Crisis in Ukraine

07.30.14

Is Putin About to Blink?

As the Kremlin gets more nervous about American and European pressure it could also get more dangerous. When Putin gets defensive, he takes the offense.

ODESSA, Ukraine — The Russian Ministry of Defense has been mocking claims by the United States that there’s proof Moscow is giving military aid to the separatists in Ukraine. Officially, the Russian government is still blowing smoke around the question of whether Moscow-backed separatists shot down the Malaysia Airlines flight almost two weeks ago, killing all 298 people aboard. Instead, according to the defense ministry, the aggressive USA is bent on joining the war against Moscow and its allies. That’s the real problem. And the latest round of sanctions announced Tuesday is just another example. Russia can take it. Russia will be brave.

But the fact is, the Kremlin’s worried.

The real battles Moscow faces at the moment are economic, and the Americans – and, more importantly, the Europeans – finally came out swinging after months spent dancing around the Ukrainian ring. The new sanctions decreed by Washington and Brussels target Russia’s state-owned banks, its arms manufacturers and its oil companies – all of them major pillars of the economy.

The Kremlin, officially, maintained its composure. So, for the moment, did the markets. The front-page headline of Vedomosti, one of the few independent newspapers, trumpeted the news on Wednesday that "The new sanctions did not stop Russian markets from growing." Obama might claim that the new measures would seriously weaken Russia’s economy, but Russian economists begged to differ. "If they intended ultimate economic damage, they could organize a collapse of Russian banks in one hour by cutting off all our banks from the international banking system ," economics expert Sergei Romanchuk told the Slon news agency. "These are still just signals, signals."

The Russian parliament did not even make an effort to read those signals, it would seem. Deputies were full of optimism: sanctions would help to make the Russian economy healthier, Duma members concluded on Wednesday. 

But is the Russian public afraid of Western sanctions? Some of it certainly is. A survey run by Radio Echo of Moscow, beloved of the elites, showed that the answer was "yes": 65.4 percent of listeners said they were afraid of sanctions. The big question is whether financial pressure will cause the country’s moneyed interest to turn on their president.

The new sanctions might not be pushing Russia's economy off the cliff, yet, but they definitely are pushing Russian President Vladimir Putin deeper into a corner, and an angry Putin is neither good news for Russian civil society nor for the West. 

Before the latest sanctions announcement, trade figures suggested that Russian companies already were importing goods from the West as fast as they could because they figured something like this was coming. In a typical act of defiance, deputies in the Russian parliament already had defined those nations imposing sanctions as “aggressor countries.”

"The time has come for all of us to open our eyes and see that this war has grown into a war between the United States and Russia.”

Meanwhile, according to Moscow, Washington is giving Kiev operational intelligence and publishing "fake" pictures to show Russia fired rockets from across the border at Ukrainian positions. And the Russians’ accusations are getting personal. They claim U.S. Ambassador to Ukraine Geoffrey Pyatt and his team are becoming "residents of the SBU building" – the Ukraine security services headquarters in Kiev.  They note that Pyatt tweeted images supposed to show the Russian shelling of Ukraine before those same pictures were released by NATO.

In an interesting little twist, Russian Defense Ministry spokesman Igor Konashenkov suggested the very fact the pictures were tweeted should discredit them. "Such materials weren't posted on Twitter coincidentally,” he said, “since it's impossible there to establish their authenticity due to the lack of exact reference to the location and the extremely low resolution."

Last week, when U.S. officials warned that 15,000 Russian soldiers had gathered close to the Ukrainian border, the defense ministry hinted that this, too, was some sort of viral nonsense, and that social media should not be the main source of intelligence information about Russian forces, as if that were the case.

Washington appears to be considering seriously whether to provide the Ukrainian military with fresh intelligence data on the locations of pro-Russian rebel rocket systems, meaning, as the Kremlin sees it, that the U.S. would become directly involved in the fight against Moscow’s proxies.

So the more "anti-Russian proof" the U.S. State Department publishes, the more irritated and furious Kremlin hardliners appear to become.

"The time has come for all of us to open our eyes and see that this war has grown into a war between the United States and Russia, with the United States pushing to expand their empire and overthrow Putin," says Yuri Kropnov, an analyst at a pro-Kremlin think tank based in Moscow. “Failure in Ukraine would threaten Putin's personal security,” he told The Daily Beast in an interview, and that would “mean the end of Russia's sovereignty.”

Kropnov blamed a group of "Putin haters and Russophobes" who are part of the Moscow establishment but working against the Russian president. He singled out the "the Kremlin's man responsible for the war in Ukraine, Vladislav Surkov,” formerly known as the “gray cardinal,” and warned that "if Putin did not persecute those undermining his power now, there would be another real Maidan [popular uprising] in Moscow by September.”

In addition to the government-imposed sanctions from Europe and the United States, the Kremlin had suffered another punch in the gut on Monday: An international arbitration court in The Hague ruled that Russia must pay back the shareholders of Yukos, once the biggest oil company in the country, for expropriating its assets. The price tag: $50 billion.

On Monday the director of the independent radio station Echo of Moscow, Aleksei Venediktov, said on his popular “Special Opinion” show that it’s time the Kremlin admits who really shot down Malaysia Airlines Flight 17 over eastern Ukraine if it wants to avoid even more serious economic sanctions imposed by the European Union and the real economic disaster that would follow.

Venediktov said he is “95 percent” sure that pro-Russian rebels brought down MH17, but “we stubbornly refuse to admit it," he said, and thus give the West an excuse to continue punishing Russia with tougher sanctions. Kremlin officials are "acting as press secretaries for the rebels, separatists, demonstrating that we support them, help them, provide for them,” said Venediktov. “I think it is a mistake."