A Bloody Borderland: Insight into the Ukraine Crisis

June 9, 2015

by Fabio Capano

The Crimean War of 1854-1855 deeply challenged Russian military dominance over the European continent and significantly upset the balance of power that was established in Vienna in 1815. More than a century and a half later, Russia’s aggressive strategy in Crimea is reawakened the ghost of former Czarist ambitions of westward expansion. Although different in their scope and nature, these wars seemingly defied the geopolitical order established after the end of the Napoleonic Revolutionary Wars in the former case and the Cold War in the latter. Today, Russia’s territorial ambition in Crimea represents the greatest challenge to the widely shared principles of national sovereignty, territorial integrity and peoples’ right to self-determination that emerged from the ashes of two world wars. More than a year after Russia’s annexation of Crimea, this specific feature of the conflict deserves the attention of the international community as it has major implications for the European order.

Putin’s War: The Return to Cold War Politics

The fall of the Berlin Wall inaugurated a season of unprecedented geopolitical changes within the Soviet bloc. Shortly before the formal dissolution of the Soviet Union, the Ukrainian Parliament declared its independence in the summer of 1991. Within a few months, many countries, including Russia, recognized Ukraine’s right to be an independent and sovereign nation. Ukraine’s new territorial borders also included the Crimean region, a political entity that showed strong autonomous ambitions. Nonetheless, Crimea remained an integral part of the Ukrainian state until the Euromaidan Revolution of February 2014. By the end of March of that year, life in the country had changed dramatically: its president had fled, its Crimean region had been occupied by Russian forces and quickly annexed, and its military had entered into an armed conflict in the Donbass region with separatist forces supported by Russia.

Despite the short-lived optimism of the Minsk cease-fire agreement, these events have further reignited Cold War practices and rhetoric that views Moscow as the main threat to European peace and stability. This tense relationship can be traced back to President Putin’s election in 2012, which effectively distanced Russian politics from Medvedev’s moderate progressivism. Over the years Putin’s image has transmuted into “something close to idolatry” despite a strong economic recession, which has been further aggravated by increased spending on national and military defense. His cult of personality has been facilitated by fears of Western encirclement over “free market imperialism” and NATO expansion to former Soviet satellites.

Therefore, the Ukraine crisis is both a test and an opportunity for NATO, the West and the European Union. On one hand, it is upon these powers to defy Russian aggressiveness by holding economic sanctions, supplying humanitarian aid and strengthening defenses. On the other hand, opposing Putin and his aggressive strategy may also represent a unique opportunity in which European partners can achieve energy independence, unveil Moscow’s corruption and populist demagogy, and further advance transatlantic relations toward a safer and freer world. Ultimately, the transatlantic partners’ legacy will be measured by their ability to effectively preserve what is truly at stake: the territorial integrity of independent and sovereign states.

An Unprecedented Challenge to Postwar Europe

The inviolability of the frontiers that were established after 1945 has become one of the main “victims” of the Ukraine war. This principle, sanctioned by the Helsinki agreements of 1975, long guaranteed geopolitical stability and invaluably contributed to the peaceful settling of state disputes while refraining from the use of military force. At that time, 35 countries, including the former Soviet Union, signed the agreement. Nonetheless, the Russian Federation, one of the successor states of the Soviet Union and a signatory of the Helsinki Act, has bluntly violated its obligations.

Interpreting Russia’s breach of international law by simply attributing it to Putin’s political leadership may be inaccurate. This breach is better understood within the broader frame of regime transitions that followed the disintegration of the Soviet bloc. Different from its Eastern satellites that quickly gravitated toward the European community, the Russian Federation and the other former Soviet Republic experienced a more troublesome and complex transformation from a communist into a post-communist state.

What George Kennan described in his Long Telegram from Moscow in 1946 as “Kremlin’s neurotic view of world affairs” survived the end of the Cold War. In a context of unprecedented political, economic, and social transformation among its neighbors, Russia also had to witness the dissolution of the Warsaw Pact, the communist-led military alliance that for almost 50 years guaranteed the cohesion and security of the Eastern bloc. Its counterpart, however, did not disappear. Indeed, NATO has reinvented itself by becoming the leading military response force to threats to Western security. These threats were not related to international communism, but rather the resurgence of ethnonationalism and later, religious extremism.

