Russia Fruitlessly Prepares for New Sanctions

Last Friday (December 7), Lithuania became the first country to impose new sanctions against Russia for its forceful and illegitimate action against three Ukrainian ships in the Kerch Strait on November 25 (RBC, December 7). This naval skirmish (see EDM, November 26, 28, 29) was a culmination of long-brewing tensions (see EDM, February 22, April 12, May 22, 31, June 11, 28, November 6) and signifies a deliberate escalation of the aggression against Ukraine started with the annexation of Crimea in March 2014. It was entirely possible for Moscow to discharge the incident and return the ships and the sailors; instead, it has opted to put a propaganda spin on the “victory” and demonstrate readiness to enhance various “hybrid” methods of conflict manipulation with a direct application of military force (Ezhednevny Zhurnal, December 7). This dangerous situation was discussed at length at the meeting of foreign ministers of the Organization for Security and Cooperation in Europe (OSCE) in Milan, Italy, last week; but Russia showed no intention of compromising (Kommersant, December 8).

Rejecting Western warnings about the consequences of such aggressive behavior, Moscow feels confident about its military dominance in the Black Sea theater (RIA Novosti, December 7). Indeed, as long as Turkey remains committed to its “strategic partnership” with Russia, visits to this closed sea by naval vessels of the United States and other North Atlantic Treaty Organization (NATO) members have only symbolic significance (Rosbalt, December 6). The Russian top brass, meanwhile, is more nervous about the military balance in other theaters, particularly the Far East, where the Pacific Fleet is badly weakened by under-funding and poor maintenance (Nezavisimaya Gazeta, December 6). Still, what worries the Kremlin most is not tests of military wills, where it is prepared to take greater risks than its adversaries, but a further increase of Western economic pressure on Russia.

Despite the upbeat official assessments of the country’s economic prospects, the protracted stagnation continues to manifest itself in painful cuts to social programs and difficult-to-hide contractions of Russians’ incomes (Nezavisimaya Gazeta, December 6). Opinion polls show a direct connection between discontent and awareness of foreign policy setbacks. The share of respondents who are very concerned about Russia’s international isolation increased from 8 to 21 percent within a year (Levada.ru, December 6). Officials demonstrate indifference to the fact that worries about sanctions have been translating into a steady decline of President Vladimir Putin’s approval ratings (Nezavisimaya Gazeta, December 5). Nonetheless, there is reluctant recognition of the need to adjust the economic guidelines in order to minimize the damage from the expected tightening of sanctions.

Some of these measures are aimed at rescuing such symbolically important projects as the Nord Stream Two natural gas pipeline, which is attracting targeted criticism from the US (Novaya Gazeta, December 7). Additionally, Moscow is attempting more diplomatic maneuvers intended to erode European unity, such as courting Greek Prime Minister Alexis Tsipras, who seemed ready while meeting Putin in the Kremlin to forget the recent quarrel caused by the awkward “special operation” of Russian intelligence services on Greek soil (Kremlin.ru, December 7). Putin even indicated readiness to reach a compromise with Japan on the long-deadlocked problem of the South Kurile Islands, expecting that Prime Minister Shinzō Abe would reward Russia’s minimal flexibility with generous economic incentives (RBC, November 30; see EDM, November 27). The prime attention, however, was focused on striking a new deal with the Organization of the Petroleum Exporting Countries (OPEC): Russia agreed to cut its oil production by as much as 228,000 barrels a day in order to break the trend of falling prices (Kommersant, December 8).

None of these diplomatic maneuvers is likely to yield dividends sufficient to prevent a small but highly significant turn in Russia’s economic dynamics from stagnation into a new recession, which many experts now predict (RBC, December 7). Sanctions are the more important ingredient here than the volatility in oil prices, and they also pose serious trouble for corrupt business magnates in Putin’s court. Russian economic policy is distorted by the supreme orders to compensate these cronies for their losses, but this exacerbates the dire plight of the have-nots (Carnegie.ru, December 6). Some of the most notorious oligarchs, like Viktor Vekselberg, mobilize lobbies in the US in order to secure a removal from the “black list” (Bfm.ru, December 7). Others, including Oleg Deripaska and Igor Sechin, find their assets squeezed and money-laundering schemes exposed as the application of personalized sanctions expands, particularly in the United Kingdom (Forbes,ru, December 8).

What renders Russia’s attempts to neutralize Western sanctions ineffectual is the new interplay between the Ukraine crisis and the Intermediate-Range Nuclear Forces (INF) Treaty crisis. Consequently, responses from the US and NATO to Russian violations of the INF Treaty come together with the West’s response to the attack on Ukrainian ships in the Kerch Strait. Illustratively, last week NATO foreign ministers hammered out a common position on the missile issue in Brussels and then traveled to Milan to warn Russia about the consequences of the naval clash (Kommersant, December 7). Moscow has been granted 60 days to demonstrate its readiness to return to compliance with INF rules. But what might have been seen as a useful window for arms control consultations has turned into a ramping up in tensions after the Kremlin described the deadline as an “ultimatum” that must be turned down (Moskovsky Komsomolets, December 5; see EDM, December 6). This predictable defiance, however, will undoubtedly undermine the Kremlin’s attempts to weaken Western solidarity and exploit holes in the sanctions regime.

Russian officials find no logical inconsistency in asserting that Western sanctions will not hamper Russia’s military build-up while, at the same time, blaming the country’s deepening economic troubles on those same sanctions. This double-speak has grown tired over the past five years, as the sanctions regime has continued to tighten. But it has also had the unintended effect of eroding domestic resilience to Western pressure. As the contraction in incomes sharpens Russians’ irritation with the lavish lifestyles of the rent-harvesting elites, many now view the sanctions as an effective punishment for the shameless corruption in the entrenched regime. Putin keeps trying to boost feelings of pride in confronting the Western assaults and encroachments, but Russia’s increasingly obvious decline and degradation render this self-glorifying propaganda hollow. Public protests may paralyze Paris; while London and Washington, DC, are engulfed in political perturbations. But for Moscow, more sanctions are coming—and this certainty foretells a profound crisis of governance and statehood.