Business New Europe: Putin says we’ll do all we can to stop conflict in Ukraine

(Business New Europe – bne.eu – Tim Ash, Standard Bank – August 15, 2014) Putin speaking in Crimea, at session of Russia’s National Security Council. This is about as far as Putin gets to extending an olive branch and saying “lets talk”. Also noting that he does not want Russia to be isolated internationally.

We had the Sochi summit over Nagorno-Karabakh over the weekend, and then this humanitarian convoy doing the rounds through Western Russia, and possibly about to cross the border, with or without the permission of Kyiv. Then changes in the leadership of the separatist movement in Donbas over the past week – with the LPR’s leader stepping down earlier today.

I think the fact this is coming from Crimea is significant. The message is first, Crimea is now ours, and not a subject for negotiation, but also look if you mess with us we have the power to go further in Ukraine, and also inflict damage on the West. By doing all this from Crimea, he is trying to offer negotiations, but from a position of strength.

Putting this together, Putin is sending a message to the West that he is key to regional stability – e.g. Nagorno-Karabakh, and can help in Ukraine (humanitarian convoy) with recovery/rebuilding. But he can also take this further – e.g. beyond Crimea, and make life much more difficult for Ukraine. The food import bans last week were also about sending a signal to the West that Russia can also hurt the West if it so wishes. So the West has to deal with him – or that is the message he is trying to send – a bit like the detective in the interogation “now we can do this two ways, the easy way, or the hard/painful way” – I guess in his KGB time he learned a few things therein.

The tricky bit is on the ground, the Ukrainian military continue to make big advances – overnight in both Donetsk and Luhansk – and will think they could clear things up and re-establish control over their territory in a matter of weeks. But then they have to figure out what Russia will do next – is the threat of invasion real. If not, they will just carry on the military campaign, as they would rather not negotiate with Moscow as what it wants and what Kyiv wants are totally different, e.g. over EU/reform.