The EU Finally Musters the Courage to Poke the Bear

In a coordinated move to further punish Russia for its material and diplomatic support to rebels in Ukraine, the United States and leaders from Germany, Britain, France, and Italy agreed to a new, relatively tougher round of sanctions.

Today’s decision is a bold move for the European Union, considering their earlier reluctance to impose sanctions anywhere beyond select high-level Russian officials. President Obama announced at the White House today a round of initiatives designed to put the squeeze on Putin’s administration, with sanctions targeting the banking, energy, and defense industries. According to Reuters:

In Brussels, diplomats said ambassadors from the 28-member European bloc agreed to restrictions on trade of equipment for the oil and defense sectors, and “dual use” technology with both defense and civilian purposes. Russia’s state run banks would be barred from raising funds in European capital markets. The measures would be reviewed in three months.

However, in a nod to the EU’s ongoing strategic trade partnership with Russia, certain agreements made prior to today’s authorization of new sanctions will be honored. Furthermore, Russia’s natural gas stores, upon which the Europeans have a critical dependency, will remain sacrosanct. This move becomes particularly compelling when considering the participation of German Chancellor Angela Merkel. Deutschland has made no secret of its reluctance to threaten Russo-German trade relations by adopting the deployment of sanctions as a first principle in weakening Russian influence in Crimea.

Indeed, an oft-overlooked, yet vitally important element in the ongoing drama of Putin’s latest expansionist push is Germany’s deep and varied economic ties to the Eurasian giant. Indeed, as Mitchell A. Orenstein observed in Foreign Affairs, the Russo-German economic partnership is likely to have a decisive influence on both the contours and nature of any future EU policy towards Russia.

Today, Russia is Germany’s 11th largest export market, after Poland. Russia sells Germany gas and oil and Germany sells Russia expensive cars, machine tools, and manufactured products. A trade embargo or asset confiscations would sting Germany more than any other European power — except Netherlands where Royal Dutch Shell has substantial interests — and far more than the United States. So would a gas cutoff or embargo.

However, tempering this new public relations blitz touting the embrace of “sectoral sanctions” is the reality that the EU counts Russia as a vital partner in investing, arms sales, and energy supplies. Thus, placing too strong a vise grip on Russian industry will undoubtedly precipitate a toxic ripple effect across Western Europe. Foreign Policy notes the following:

The EU will likely restrict each industry slightly, rather than imposing a full ban — such as an arms embargo. That approach would help address the fundamental problem of different EU countries relying more on Russian business in different industries. London’s financial district, for instance, has many ties to wealthy Russian businessmen, whereas in France it’s the defense industry that could suffer if it can’t fulfill a $1.6 billion deal to sell warships to Moscow. The new measures could also target technology provided by Western companies that Russia relies on in its energy sector, which the United States has also considered.

The abiding reality is that the Europeans can only take sanctions on Russia so far before hurting themselves. Thus, the collective desire to decisively cripple an already-weak Russian economy is likely to remain at a simmer, instead of an all-out boil. The Europeans can’t afford to cause self-inflicted pain on their tender economies— and beyond that, force is clearly out of the equation. So what’s the endgame for the West?

The American public will be understandably outraged at the mere suggestion of putting boots down in a far-flung European locale to fight a pumped up menace from the Cold War era. We are battle fatigued from the ongoing chaos in Iraq and Afghanistan. However, with congressional midterms approaching, and a presidential election looming over our discourse like a red- white- and blue cloud, chest-thumping rhetoric about reigning in a recalcitrant Russia is likely to gain steam.

However, any cynical attempt raise the specter of the big, bad, heavily accented Russian wolf in order to justify the deployment of even the most minor contingent of American troops will destroy the political capital of the poor shmuck who dares to suggest it. And so we circle back…what is the end game here?

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