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Analysis
Vicious circle looms over Kiev and Crimea

Vicious circle looms over Kiev and Crimea

For Putin, sanctions far less devastating than losing Ukraine

by Michael Kaimakliotis

Thu 13 Mar 2014

Europe’s policies over Ukraine appear to have been fatally flawed from the start. By seeking to draw Kiev more closely to the European Union, the Europeans issued a warning signal to Moscow that President Vladimir Putin was unlikely to ignore. Strategic minds in Brussels should have reflected on this and been ready for the hostile reaction that inevitably emanated from Russia’s fears of a westwards drift by a key neighbour.

Not surprisingly, the Russian leadership noted Europe’s weak and divided state – and decided that the answer lay not in backing down but in a show of strength. Russia reasoned it could act aggressively in Ukraine without fear of a strong and united Europe. So far, Europe’s miscalculation has exposed it to a double setback. On the one hand, as events in Crimea have demonstrated, Russia has been empowered to take aggressive action. On the other, Europe has presented, to its citizens and to the world, an unnerving display of prevarication and indecisiveness.

In courting Ukraine, Europe’s leaders made overtures to a country that is well known to be divided between support for Russia and for the west. Ukraine’s deep economic difficulties require significant financial support that Europe is unwilling to provide. Russia supports Ukraine through sales of natural gas at discounted prices. The odds were stacked against Europe. Had Ukraine accepted Europe’s offer, Russia could have taken steps to worsen Ukraine’s economic plight. Even if the Europeans had tried harder, it was extremely unlikely that they could have succeeded in wooing Ukraine on a sustainable basis.

Ukraine’s strategic importance to Russia is enormous. Russia could not be expected to allow Ukraine to fall into what it regards as unfriendly hands. It provides Russia with further access to the Black Sea and the Mediterranean. Ukraine is the route for the lion's share of Russian gas exports to Europe, the basis of much of Russia’s economic power. Ukraine is the lynchpin of the Eurasian Economic Community, Russia’s instrument for regaining or enhancing control over former Soviet states.

Europe’s weakness and American hesitations over involvement in overseas conflicts have made the Russian decision rather straightforward. Moscow can brush off sanctions, which would be far less devastating to Russia’s geopolitical position and Putin’s standing than losing Ukraine. Game theorists would say that Ukraine has great salience for Russia but far less for Europe.

For Europe, a successful Ukraine strategy would require economic strength, political leadership and support from electorates. None of this is evident. Euro policies and politics still risk undermining Europe, even if the near-term outlook has improved. A vicious circle is apparent. Lack of European cohesiveness over Ukraine further weakens support among Europe’s citizens for the reinforced political and economic structures that would best serve the continent’s long-term interests.

Michael Kaimakliotis is an adviser to Quantum Global in Zurich.

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