EU officials prepare for sanctions against Moscow if it goes ahead with referendum on Crimea, but fears Russian retaliation may lead to trade war and destabilisation in the Balkans
Europe is bracing itself for painful reprisals from the Kremlin as both sides become locked in an increasingly intransigent conflict over Ukraine and Crimea that many expect to escalate into a ruinous trade war, and further destabilisation in the Balkans.
Over the weekend, EU officials and diplomats are to negotiate a blacklist of senior Russian figures to be subjected to visa bans and assets freezes if Moscow, as expected, goes ahead with a secessionist referendum aimed at annexing Ukraine's Black Sea peninsula on Sunday.
The Russians are certain to retaliate against any punitive action, EU officials say, while tightening their grip on part of Ukraine and ignoring western demands to stand down their forces.
"They are not de-escalating, they are consolidating," said a senior European diplomat.
President Vladimir Putin has ample levers to pull in his confrontation with the west, from gas and oil supplies, to mobilising Russia-friendly minorities in other countries, to offering cheap credits to haul neighbouring states into Russia's orbit and away from western integration, to throttling and threatening recalcitrant countries in Russia's backyard through embargoes and closing borders, to sabre-rattling with the Russian military. He can also cause mischief further afield in places where western policy is seen to be drifting and failing, such as Bosnia.
Milorad Dodik, the leader of the Serbian half of Bosnia and a politician committed to sabotaging any single Bosnian state, was in Moscow this week where he was feted as a hero by the Russian Orthodox church leadership. He met foreign minister Sergei Lavrov and had been scheduled to meet Putin, though that meeting was never confirmed.
Western officials in Sarajevo suspect the real aim of the visit was to secure Russian funding in order to be able to wreck a two-year International Monetary Fund standby agreement with Bosnia, conditioned on slimming down the bloated government apparatus in both halves of the country.
In return, Moscow is asking for vocal support for its policy in Crimea, and if the crisis escalates, a possible Serb renunciation of closer ties with Nato and the EU. Russia is also pushing Dodik to participate in Russia's Southstream gas pipeline project in south-east Europe, a project opposed by the west.
"Will they continue to have the standby arrangement with the IMF? Who knows what other options are being explored," said the diplomat in Sarajevo. "Dodik is feeling strong these days. I wouldn't put an ambitious move beyond them if they feel it reinforces their autonomy."
Paddy Ashdown, the Liberal Democrat peer and the international community's former High Representative in Bosnia, warned that Moscow's support for Bosnian Serb separatism could be dangerously destabilising for Europe.
"Given the fragility of Bosnia, to try to draw it into a wider confrontation over Crimea is incredibly irresponsible. Bosnia is not a functioning state but a failed state," said Ashdown, who intends to use a speech in Sarajevo next Tuesday to raise the alarm. "I do not believe the most likely outcome at present is violence, but I can't now discount that outcome."
While Putin is expected to ratchet up the worsening dispute, the Europeans appear committed to expanding the sanctions on Russia into the spheres of trade, finance and energy, moves that will expose EU vulnerability, with tens of billions at stake in commerce, investment and the mutual energy dependence that hinges on EU reliance on Siberian gas piped mainly via Ukraine.
European governments are drawing up contingency plans to try to navigate energy shortfalls within the union, but senior officials and diplomats are warning that eastern Europe, Germany and Italy in particular will have to be able to take the pain dished out by Putin if the policies are to have much impact.
"We can expect tough measures from Putin. He has nothing to lose now," said Michael Leigh, a former senior European Commission official dealing with EU enlargement and policy towards the EU's neighbours. "I would expect him to up the ante. His plans have been laid long in advance."
Depending on what happens in Crimea on Sunday, EU foreign ministers are to announce their blacklist on Monday in Brussels. A summit of EU leaders next Thursday, which will be completely dominated by Ukraine, is then likely to press ahead with the penalties while reserving the "stage 3" option of trade sanctions.
"He has a clear objective," said Leigh, a senior adviser in Brussels to the German Marshall Fund. "It's 19th-century sphere of influence. Without the use of force, if possible."
In Ukraine, say senior EU diplomats, Putin's aim is to disable and paralyse the post-revolutionary government in Kiev. "The Russian strategy now is to create facts on the ground. It's not just Crimea, it's his view of Ukraine. The aim is deliberate balkanisation and weakening," said one.
While Ukraine is the immediate emergency, there is likely to be more trouble in the coming months in parts of the former Soviet Union which the Kremlin eyes proprietorially.
Next door to Ukraine, Georgia and Moldova are supposed to sign trade and political pacts with Brussels by the summer, aligning themselves with Europe. A highly vocal pro-Russian minority in Moldova, the Gagauz, which, like Crimea, has an autonomous regional parliament, is already loudly demanding that the government in Chisinau choose Russia over Europe.
"It's a real problem," said Leigh. "The communists are strong, Russian is widely spoken. The simplistic idea of Moldova breaking away [from Russia] won't ever appeal to large parts of the population. And the government in Georgia is also having second thoughts."
It was the same issue – trade and political pacts with Brussels – that triggered the Ukrainian crisis in November. Chastened by the experience and their blunders, EU leaders say they are now racing to seal the deals with Georgia and Moldova. Reported by guardian.co.uk 9 hours ago.
