Ukraine crisis forced into suspended animation for 2015

December 29, 2014

By Pierre Briançon

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

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Western economic sanctions against Russia were expected to have no effect. Yet they have caused much pain. They were also meant to have a clear goal. So far, they don’t.

“The war that dare not speak its name,” to quote New York University professor Mark Galeotti, is a problem both for Russian President Vladimir Putin and for European leaders who have struggled to keep a united front since Russia moved to annex Crimea – and must decide in March, 2015 whether to roll over their sanctions against Moscow.

Defining a strategy beyond sanctions is all the more important for Europe now that Russia is sending all the signals that it has no intention of retreating from its power-flexing policy, from the Baltic to the Balkans. Moscow is hinting that it can take the pain from prolonged economic isolation – at least for the next couple of years. Even before the steep fall of oil prices, and the subsequent crisis of the rouble, that was a highly optimistic view, but the implication of the Kremlin’s position is clear: don’t expect any short-term change.

The harm done to a Russian economy already immersed in deep problems before anything happened in Ukraine has been substantial. The rouble fell 40 percent against the U.S. dollar in 2014. Capital flight may have topped $130 billion over the same period, according to official estimates. The Central Bank of Russia tried without success to defend the rouble and keep inflation under control, taking its key interest rate to an unprecedented 17 percent, and putting a brake on growth. Meanwhile, sinking oil prices are pushing Russia’s resource-dependent economy ever deeper in the hole. Gross domestic product will barely increase in 2014 and shrink by 4.5 percent in 2015 if oil prices stay around the $60-a-barrel mark, according to the central bank.

The European economy is hurt in return. Some countries are hit by Putin-ordered embargoes on food or clothing imports. Others are worried about their energy dependence on Russia. Western diplomats and businessmen think there’s little chance Moscow will ever cut off gas to Europe. But no one has ever accused Putin of being predictable.

This state of affairs will continue as long as Europeans don’t agree on what they want to achieve. Is Putin open to a deal that would ease tensions in eastern Ukraine? Or has he embarked on a long game of brinkmanship from which he will not retreat whatever the economic cost?

The answers to these questions lie with the Kremlin. But as long as Europe lacks a clear objective, the Russian president will be left to misinterpret mixed messages – and the Ukraine crisis remain in suspended animation.

11 comments

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Same scenario that Georgia and Moldova are dealing with due to Russian interference. Breakaway “republics” that are nothing more than hubs of illicit trades and thorns in the sides of their neighbors.

Posted by smokeymtnblues | Report as abusive

The new USSR must give up the occupied territory of Crimea and Eastern Ukraine; Putin, as KGB director, will not do this; he and his real supporters have their wealth stowed, safe from whatever happens to Russia’s economy.

Posted by SixthRomeo | Report as abusive

“Western economic sanctions against Russia… were also meant to have a clear goal. So far, they don’t.”

How is Russia removing its troops and its aid for pro-Russian separatists from Ukraine not a clear goal?

Posted by FUD312 | Report as abusive

Truth be known.

The conflict did not start in Crimea.

The conflict started in Kiev; with the west in sighting the overthrow of a democratically elected government.

Peace be with you All.

Love
Omega

Posted by Lovetwo | Report as abusive

The best “strategy” for the west is to quit pussy-footing around and arm the Ukrainian military to the teeth. We need to send them our best weapons systems in significant quantities along with NATO advisers to show their soldiers and airmen how to use them. We also need to provide funding and heavy equipment for the construction of a formidable defensive barrier along the entire length of the Russian/Ukrainian border.

The Ukrainians aren’t asking us to do their fighting for them. All they’re asking for is the means to defend themselves.

And for all the navel-gazers out there who can’t wait to shout “We shouldn’t send arms to Ukraine. No matter how much we send to the Ukrainians, the Russians will always have more!”, I would reply that the objective isn’t to enable the Ukrainians to be able to defeat Russia in a full-blown war. The objective is to enable them to inflict casualties on the Russian army that the Russian public will not tolerate.

Posted by Danram | Report as abusive

As the US and NATO continue to do their best to bastardize Putin and create conflict between Russia and the west.

Posted by zac48 | Report as abusive

I agree with FUD312 — the sanctions have a clear goal. the problem is that not all European nations are willing to enforce them to the level which would achieve this goal.
of course Putin is not ’embarked on a long game of brinkmanship from which he will not retreat whatever the economic cost’ … he will obviously not survive the collapse of the Russian economy.
the western democracies will exercise patience whether or not their leaders would like to or not … since all countries must be kept (more or less) on board.
further sanctions are required as well as the careful arming of the Ukraine army. these both seem to be on the cards.

Posted by PeterLP | Report as abusive

Crimea only reunited with Russia same way as East Germany reunited with the West.

Posted by Macedonian | Report as abusive

Dear Danram

Peace be with you All.

Love
Omega

Posted by Lovetwo | Report as abusive

Former VP Cheney’s Crowning Glory was to be project Helena gas pipeline from Vladimir Putins great Outback including all countries ending with the letters, “Stan,” all the way to Europe.Enter the Bush Admin. offering Patriot missile Batteries and a new Iron Curtain to any country willing to oppose Putin; For the price of two bottles of Stoli and a carton of Marlboro’s Putin brought the Big oil Bandit Brothers;”W,” and ,”Dick,” to their knee’s….Where are the Diplomats of yesteryear…Born on Olympus….Can walk on water(Briefly)And Quote Emily Post and Sir Winston Churchill….. Adnosium

Posted by DJSanDiego | Report as abusive

European countries need to take a hard look at the benefits and also the bad effects of the sanctions. Please do NOT “go along to get along” with the US and what that government wants. What is good – or so our US government says is good – for the US may not be in the best interests of other countries.

Many of us realize that countries closer to Russia face a different set of problems with Putin than we in the US do. Plus, we do not seem to realize that the Russian people have been through much worse that these sanctions and they are tough, having to sacrifice much in the past.

Posted by AZreb | Report as abusive