Increasing Pressure on Russia to Resolve the Ukraine Conflict

July 23, 2014

President Barack Obama and President-elect Petro Poroshenko of Ukraine talk after statements to the press following their bilateral meeting at the Warsaw Marriott Hotel in Warsaw, Poland. [Official White House Photo by Pete Souza, 6/4/2014]

Following the downing of Malaysian Airlines Flight 17 (MH17) in eastern Ukraine, the West faces challenges in coordinating a significant increase in pressure on Russia to bring an end to the regional conflict. Thus far, relatively modest sanctions by the United States and Europe have been effective in imposing costs on the Russian economy and were likely a factor in the removal of Russian forces from the border and Moscow’s backing away from the threat of invading eastern Ukraine. Nonetheless, Russian support for separatists has continued to fuel the conflict. Short of an unlikely reversal of Russian policy, the United States should employ more assertive diplomatic measures. Perhaps the greatest challenge facing Washington is coordinating effectively with the European Union, which has been reluctant to impose harsher measures despite the fact that the crisis in Ukraine more severely affects European interests. However, the EU’s recent Council Meeting following the downing of MH17 may signal a shift in European thinking toward harder-hitting sanctions, though it backed away from the harshest measures proposed, leaving it unclear how far Europe is willing to go to address security crises on its own soil.

Next steps and considerations for further U.S. action on the Ukraine crisis:

Sanctions thus far have had a real impact, but more actions are needed. Thus far, sanctions have already made an impact on the Russian economy and appear to have played a role in Russia demobilizing most of its 40,000 troops from the Ukraine border and withdrawing the threat of invasion, although Russia still maintains an estimated 12,000 troops nearby. Sanctions have already resulted in the downgrading of Russia’s credit to BBB by Standard & Poor’s, the second lowest grade. Additionally, BBC reports other effects of sanctions, “Capital worth $75bn (£44bn) has left Russia so far this year - a much higher rate of hemorrhage than last year. Russia is teetering on the brink of recession. The economy grew just 1.3% last year and did not grow at all between April and June.”

On July 16, the day before MH17 was shot down, the White House imposed additional targeted sanctions on Russia, including on “The banks — Gazprom Bank and Vneshconom Bank — and the energy firms — Novatek and Rosneft Oil Company,” which are “some of the largest in Russia,” reports The Hill. [BBC, 7/22/14. The Hill, 7/16/14]

Sector-wide sanctions should be on the table for next steps. Outlining the option of sectorial sanctions, Senators Dianne Feinstein (D-CA), Carl Levin (D-MI), and Robert Menendez (D-NJ) wrote to the president that, “We strongly urge you to aggressively exercise your authorities under the International Emergency Economic Powers Act and other relevant statutes to impose immediate broad sanctions against Russia’s defense sector, including state-owned Rosboronexport, in order to prevent Russia from providing weaponry, equipment, or assistance and training to separatists in Ukraine. We also urge you to give additional consideration to impose broader sanctions on Russia’s energy and financial industries, as well as other sectors of the Russian economy as appropriate.” [Senators’ letter, 7/22/14]

Caution needed in exploring the option of sending arms to Ukraine. U.S. military assistance to Ukraine has been limited to non-lethal supplies. While prominent analysts like Zbigniew Brzezinski have suggested sending low-capability items to Ukraine, such as anti-tank weapons, it’s unclear what the actual level of Ukrainian need is. The Pentagon has sent a team to Ukraine to assess their military needs and “in coming weeks is sending a second assessment team to Ukraine to examine ways to provide long-term assistance to Ukraine’s military,” reports USA Today. In terms of supplying potentially more useful and sophisticated aid, special caution is required. According to The Daily Beast, Ukraine has requested electronic warfare equipment to counter increasingly effective rebel use of surface-to-air missiles that have downed a number of Ukrainian aircraft. However, the risks of sending such arms may be considerable as it is also reported that “The Ukrainian military is believed to be thoroughly penetrated by Russian Intelligence,” and that, according to an anonymous defense official, “these are highly sensitive systems, we don’t trust Ukrainian military folks on this.” [USA Today, 7/23/14. The Daily Beast, 7/23/14]

In considering further action, it will be important to manage the trans-Atlantic coalition and for Europe to increase its willingness to act on what is primarily a European problem. Brian Katulis of the Center for American Progress explains, “Ill-founded criticism from Mr. Obama’s Republican opponents ignores this important dynamic – that key countries such as France and Germany have been less willing to do as much as the United States to isolate Russia since the crisis deepened in February. This reluctance is largely rooted in European energy dependence on Moscow. Washington Post columnist David Ignatius cited a study this week that suggested this dependency could be reduced if Europeans were willing to do so over the long run — but it requires a new energy strategy coordinated across the Atlantic. Despite Mr. Obama’s visit to Europe last month, there remains a gap between what the U.S. has sought to do and what most European countries have been willing to do in response to conflict in Ukraine.” [Brian Katulis, 7/18/14]

Europe should take stronger measures as it coordinates its next round of sanctions. While the EU has stopped short of “level three” sector-wide sanctions, it appears to be taking firmer action following the shooting down of MH17. After its European Council meeting on July 22, the EU “is planning to expand its list of Russian officials, businessmen and entities under asset freezes and travel bans…The list of names will be released by the end of July. It means the EU will probably follow the US lead in targeting more individuals in President Vladimir Putin’s inner circle, as well as some major companies,” according to BBC. The BBC also reports that, “there was also agreement that the European Commission would look at further measures to be taken against Russia in the fields of defence, concerning ‘dual-use goods in the field of energy’, and in financial services.” [BBC, 7/22/14. BBC, 7/22/14]