It’s dangerous to corner Russia too much
When President Vikto Yanukovych of Ukraine fled his capital Kiev on Feb. 21, 2014, after the Maidan protests, very few could have predicted that it would unfold into a second Cold War between Moscow and the West.
Only five days later on Feb. 26, Russian forces sneaked into the strategic Crimean Peninsula in the Black Sea, essentially occupying the Ukrainian territory.
It was the European Union that acted first. After all, the protests had started based on Ukraine-EU relations. In an extraordinary meeting, the Council of Europe condemned the Russian move, imposed travel bans and froze the assets of a number of Russian and Ukrainian officials, demanding that Moscow pull out of Ukraine.
U.S. President Barack Obama issued his first Executive Order regarding the crises on March 6, imposing sanctions on “individuals and entities responsible for violating the territorial integrity of Ukraine, or for stealing the assets of the Ukrainian people.”
Russian President Vladimir Putin’s answer to those moves was to rush a referendum in Crimea on March 16, and the next day Crimea was annexed to Russia. Putin thought Obama would never get into a war against Russia over Ukraine, like Russia would never fight with the Americans for Syria. This is why some people are referring to the Ukraine-Syria situation (which squeezes Turkey from both the north and south) as a Second Cold War.
The same day, on March 17, and then again on March 20, Obama issued two more Executive Orders extending the scope of sanctions on Russia, including Putin’s “inner circle,” in coordination with the EU.
The U.S. and the EU have sanctioned in coordination almost all the major defense companies, state banks and energy companies of Russia.
Energy represents half of the Russian economy, as Russia is the world’s largest oil and gas producer.
So the U.S., in coordination with Saudi Arabia and other oil producing Arab countries in the Persian Gulf, encouraged a plan to choke Russia by increasing production, thus pulling down prices (which would also help put pressure on Iran, as the deadline on nuclear talks was extended until July 2015).
The price per barrel declined from $100 to below $80 during the autumn months, and when the oil producers cartel OPEC decided on Nov. 26 not to cut production, the prices fell further; nowadays it is around $60 per barrel and starting to threaten Gulf producers as well.
The Russian Finance Ministry revealed the cost of sanctions by the end of November to be $140 billion. The value of the Ruble against the U.S. dollar fell by almost half during the same period, and the dollar reserves of the Russian Central Bank have dropped by around 20 percent in order to support the national currency.
Russia is suffering due to its move on Ukraine. But Putin is not likely to retreat; it’s not his style.
In the end, Russia is not just any other country to corner by sanctions. It is a global nuclear power with space and conventional warfare capabilities. Moscow also knows that more conflict in sensitive locations could lead to oil price rises.
It is a commonly shared opinion that if France had not pressed Germany too much to get what it wanted at the end of the First World War, perhaps there would never have been a Nazi movement in Germany against the austerity imposed by foreign powers. Thus, another World War might have been averted.
History is there for us to draw lessons from.