“What was that flying circus all about?” says one of the many dead-eyed, cynical functionaries in Sergei Loznitsa’s macabre new social-realist portmanteau movie about the civil war in eastern Ukraine; the film is set in the Donbass region. The echo of Monty Python is maybe deliberate. This man had just received a deputation from a devotional group wishing for cash for the public veneration of a certain icon, part of the religious nationalism that is fuelling the split between pro-Russian Putinites and independent Ukrainians whose sympathies are with Europe and the west. It is a vicious conflict in a place where there are still memories of the second world war, tribal loyalties concerning the Russia that saved Ukraine from Nazi Germany and fascism – but also, on the other side, the Stalinist terror-famine visited on Ukraine before the war.

The extraordinarily prolific Loznitsa (whose previous picture A Gentle Creature was in Cannes only last year) has created a freakish kaleidoscope of bizarre scenes and nightmarish vignettes. Here is the horror, the violence, the bureaucracy and the Orwellian propagation of fake news and an eternal war hysteria to nourish patriotism. The scenes are fragments from an explosion of fear. This is the world of Novorussia, loyal to the motherland.

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Donbass starts with what looks like actors being made up, grumbling and chatting, ready for an appearance in a film. When they are ready, the actors are led across what looks like a very realistic urban war zone in an action movie – but actually they are bit-part players in a fraudulent TV news broadcast, playing shell-shocked civilians whose job is to denounce the outrages perpetrated by the “fascist” traitors. And at the end of this, these extras will themselves need to be got rid of. Elsewhere, at a local council meeting, a minor official has a bucket of shit poured over his head by a woman complaining about the way she has been libelled in a newspaper report. A free press, or an inconvenient and unpatriotic press that is insufficiently enthusiastic about the war, can be attacked with impunity – and so can those hapless politicians who appear to defend it.

A blandly sycophantic state official takes careworn hospital workers on a tour of a crumbling and chaotic medical facility, boasting of how it has been cleaned up and a certain corrupt chief doctor shamed and fired, but a later scene reveals him to be in cahoots with another official. We see a grim underground shelter for civilians seeking refuge from the shelling in the city. A German journalist attempting to interview the various soldiers is fiercely attacked for his links to the great fascist enemy: “If you aren’t a fascist. then your grandfather was!” barks one. At a roadblock, a woman officer orders all the civilians off the bus and harangues them for being supposed pro-fascist traitors; evidently the toxic masculinity of war extends everywhere. A hapless businessman is shown not quite comprehending that his car is being requisitioned by the army. In another scene, someone is subject to the traditional, brutal Russian military punishment of running the gauntlet, made to stumble past a line of soldiers who beat him with sticks, as in Tolstoy’s story After the Ball.

Most horribly, there is a Nazi-style “placard shaming” scene in which a supposed traitor, accused of being part of a foreign-backed “extermination squad”, has a sign revealing this Sellotaped to his chest and is tied to a lamppost where passersby are encouraged to jeer, spit, and throw things at him, pose for sadistic selfies with him, and finally beat him to death. It is an almost unwatchably grisly sequence, reprised in a later grotesque scene when a soldier gets married and his rowdy comrades show up at the reception and show him the smartphone video of this man being tortured.

Some of Loznitsa’s grotesquery doesn’t quite work, or works in ways that only make you to want to know more, to sympathise more, about the human victims involved. But there is an incredible kind of cold energy and steely control in the way all this has been orchestrated. After the film had finished, I realised what it reminded me of: Emir Kusturica’s 1995 film Underground. Loznitsa’s icy, non-musical film is the opposite side of the coin to Kusturica’s roistering vision of the chaotic war in former Yugoslavia. Donbass is a flawed, but vivid achievement.