In Dealing with Putin, Sanctions Offer Best Bet

By Elizabeth Pond

Though 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, President Barack Obama was wrong to relegate the Ukraine crisis initially to a low-rank "regional" priority. Hanging in the balance on this historically war-prone continent is nothing less than the miraculous peace in heartland Europe that has lasted for the 70 years following World War II.

The alarmed comparisons between Ukraine’s crisis and Germany's first step toward World War II in 1938 are not exaggerated. Russia's annexation of 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 justification of the Crimean takeover—"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. 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 . The memorandum assured Ukraine's security in 1994, when Ukraine became 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 rules-based international system in Europe that was constructed over three generations 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 occupying scattered security posts in eastern Ukraine gives every indication that Putin is following the Crimea scenario in targeting Ukraine's two oblasts of Donetsk and Luhansk as the next step in dismembering Ukraine.   

For this reason, the West's course correction this week in toughening up sanctions against Russia is beneficial. Even in the absence of any mass invasion of Ukraine so far by the 80,000 Russian troops gathered on three of Ukraine's four sides, the U.S. and Europe are increasing the financial constraints they first on members of Putin's entourage after the annexation of Crimea. The U.S 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 people. The hostage-taking of unarmed international peacekeepers in Slovyansk in east Ukraine over the weekend pushed the German government somewhat toward the harder American line, but not far enough to stop the American criticism of the weaker European stance. Foreign Minister Frank-Walter Steinmeier  called the separatists' public exhibition of bound and blindfolded Ukrainian security service personnel in their underwear with bloody bandages on their heads "repulsive." Yet even that spectacle was not grisly enough to unite the 28 EU members on a new sanctions list as extensive as the American list.

The question remains however, will this week's raising of financial costs be enough to deter a full Russian invasion of Ukraine and stop the occupation of security posts in more than a dozen towns and cities so far by pro-Russian gunmen in Donetsk and Luhansk oblasts?

The answer is, probably not. Uncertainty about the impact of sanctions may already have triggered sober forecasts of a potential capital flight from Russia of up to $150 billion this year, along with an economic decline of up to 1.8 percent. Additionally, Standard and Poor's may also have downgraded Russia's credit rating to just above junk level. However, financial sanctions take a long time to bite and therefore have little impact in the short term. Yet, even this grim outlook has not softened Russia's threat to a Ukraine that Putin regards as having betrayed Moscow by rejecting Russian tutelage for EU sponsorship.

Ironically, what might actually deter Russia's threatened invasion—by making it unnecessary—is the very success so far of Moscow's efforts to deny full control of East Ukraine to the caretaker government in Kiev. The pro-Russian separatists have occupied only a dozen posts in the past three weeks. Nor have they been able to attract more than a thousand or so supporters when they have tried to stage rallies in the oblast capitals—or, as over the weekend, capture the Donetsk oblast radio and TV broadcaster temporarily. Regardless, this relatively small number of provocateurs has created havoc and prevented Ukrainian security forces from retaking those few posts by surrounding themselves with Ukrainian grannies who are nostalgic for the old Soviet days—and whom the Ukrainian forces refuse to shoot in order to arrest separatist ringleaders.

This gives the rebels momentum and an air of victory, especially given the recent effectiveness of such tactics in priming Russian navy retirees on the Crimean peninsula to demand annexation with Russia. Separatists have just seized another city hall and police station in Kostyantynivka in eastern Ukraine. The militant separatists in Slovyansk have proclaimed a Donetsk People's Republic and called a "referendum" for May 11. They still hold some 40 Ukrainian and international hostages—including Organization for Security and Co-operation in Europe (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 has supported keeping a unified, Europe-oriented Ukrainian state.

If a Russian invasion can be deterred for whatever reason until the snap May 25 presidential election, the period of greatest immediate danger will have passed for Ukraine. The caretaker government in Kiev appointed by parliament three months ago as Yanukovych fled the country will acquire more legitimacy. Russian commanders will probably not want to invade Ukraine with the raw recruits they will be working with then, or face what could turn into an extended guerrilla war that might remind them of Afghanistan.

These new sanctions do not assure success for the West. A long period of Russian provocations to destabilize the Kiev government can be expected. A reminder of this has just come in the critical shooting of Kharkiv mayor Hennady Kernes by unknown assailants. He had many enemies as an earlier ally of ex-President Yanukovych who recently switched to support the Kiev interim government.

For now, toughened Western sanctions on Russians close to Putin can make clear the increasing costs to Russia of continuing to foment unrest in eastern Ukraine. They can demonstrate Western resolve to help the state of Ukraine survive until the election, when it can then begin the hard task of resurrecting its economy and making urgently needed institutional reforms.

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, a Berlin-based American journalist, has covered Ukraine periodically over the past quarter century.

[Photo courtesy of World Economic Forum]

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