These changes in NATO’s scope and nature have faced major criticism from Moscow, which has often perceived NATO’s new role as an instrument of Western interference into domestic affairs of sovereign nations. When looking at today’s Ukraine, this critique appears incredibly hypocritical, yet NATO’s military interventions in the Yugoslav wars as well as multiple peacekeeping and peacebuilding missions in both Southeastern Europe and Africa have attracted more founded concerns from its detractors. Moreover, NATO’s role in the military campaigns that followed 9/11 and the harsh debates inside the UN reignited the feasibility of Western “mission civilizatrice.” However, following the Crimean events, NATO re-embraced its original raison d’être as a shield from Russian aggressiveness and an integrative force for its former republics.

The Russian-sponsored separatist war in Crimea marked a new chapter in post-war international affairs. For the first time since 1945, a country has supported the secession of a region that is part of a bordering sovereign and independent state while also using military force to invade and occupy the same region in the name of peoples’ right to self-determination. The use of force and the rebuttal of diplomacy as a means to settle state disputes certainly represent one of the most frightening features of this crisis and calls for an enduring response from the international community.    

Conclusion

The violent confrontation between Ukraine and Russian separatist forces is being played upon opposing nationalist ambitions over a region whose conflicting ethnic and political identities reemerged after 1989. Russia’s violation of the territorial integrity of Ukraine, an independent state, has been largely perceived by Western countries as a direct attack on one of their leading principles: national sovereignty and territorial integrity. The United States and the European Union’s response has largely relied on the use of soft power: economic sanctions against Russia, partnership agreements with the former Soviet Republics, and humanitarian aid. While the United States has gone as far as to grant military training to Ukrainian troops, EU members are still entangled in internal debates. The EU’s inability to deepen common defense capabilities has further reaffirmed NATO’s role as the single most credible instrument of defense for crisis management of the West.

More important, analyzing the Crimean conflict through the lenses of geography, politics and identity tackles the Ukrainian crisis at its core. Territorial changes in the geography of an area also imply changes in its political allegiances. According to Moscow, the local population in Crimea never strayed from its political loyalty to the Russian motherland. Thus, it argues that its reincorporation simply fulfills Western principles of peoples’ right to self-determination. In Moscow’s view, both the transatlantic partners and Russia are fighting to affirm the same principle. This message is clearly misleading and oblivious to the true nature of the issue. Conducting a referendum during military occupation impairs voters’ ability to freely express their will.

Thus, transatlantic partners need to first counter Moscow’s misleading rhetoric. Although repression and censorship is rampant in Russia, the use of international media provides an opportunity to enter into the hearts and minds of the Russian people. Therefore, supporting domestic opposition to President Putin appears to be the best means to contain Russian aggressiveness. Although some analysts have pointed out that political opposition to Putin is extremely fragmented and an easy target for governmental repression, providing financial and political support to underground grassroots movements could actually enhance voices of dissent within Russian national public opinion.

Second, European partners need to quickly overcome their divergent strategies and budget constraints. Although asking European constituencies to devote more resources to defense can be extremely unpopular in a context of the recent recession, the EU can no longer postpone the creation of an autonomous military force to rapidly and effectively respond to challenges on its borders. As the wars in the former Yugoslavia amply demonstrated, Europe was incapable of containing localized ethnopolitical violence that produced waves of atrocities unseen since 1945.

Finally, the transatlantic partners need to firmly sustain current economic sanctions against Moscow while also leaving room for dialogue with both the Kremlin and its partners. In this respect, the Ukraine crisis is proving the United Nations’ inability to serve as the defender of international peace and security. Its outdated system of governance needs to be deeply revised and rethought; otherwise, it will continue to lack the capacity to fulfill its mission.   

