Canny Merkel plays the long game with Putin

Financial Times  31 July 2014

By Elizabeth Pond

No, Angela Merkel did not experience a sudden epiphany about imposing tough sanctions on Russia when the MH17 airliner was shot down two weeks ago over Ukrainian rebel territory. The German chancellor’s wake-up call from her own reluctance to open EU doors to Ukraine in fact came in March, after Russia seized Ukraine’s Crimea by intimidation in Europe’s first forcible land grab in 69 years.

Since then Europe’s de facto leader has been working night and day to persuade three very different audiences that peace and security trump European economic interests, and will now require European financial sacrifice.

Ms Merkel’s first audience was Vladimir Putin, the Russian president. The second was the domestic business lobby, and the 6,200 companies that make Germany by far Russia’s most important trading partner. The third consisted of Berlin’s fellow EU members, especially Britain, France and Italy, which have their own pro-Russian business lobbies.

Ms Merkel laid down the line in an uncharacteristically blunt speech in the Bundestag on March 13.

“Relations among European states were marked for centuries by rivalry, changing alliances, and over and over again by terrible bloodshed” that culminated in the Shoah, she began. The fact that this “terror” was succeeded by more than half a century of European integration and the resulting “peace, freedom, and prosperity … still borders on the miraculous”.

Neither the EU, the US nor indeed Russia, said Ms Merkel, “can still confine itself in the 21st century to thinking only in its own interest”. Any country that does so “will harm itself sooner or later … The action of Russia in Ukraine is an unambiguous breach of the principles of international law,” she proclaimed.

In her barrage of phone calls to the Russian leader in recent months – when Ms Merkel was, in effect, the only western leader who could still communicate with him – her main message was that Europe was not going to play the wimp as he expected. Commercial interests would not override the continent’s primary interest in restoring a rules-based system of peace and its renunciation of the forcible changing of borders. If Mr Putin proceeded with dismembering eastern Ukraine, the west would react by imposing ever stricter sanctions on Russia. He was certainly correct in arguing that these sanctions would hurt Germany, she conceded, but Germany was ready to pay that price, and the sanctions would hurt Russia even more.

Ms Merkel’s message to German business people was essentially the same. They must be prepared to make the sacrifices she kept warning Mr Putin that Germany would make if push came to shove. This priming has taken place very quietly. But in the past month, more and more German exporters and importers have accepted in private that European security must take primacy over commercial profits. It took only the MH17 disaster – along with Mr Putin’s subsequent remassing of Russian troops on Ukraine’s eastern border and increased flow of heavy weapons to separatists in eastern Ukraine – for those at the head of leading industry associations to begin confessing their change of heart in public.

Persuading fellow EU members, Ms Merkel’s third audience, was perhaps her hardest task. London was loath to curtail the flow of Russian oligarch money into British banks (and, according to critics, even to enforce its own money-laundering laws strictly). Paris was, and still is, loath to stop its export of two Mistral helicopter carriers to Russia. Rome is loath to curtail its close energy ties to Moscow. But once German business people agreed to sacrifices, it was hard for others not to do the same.

At this point, Mr Putin’s relentless pursuit of his Ukraine strategy has shut the door on his last chance to de-escalate east-west confrontation and still save face. This week’s tougher co-ordinated American and European sanctions are the result.

The US commentariat, like Mr Putin, has defaulted in recent months to a consensus that Germany would never agree to tough sanctions because its economy is too beholden to Russian energy and trade.

That view discounts Ms Merkel’s service in decelerating the pace of western sanctions to leave room for escalation as and when needed; and to keep Mr Putin talking, rather than shooting, at the moment of greatest danger of a direct Russian invasion of Ukraine last May. This allowed Kiev time to mobilise the ragtag Ukrainian army and purge the most obvious Russian moles from its ranks.

In Germany, the MH17 tragedy has done much to dispel the popular notion that the country should try to engineer a conciliation between America and Russia. The shifting mood has given Ms Merkel more room for manoeuvre. She has used it well – and cemented her own emergence as the geopolitical leader of Europe.

The writer is a journalist and author who has covered Ukraine for 30 years


The Changing Equation of Escalation

IP Journal 28 July 2014

Kiev, not the Kremlin, is now writing the political narrative of the region

by Elizabeth Pond

David is right to defy Goliath with his slingshot – despite the menace of armored Russian troops massing once again on Ukraine’s eastern border, mounting evidence that Russian troops are firing artillery from Russian territory onto Ukrainian military positions in Ukraine,  and an accelerated flow of Russian weapons to separatists in the region.

The most obvious spur to Kiev’s counteroffensive in Donetsk this week is the desire to free eastern Ukraine from rule of the gun by rebels who find it normal to shoot down a civilian airliner by mistake and then violate the dignity of the victims’ bodies that rain down. The more complicated Ukrainian goal involves deterrence and narrative.

The decision to escalate military action does not come lightly to a country whose small and neglected armed forces could not resist any direct invasion from the next-door ex-superpower for more than five days. Ever since Russia suddenly prized Crimea away from Ukraine in March and annexed it, Moscow has held escalation dominance in the fratricidal confrontation by virtue of its superior local firepower and its will to fight for existential stakes. For this reason Washington and all NATO member states, from the beginning, ruled out going to war with Russia to defend non-NATO Ukraine.

