Russian President Vladimir Putin speaks during a speech in Moscow, Russia, March 23, 2018 Photo Credit: AP
By: Simon Machalek, Columnist
Although both the EU and the US remain committed to upholding sanctions on Russia, there are voices—especially among Eurosceptics—who suggest that sanctions on Russia are not working and that they should be lifted.[i] Proponents of such view argue sanctions, imposed on Russia following their annexation of Crimea in 2014, have had little effect on Russian behavior and that they hinder prospects for cooperation with Moscow. But this view misses the deeper reality of what sanctions were designed to do and why have they been imposed. Lifting sanctions would be a dangerous win for Putin. Instead, pressure should be maintained until the Kremlin complies with the Minsk agreements, a protocol signed by Russia, Ukraine, the Donetsk People’s Republic, and Luhansk People’s Republic implementing a ceasefire in the Donbass in 2014.
It is important to remember the unprecedented nature of Russia’s brazen annexation of Crimea. For the first time since the World War II, a European state violated international law by annexing territory of another sovereign state. This provoked panic across the continent, reminding East European countries of past Soviet aggression and interventionism in the 20th century. What followed was a wide sanctions campaign—a legitimate response to what was the most destabilizing action in Europe in this century—that had four objectives: to restrain Russia from additional military aggression; to punish Moscow for its belligerent actions; to send a clear signal to the international community that such acts will not be tolerated and met with serious repercussions; and to push Russia to reach a political agreement between all major parties involved, which materialized into the Minsk agreements.[ii]
Sanctions were put in place—as one tool on a broad spectrum of diplomatic and preventive military steps—to create significant leverage for the West, and to make Moscow understand it had crossed the line and that any other destabilizing actions will be followed by an intensified sanctions campaign. Without these punitive measures Russia likely would have expanded its military outreach; there is an argument to be made about sanctions deterring Russia from taking the strategic city of Mariupol in September 2014, which the Kremlin sought to seize.[iii] Sanctions therefore influenced Russia’s decision making calculus and deterred them from initiating further aggression. This is evidence of how severe sanctions, when enforced, can act as a powerful deterrent.
Moreover, sanctions also act as a sign of NATO/European cohesiveness. After the annexation of Crimea, the West joined forces, operating as a multilateral block united in condemning Russian aggression and willing to tolerate the self-imposed cost of sanctions. For some Eastern European countries in particular, these costs have not been insignificant.[iv]
This unity around sanctions policy and enforcement may now change. The powerful Eurosceptic block in Europe, led by Hungary’s Victor Orban and supported by other populists across the continent, is increasingly vocal and critical about sanctions. In the past, Orban has argued that “non-economic problems cannot be solved with economic means… everyone stands to lose from such solutions,”[v] and has insisted that “if there were no sanctions, we would be able to cooperate more and make greater advances.”[vi] Elsewhere, Austria’s vice chancellor and leader of the country’s far-right Freedom Party, Heinz-Christian Strache, has argued that “it is high time to put an end to these exasperating sanctions and normalize political and economic relations with Russia.”[vii] These views have gained traction in recent months, which raises the risk dividing the EU on the sanctions issue for the first time since their imposition in 2014.
These views are dangerous and wrong. First, lifting sanctions would result in a colossal win for Moscow, as it would essentially legitimize all of Russian actions in Ukraine and elsewhere, giving Putin de facto approval for further aggression. Second, it would show disunity and weakness among European actors, which is exactly what Moscow seeks to achieve in an attempt to debilitate the West and its institutions in particular.
Sanctions are not the reason for the tense relationship between the West and the Kremlin. The punitive measures are not what stand in the way for more cooperation and advancement; Moscow’s deliberate hostile initiatives and unwillingness to comply with the Minsk agreements is the root of the problem. Until Russia decides to cooperate on stabilizing Ukraine, enforcing the agreed upon ceasefire, withdrawing its military equipment from the front lines, and enabling Ukraine to restore its borders, there can be no progress.[viii] Until then, sanctions must be maintained, enforced, and strengthened every time Russia resorts to aggression and demonstrates unwillingness to collaborate.