As history has shown, the fluidity of state borders has caused much more harm than good to Europe over the years. After 1945, the impulse to expand was subdued by the imperatives of international peace and geopolitical stability. The mutually accepted permanence of national frontiers assisted both sides during the Cold War. While it greatly helped Moscow minimize Western interference in its internal affairs, it also fostered Soviet satellites’ ambitions for national independence and territorial integrity. And just as the Soviet Union attempted to contain these ambitions through political violence and military force, it is clear that the Russian Federation has taken on the same task more than two decades later.

Fabio Capano is a transatlantic security analyst at the Streit Council. Photo credit: German Federal Archives 

The Case for Arms: What is at Stake if Weapons are Sent to Ukraine

June 3, 2015

by Arie Groenveld

Lithuanian Mechanized Troops

Since the Ukraine Crisis began, Western states have faced growing pressure to provide the Ukrainian government with lethal weapons to combat Russian and separatist forces in the east of the country. President Obama has so far been reluctant to provide arms, first wanting to give sanctions more time and exhaust all possible diplomatic efforts. The administration is torn on the issue, as are many European governments that have been involved in seeking a peaceful resolution to the conflict. German, French and other European leaders are, however, more vocally opposed to arming Ukraine, doubtful that such as escalation would convince Putin to back down. As Russia positions itself for another military intervention and the conflict resumes, many Western leaders will face renewed calls to send lethal aid to Kiev – a dangerous proposition that they should resist.

Arguments for lethal aid

Russian and separatist forces made significant gains this year and inflicted heavy losses on the Ukrainian army. The U.S. pledged to support Ukraine with non-lethal aid, but even fulfilling that promise has fallen short so far. The U.S has not sent many urgently requested items, such as body armor, night vision devices, aviation fuel and more sophisticated communications equipment, which it dubbed “force multipliers.” Ukraine is currently undergoing a full military mobilization and possesses a large domestic arms industry. Despite these factors, experts claim that Ukraine will not be able to defend its territory against Russian and separatist forces if it does not acquire the requested equipment. While Ukraine may still be unable to stop their advance with lethal aid, raising the costs of intervention for Russia might help change Putin’s calculations.

The Ukraine Freedom Support Act of December 2014 authorized President Obama to provide weapons to Ukraine, but so far the president has instead opted to pursue diplomatic and economic efforts. The first was through sanctions and the second was via the Minsk Agreements, which have not yielded any significant results. Calls for arming Ukraine increased after the Minsk ceasefires failed to stop the fighting and secure a change in Moscow‘s policy. In March, the House of Representatives voted 348 to 48 on a resolution urging the president to provide lethal aid to Kiev. Their views have been echoed by  Obama Administration officials and high-profile commentators such as General Wesley Clark. Many believe that not reacting to Russian aggression in Ukraine will be interpreted as tolerating it, and therefore invite further aggression elsewhere. This last point in particular has driven many Baltic and Eastern European states to push for a permanent NATO presence on Russia’s periphery, out of fear that they could be next.

Risks

The potential hazards of supplying Ukraine with lethal aid have shaped the debate from the beginning. If the West as a whole, or the United States alone, pursues this policy, it is argued that Russia would not hesitate to match it. Russia could supply greater quantities of arms to the separatists more rapidly than the U.S., and possibly even its NATO allies, would be able to supply Kiev. Moscow could also intensify its own direct involvement, which would further escalate the conflict. Russia would likely escalate regardless of any initial success Ukrainian forces might achieve, calling into doubt the net efficacy of lethal aid in the first place. Furthermore, the prospect of Russian citizens being killed by American weaponry would serve Russia’s disinformation campaign against the West and possibly act as a catalyst for retaliation.

A decision to supply lethal aid to Ukraine would also jeopardize Western cohesion. Already, internal EU disputes have marred the chances for a cohesive approach. Most visibly, Greece has pushed against broader sanctions against Russia as its new government is at odds with the rest of the Eurozone over its own economic situation. More importantly, Germany, France and many other EU states are opposed to arming Ukraine, so if the U.S. decides to do so unilaterally it might split NATO and undermine the Alliance’s credibility. Faced with escalation, Moscow could also interfere with Western policies elsewhere. Amid a warming of U.S.-Iranian relations, Moscow stands to lose a key bargaining chip in Iran and potentially a great deal of revenue from Iran’s lucrative nuclear, petrochemical and manufacturing industries if Iran has its sanctions lifted. In this scenario, Iran could even grow to compete with Russia in oil and natural gas exports, further worsening Russia’s economic outlook. Putin could set himself against rapprochement between the West and Iran and seek to thwart a deal on its nuclear program.

