MH17: Obama gains over Putin as US pushes EU on sanctions

Terry Atlas and Jonathan Allen
Brisbane Times
July 21, 2014

Washington: President Barack Obama’s response to the downing of Malaysian Airlines Flight 17 over Ukraine reflects the conclusion of US officials that time, evidence, and world opinion are increasingly on his side as he takes on Russian President Vladimir Putin.

Secretary of State John Kerry cited the tragedy on Sunday in an effort to prod Europeans into increasing sanctions against Russia, even at some peril to their own economies, in an effort to break Mr Putin’s support for pro-Russian Ukrainian separatists. “We are trying to encourage our European friends to realise this is a wake-up call,” Kerry said on Fox News Sunday, invoking a phrase used last week by Mr Obama.

US officials, some speaking on the condition of anonymity to discuss administration strategy, said the shooting down of the civilian jetliner — blamed by the US on pro-Russian separatists armed by Russia — should ignite anti-Putin sentiment and push reluctant EU countries to catch up to the more stringent sanctions the US had imposed last week. Dutch and other European citizens were among the 298 passengers and crew that perished.

This gives Obama confidence that the US and EU can prevail over Putin in the short-run — overcoming European reluctance to expand sanctions — just as the Obama administration believes it will prevail in the long-run over a Russia that has a battered economy and a leader who is overplaying a weak hand, the officials said.

EU Shifting

While the timing for EU decisions isn’t set, two European diplomats said previously resistant members such as Italy now are shifting. The bloc’s foreign ministers are scheduled to meet July 22, and top leaders also may meet as early as this week, according to the diplomats, who asked that they not be identified because the plans haven’t been announced.

The US and its allies have the capability to further squeeze Russia through punitive measures such as sanctions against entire sectors of its economy, though they want to leave open a course for Mr Putin to back down, according to several officials.

Europeans may hesitate to ramp up a fight when they need Mr Putin’s influence with the rebels to permit the recovery of passengers’ remains and an international investigation.

The EU foreign ministers at their meeting in Brussels will consider blacklisting more Putin associates and, for the first time, Russian companies accused of profiting from Ukraine’s woes.

Defence Industry

The UK is pushing for the EU to sanction the entire Russian defence industry, a British official said in London on condition of anonymity. France has repeatedly rebuffed calls to cancel its sale of two Mistral helicopter carriers to Russia.

The airline disaster follows months of US efforts to persuade the Europeans to raise the costs on Putin for his efforts to destabilise Ukraine. Mr Obama now is “absolutely prepared” to consider more sanctions, and the EU should do likewise, Kerry said on ABC’s This Week with George Stephanopoulos.

The top US diplomat appeared on five US Sunday morning talk shows to make the case for further action.

“Since sanctions are the administration’s default instrument of coercive statecraft, I would expect an escalation of US sanctions pressure, specifically targeting more Russian financial institutions, energy companies and military firms,” said Mark Dubowitz, executive director of the Washington-based Foundation for Defence of Democracies, a nonprofit group that focuses on national security issues.

Putin’s Options

“People are looking for sanctions that are severe enough to change Putin’s mind, but won’t do harm to the US and European economies,” said Andrew Weiss, vice president for studies at the Carnegie Endowment for International Peace, who specialises in Russia and Eurasia.

Mr Putin has levers of influence too, including sending Russian forces into eastern Ukraine, as he did in Crimea; reducing natural gas supplies to Europe; and undermining international negotiations seeking to curtail Iran’s nuclear program, one of Obama’s top diplomatic priorities.

Some of the US officials said they see Putin fighting a losing geopolitical battle over time as neighbouring states such as Ukraine, once regarded as the breadbasket of the Soviet Union, shift toward western European economies. That also may make him unpredictable and dangerous, they said.

Russian economy

The long-term strategy, these officials said, is to further isolate Mr Putin, who they say is presiding over the decline of a country facing economic, demographic and social problems. While it has an economy comparable in size to Italy’s, Russia’s per capita gross domestic product, at $US14,612, is less than half of Italy’s $US34,619, according to World Bank data for 2013.

“From the beginning, Russia’s aggression in Ukraine has been a reflection of its diminished stature and influence in Europe and the world,” said former White House Press Secretary Jay Carney, who worked for Vice President Joe Biden during the Russia reset and once worked in Time Magazine’s Moscow bureau.

The US last week imposed targeted sanctions on selected Russian banks, military, and energy companies including OAO Rosneft, Russia’s largest oil company, after the EU was unable to agree on more than limited additional sanctions.

European Trade

“The president imposed a greater cost on Vladimir Putin the day before this shoot-down took place,” Mr Kerry said. “And what we are doing now is trying to bring our European counterparts along” because 4 per cent of Russia’s trade is with the United States while “50 percent of their engagement is with Europe.”

The US has been urging the EU to act more forcefully despite its reliance on Russia for about 30 percent of its gas imports. U.K Prime Minister David Cameron said he agreed with his French and German counterparts that Europe should be ready to impose further sanctions this week.

“There’s value, political and economic,” in waiting to see what the Europeans do because Obama wants to show a united front, said Robert Kahn, a former Treasury official who is now a senior fellow for international economics at the Council on Foreign Relations.

Incremental Action

Stephen Myrow, managing partner of Beacon Policy Advisors LLC, an independent research firm in Washington, said the US is likely to increase sanctions only incrementally absent strong steps by the EU.

“Even though some members of the Obama administration would like to take stronger action, they do not see it as plausible without the EU’s acquiescence, and the EU still is not there,” said Mr Myrow, a former Treasury Department official. “The EU is threatening another round of sanctions on its own, but the trigger is tied to Russian cooperation in the crash investigation, not its aggression against Ukraine.”

Further, there’s no guarantee that more sanctions will push Putin in the right direction, said Samuel Charap, a fellow at the Washington branch of the International Institute for Strategic Studies, a London-based policy group.

Moral Case

“The moral and political case for more sanctions is clearly easier to make now,” Mr Charap said. “The problem is that the theory of the case remains as questionable as before — that this kind of pressure will produce the kind of policy change from Moscow that the West is seeking. In fact, it might well have the opposite effect.”

In a phone call with Cameron, Mr Putin said it’s “important” to refrain from “hasty conclusions and politicised statements” before international investigators determine the reasons for the Malaysian Air crash, according to an e-mailed statement from Russian government.

EU foreign ministers this week will call for unimpeded access to the crash site for investigators and for the repatriation of remains in a humanitarian matter, according to the two EU diplomats.

Bloomberg