Chapter 3
Time is Not on Our Side

The EU–Russia stalemate can only be broken if it serves the interests of all of the players involved, including the new, democratic Kiev government. The EU, Russia and Ukraine will all have to compromise; if not, eastern Ukraine will turn into a ‘frozen conflict’, Crimea will remain Russian, and European security will truly sleepwalk into a ‘Cold Peace’ (or worse). The EU’s dual-track approach of sanctions and dialogue has worked reasonably well, and the EU’s aim to harm the Kremlin and Russia’s oligarchy is a measured success. Helped by the collapse of global crude oil prices, Russia has suffered from a haemorrhaging outflow of capital, falling credit ratings and a sinking rouble. In 2014, the rouble lost half of its value, forcing a drastic rise of interest rates and deflating Russia’s self-confidence. The Russian government has implemented significant budget cuts (especially in the public sector), causing a drop in the average income of ordinary Russians for the first time this decade.

With two elections coming up in Russia (parliamentary elections in September 2016 and presidential elections in March 2018), the EU hopes that President Putin will ultimately decide to adopt a constructive attitude towards eastern Ukraine; as to Crimea, all bets are off. In the meantime, Western sanctions are becoming ‘a form of collective punishment on the Russian people, threatening to reduce a significant proportion of the population to penury’.[20] Clearly, Moscow’s tit-for-tat food import ban (including meat, fish, dairy products, fruit and vegetables) from the EU and other countries supporting Western sanctions further penalizes the Russian populace.[21] Apart from encouraging Russia’s pivot to Asia (and China in particular), Western sanctions have probably strengthened public support for President Putin and harmed the EU’s image among ordinary people. Although the Russian government may become vulnerable if it no longer delivers basic public goods, it is not at all clear that the alternative to President Putin will be more congenial. As Richard Sakwa argues, ‘If there was to be “regime change” in Russia, all the polls indicate that this would be followed by a more authoritarian consolidation’.[22]

In this complicated game of geopolitical poker, it is the EU (and hence the West in general) that will probably blink first.

The EU (and the West in general) has a clear, but rather rigid set of conditions that Russia has to fulfil before sanctions can be lifted. The Minsk Protocol stipulates Russia’s role in stabilizing eastern Ukraine, and the EU’s Crimea/Sevastopol sanctions call upon Moscow to respect Ukraine’s territorial integrity. These regimes are obviously closely linked, which raises the question of whether the EU is prepared to relax sanctions even if Russia’s hold on Crimea lasts? Conversely, what options does the EU have if Russia remains uncooperative? And how can the EU ensure that, during this on-going European crisis, Russia will remain engaged on global security matters such as dealing with Syria and fighting jihadism and WMD (weapons of mass destruction) proliferation? In this complicated game of geopolitical poker, it is the EU (and hence the West in general) that will probably blink first. In September 2015, French President François Hollande argued that since progress had been made towards the implementation of the Minsk agreements (of February 2015), the EU should show flexibility: ‘The process has moved forward. There has been progress in the last few weeks. The ceasefire has almost been respected’. If local elections and decentralization reforms are successful, Hollande argued, ‘then I will ask for sanctions to be lifted’.[23] This French call for leniency towards Moscow will only grow louder after the recent Paris terror attacks, which underline the need to keep Russia on board to fight jihadism and the Islamic State (in Syria and beyond).

To complicate matters further, powerful economic lobbies within the EU continue to call for a more lenient approach to Russia, arguing (for example) that as many as 60,000 jobs could be lost because of the nearly 20 per cent drop in German exports to Russia.[24] Even more alarmist estimates indicate that sanctions on Russia may cost the EU €100 billion.[25] Theoretically, the high economic price that the EU pays for its Russia sanctions should signal the EU’s sincerity and determination.[26] In reality, however, the damage done to European economies moderates the EU’s posture, making it just a matter of time before the sanctions’ regime will be undermined and gradually softened. Politically, the EU’s united front may also prove more brittle than expected. In August 2015, the European Parliament’s Progressive Alliance of Socialist and Democrats (S&D) called for a ‘new initiative for political dialogue in Europe’, as well as the removal of some sanctions.[27] Center–right Members of the European Parliament (MEPs) have also established a group called ‘For New Dialogue with Russia’, which is to visit Moscow in early 2016.[28]

