Editorial Board

Making Putin Pay

The U.S. and EU need to convince Vladimir Putin that they're serious about deterring his bad behavior in Ukraine.
Boots on the ground would be even better. Photographer: Petras Malukas/AFP/Getty Images

There's wisdom to speaking softly in diplomacy, but you won't go far if all you're carrying is a little stick. That Rooseveltian lesson should guide the U.S. and the European Union in their talks tomorrow with Ukraine and Russia over the crisis caused by Russia's aggression.

Russian President Vladimir Putin hardly seems deterred by the penalties the U.S. and the EU imposed after his country's takeover of Crimea. Since the U.S. issued its most recent executive order on March 20 targeting Russian officials, Russia has: stoked separatist protests and takeovers of government buildings in cities across eastern Ukraine; jacked up what Ukraine pays for Russian natural gas; strong-armed countries to back Moscow's case at the United Nations; and massed tens of thousands of troops on Ukraine's border instead of heeding calls to talk things out. So much for the West's coercive diplomacy. And in response to Russia's ongoing bad behavior, the U.S. and the EU have mostly blustered about "consequences."

QuickTake Standoff in Ukraine

After weeks of warnings, Ukraine has now dispatched its military to confront the armed provocateurs who have seized police stations, ministries and airfields. Past a point, like any state seeking to defend its sovereignty, it really didn't have a choice. It's a relief that yesterday's operations did not lead to major violence. Russia would use that to justify an intervention by its tens of thousands of troops on the border to "protect" pro-Russian separatists. The Ukrainian authorities must continue to act with restraint, calling out Russian sabotage without resorting to Putinesque agitprop about "terrorists" to describe those who have grievances with the current government in Kiev.

To help quell unrest among Ukraine's Russian minority, for instance, the Ukrainian government should follow through quickly on its plans to grant more autonomy to regions, including by allowing them to elect their governors -- a luxury that citizens do not necessarily have in Russia. That contradiction doesn't bother Putin. His vision of a federalized Ukraine includes giving its provinces the right to manage, among other things, their own foreign affairs -- a dangerous invitation to meddle that Ukraine should resist. Nevertheless, some kind of federalization may be the only way to pacify Ukraine's Russian minority.

In the long run, some analyses suggest, Ukraine's pro-European tendencies reflect more of a generational divide than a regional one; the young generally favor a European political and economic system. Time is on their side.

To help Ukraine hold together now, the U.S. and the EU will need to show more resolve. It's not as if their sanctions are having no effect at all: Capital outflows from Russia were $50.6 billion in the first three months of 2014, up from $27.5 billion a year earlier. The ruble is the second-worst-performing emerging-market currency this year, down about 9 percent against the dollar. Stock indexes are sharply lower, and economic growth is expected to stagnate. But the price is not yet high enough for Putin to care, and he's seen with his own eyes that the EU is loath to jeopardize its economic fortunes, and President Barack Obama draws his red lines with disappearing ink.

If the U.S. and the EU want to be taken seriously, they need to send a strong signal to Russia before Thursday's meeting of foreign ministers. The U.S. could start by making good on its leaked intention to sanction Igor Sechin , a Putin ally and president of Rosneft OAO, Russia's largest state-owned oil company. The U.S. could also make clear that if Russia does nothing to de-escalate the situation, then broader sanctions on Russia's financial sector and energy industry will kick in.

The North Atlantic Treaty Organization has just announced it will bolster air and sea patrols and increase its readiness. Yet U.S. boots on the ground in Europe remain the ultimate tripwire. NATO needs to convince Germany and other reluctant members that Putin's sensibilities are less important than the concerns of Poland and other NATO members with harsh memories of Soviet behavior.

Representatives from Germany and France have said the EU will move to a "third stage" of sanctions if this week's talks fail. Some specifics on what they have in mind might make that threat more credible. Then again, given the EU's unwillingness to take robust measures thus far, maybe not. Many Europeans, beginning with industrialists in Germany and France, quail at the possible effect of sanctions on their bottom line.

They should look at things with a more historical perspective. The U.S. and the EU may have asymmetric levels of economic interest vis-a-vis Russia. They have more equal concern, however, for upholding the principles of sovereignty and rules-based relations among nations. Their willingness or reluctance to do so will have an effect that ripples from Ukraine's public squares to Asia's troubled waters.

    --Editors: James Gibney, Mary Duenwald.

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    To contact the editor on this story:
    David Shipley at davidshipley@bloomberg.net

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