Sanctions on Russia will cost less than inaction

April 17, 2014

By Pierre Briançon

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Vladimir Putin has set the stage well for the first international talks on Ukraine. Armed pro-Russian separatists have seized buildings in several eastern Ukrainian cities. Their uniforms and weapons suggest they are equipped by the Russian army, if not part of it. The rebels’ success has shown that the government in Kiev is not in control of the country – not even of its own security forces.

It’s far from certain that Putin wants to annex part of all of Ukraine, Crimea-style. He has already reached his goal: he has demonstrated that Ukraine doesn’t have a real government, after encouraging Russian-speaking separatists and drowning eastern Ukraine with relentless propaganda on Russian-language TV channels. Those are techniques of agitation and provocation taken from the best old-style KGB handbooks.

Russia’s stated goal for Ukraine is “federalisation” – wide regional autonomy that would result in a de facto split of the country, with the eastern half under Moscow’s influence. Putin has backed his demand with open threat of military intervention to “protect Russian speakers.” He hopes that Europe and the United States will cave in, fearful of the consequences of a full-blown economic war.

In the talks, due to be held in Geneva on April 17, the U.S. and Europe will only threaten tougher sanctions on Russia. The U.S. position is important politically but doesn’t matter much in the real world: severe, Iran-style sanctions would cost the American economy little. Europe, on the other hand, still depends on Russia for an important, albeit declining, part of its energy needs – and also for a bit of trade or, in the case of the City of London, finance.

Serious economic sanctions would inflict incommensurately more pain on Russia, which was already entering a serious crisis, than on Europe itself. But the EU is pain-averse. So it is playing legalese, saying it must wait for overt signs of Russian intervention before it acts.

Such wavering needs to be set against the price Europe would have to pay later for a divided Ukraine on its border, dominated by an expansionist Russia emboldened by Western weakness. If Putin is to be stopped, the sooner the cheaper.

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