How the US is Overplaying its Hand in Ukraine

In recent days, the Obama administration has warned that “there will be costs for any military intervention in Ukraine,” with Secretary of State John Kerry stressing the “huge price to pay” if Russia presses on. But as to be expected, the West hasn’t deterred Russian President Vladimir Putin, and Russia has now fully occupied Crimea while posturing for a potential move into Eastern Ukraine.

From the American perspective, the Russians have already crossed the Rubicon, with the Obama administration demanding a return of Crimea to Ukrainian sovereignty ‘or else.’ But there are three serious miscalculations here, in ascending order.

First, the American list of economic and diplomatic threats will be exceedingly hard to make good on. Second, this “huge price” pales in comparison to the economic hit Russia has already proved willing to pay. Lastly, provoking Russia is a strategic mistake and not in the best interests of the Ukrainian people as a whole. I’ll take each in turn.

Kerry has threatened Russia with economic and political isolation, setting out a gamut of potential punishments that, at first blush, sounds akin to the US-led sanctions against Iran. But there's no such plan for Russia whatsoever. Washington has convinced its allies to halt plans for the G-8 summit in Sochi, and Kerry has also said the US would consider removing Russia from the group altogether. The US would probably place visa restrictions on some Russian leaders and politically connected oligarchs and consider freezing some assets. But none of this would shake the Russians, and it’s not assured that the US can even get the Europeans on board. More meaningful sanctions impacting Western-based multinationals are a non-starter from the perspective of France, Germany and Italy (and likely the US as well).

The problem: there is no “or else” from the United States that remotely offsets Putin’s interests in Ukraine. Outside of subduing Chechnya, retaining Ukraine is his single biggest national security priority. After Russia’s push into Crimea, the ruble collapsed, necessitating a massive interest rate hike. On Monday alone, Russian stock market losses exceed the bloated cost of the Sochi Olympics. The direct hit to the Russian economy exponentially outweighs the West’s threats—and it’s still a price Putin is paying without flinching. The bottom line: having occupied Crimea, the chance Russia would back away from the peninsula is zero, and American threats can only make Putin dig his heels in.

The biggest issue with the American strategy is that it is in the US’ interest for Russia to have a slow, steady decline…and not really notice. There is no need to torpedo a sinking ship. The US broke this cardinal rule in Ukraine, crossing a redline for Putin (albeit an unstated one: the most dangerous kind). It is going to be exceptionally hard to salvage a diplomatic solution. But that is what the US needs to do, even if the odds of success are narrowing.

What does the path forward look like? Crimea was always in Russia’s pocket, regardless of how formalized that status is. The US needs to tacitly accept Russian occupation of Crimea until a formal referendum on autonomy--with external election observers--can proceed. It must support an interim IMF deal for the Ukrainian government contingent on accepting this external Crimean outcome along with guarantee for an inclusive respect for all ethnic minorities (read: Russians) in the rest of Ukraine. In return, Russia would have to pledge to respect the territorial integrity of core (non-Crimean) Ukraine, reverting to a strategy of maintaining informal influence, doing so by supporting core oligarchs and influencing the upcoming May presidential elections.

This is, of course, going to be very difficult to achieve. It cuts against Ukrainian nationalism, and there are many players (some of whom are now in Ukraine’s cabinet) that will find this trade-off completely unacceptable. The Obama administration would fear looking like it's granting concessions to Moscow. And if tensions in southeast Ukraine between ethnic Russians and ethnic Ukrainians with conflicting loyalties spill over into violence, it could still force Putin’s hand to move in.

But the point is, even after alarming recent events, there's a chance of renewing diplomacy. Instead of making empty threats, the US should iterate towards a diplomatic solution—even if it’s a tightrope.

Photo: KEVIN LAMARQUE/ AFP / Getty Images