered, even when they are privately disgusted by the source. Until that changes, we have little chance of resisting the Kremlin - and even less of persuading ordinary Russians that their corrupt, cynical, brutal and incompetent rulers are harbingers of disaster, not triumph.

Edward Lucas is author of The New Cold War: how the Kremlin menaces both Russia and the West

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