Obama’s Test: Can Penalties Change Russia’s Course?
http://www.nytimes.com/2014/03/19/world/europe/obamas-test-can-penalties-change-russias-course.html?emc=edit_cn_20140318&nl=us&nlid=56381892&_r=0
By PETER BAKERMARCH 18, 2014
WASHINGTON — After Russia invaded Crimea, a senior American official vowed to “make it hurt.” More than two weeks later, Moscow has given no sign that it feels any pain, and the challenge for President Obama is whether he is willing or able to inflict enough to change the Kremlin’s calculus.
When President Vladimir V. Putin signed an annexation treaty on Tuesday, he essentially laughed off the modest sanctions imposed so far by the United States and Europe, all but guaranteeing that Mr. Obama and his allies will follow up with another round. “More is coming,” Jay Carney, the White House spokesman, said after the Moscow ceremony.
But it remained unclear just how much more, not just in the next 24 hours, but in the longer run.
Mr. Obama’s critics and even some supporters were surprised and disappointed that the financial sanctions he imposed on Monday were applied to only 11 Russian and Ukrainian figures who were unlikely to have many assets to freeze in the United States. The president quickly came under pressure from both sides of the aisle on Tuesday to be more assertive.
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As President Putin announces the annexation of Crimea, a look at the geopolitical costs and how China is closely watching the situation.
“Putin has dramatically escalated this crisis by taking the decision to annex Crimea,” said Michael McFaul, who was Mr. Obama’s ambassador in Moscow until a couple of weeks ago. “The Obama administration must respond and expand the list of sanctioned individuals well beyond what was announced yesterday.”
David J. Kramer, an assistant secretary of state under President George W. Bush and now the president of Freedom House, a Washington-based advocacy group, said sanctions should target the most senior officials in Moscow, Russian banks and state-owned enterprises, and eventually Mr. Putin himself.
“Until Putin and his circle pay a real price for their actions — and I think the U.S. and E.U. can impose such a price — the Kremlin won’t see a reason to stop,” Mr. Kramer said.
Senior administration officials said they were trying to stage their response, starting relatively modestly to make the point that their punitive actions can grow much more damaging if Mr. Putin does not reverse course. They had hoped that their approach would allow room for Mr. Putin to stop short of actual annexation after a Russian-supported referendum in Crimea on Sunday, a hope that has now proved unfounded.
Realistically, American officials recognize that there is now little chance of prying Crimea out of Moscow’s hands, although that is not something they will admit publicly. Instead, the goal is to make Mr. Putin at least pay a price for Crimea and to deter him from escalating the crisis by further destabilizing the largely Russian-speaking eastern Ukraine or even trying to take control of parts of it outright.
After the annexation treaty signing on Tuesday, the United States and six other industrial powers that belong to the Group of 8 with Russia all but signaled that they will throw it out of the organization. Instead of traveling to Sochi in June, where Mr. Putin was scheduled to host this year’s G-8 meeting, Mr. Obama invited leaders of the rest of the group, reconstituting themselves as the G-7, to meet in The Hague to talk about Ukraine next week on the sidelines of a previously scheduled nuclear summit meeting.
U.S. Imposes New Sanctions on Russia
President Obama announced sanctions aimed at President Vladimir V. Putin’s inner circle.
Mr. Carney said the United States would also expand its sanctions, and noted that the geopolitical uncertainty had already taken a toll on Russia’s currency and markets. “I wouldn’t if I were you invest in Russian equities right now unless you’re going short,” he said.
And yet world markets rose on Tuesday after Mr. Putin’s speech and action, either shrugging off the crisis or interpreting his reassurance that he did not want to split Ukraine as a signal that he would be satisfied after taking Crimea. The ruble, bolstered by Russia’s central bank, backed off the record lows it had fallen to in recent days.
Either way, Mr. Obama was left on the defensive against critics who said he was not being strong enough. Mitt Romney, his Republican challenger in the 2012 election, said Tuesday that Mr. Obama and his team waited too long to project strength and prepare possible punishments before Mr. Putin sent troops into Crimea. “Part of their failure, I submit, is due to their failure to act when action was possible, and needed,” Mr. Romney wrote in The Wall Street Journal.
Mr. Carney said it was “preposterous” and “provably wrong” to suggest, as other critics have, that the president sent a signal of weakness that emboldened Mr. Putin after failing to follow through on threats to retaliate against Syria last year for a chemical weapons attack on civilians. Mr. Carney went on to note that Mr. Bush’s willingness to invade Iraq “didn’t seem to affect Russia’s calculations when it came to its actions in Georgia” in 2008.
Mr. Obama has given himself more tools to use against Russia, if he chooses to do so. An executive order he signed on Monday authorizes sanctions against not just Russian government officials but also the Russian arms industry and Russian oligarchs who support Mr. Putin’s rule.
One Russian who has been on some lists of possible targets circulated in Washington and Brussels is Igor Sechin, a longtime Putin adviser who is now the president of Rosneft, the state oil company.
Rosneft is deeply entwined in a variety of projects with ExxonMobil, including a joint venture signed in December to develop oil reserves in Siberia. If Mr. Sechin is barred from traveling to the United States and has his personal assets frozen, current and former government officials said that could put the partnership between the oil companies in real jeopardy.
Republicans in Washington are also pushing Mr. Obama to be more assertive to break Russia’s energy grip over Ukraine and Europe. “If we are serious about challenging Putin’s aggression,” said Representative Ed Royce, Republican of California, the chairman of the House Foreign Affairs Committee, “the U.S. and our European allies should make an all-out effort to break that grip.”
