- By David FrancisDavid Francis was a senior reporter for Foreign Policy, where he covered international finance., Jamila TrindleJamila Trindle is a senior reporter who covers finance, economics and business where they intersect with national security and foreign policy. Her beat spans everything from the economic underpinnings of conflict to sanctions, corruption and terror finance. Before coming to Foreign Policy magazine, Jamila reported for the Wall Street Journal’s Washington bureau, covering financial regulation and economics. She has also worked as a foreign correspondent in China, Indonesia and Turkey as a freelancer for NPR, Marketplace, The Guardian and others. She moved back to the U.S. to cover the post-crisis economy for PBS in 2009.
When Barack Obama’s administration sanctioned a prominent Russian bank after Moscow’s annexation of Crimea, Russian President Vladimir Putin pointedly opened a new account at the bank punished by the sanctions. When the United States issued travel bans against prominent Russians in Putin’s inner circle because of Moscow’s continued meddling in Ukraine, Putin placed a travel ban on longtime critic Sen. John McCain. When Western allies levied penalties against Russia’s energy sector after Putin-backed anti-government rebels inside Ukraine shot down a Malaysia Airlines flight, killing 298, the Russian strongman responded by banning American and European agricultural imports. He then shut down the biggest symbol of American cultural might in Russia: McDonald’s.
Now, with the new Western-backed Ukrainian government steadily reconquering territory that had been taken by pro-Russian separatists, Putin has ignored Western calls to stay out of the conflict and has instead sent a convoy of trucks carrying what Russian officials describe as "humanitarian" aid into Ukraine. According to a report in the New York Times, artillery units manned by Russians have been moved across the border into Ukraine and were shelling Ukrainian troops inside their own country. Russia has also been steadily massing its troops along its frontier with Ukraine, and Western officials estimate that Moscow has roughly 20,000 soldiers — including large numbers of elite special operations commandos — there. Late Friday, Aug. 22, U.S. National Security Council spokesperson Caitlin Hayden alleged that the trucks were actually Russian military vehicles painted as civilian trucks.
Putin’s new push into Ukraine immediately raised fears that Moscow would mount a broader military intervention there that it would try to justify on similar humanitarian grounds. The Ukrainian military has been pressing its offensive against the separatist-held cities of Donetsk and Luhansk, leading to large numbers of casualties on both sides. Russian state-run media have reported that nearly a hundred civilians were killed in the two cities this week alone. Putin has previously warned that he would take steps to protect Russian-speakers across Ukraine.
Putin’s move brought swift condemnation from across the international community. It also brought a familiar promise from the White House: Deputy National Security advisor Ben Rhodes told reporters that if Russia doesn’t reverse course, it would "face additional costs and consequences," likely in the form of — you guessed it — new sanctions. Rhodes didn’t elaborate on what these sanctions would entail.
Putin’s bold actions in Ukraine and the response from the White House are the latest in the tit for tat that has come to define the crisis. With each new sanction, Putin has been increasingly defiant; he’s downright contemptuous of the West. If the past few months are any indication, a new threat from the White House will not prompt a change of heart.
And while Moscow’s incursion increases the likelihood that the West will slap more sanctions on Russia, it’s unclear when the United States or Europe would move or how far they would be willing to go. For instance, Washington would prefer that Europe punish existing energy deals with Russian companies. However, Europe has steadfastly refused to jeopardize its energy supplies.
"In response to the entry of the convoy, the U.S. will likely expand sanctions over the next several weeks," Mujtaba Rahman, Eurasia Group’s head of European risk analysis, said in an emailed analyst’s note. But he said new restrictions would likely fall short of cutting off important sectors of the Russian economy, like energy and finance.
German Chancellor Angela Merkel is set to meet Ukrainian leaders in Kiev on Saturday. Rahman said he expects she will signal the European Union’s willingness to support stiffer penalties for Moscow’s disregard of earlier warnings not to send the convoy across border into Ukraine. But a swift, unified response could be complicated by the fact that most European policymakers are still on their August holiday.
Tim Ash, head of emerging-markets research at Standard Bank Group, said the United States would be loath to act alone and therefore may have to wait.
"We may now see some harsh words, warnings, from the U.S., plus some ‘filling in’ of existing sanctions, aiming to tighten up on existing iterations," Ash said. "But a more decisive sanctions move may be some weeks off, perhaps through to September."
Even if new sanctions could deter Putin, it’s unclear whether there is the public will in Europe — especially in Germany — to pass them. Public support for the penalties there has always been shaky. Now, the German government is blaming them for Germany’s economic slowdown.
"The decline in gross domestic product (GDP) goes beyond the expected counter-effect to the very strong weather-related performance in the previous quarter," the German Finance Ministry said in a statement Thursday. "This is likely to have been related to the effect of sanctions and negative effects on confidence due to the Ukraine crisis."
As Foreign Policy noted last week, Germany’s economic slowdown, along with that in the rest of the struggling eurozone, has little to do with Ukraine and more to do with a hangover from the European debt crisis. But the crisis provides a convenient straw man for politicians and finance ministries to blame.
Even if new sanctions aren’t in the cards, condemnation of Russia’s actions were swift. NATO chief Anders Fogh Rasmussen called Russia’s actions a "major escalation" of the crisis. Gen. Philip Breedlove, the top U.S. military commander in Europe, compared the Ukraine incursion to "’humanitarian’ and ‘peacekeeping’ efforts to Georgia, Moldova, and Crimea," referring to areas Russia has either annexed or partially controls.
But the enduring mystery of what exactly is in those Russian trucks remains. Putin knows, putting him one step ahead of everyone else.
"We don’t have a perfect picture of what’s inside those trucks," Kirby, the Pentagon spokesman, said at a Friday briefing. "I don’t have an imperfect picture either."