From the economic perspective, sanctions have work as designed, as they have had a significant impact on the already fragile Russian economy. Recent studies show how sanctions may have knocked as much as 6 percent off Russia’s GDP over the past four years.[ix] Russia’s economic development ministry also estimates that Russia has lost $6.3 billion since annexing Crimea.[x] In an unproductive and stagnant Russian economy, these are notable drops which create serious problems, especially since Putin’s approval ratings are steadily declining and the domestic population is more and more dissatisfied with the economy and their future prospects.[xi] Thus, the sanctions have exerted extensive financial pressure which, at a time when Putin seeks to modernize his military and attain nuclear advantage, constrain Moscow and make it harder to achieve their economic and political targets.
The debate around sanctions should not be about whether or not to maintain them. Rather, policymakers should aim to make sanctions more effective in order to increase economic pressure and achieve political progress in Ukraine. This will require patience, since sanctions’ impact, by design, increase more with time.[xii] The decision is on Moscow’s side; either comply with the Minsk agreements to alleviate economic pressure, or deal with the amounting financial strain that will further exacerbate the domestic and economic problems of the country.
[i] Darko Janjevic, “Vladimir Putin and Viktor Orban’s Special Relationship,” DW, September 18, 2018, https://www.dw.com/cda/en/vladimir-putin-and-viktor-orbans-special-relationship/a-45512712.
[ii] Nigel Gould-Davies, “Sanctions on Russia Are Working,” Foreign Affairs, August 22, 2018, https://www.foreignaffairs.com/articles/russian-federation/2018-08-22/sanctions-russia-are-working.
[iii] Andrew S. Weiss & Richard Nephew, “The Role of Sanctions in U.S.-Russian Relations,” Carnegie Endowment For International Peace, July 11, 2016, https://carnegieendowment.org/2016/07/11/role-of-sanctions-in-u.s.-russian-relations-pub-64056.
[iv] Oliver Fritz, “Russia and the EU’s Sanctions: Economic Trade Effects, Compliance and the Way Forward,” Directorate-General For External Policies, Policy Department, September 20, 2017, doi:10.2861/658339.
[v] Andrew Byrne, “Orban Joins Putin In Attack On Russia Sanctions” Financial Times, February 2, 2017, https://www.ft.com/content/f1f4482a-e96b-11e6-893c-082c54a7f539.
[vi] Creede Newton, “Does Hungary’s Relationship With Russia Send a Message To the EU?, Al Jazeera, September 19, 2018, https://www.aljazeera.com/news/2018/09/hungary-relationship-russia-send-message-eu-180919131248490.html.
[vii] Michael Shields, “Austrian Far-right Leader Wants EU’s Russian Sanctions Ended,” Reuters, June 3, 2018, https://www.reuters.com/article/us-austria-russia/austrian-far-right-leader-wants-eus-russian-sanctions-ended-idUSKCN1IZ09B.
[viii] N.S., “What Are the Minsk Agreements?,” The Economist, September 14, 2016, https://www.economist.com/the-economist-explains/2016/09/13/what-are-the-minsk-agreements.
[ix] Natasha Doff, “Here’s One Measure That Shows Sanctions on Russia are Working,” Bloomberg, November 16, 2018, https://www.bloomberg.com/news/articles/2018-11-16/here-s-one-measure-that-shows-sanctions-on-russia-are-working.
[x] Joel Gehrke, “Russia Admits New US sanctions Would Hammer Its Ailing Economy,” Washington Examiner, February 19, 2019, https://www.washingtonexaminer.com/policy/defense-national-security/russia-admits-new-u-s-sanctions-would-hammer-its-ailing-economy.
[xi] Neli Esipova & Julie Ray, “Record 20% of Russians Say They Would Like to Leave Russia,” Gallup, April 4, 2019, https://news.gallup.com/poll/248249/record-russians-say-leave-russia.aspx.
[xii] Nigel Gould-Davies, “Sanctions On Russia Are Working,” Foreign Affairs, August 22, 2018, https://www.foreignaffairs.com/articles/russian-federation/2018-08-22/sanctions-russia-are-working.