Policy moving forward

On balance, Western leaders have been prudent in pursuing a diplomatic solution. While renewed Russian intervention in Ukraine would be the strongest indication yet that the West’s current strategy toward Russia is insufficient to resolve the crisis, the alternative of arming Ukraine would lead to a worse outcome. Western states have little choice but to maintain their risk-averse approach of showing strength and support for NATO states closest to Russia – enhancing confidence in their Article 5 commitments –while sustaining sanctions in an effort to curtail further Russian encroachment and alter Moscow’s behavior in the longer-term.  

Arie Groenveld is a transatlantic security analyst at the Streit Council. Photo credit: U.S. Army Europe 

Russia’s New Military Doctrine and NATO

March 3, 2015

by Arie Groenveld

PutinOn December 26, 2014, Russia released its new military doctrine. In this document, as in the previous edition released in 2010, NATO is named as the main external danger to Russia. While this updated military doctrine was first requested by the Russian Security Council in July 2013, it comes at a time when relations between Russia and NATO are increasingly strained – especially over the conflict in Ukraine. As a result, it includes several new features that have implications for what the alliance should expect from Russia going forward, and how it should prepare.

Continuity, Change and Context

The new military doctrine is similar to 2010 version in several ways. Concern is expressed over NATO’s expanding military presence in Eastern Europe and the potential for expanding its membership up to Russia’s borders. NATO’s increasingly sophisticated missile defense and precision weapons systems are also reiterated as top concerns. The document, moreover, cites NATO’s “global functions” as a violation of international law – a reference to NATO operations over Kosovo in 1999 and Libya in 2011. Other aspects of Russia’s new military doctrine also remain the same: Russia will continuously seek to bolster its own military capabilities and those of its allies, and its nuclear capabilities will be used to deter both nuclear and conventional conflict.

The document does, however, include several additions relevant to NATO, including the perceived danger posed by the overthrow of “legitimate public authorities” friendly to Moscow – a clear reference to developments in Ukraine. An important change is the greater emphasis placed on the perception that foreign actors are using information warfare and “a complex usage [integration] of military force and political, economic, information, and other non-military means, accomplished [in part] through the extensive exploitation of the potential of popular protest and special operations forces.” These are, at the very least, indirect references to what Russia accuses NATO states of doing in Ukraine. Also notable are added references to the Arctic and space. The doctrine now explicitly mentions the Arctic as a key security interest and reiterates the dangers of placing precision weapons in space, but adds that the United Nations should regulate space to prevent its militarization.

These additions and changes to Russia’s military doctrine reflect the Kremlin’s increasingly anti-NATO narrative and actions. As other analysts have argued, Russia now views dangers and threats (which are defined differently in the document) as more immediate than they were during the past two decades, and continues to build its military as it vests little trust in the international system to help maintain a favorable status quo. After Russia’s inability to curtail NATO military action during the Kosovo conflict in 1999, it has seen NATO take steps which it deemed as being anything from aggressive to illegal. As a result, Russia has sought to prop up friendly neighbors such as Belarus and fosters ties with ethnically Russian populations from Ukraine to Abkhazia and South Ossetia.

More recently, the annexation of Crimea and a variety of other intimidating and aggressive actions – such as Russian military planes flying over the Baltic with deactivated transponders – highlight this posture. Moreover, Moscow’s emphasis on information warfare and political subversion as key dangers reflects its own use of “hybrid warfarein Ukraine: the use of special forces, information campaigns and proxies as an alternative to direct warfare.

Implications and Recommendations for NATO

For NATO, the new military doctrine further confirms that it is facing a far more assertive Russia which is willing to act aggressively at times to counter what it perceives to be a deteriorating security environment. The emphasis on precision weapons in space and hybrid warfare – indirect references to perceived dangers emanating from NATO states – illuminates Russia’s growing concern about their activities. Russia’s anti-NATO narrative and actions also signal its intent to address these concerns. NATO should therefore not expect Russia to withdraw from Ukraine without substantial, and most likely unacceptable, incentives to offset its perceived loss of influence there.

