Ukraine Warns Putin Crimea Accusations Will Widen Conflict

  • Putin vows ‘serious additional measures’ on peninsula
  • Ukrainian officials say Russia wants to intensify strife

Accusations that Ukrainian agents have engaged in “terror” tactics on the disputed Crimean peninsula may be a ploy by Russia to justify an escalation of the military conflict in its former Soviet ally, officials in Kiev said.

President Vladimir Putin vowed in Moscow to respond with “very serious” measures after his Federal Security Service, of FSB, the main successor of the Soviet-era KGB, said Wednesday that Ukrainian intelligence officers killed two Russian servicemen during a covert operation on the Black Sea territory that Russia seized from Ukraine in 2014. The accusation triggered a spike in the yields of Ukrainian bonds.

“To further escalate the conflict, Putin couldn’t imagine anything better than a cheap theater performance by the FSB,” Oleksandr Turchynov, chairman of Ukraine’s National Security and Defense Council, said in a website statement. Dmytro Kuleba, Ukraine’s ambassador to the European Union, added in a Facebook post Thursday: “This is not a casus belli yet, but Russia is actively accumulating stories for casus belli.”

The confrontation coincides with a surge in violence in the war in Ukraine’s easternmost regions and torpedoed plans to revive talks between Russia and Ukraine in China next month, with Putin reversing earlier support to call negotiations “pointless.” It also caps a week in which the Russian leader met with the presidents of Turkey and Iran and spoke with India’s Narenda Modi , as well as U.K. Prime Minister Theresa May, as he seeks to ease international isolation and he prepares for the G-20 summit of developed nations.

Military Threats

Interest on Ukraine’s dollar-denominated note maturing in 2019 jumped 42 basis points from a record low to to 7.891 percent at 11:57 a.m. in Kiev. Russia’s ruble weakened 0.2 percent against the dollar, while the Micex stock index fell 0.2 percent, tracking the third day of declines in the price of crude oil.

Military and political analysts were perplexed by the timing of the flareup as it followed efforts by Putin to repair ties with Turkish President Recep Tayyip Erdogan that frayed after Turkey shot down a Russian fighter on the Syrian border last year.

The Russian leader has exhibited a tendency to use instability in the region as leverage in negotiations and to embark on big foreign-policy and military campaigns both at times when he has the global spotlight -- as he does with his operations in Syria now -- and during Olympic games. He started the annexation of Crimea, for example, as Russia hosted the Sochi Olympics and sent troops into neighboring Georgia during the Beijing Games in 2008.

For a QuickTake explainer on the standoff in Ukraine, click here

“It is always difficult to read Putin’s military game plan on the ground,” Tim Ash, head of EMEA Credit Strategy at Nomura International, said in a note. “This could be much of the same as we have seen over the past year, of small re-escalations just to impress on the West, and policy makers in Kyiv, that the issue over Crimea/Donbas and Russo-Ukraine relations is still unresolved, and Moscow remains a key player.”

Reasons could also include an attempt to pressure western countries, which have refused to recognize Russia’s takeover of Crimea, to end economic sanctions that have forced the world’s biggest energy-exporting economy into a two-year recession. Putin’s comment that pursuing further talks tied to the 2014 cease-fire signed in Minsk, Belarus, may suggest that he’s threatening to reignite simmering tensions, said Alexander Rahr, a member of the German Council on Foreign Relations.

“If the West is silent, this could turn into an explosive situation with the risk of canceling out everything that has been done recently,” he said.

Other motivations could include bolstering domestic support before Russia’s Sept. 18 parliamentary elections, providing a distraction before Ukraine’s 25th anniversary of independence from the Soviet Union on Aug. 24, or maneuvering to stoke tensions before the U.S. Presidential elections in November, Ash said.

Putin discussed bolstering protective measures for the peninsula with his Security Council, according to the Kremlin press service. On Wednesday, he said Russia “certainly won’t let such things pass by” and that his administration “will adopt additional security measures, and they will be very serious additional measures.”

The U.S. government has seen no evidence that corroborates Russian allegations of a ‘Crimea incursion,” Washington’s ambassador to Ukraine, Geoffrey Pyatt, said on Twitter. He added that Russia has a record of levying false accusations at Ukraine to deflect from its own “illegal” actions, and that the U.S. would maintain its Crimea-related sanctions against Russia until it returns the peninsula to Kiev’s control.

Ukrainian President Petro Poroshenko dismissed Putin’s accusations on Wednesday as “fiction” that could be an “excuse for further military threats” by Russia. Ukraine has accused its former fellow Soviet republic of funneling cash, weapons and fighters to the separatists who have seized control of much of its easternmost regions in a conflict that the United Nations estimates has killed at least 9,500 people.

A surge in fighting made July the deadliest month since August 2015, before a truce was signed, while the Organization for Security and Cooperation in Europe noted increased activity by border guards along the Crimean frontier this week. Ukraine’s military reported 67 cease-fire violations in the last 24 hours, it said on Thursday.

“Nothing good will come of these relations -- the events are developing according to a pretty negative scenario,” Alexei Makarkin, deputy head of the Moscow-based Center for Political Technologies, said by phone. “The tensions will remain or even escalate. Very strict security measures will be put in place in Crimea and the escalation probably won’t happen there. But there may be escalation in eastern Ukraine and that is very dangerous.”

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