The Kremlin’s next strategic move might be to wait things out until the onset of winter, when both Ukraine and its Western supporters will be forced to bargain from a position of weakness.
Russian President Vladimir Putin, left, and Russian Defense Minister Sergei Shoigu, center, use binoculars during a parade marking the country's Navy Day in Severomorsk on July 27. Photo: AP
The sanctions imposed by the EU and U.S. have been designed to hit Russia at its weakest spot - its economy, which is still badly in need of modernization. So far, the Kremlin hasn’t been harsh in its response to the sanctions. Its ban on the import of agricultural goods from those countries which have imposed sanctions on Russia seems to be not so tough.
Rather than seriously retaliating, Russia has hinted that gas prices could rise and that it might consider more extensive steps that go beyond just selectively banning imports from certain European nations. Wider counter-sanctions could further weaken Russia’s economy and, thus, seem inappropriate at this point.
At same time, yielding to sanctions is not an option, as Russia’s actions in Eastern Ukraine are a natural result of global structural changes and conflicting national interests, rather than the performance of one “misbehaving” state or person. Consequently, the horrible MH17 incident is another unfortunate development for Russia, but it will not change the geopolitical status quo. Moscow will continue to work for a more favorable outcome from the current crisis, launch a number of largely symbolic blows against its adversaries and, ultimately, try to re-establish normal relations with Europe.
Since 1990, Russia has faced a slow but constant expansion of NATO and EU frontiers eastwards, gradually minimizing what was left of Russian influence in Eastern Europe. Russia’s leaders have observed warily how the “triumph of liberalism” turned into a Western claim to global superiority. This perception was strengthened by U.S.-led interventions worldwide, while attempts to integrate with Europe economically have been largely rejected.
In short, one shouldn’t be surprised that Moscow isn’t delighted about continuing NATO and EU expansion into Russia’s “near abroad” of former USSR countries, as this would further weaken its regional power. Yet, the Ukrainian Maidan was not only perceived by the Kremlin as an attempt to forcefully wrest Kiev away from Russian influence by pro-Western and nationalist movements, but also a welcome opportunity to enhance Western political expansion into Russia’s borderlands under the pretext of democracy promotion.
Thr Kremlin's most available strategy in Ukraine
The crisis in Eastern Ukraine is therefore understood as a proxy war in a wider geopolitical power struggle, eventually determining which way Ukraine will go in the future and whether Russia can defend its weakened regional power position.
Surprisingly, the Kremlin might choose the most available strategy of continuing cautious escalation until Europe gives “backdoor diplomacy” a try. To be specific, that means an ongoing flow of material and money to the pro-Russian rebels, a potentially destabilizing concentration of Russian forces at the border and sporadic shows of military prowess that fall short of an actual intervention. Logistics for asymmetric warfare may be seen by Moscow as necessary, considering the latest advance of Ukrainian troops, as well as opaque messages from the Kremlin regarding the willingness to start a humanitarian intervention.
In addition, the Kremlin will continue to spread its message within the media of the use of heavy armaments in populated areas and the constant flow of refugees to Russia. And, of course, recurring incidents of Ukrainian desertion remain indispensable from the Russian perspective. Further escalation bears the danger of enlarged sanctions - but without major disasters involving foreign citizens, a massive intensification is not expected and could be withstood for months, if not years, as long as measures are taken to avoid panic.
Ironically, time may play into Russia’s hands: Winter is coming and will create enormous challenges for crisis-ridden Ukraine. Due to its questionable payment capabilities and a steep increase of prices for Russian gas deliveries, Kiev is now forced to buy its resources from Central Europe, while still paying a high price and lacking the infrastructure to guarantee a sufficient flow back into Ukraine. Stated bluntly, freezing temperatures and the inability to keep the population warm will create immense pressure on the new Ukrainian government.
Ukraine: On the edge of bankruptcy and a 'new Maidan'
As if this wasn’t enough, Kiev is on the edge of bankruptcy. Without massive foreign cash inflows, Kiev will be unable to pay pensions and wages for civil servants. Kiev also faces massive costs for the reconstruction of destroyed infrastructure and the ongoing “anti-terror” campaign (which led recently to the implementation of a 1.5 percent military tax).