In response, NATO must be prepared to reassure its Eastern European members over the long-term, absent a constructive change in leadership and vision in Moscow. Further, as Western sanctions take their toll on Russia’s economy and leadership, and the crisis in Ukraine freezes into a strategic stalemate, NATO must be prepared for Russian action against other states – particularly those with Russian speaking populations – along its periphery.    

Arie Groenveld is a transatlantic security analyst at the Streit Council. Photo credit: Republic of Korea

NATO Membership for Sweden and Finland?

December 11, 2014

by Dean Ensley

Meetings of the Foreign Ministers at NATO Headquarters in Brussels - Meeting of the North Atlantic Council

The Ukraine Crisis, however it is ultimately resolved, will have a lasting impact on the NATO-Russia relationship. With increasing Russian assertiveness in terms of gas exports, bomber flights and naval expansion, Sweden and Finland are likely to reconsider their positions on joining NATO. While membership would benefit these countries and the alliance, it would lead to a net loss for European security at this time.

Occasional Russian military activity is nothing new, but the recent increase along NATO’s periphery is being used as political saber-rattling. In 2014 alone, there have been over 400 NATO intercepts of Russian military aircraft (50 percent more than in 2013), an Estonian intelligence officer was seized and imprisoned on the pretext of counterespionage, and a possible Russian submarine was spotted just outside of Stockholm. According to a recently published study by the London-based European Leadership Network, 3 out of 40 close encounters by Russian forces with the West are classified ashigh risk – meaning that they “carried a high probability of causing casualties or a direct military confrontation.”

Most analysts assert that Russian President Vladimir Putin’s actions are rooted in a desire to consolidate domestic political support, roll back the post-Cold War international order, and preserve what he views as a zero-sum Russian interest in Ukraine. His speech at the Valdai Discussion Club on October 25th reflected these views:

“…the so-called ‘victors’ in the Cold War had decided to pressure events and reshape the world to suit their own needs and interests….Let me stress that Russia is not going to get all worked up, get offended, or come begging at anyone’s door. Russia is a self-sufficient country. We will work within the foreign economic environment that has taken shape, develop domestic production and technology and act more decisively to carry out transformation. Pressure from outside, as has been the case on past occasions, will only consolidate our society, keep us alert and make us concentrate on our main development goals….The crisis in Ukraine is itself a result of a misbalance in international relations.”

There are three central conclusions we can draw this understanding of Putin. First, he will not, under any circumstances, allow sanctions to deter or change his chosen path of action in Ukraine. Second, Russia will temporarily cooperate with what Putin perceives to be the U.S.-dominated “foreign economic environment,” but ultimately hopes to replace this system with one of his own liking. Third, by harkening once again to the “past occasions” of World War II and the Cold War, he seeks to galvanize his inner circle and the broader population in an “us versus them” mentality.

Putin’s pursuit of these objectives will have long-term effects on NATO’s attractiveness as an alliance, most notably on non-NATO members Sweden and Finland. Despite their “non-aligned” status, these long established liberal democracies are more inclined to join – and more likely to be accepted by – NATO than other European non-members and already participate in alliance activities and operations.

Non-aligned since the Napoleonic era, the Ukraine crisis has roused discussions on Sweden’s defenses, level of defense spending and relationship with NATO. After 250 public sightings and a week-long operation that failed to find a supposed Russian submarine, the government announced a 300 million Swedish krona increase to its annual defense budget and a 900 million Swedish krona purchase of 10 fighter aircraft and a submarine. For the first time ever, pollster Novus found in October that 37% of Swedes favor joining NATO, versus 36% who are against the idea. This represents a significant shift from May, when the numbers were 28% in favor and 56% against. A participant in NATO’s Partnership for Peace (PfP) program since 1994, Sweden participates in alliance operations and activities but has not been granted the security guarantee that comes with membership.