EU policy towards Russia is therefore weighed down by numerous challenges and demands. Externally, global security issues require Moscow’s cooperation, or at least a Russia that does not use its ample obstructive power. Internally, economic and political pressures mount, and will continue to nag at the EU’s confidence and tenacity vis-à-vis Russia. Most importantly, moreover, time is not on the EU’s side. The EU’s gamble that mounting economic pressure on Russia will force the Kremlin’s hand on eastern Ukraine and Crimea reveals just another triumph of hope over experience. For President Putin, eastern Ukraine and Crimea are so-called ‘first order’ national security priorities. Although EU leaders huff and puff that ‘Ukraine’s security is Europe’s security’ (and vice-versa), this is clearly half-hearted rhetoric. In the end, the EU’s security and prosperity do not hinge on Ukraine’s territorial integrity and sovereignty. If matters are not resolved within the next year or so, eastern Ukraine and Crimea will slide down the EU’s overflowing policy agenda and become, at best, ‘second order’ priorities. Arguably, this process is already well under way, as the compromising words of French President Hollande (see above) seem to indicate.

This should not come as a surprise. The EU has neither been able to mollify Turkey’s stance on Northern Cyprus (which it has occupied since 1974), nor to prevent (or end) Morocco’s occupation of the Western Sahara (since 1976). The recent nuclear deal with Iran (after more than a decade of tough UN-backed sanctions) further indicates that the EU (and the West in general) will ultimately fold because of a mix of greed, impatience and disillusionment.[29] The Paris terror attacks have reshuffled the strategic cards between the EU and Russia. In an instant, Russia has turned from a quasi pariah state into a crucial, coveted player and even potential partner to address the EU’s new top security priority: to fight, and win, the ‘war’ on jihadism, both in Syria and in Europe. As Russian political strategist Gleb Pavlosky has argued: ‘The West may find it hard to discuss a degree of Russia’s responsibility for what happened in Ukraine, or the legitimacy of its presence in Syria, at a moment when the [Islamic State] has reached all the way to the Eiffel Tower’.[30] European Council President Donald Tusk clearly recognized this new reality by suggesting that a ‘common aim for us [that is, the EU] should be coordinating actions against Daesh [the Arabic acronym for the Islamic State] and the cooperation between the United States and Russia is a crucial one for sure’.[31] Hence, the EU’s window of opportunity to affect Russia’s policies is already closing, and policy-makers in Brussels know it. Understandably (and more worryingly), the Kremlin knows this as well.

Richard Sakwa, ‘Politics and International Affairs in Putin’s Third Term’, in Richard Sakwa, Mark Galeotti and Harley Balzer, Putin’s Third Term: Assessments amid Crisis (Washington DC: Center on Global Interests, 2015), p. 12.
‘Russia Adds Countries to Food Import Ban over Sanctions’, BBC News (13 August 2015).
Sakwa, ‘Politics and International Affairs in Putin’s Third Term’, p. 12.
‘Ukraine Conflict: France Hopes to End Russia Sanctions’, BBC News, 7 September 2015. Hollande’s exact words (in French) are revealing: France is ‘pour une levée des sanctions qui touchent la Russie, si la logique des accords de Minsk était respectée’ (emphasis added). Translation: France ‘is for lifting sanctions on Russia if the logic of the Minsk agreements will be respected’. This choice of words clearly opens considerable room for manoeuvre for all parties involved, especially for the EU.
‘German Exports to Russia Could Fall More in 2015 – Business Lobby’, Reuters (23 January 2015).
Jörg Eigendorf, ‘Russland-Krise Kostet Europa Bis Zu 100 Milliarden Euro’, Die Welt (19 June 2015).
David Baldwin, Economic Statecraft (Princeton, NJ: Princeton University Press, 1985).
Maïa de la Baume, ‘MEPs Call for Thaw in EU–Russia Relations’, (3 August 2015).
‘EU Lawmaker Confirms Group “For New Dialogue with Russia” to Visit Moscow’, (27 July 2015).
Frederick Kagan, ‘Why They’re Cheering in Tehran’, Wall Street Journal (14 July 2015).
Vladimir Isachenkov and Josh Lederman, ‘Narrowing Rift, US and Russia Entertain Cooperation in Syria’, The Washington Post (18 November 2015).
‘US, Russia Cooperation Crucial to Defeat ISIS: EU Official’, ARA News (15 November 2015).