The European Union, at the forefront of the hostilities between Russia and the West, is in a bind.
It has belatedly adopted Ukraine as one of its own. Yet the EU economy is so frail, thanks to its beggar-thy-neighbor economic policies, that it is reluctant to use financial and trade sanctions to punish Russia for occupying Crimea and threatening to occupy the eastern part of Ukraine.
Even if the EU appeases Russian President Vladimir Putin’s territorial expansionism and allows Crimea to be annexed, it is going to pay a heavy political and economic price. Had German Chancellor Angela Merkel, who drives the European enlargement project, and the International Monetary Fund been more clear about wanting Ukraine to eventually join the European Union, and more generous in their dealings with the nascent democracy there, they would have saved the Ukrainian people a lot of suffering, the world a deal of agony -- and the EU a lot of money.
In February 2013, EU negotiators offered Ukrainian President Viktor Yanukovich a hard bargain: If Ukraine wished to sign a free trade agreement that would be a prelude to joining the EU and receive $805 million in immediate aid, it must quickly improve its justice system and make structural changes to the economy.
What the EU negotiators did not tell Yanukovich was that it was prepared to offer a further $26 billion once Ukraine put its house in order.