Similarly, after three unauthorized Russian military aircraft overflights within a single week in August, a Finnish poll showed 43% of Finns perceived Russia as a danger, an increase of nearly 20% from March. Russian officials have repeatedly and explicitly warned Finland against joining NATO, a reflection of a Finland-USSR treaty in 1948 that barred Finland from assisting or joining the alliance. Like Sweden, Finland joined the PfP program in 1994 and participates in alliance activities and operations without a security guarantee. Finnish Prime Minister Alexander Stubb said in September that his nation should have “become a member in 1995” and that each threatening gesture by Russia strengthens the pro-NATO argument.

While Sweden and Finland are not yet moving to join NATO, in September they signed  Host Nation Support Memorandums of Understanding with the alliance, allowing for joint exercises on their soil and assistance from NATO members in situations such as “disasters, disruptions and threats to security.” There are compelling arguments in favor of taking the next step toward full membership in NATO: Membership would politically reassure these countries – strengthening their ability to deter Russia militarily and politically – while expanding NATO’s collective defense capabilities and improving the alliance’s ability to guard against non-traditional threats such as the spread of long-range delivery systems and weapons of mass destruction.

Yet there are major risks to expanding NATO to include Sweden and Finland. Sergei Markov, a senior adviser to Putin, said in August that “Russophobia” in these countries could start another world war and that they should therefore not join the alliance. This is likely to contain a degree of bluster, but given Putin’s actions in Ukraine it is likely that he views Finland’s neutrality, in particular, as vital to Russian interests. In this case, Finnish membership in NATO is likely to trigger a similar response. Putin may not be willing to use force on a NATO member, but the expansion of the alliance could lead to the full annexation of Eastern Ukraine or Transnistria, a bolstered military presence in Kaliningrad or Crimea, or a withdrawal from arms control agreements – among other potential reactions. Domestically, the admission of Sweden and Finland would feed into Putin’s narrative of encirclement by the West, granting him political leeway to take further action. This dynamic has strengthened since the Ukraine crisis started, and as a result Putin’s approval rating is almost at an all-time high.

On balance, Sweden and Finland’s entrance into NATO would be harmful for European security at this time. Memorandums of understanding can facilitate further steps toward enhancing interoperability and cooperation between the alliance and these states, but full membership would give Putin’s Russia a major pretext for further action.

Dean Ensley is a transatlantic security analyst at the Streit Council. Photo credit: NATO

The Ukraine Crisis: The Current Sanctions Regime and its Limits

November 6, 2014

by Jack Beecher

Vladimir Putin

Russia’s annexation of Crimea, military aid to pro-Russian separatists in Ukraine, direct military intervention, and the downing of Malaysian Airlines flight MH17 triggered a series of escalating sanctions from the United States and the European Union, among others. Yet it does not appear that Russia will be moving from Crimea anytime soon, and the Ukrainian government has effectively ceded autonomy to the eastern regions following a ceasefire. More than eight months into the Ukraine crisis, are Western sanctions achieving their objectives?

Western sanctions target Russian President Vladimir Putin’s inner circle and senior officials, and – when applicable – their companies, but not the broader economy or people at large. Even so, they are weakening the Russian economy as a whole. The IMF believes the Russian economy will grow by 0.2% this year, down from its previous estimate of 3%, while it recently downgraded its estimate for 2015 from 1% to 0.5%. The ruble continues to depreciate, raising prices on imports, the cost of living and overall inflation. The latter is at 8.4%.

The ostensible goal is to inflict economic pain on Putin’s inner circle and senior officials, leading them to put pressure on him to change course. “Now that their wealth has been diminished by Putin’s actions, they have a big incentive to act against Putin and he knows that,” said Bill Browder, a hedge fund manager and vocal campaigner against Russian corruption. Yet Moscow has not ceased its support for pro-Russian separatists in Ukraine, and, as was the case with Russian intervention in Georgia in 2008, Putin’s public approval rating increased from 65% in October 2013 to 86% in September 2014. The house arrest of Russian oligarch Vladimir Yevtushenkov and seizure some of his assets may be a sign of growing tension among the ruling elite, but it is not clear that they are willing to undertake any great personal risk to alter Putin’s behavior. Ukraine and the EU, moreover, decided to delay the implementation of their trade pact to assuage Moscow’s opposition to the agreement.

