Isolated Russia has little left to lose

Story highlights

  • July 17 marks one year since MH17 passenger plane was shot down
  • Tragedy was trigger for imposition of tough, coordinated sanctions, authors say

Matthew Rojansky is director of the Kennan Institute at the Woodrow Wilson Center. Michael Kofman is a public policy fellow at the Woodrow Wilson Center. The views expressed are their own.

(CNN)The one-year anniversary of the tragic shooting down of Flight MH17 over Ukraine is an opportunity to take stock of the costs of Europe's latest, biggest, and apparently most intractable security crisis.

Twelve months after Russia-backed separatists were first accused of shooting down the Malaysia Airlines passenger jet, Europe's relations with Russia -- having advanced by leaps and bounds over nearly three decades since the fall of the Iron Curtain -- have again descended into deep distrust and hostility.
Matthew Rojansky
European leaders, initially knocked off balance by Russia's annexation of Crimea and cascading outbreaks of violence in eastern Ukraine, found new resolve when nearly 300 passengers, many of them EU citizens, became victims of the conflict. This tragedy, for which Europeans held Russia morally and politically responsible, became the rallying cry and the trigger for imposition of tough, coordinated sanctions by the U.S. and the EU. And while the impact and legacy of the sanctions themselves are mixed, there can be no doubt that the era of partnership in Russia's relations with Europe and the West is now fully over, and that a new period characterized by mutual isolation and deterrence has begun.
    EU and U.S. sanctions have targeted prominent individual Russian officials and business leaders, as well as Russia's state corporations, its banking sector, and its ability to refinance corporate debt. Stacked on top of a sharp decline in oil prices and an economic recession that began early in 2014, the sanctions have added painful layers to Moscow's larger financial woes. So far they are projected to have cost at least $40 billion and accelerated capital flight -- hundreds of billions in hard currency that the Russian economy can ill afford to lose.
    Michael Kofman
    But although the sanctions were intended as a long-term instrument of leverage, they have thus far proven more punitive than coercive. Since their imposition, Ukraine has seen two major Russian-backed military offensives, further loss of territory, and no substantial change in Moscow's unwillingness to implement key terms of either the September 2014 or February 2015 Minsk agreements.
    For its part, the Kremlin acknowledges the economic damage from sanctions, but has also used cycles of sanctions and countersanctions to shore up its domestic political standing. In early and mid-2014, the Ukraine crisis was seen by Russians largely through the lens of Ukraine's internal dysfunction, but it is now cast exclusively in terms of a larger battle between Russia (good) and the West (evil), in which an appeal to fundamental Russian patriotism necessitates support for President Vladimir Putin and his policies.
    Still, the downing of MH17 forged a collective European response from what had previously been a fractious and divided EU, where some member states were prepared to write off Ukraine and the whole "Eastern Neighborhood" in the interests of preserving lucrative economic ties with Moscow.
    As a result, it also deflated the Kremlin's expectation that it could block collective EU action by maintaining strong bilateral trading relationships with European states and undertaking selective intervention into European domestic politics and media discourse. Even one year later, European solidarity has held fast, with the sanctions renewed by consensus through January 2016.
    So MH17 was a turning point, after which many European leaders abandoned their previously held view that Russia could be successfully integrated into Western-led economic, political, or security frameworks.
    This revolution in thinking about Russia has been most significant in Germany, which was the keystone of Russia's political and economic relations with the EU. While there is still open debate in Berlin on the path forward -- a new version of "Ostpolitik" or a return to the Cold War? -- and while Chancellor Angela Merkel is still the intermediary of choice between Russia and the West, it is clear that the relationship that both Germany and Russia once characterized as a "strategic partnership" has come to an end.
    Instead, Russia's war in Ukraine has plunged Russia and the West into a new phase in their relations, effectively ending the post-Cold War period. But while Russia has taken a strategic bite out of Ukraine, it has done so at a cost that was once inconceivably high: the end of the Russian-European economic and political partnership and the emergence of a situation where NATO and Russia once again see direct confrontation as a real possibility.
    Meanwhile, Ukraine's future remains no less uncertain today than it was a year ago. The country marches fitfully down the road of economic and political reforms, but its citizens and international creditors are growing impatient. Crimea appears lost for all practical purposes, and there is no end in sight to the conflict in Donbas. Both in Ukraine's domestic political and economic agenda and in the simmering Donbas conflict, Russia could intervene at any time to dramatically raise the costs for Ukraine and its Western supporters.
    Ultimately, Europe and the U.S. may be disappointed by the limited success of sanctions in changing Russia's behavior or improving the situation in Ukraine.
    But this is now about more than Ukraine. The MH17 tragedy and subsequent sanctions likely mark a revolution in European thinking about Russia, one that includes the dismantling of basic trade, financial and political relationships at all levels.
    And all this raises a worrying question for the future: What can we expect from a Russia that has been so isolated from the West it has very little left to lose?