At the same time, Ukraine’s industrial heartland is torn apart with intense fighting going on in the Donbas region, which is partly responsible for an expected 5-7 percent fall in Ukrainian GDP, a 15-19 percent growth of its inflation rate and increasing unemployment.
Such instability is the perfect breeding ground for social unrest and the appearance of right wing agitators like Oleh Lyashko and Dmitry Yarosh. In fact, just two weeks ago, the renowned British security think tank IHS Jane’s warned of declining government legitimacy and the possibility of a second Maidan revolution if Ukrainian forces fail to reestablish territorial control by November. Should this scenario unfold, further economic deterioration would follow.
As the European Union stumbled into the crisis and continued its integration course, it will now have to provide sufficient financial and economic support or face a descent into chaos in Ukraine. Billions of dollars are already on the way, both from the International Monetary Fund (IMF) and Brussels - but that will be hardly enough if stability is not achieved soon.
Either way, with the oligarchs still in power and widespread corruption, foreign aid won’t solve Ukraine’s problems. At most, it will provide a moment of relief, while eventually becoming indispensable for years to come. As an example of what might be expected, Greece received over 240 billion euro in foreign aid over the last five years and still keeps struggling with recovery. Chances are that, sooner or later, Europe will recognize that it overplayed its political ambitions, especially if the country faces another nationalist uprising while consuming unspeakable amounts of money.
After all, in times of growing euroscepticism and billions in financial aid, it will be a tough challenge domestically to justify additional international commitments while intensifying the confrontation with Russia. In particular, France and Germany, both countries that were reluctant in sanctioning the Kremlin until the catastrophe of MH17, will face significant resistance from both the political left and right.
Why the Kremlin could benefit
At the end of the day, Moscow will be the one to benefit from that development. With the situation slipping out of control and creating costly commitments, Europe will both appreciate a Russian offer to cooperate and willingly accept its take in financial support to restore stability in Ukraine.
Moreover, renewed gas flow from Russia, exceptional low prices and the willingness to tame the pro-Russian separatists could come for such a cheap price as the guaranteed military neutrality of Ukraine and an immediate federalization. Last but not least, it might ease the financial distress in Kiev.
That way, Putin could keep NATO out of Ukraine, “contain” Europe in its urge for expansion and ensure Russian access to economically relevant regions in Eastern Ukraine.
Additionally, Kiev would be politically demoralized, ultimately being decades away from fulfilling the necessary requirements to join the European Union. Russia may ultimately lose the supposed battle for Novorossiya, but could reclaim an upper hand in the standoff.
On the other hand, U.S.-Russian relations would be fractured for years to come. Yet, giving in to U.S.-led pressure would do nothing to fix that rift anytime sooner. In fact, it might encourage the future use of similar punitive measures on increasingly divergent positions.
Putin could attempt to personally weaken U.S. President Barack Obama by undermining the latest show of strength from a united U.S.-EU front, thereby strengthening Republican “hawks” on Capitol Hill. This would help to further erode the positions of the Democratic party in the U.S.
In the end, a Republican-led U.S. government that’s less tolerant of Russia isn’t the best option for Moscow, but may already be unavoidable. In fact, it could indeed help foster domestic support for a Russian reorientation towards India, China and Brazil. It could finally boost Russia’s leading role among revisionist powers.
Also, restoring normal relations with Central Europe remains a top priority, while Eastern Europe will anyway seek increased bilateral economic and military cooperation with the U.S. But again, that is the lesser of two evils, just as dropping support for pro-Russian rebels in favor of a more useful political outcome.
The current crisis could be ended within a few weeks if all sides would be willing to accept certain geopolitical realities, give secret diplomacy a try and abandon idealistic daydreaming. Yet, considering that this is unlikely to happen, Vladimir Putin should instead embrace the famous political advice of Niccolo Machiavelli: He should act like both a fox and lion, in order to discover the traps and frighten the wolves.
The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.