Given Putin’s lack of responsiveness to Western sanctions so far, what can be expected going forward? When it comes to the history of sanctions, the record is mixed. While the outcome was the right one in Rhodesia and South Africa, these were minority regimes facing great domestic pressure. Sanctions have arguably not undermined the Cuban regime, and some assert that they give the regime an excuse for the poverty generated by its economic system. The U.S. first sanctioned Iran in 1979, but Iran simply sold its oil to other countries. In contrast, multilateral sanctions imposed on Iran in response to its nuclear program since 2006 have imposed serious costs on the Iranian economy, and are largely credited for its more positive tone since the election of President Rouhani. In other words, the record shows that the effectiveness of sanctions depends on many variables, many of which are specific to the target country.

With regard to Russia in particular, some argue that targeting its leadership could have the opposite effect, making it more radical and less willing to compromise with Ukraine and the West. While it is not clear if this is happening, Putin’s aforementioned poll numbers indicate that a “rally around the flag” effect has, at the very least, taken hold at the public level. This may continue in the short-term, but as the punitive economic effects of the sanctions affect more of the Russian public, Putin’s approval rating is likely to fall as it did after his conflict with Georgia, leading him to provoke another conflict, change course, lose the next election, or resign. Assuming that the West successfully prevents the first pathway from materializing, and that the last two outcomes are least desirable for Putin, at least two open questions are: 1) How long will it take for the sanctions to alter Putin’s behavior? and 2) Will the West lose its resolve to maintain its sanctions in the interim period? Putin may not be able to withstand the consequences of his aggressive policies indefinitely, but there are also limits to the West’s cohesion and the how quickly its sanctions regime can achieve results.

Jack Beecher is a transatlantic economy analyst at the Streit Council. Photo credit: Jürg Vollmer

Winter is Coming: Time to Bolster EU Energy Security

October 27, 2014

by Dean Ensley

Natural Gas

Recently, the European Union completed its first bloc-wide stress test on energy supplies. As Russian natural gas exports to Central and Eastern Europe shrink, the EU needs to move forward on several aspects of its natural gas policy to avoid a repetition of the 2006, 2008 and 2009 gas crises with Russia. 

If the EU’s energy security strategy is not more completely implemented, the 28-state bloc risks grave supply shortages this winter due to enduring tensions with Russia over the Ukraine crisis. Faced with shrinking Russian gas imports, the EU recently conducted its first gas stress test, which is a consideration of its gas distribution system as a whole rather those of individual nations. Ideally, this review will enable the EU to better prepare for disruptions in gas supplies during winter months, but it must be followed with swift adherence to its existing energy security strategy released in May.

There is no questioning the impact that gas shortages would have on the quality of life of European citizens and the resulting economic stress as nations try to meet demand. As of 2014, the EU receives about 30% of its total gas imports from Russia and pays around $250 billion in annual energy bills. This is all the more concerning when one recognizes that half of Russian gas exports to Europe, over 86 billion cubic meters in total, passed through Ukraine’s pipelines in 2013. The situation in 2014 has deteriorated because Gazprom, Russia’s state-run energy giant, cut off all gas exports to Ukraine in June over claims that Kiev had not paid its bills. Additionally, Russia has reduced gas exports to Poland by a 45%, and reduced supplies by relatively smaller amounts to Slovakia, Austria, and Hungary. What reason does Russia give for targeting other European nations? Gazprom claims they are “re-exporting” Russian gas to Ukraine when it “isn’t intended for them.” 

On May 28th, the European Commission released the EU’s energy security strategy, which outlines several suggested short and long-term measures. Short-term measures include reducing energy demand and switching to alternative fuels, whereas long-term measures include increasing energy efficiency and protecting critical infrastructure. The suggestions are constructive, but will do little in the near future to curb Russia’s leverage. For example, the goal of increasing energy efficiency is defined by reaching the proposed 2030 energy and climate goals. In the intervening period, outlying nations such as Ukraine and even the bloc itself will continue to suffer Russian methods of coercion.

