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Seven Reasons Putin Won't Give Up Ukraine

Russian President Vladimir Putin at the 2014 Winters Olympics in Sochi

Photograph by Sasha Mordovets/Getty Images

Russian President Vladimir Putin at the 2014 Winters Olympics in Sochi

Bloomberg’s Henry Meyer has an extraordinary article today about the dwindling options available to Russian President Vladimir Putin, whose Sochi Olympic moment has been overshadowed by the bloody mess in neighboring Ukraine.

But as much as the situation seems to be slipping out of control, it’s hard to imagine that Putin will just walk away and leave Ukraine to its own devices. Here are seven reasons why:

Pride: Putin said in 2005 that the fall of the Soviet Union was “the greatest geopolitical catastrophe” of the 20th century. From that perspective, to allow Ukraine to slip out of Russia’s orbit would make Putin no better than Mikhail Gorbachev, who presided over the Soviet empire’s dissolution in 1991.

Trade: Putin wants Ukraine to join Russia’s fledgling customs union with Belarus, Kazakhstan, and soon, Armenia. The customs union is his answer to the European Union’s much larger trading bloc. Indeed, the current protests broke out after Ukrainian President Viktor Yanukovych, a Putin ally, pivoted away from a European Union integration accord last November and chose Russia instead.

History: Russia and Ukraine have deep historical links dating back to the Kievan Rus, whose glory days were the 11th and 12th centuries. According to Russiapedia, the Kievan Rus “is traditionally seen as the beginning of Russia and the ancestor of Belarus and Ukraine.”

Statehood: In 2008, the Russian business daily Kommersant cited a source in a NATO country’s delegation who quoted Putin as telling President George W. Bush: “You understand, George, that Ukraine isn’t even a state.” For most of the 900 years preceding independence in 1991, it wasn’t. Parts of what’s now Ukraine were controlled by Poland, Lithuania, the Khanate of Crimea, Austria Hungary, Germany, and of course Russia. In 2009 Putin approvingly quoted a description of Ukraine as “little Russia.” If Putin doesn’t perceive Ukraine as a real state, he’s less likely to respect its independence.

Crimea: Crimea, the southern part of Ukraine on the Black Sea, was part of Russia until 1954, when it was given to the Ukrainian Soviet Socialist Republic by the Presidium of the Supreme Soviet, supposedly to strengthen brotherly ties, even though it had a majority-Russian population. Historians still aren’t sure why Russia gave away Crimea, but Putin isn’t likely to let that gift get too far away.

The Navy: Russia’s Black Sea Fleet is headquartered in the Crimean city of Sevastopol (which is less than 200 miles northwest of Sochi). If an unfriendly Ukrainian government ended the lease, Russia would be forced to move its headquarters east to Novorossiysk. In December, Russia dangled an offer of cheaper natural gas to Ukraine in exchange for better terms on its lease in Sevastopol.

Energy: Natural gas sales to Europe are a key source of foreign exchange for Russia, and a big share of that gas passes through Ukraine. It wants to keep those pipelines in friendly hands. But Russia’s Gazprom (GAZP:RM) is also hedging its bets by building a new South Stream pipeline that crosses the Black Sea on the seabed from Russia to Bulgaria, bypassing Ukraine.

Josef Stalin brutally subjugated Ukraine in the 1930s, liquidating the wealthy farmers known as kulaks. Putin is no Stalin, but no one should assume that he will let Ukraine go without a struggle.

Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.

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