Europe is bracing itself for painful reprisals from the Kremlin as both sides become locked in an increasingly intransigent conflict over Ukraine and Crimea that many expect to escalate into a ruinous trade war, and further destabilisation in the Balkans.
Over the weekend, EU officials and diplomats are to negotiate a blacklist of senior Russian figures to be subjected to visa bans and assets freezes if Moscow, as expected, goes ahead with a secessionist referendum aimed at annexing Ukraine's Black Sea peninsula on Sunday.
The Russians are certain to retaliate against any punitive action, EU officials say, while tightening their grip on part of Ukraine and ignoring western demands to stand down their forces.
"They are not de-escalating, they are consolidating," said a senior European diplomat.
President Vladimir Putin has ample levers to pull in his confrontation with the west, from gas and oil supplies, to mobilising Russia-friendly minorities in other countries, to offering cheap credits to haul neighbouring states into Russia's orbit and away from western integration, to throttling and threatening recalcitrant countries in Russia's backyard through embargoes and closing borders, to sabre-rattling with the Russian military. He can also cause mischief further afield in places where western policy is seen to be drifting and failing, such as Bosnia.
Milorad Dodik, the leader of the Serbian half of Bosnia and a politician committed to sabotaging any single Bosnian state, was in Moscow this week where he was feted as a hero by the Russian Orthodox church leadership. He met foreign minister Sergei Lavrov and had been scheduled to meet Putin, though that meeting was never confirmed.
Western officials in Sarajevo suspect the real aim of the visit was to secure Russian funding in order to be able to wreck a two-year International Monetary Fund standby agreement with Bosnia, conditioned on slimming down the bloated government apparatus in both halves of the country.
In return, Moscow is asking for vocal support for its policy in Crimea, and if the crisis escalates, a possible Serb renunciation of closer ties with Nato and the EU. Russia is also pushing Dodik to participate in Russia's Southstream gas pipeline project in south-east Europe, a project opposed by the west.
"Will they continue to have the standby arrangement with the IMF? Who knows what other options are being explored," said the diplomat in Sarajevo. "Dodik is feeling strong these days. I wouldn't put an ambitious move beyond them if they feel it reinforces their autonomy."
Paddy Ashdown, the Liberal Democrat peer and the international community's former High Representative in Bosnia, warned that Moscow's support for Bosnian Serb separatism could be dangerously destabilising for Europe.
"Given the fragility of Bosnia, to try to draw it into a wider confrontation over Crimea is incredibly irresponsible. Bosnia is not a functioning state but a failed state," said Ashdown, who intends to use a speech in Sarajevo next Tuesday to raise the alarm. "I do not believe the most likely outcome at present is violence, but I can't now discount that outcome."
While Putin is expected to ratchet up the worsening dispute, the Europeans appear committed to expanding the sanctions on Russia into the spheres of trade, finance and energy, moves that will expose EU vulnerability, with tens of billions at stake in commerce, investment and the mutual energy dependence that hinges on EU reliance on Siberian gas piped mainly via Ukraine.
European governments are drawing up contingency plans to try to navigate energy shortfalls within the union, but senior officials and diplomats are warning that eastern Europe, Germany and Italy in particular will have to be able to take the pain dished out by Putin if the policies are to have much impact.
"We can expect tough measures from Putin. He has nothing to lose now," said Michael Leigh, a former senior European Commission official dealing with EU enlargement and policy towards the EU's neighbours. "I would expect him to up the ante. His plans have been laid long in advance."
Depending on what happens in Crimea on Sunday, EU foreign ministers are to announce their blacklist on Monday in Brussels. A summit of EU leaders next Thursday, which will be completely dominated by Ukraine, is then likely to press ahead with the penalties while reserving the "stage 3" option of trade sanctions.
"He has a clear objective," said Leigh, a senior adviser in Brussels to the German Marshall Fund. "It's 19th-century sphere of influence. Without the use of force, if possible."
In Ukraine, say senior EU diplomats, Putin's aim is to disable and paralyse the post-revolutionary government in Kiev. "The Russian strategy now is to create facts on the ground. It's not just Crimea, it's his view of Ukraine. The aim is deliberate balkanisation and weakening," said one.
While Ukraine is the immediate emergency, there is likely to be more trouble in the coming months in parts of the former Soviet Union which the Kremlin eyes proprietorially.
Next door to Ukraine, Georgia and Moldova are supposed to sign trade and political pacts with Brussels by the summer, aligning themselves with Europe. A highly vocal pro-Russian minority in Moldova, the Gagauz, which, like Crimea, has an autonomous regional parliament, is already loudly demanding that the government in Chisinau choose Russia over Europe.
"It's a real problem," said Leigh. "The communists are strong, Russian is widely spoken. The simplistic idea of Moldova breaking away [from Russia] won't ever appeal to large parts of the population. And the government in Georgia is also having second thoughts."
It was the same issue – trade and political pacts with Brussels – that triggered the Ukrainian crisis in November. Chastened by the experience and their blunders, EU leaders say they are now racing to seal the deals with Georgia and Moldova. Reported by guardian.co.uk 9 hours ago.