Given Russia’s current strategy, how can Europe further protect itself in the face of such dependence on Russian gas exports? That is where the recent stress test comes to play. According to The New York Times, this test was officially designed “to see how badly [Europe] would fare if flows of Russian natural gas were disrupted.” The test effectively checked whether member countries have improved energy security since the 2009 gas crisis, when Russia disrupted exports through Ukraine. Even though the stress test showed that the EU could withstand the loss of Russian gas flows through Ukraine for one month, it should be followed by at least four steps to more fully implement the EU’s energy security strategy.

First, the EU needs to develop a single gas market. Currently, members in the east and southeast such as Poland, Finland, Romania and the Baltic states would suffer the heaviest impact of gas shortages from Russia. This is partially due to their proximity to Russia, and therefore greater trade density, but also due to the lack of pipeline interconnections. If the EU builds more pipeline interconnectors, which the European Commission estimates will cost $22 billion, there will be enough pipelines such that countries without access to gas can import it from others with sufficient supplies. Therefore if the EU as a whole suffers a gas supply crisis, the burden will be shared as a bloc. This implies Russia would have no middle ground option, and would likely have to cut off several countries in order to effectively cut off one. This increased cost makes it a less attractive option for a nation so dependent on gas exports.

Second, the EU should collectively demand that Russia sell gas to EU members at a uniform price. Russia benefits from its status as Europe’s biggest gas supplier and uses that as leverage to manipulate prices. For example, as Russia recently increased gas prices in Ukraine it decreased gas prices in Lithuania. Beyond internal European price differentials, Russia has even sold Europe gas it bought from Turkmenistan at several times the original price. If the EU is to pursue collective energy security, then it must place unity over parochial interests to prevent Russia from weaponizing gas sales. This would likely change Russia’s behavior dramatically because its options would be reduced to targeting the entire bloc or not using gas exports for political leverage. Given its current trajectory, perhaps Russia is willing to antagonize the entirety of Europe, but it would only feasibly happen when it is left without alternatives or feels intrinsically threatened.

Third, the EU must pursue the accelerated construction of the South Stream pipeline in order to prevent Russia from holding the EU hostage over disagreements with Ukraine. Most major gas pipelines currently pass through Ukraine or Belarus. As of December 5, 2013, the Nord Stream pipeline finished its final 30-day test and it currently transports up to 27.5 billion cubic meters of natural gas directly from Vyborg, Russia to Lubmin, Germany. Similarly, the proposed South Stream would pass through the Black Sea, and directly export gas to Varma, Bulgaria, and onward to Central Europe. While the EU should not abandon Ukraine, it should not be dependent on gas transiting through it. This would allow European leaders a degree of political flexibility if they decide that energy security is more important than Ukrainian security.

Fourth, and most importantly, the EU must diversify its energy sources and increase emergency stockpiles. The European Commission has an initiative to establish a Southern Gas Corridor from the Caspian and Middle Eastern regions to Europe, which would decrease Russian dominance over EU imports. In terms of other forms of transporting gas, the EU currently has over 20 regasification terminals designed to receive liquefied natural gas, with six more under construction. By expanding these operations, there will be new opportunities to import from LNG-exporting countries such as the U.S. or Israel. Finally, coming full circle, the recent stress test confirmed a 30-day buffer of emergency gas supplies. But if Europe is willing to go head-to-head with Russia, it will need a bloc-wide emergency supply, similar to the U.S. Strategic Petroleum Reserve, which should last longer than 30 days.

In summary, the EU is still highly dependent on Russian gas exports. The Ukraine crisis has once again ignited debate, leading to the first-ever EU-wide review of gas supplies. However, the EU must fully implement the aspects of its energy security strategy that center on natural gas. While not limited to the measures suggested here, such collective policy would strengthen European energy security and move it away from the yolk of Russian gas manipulation. With winter only months away, the stress test must serve as the basis for a more robust EU commitment to its own strategy rather than a purely academic exercise.

Dean Ensley is a transatlantic security analyst at the Streit Council. Photo credit: Ervins Strauhmanis

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