Ratcheting Up the Sanctions on Russia

written by On April 30, 2014 in 2010-2016, Europe, Ukraine, WIIS Blog

By Elizabeth Pond

Yes, the West was right not to send NATO soldiers into Ukraine and sleepwalk into another world war, especially in a theater where Russia has both local military supremacy and a vastly higher stake than the West does. But no, President Barack Obama was wrong to relegate the Ukraine crisis initially to a low-rank “regional” priority on the vast geopolitical scale.

What is now hanging in the balance on this historically bloody continent is nothing less than the miraculous 70-year reconciliation and absence of war and intimidation in heartland Europe.

For once, alarmed comparisons with 1938 rather than with the 1914 slide into World War I are not exaggerated. Russia’s annexation of Ukraine’s Crimea last month was Europe’s first land grab by a strong military state of a weaker neighbor’s territory since 1945. Russian President Vladimir Putin is no Adolf Hitler. But his bellicose justification of the Crimean takeover—as Moscow’s “protection” of all ethnic Russians and Russian speakers in Ukraine and elsewhere—eerily echoes Hitler’s specious protection of ethnic Germans by seizing Czech Sudetenland in his first step toward World War II. The newest Central European members of NATO that joined the transatlantic alliance ten years ago feel especially threatened.

Russia’s acquisition of Ukrainian Crimea by military muscle violated both international law and Moscow’s specific Budapest Memorandum assuring of Ukraine’s security in 1994, when Ukraine went non-nuclear and ceded its large cache of Soviet nuclear weapons to Russia. With his annexation of Crimea last month, Putin slammed the door on the whole rules-based international system that three generations constructed in Europe to replace war-war with jaw-jaw.

Putin’s reversion to might-makes-right threatens Western norms—and the very foundation of today’s globalization—far more fundamentally than any mere challenge to the West’s material interests would have done. The expanding operation of well armed pro-Russian forces in spearheading takeover of scattered security posts in eastern Ukraine gives every indication of following the Crimea scenario in targeting Ukraine’s two oblasts of Donetsk and Luhansk for the next step in dismembering Ukraine.

For this reason, the West’s course correction this week in toughening up sanctions against Russia is welcome. Even in the absence of any mass invasion of Ukraine so far by the 80,000 Russian troops now feinting attacks on three of Ukraine’s four sides, the NATO allies are increasing the financial constraints they placed on access to Western bank accounts by some Russian oligarchs and politicians close to Putin after the annexation of Crimea.

The US extended sanctions to target seven persons and 17 companies said to be close to Putin’s inner circle. Simultaneously, European Union members provisionally imposed asset freezes and visa bans on another 15 Russians. Both held in reserve the next step of escalation in imposing sanctions on entire sectors of the Russian economy.

The hostage-taking of unarmed international observers in Slovyansk in east Ukraine last weekend pushed the Europeans toward  the harder American line, but not far enough to stop American criticism of the weaker European stance. German Foreign Minister Frank-Walter Steinmeier called “repulsive” the separatists’ public exhibition of bound and blindfolded Ukrainian security service officers in their underpants with bloody bandages on their heads. Yet even that spectacle was not enough to unite the 28 EU members on a list as extensive as the American list.

Will this week’s raising of long-term financial costs for Russian intimidation of Ukraine  suffice to deter a full Russian invasion of that country and stop the seizure of security posts in more than a dozen towns and cities so far by pro-Russian gunmen in Donetsk and Luhansk oblasts?

Probably not. Uncertainty about the impact of sanctions may already have triggered sober forecasts of potential capital flight from Russia of up to $150 billion this year, along with an economic decline of up to 1.8 percent.

And Standard and Poor’s may also have downgraded Russia’s credit rating to just above junk level. Yet this grim outlook has not softened Russia’s threat to a Ukraine that Putin regards as having betrayed Russia by rejecting Moscow’s tutelage and seeking EU sponsorship instead. Financial sanctions take a long time to bite and therefore have little impact in the short term.

Ominously, what might actually deter Russia’s threatened invasion—by making it unnecessary—is the very success so far of Moscow’s efforts to deny control of east Ukraine to the caretaker government in Kiev. The pro-Russian separatists have occupied only those dozen posts in the past three weeks. They have not been able to attract more than a thousand or so supporters when they have tried to stage rallies in the oblast capitals. Yet this relatively small number of provocateurs has created havoc and prevented Ukrainian security forces from retaking those few posts, in part by surrounding themselves with Ukrainian grannies who are nostalgic for the old Soviet days. The Ukrainian forces refuse to shoot their way through the babushkas in order to arrest separatist ringleaders.

Most important, perhaps, the provocateurs have time and again neutralized the local police, who stand by passively as they watch the rebels capture government buildings—or the attempted assassination of the mayor of Ukraine’s second-largest city of Kharkiv.

All this gives the rebels a momentum and an air of victory, especially given the recent effectiveness of similar tactics in priming Russian navy retirees on the Crimean peninsula to demand annexation with Russia. The militant separatists in Slovyansk have proclaimed a Donetsk People’s Republic, called a “referendum” on it for May 11, and easily kept Ukrainian security forces at bay. They still hold some 40 Ukrainian and international hostages—including OSCE peacekeepers and journalists—with impunity.

The longer the militants continue unchecked, the more invincible they look to local inhabitants of both Russian and Ukrainian ethnicity. And the more invincible they look, the more residents will hedge their bets and erode the majority that until now, even in the east, has supported keeping a unified, Europe-oriented Ukrainian state.

At this point the immediate goal for the Kiev government is simply to survive until the snap May 25 presidential election. If that can be carried out, the caretaker government in Kiev appointed by parliament three months ago as Yanukovych fled the country will acquire more legitimacy. Russian commanders would probably not want to invade Ukraine after the end of May with the raw recruits they would be working with then, or to face what could turn into an extended guerrilla war that might remind them of Afghanistan.

The new American and European sanctions by no means ensure the survival of the interim Kiev government. A long period of Russian provocations to destabilize the Kiev government can be expected.

Nonetheless, toughened Western sanctions on Russians close to Putin are the least worst policy. They can make clear the increasing future costs to Russia of continuing to foment unrest in eastern Ukraine. They can demonstrate Western resolve to help the state of Ukraine begin the hard task of resurrecting its economy, building functioning institutions, and establishing rule of law.

Under Putin’s present existential threat both to the state of Ukraine and to the post-World-War-II rules-based order in Europe, sanctions are the best hope.


Elizabeth Pond is a Berlin-based American journalist and author of The Rebirth of Europe. She has reported on Ukraine over the past three decades.




A version of this blog will be posted later today on the World Policy Journal site at http://www.worldpolicy.org/blog,