My View: Hitting Russia where it hurts
April 3, 2014
The press conference held in the Hague after a meeting on nuclear issues last week was both clarifying and revealing. Much can be deduced about our relationship with Russia, the Ukraine situation and the world's view of America's leadership, its limit of power and in particular, President Obama's role. The President came in for high praise from the hosting Dutch foreign minister for his leadership.
The goal, per the President, is to give those in Ukraine the chance to decide on their own relationship with the West and Russia in May elections. Looming is the fear Russia will attempt to carve out a land bridge from Russia to Crimea through Eastern Ukraine.
Ukraine has a Russian gun pointed at its head. The fear is Russia will try the same tactics used in Crimea, like outside provocateurs, gangs of irregulars and infiltration of unmarked military personnel. Currently massed on Ukraine's borders are Russian troops. Putin initiated a call to President Obama, but at this writing it is unknown if Russian troops were pulled back and Russia accepted the deal to have international observers protect Russian-speaking Ukrainians from the new Ukraine government in Kiev.
A measure to kick Russia out of the G8 and isolate Russia got unanimous approval in the Netherlands. This follows Russia's veto in the U.N. of a resolution upheld by 13 other members of the Security Council declaring Russia's takeover of Crimea invalid. Only China abstained.
The original group of Western economic superpowers was once called the G7. The first time Russia was invited to participate was when the summit was held in Denver in 1997. Those of us living in Colorado were eyewitnesses to quite a spectacle and the first ladies were treated to a train ride to Winter Park and lunch.
A very important outcome in the Hague was unanimous reaffirmation that NATO military treaty obligations would be honored if Russia tried to expand to the Baltic states, which, like Crimea and parts of the Ukraine, also have large populations of Russians. There are many Lithuanian immigrants in Grand County who must be taking comfort from that.
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The delicate question is how can Western Europe or the U.S. up the ante to modify Russia's behavior short of military action without shooting themselves in their own economic feet? The most effective way would be for Europe stop being dependent on oil and gas from Russia. This would get Russia where it hurts, since their economy has been pumped up by sales to the West. The E.U. is presenting a plan in June to wean themselves off of Russian energy.
Russia is already feeling the pressure. Rana Foroohar, writing in Time on March 24, 2014, believes "Putin's petro state will eventually implode all by itself," pointing out the U.S. that has the fastest growth in the world. She predicted that there would be a foreign capital flight to the U.S. "as investors seek safety in U.S. Treasury bills and blue-chip stocks. In economic terms, the war over Ukraine has already been won – and not by Putin." Russian government sources confirm the flight of capital out of Russia, $70 billion in the first quarter (as much as in all 2013); stagnation instead of forecasted growth and inflation of 7 percent due to ruble devaluation.
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