It was therefore a huge gamble when President Petro Poroshenko, in his early weeks after taking office, launched Ukraine’s first real counteroffensive at the beginning of July. The military campaign would have to be robust enough to retake territory in the self-declared “people’s republics” that sought to secede from Ukraine and join Russia. Yet it should not be powerful enough to defeat the entrenched militias of mixed Russian and Ukrainian proxies under Russian leadership and thereby trigger devastating intervention from Moscow.

When Poroshenko ended his initial unilateral truce with pro-Russian separatists and sent troops to recapture both a Ukrainian customs post on the Russian border and the insurgents’ stronghold of Slovyansk, his chutzpah was three-fold.

First, he dared to assume that the Ukrainian military, purged of the most obvious Russian moles and equipped at last with American kevlar vests and night-sight goggles (and apparently with fuel from some anonymous well-wishers), could actually rout the Moscow-backed militias in eastern Ukraine. His faith belied the army’s inglorious record in failing to resist Russian annexation of Ukrainian Crimea last March and in suffering humiliation in its first attempt to evict pro-Russian mercenaries from Slovyansk last May.

Second, Poroshenko made the bold assumption that if his counteroffensive succeeded, Putin would not react by actually invading Ukraine with the armored troops massed on high alert on Ukraine’s borders to the north, east, and south. Instead, he hoped that flaunting the suicidal resolve of Ukrainians to defend their country against its mighty neighbor would persuade Putin that Kiev has even more of a stake in this contest than Moscow does and will match any escalation by the Kremlin, even if this requires a long guerrilla war.

Third, Poroshenko guessed that enough time had passed to dilute Putin’s raw fury at the perfidy of Ukrainians in wanting to swap their thousand-year East Slav identity under Russian hegemony for a modern, autonomous European identity. If so, Putin might finally be persuaded to reach beyond his inner circle of ex-KGB hardliners and listen to some unemotional cost-benefit calculations by his economic and military advisers of just how much his dream of restoring Russia’s 18th-century core empire in defiance of Western sanctions could cost him economically, militarily, and even politically.

Rejecting the more cautious advice of Berlin and Paris, Poroshenko launched his counteroffensive. The operation indeed exposed weaknesses in the five-month-old covert Russian war on Ukraine. Putin’s expectation that Russian loyalists in all of eastern Ukraine would rise in spontaneous revolt, once Russian military professionals lit the fuse of secession, was disappointed.

Moreover, the shallowness of rebel control in the two oblasts where separatists did declare pro-Russian People’s Republics led to infighting among the insurgent militias and to a melting away by mercenaries once they began losing skirmishes to the Ukrainian forces. The economy of proxy takeovers did work well in Crimea, where the Ukrainian military did not fight. However, it failed in heartland Ukraine, which Kiev’s army is now defending. Already reminders of this failure are coming home to Russia with the repatriation of bodies of Russian citizens who have fought and died in Ukraine to a country that does not want to acknowledge their existence.

As Ukrainian forces gradually shrank insurgent territory at the beginning of July, while the Kremlin remained publicly passive about the loss, some of the Russian military point-men in Ukraine bitterly accused Putin of deserting them. Muscovite Igor Strelkov, identified by Komsomolskaya Pravda last April as the Russian army intelligence colonel in command of the local pro-Russian armed takeovers in Ukraine, issued an “urgent appeal” to Moscow on July 4 to send weapons to prevent the impending surrender of Slovyansk to the Ukrainian army. “Over three months,” he complained, “no real help has arrived.”

By the second week in July, after Ukrainian recovery of Slovyansk, Strelkov’s appeal was answered.  Real Russian help arrived, in the form of multiple rocket launchers, anti-aircraft missile systems, plentiful ammunition, and the powerful Russian ground-to-air BUK missile system that could reach the altitude of 10,000 meters, where Malaysian Air’s Flight 17 was flying on 17 July and was shot out of the sky.

Clearly Poroshenko has lost his third bet. Putin still shows little inclination to listen to advisers who warn him about long-term damage to Russia if he continues to pursue military destabilization of Ukraine and invites more severe Western financial sanctions. There is mounting evidence in Russian social media that Russian troops are firing artillery directly from Russian territory onto Ukrainian territory. The delivery of more and more heavy weapons from Russia to militants in eastern Ukraine continues across the two countries’ porous border.

However, the Ukrainian president has won his first gamble on the capacity of the Ukrainian army. With this, he has demonstrated the suicidal resolve of Ukraine to fight Russian dismembering of Donetsk and Luhansk from Ukraine. Kiev’s army continues to shrink the territory controlled by insurgents, and volunteers continue to line up at the Ukrainian army’s mobilization and recruitment centers.

This resolve – along with international horror over the shooting down of MH17 and its 298 passengers and crew – has changed the equation of escalation. NATO is upgrading its military presence in the Baltic states and Poland. The European Union has stopped dithering and is now heading toward agreement on serious sector-wide sanctions on Russia. The unequal race between Putin’s fast military and political gains and the West’s slow-moving financial sanctions has at least become more equal.

Moreover, for the first time in the confrontation, Kiev – and not Moscow, with its unison media defamation of the Ukrainian government as “fascist” – is now writing the international narrative of developments in the region.

ELIZABETH POND, a Berlin-based journalist, is the author of “The Rebirth of Europe.” She has covered Ukraine for over 30 years.