Judy Asks: How Can Europe Now Deal With Russia?

In short, the EU should deal with Russia by standing up for its own core values, rules, and commitments. The bloc should also take this opportunity to enhance coordination among its 28 member states.

The Ukraine crisis constitutes a profound challenge for the EU, both externally—in terms of its neighborhood policy and relations with Russia—and internally. The instruments that the EU chooses to adopt will depend on how it defines its short- and long-term objectives and interests in its Eastern neighborhood. That, in turn, depends on what kind of relationship with Russia the EU considers best for Europeans of today and tomorrow.

Major EU crises can also provide an important trigger for internal change. In the energy field, a 2009 gas dispute between Russia and Ukraine speeded up work on a common EU energy policy and measures to increase security of supply.

The current Ukrainian crisis is much deeper and more complex. It might offer a chance for the EU to reunify internally and step up to the next level of integration on external policy. On energy, the crisis could spur the EU to develop specific tools for dealing with complex, unresolved transit issues or to support major diversification projects.

Russia’s annexation of Crimea would be an unacceptable breach of international law, and Europe has to deal with Russia now. The EU must avoid knee-jerk reactions, keep calm, and continue to seek ways to deescalate the crisis.

EU leaders should not waver from their minimal demands of establishing an international “contact group” on Ukraine and deploying military observers from the Organization for Security and Cooperation in Europe. If the EU is forced to introduce sanctions, they should be measured and constructed in such a way that they can be ramped up or scaled down depending on how the crisis evolves.

The main goal of all EU endeavors is to avoid a war in Ukraine. The country has experienced a popular uprising and the situation is revolutionary. Threats to Ukraine’s territorial integrity only exacerbate the situation. Any escalation of tensions in the south and east of the country might lead to armed clashes and spark further violence. Bringing Russian troops, with or without insignia, into eastern Ukraine risks civil war.

Finally, any EU assistance to the Ukrainian government must be conditional on structural reforms of the country’s economy that are feasible and based on realistic timetables.

The image of EU High Representative Catherine Ashton offering high tea to Russian Foreign Minister Sergei Lavrov at the height of Russia’s invasion of Crimea was a diplomatic triumph for Russian President Vladimir Putin. Shiny silverware, tasty crumpets, and finger sandwiches ensured the photo went viral on social media. You do not tackle a major political crisis—exacerbated by the apparent disappearance of 250 of Kiev’s pro-European demonstrators—while allowing such a picture to circulate.

Yet the image was not just a public-relations fiasco for the EU, it was also a true reflection of Europe today—a continent resigned to cave in to the Kremlin’s aggressive posturing. “Are you proposing war?” retort EU diplomatic sources lamely. Of course not, but between pastries and boots on the ground there are a number of intermediate options. Writing on Twitter, former chess champion Garry Kasparov has proposed “banks not tanks,” suggesting that the EU should apply firm financial pressure on Russian oligarchs in London to convey a clear message to Putin.

After all, the Russian oligarchs’ counterparts in Ukraine are siding with the new pro-EU government in Kiev not out of love for the blue-and-gold starred flag but because they are afraid of reprisals against their fat bank accounts in the City of London.

A quarter of a century after the end of the Cold War, the EU has much at stake in Russia: nearly half a trillion dollars’ worth of trade according to some estimates, compared with only $40 billion for the United States. Can the EU develop a responsible strategy for dealing with Russia in these circumstances?

The EU appears to have little appetite for trade embargoes or other punitive measures against Russia. But perhaps there is no need for such actions. Russia’s key source of leverage vis-à-vis Europe—its energy trade—is already under assault from the shale gas revolution that is gradually enabling Europe to diversify its energy supply.

At the same time, the EU’s Third Energy Package requires Russian energy giant Gazprom (and other companies) to separate its gas production operations from its transmission lines, while the European Commission is conducting an antitrust investigation into the firm’s business practices. Both actions hold out the prospect of a different EU-Russia energy relationship and hence renewed bilateral ties more generally.

Yet the EU’s first priority should be helping Ukraine rather than punishing Russia. Ukraine may lose Crimea when the peninsula votes in a referendum on March 16 on whether to join Russia. But the EU’s ultimate goal in the East should be to help Ukraine stand on its feet, shed its legacy of crony capitalism, and diversify its energy supply. Sustained, long-term engagement with Kiev—admittedly a difficult undertaking—is the best recipe for improving the EU’s relations with Russia.

The EU must make Vladimir Putin pay a price for his invasion of Crimea. At the same time, it must make a gesture toward ordinary Russians. In other words, carrots for the people and sticks for the regime.

The Kremlin’s inner circle is vulnerable to economic pressure. Through travel bans and asset freezes against Putin’s allies, the West must send a message that it will not accept the violation of key principles of international law.

The EU must also be clear that it does not endorse the Kremlin’s view of Eastern Europe as a region of diminished sovereignty. European leaders must redouble their efforts to stabilize countries in the region and to help them fend off pressure from Russia.

At the same time, the EU must communicate to the Russian people that enforcing the inviolability of borders is in Russia’s interest as well. Weakening Europe’s peaceful order is a risky game that will not benefit Russia.

The EU’s outreach to Russians must also be tangible. The more firsthand experience Russians have of the EU’s way of life, the more skeptical they may become of their own regime and its narrative. That means visa facilitation and more exchange programs for students and others. In the longer term, the EU should offer Russians a new vision for a more cooperative, mutually beneficial relationship.

Europe must be loud and clear about the price the Russian authorities have to pay for abusing the rules of the international order. This is the moment to counter the perception that the EU is unable to swing a punch. Nicety will not stop Vladimir Putin from escalating the situation.

The EU should target all individuals in Russia who have played, or will play, a role in infringing Ukraine’s sovereignty. That means visa bans and asset freezes for all the members of the Russian parliament who vote on March 21 in favor of a bill to create a legal framework for the annexation of Crimea.

Brussels should also enforce strict money-laundering measures against capital deposits and financial operations carried out by Russian citizens. It should pursue competition law unscrupulously vis-à-vis Russian companies, as the European Commission has done with regard to energy giant Gazprom.

Europe should stop its arms trade with Russia. All existing contracts should be terminated, regardless of how advanced they are. At the next European Council meeting on March 20, the EU should also discuss a strategy for weaning itself off Russian gas.

At the same time, EU leaders should make it clear that they are targeting the Russian authorities and have no issue with Russian society. There is therefore no reason to consider economic sanctions, embargoes, or tighter border controls. Russian society must know that the EU will be happy to reengage with a free and democratic Russia.

The EU has limited options for dealing with Russia. It can express outrage, impose limited sanctions, freeze initiatives such as visa liberalization and new trade agreements, and assist the Ukrainian government to consolidate its economy and ties with the EU. The EU should also do what it can to further diversify its energy supplies and limit the role of Russian energy companies in the European market.

Those who liken the current Ukraine crisis to Cold War–era conflicts are overlooking the essentially new nature of the Russian-European relationship. Russia is now a form of open-market economy and is no longer as isolated from the West as it was during the Cold War. Both sides have developed a new kind of mutual assured destruction, this time in the economic sphere, which limits their policy options. As long as Russia does not widen its incursion beyond Crimea, the situation will stabilize and will not escalate further. But in its wake, the crisis will leave a new EU-Russia relationship.

The EU and the broader West must now correct the imbalance between their economic interests and their liberal values. Geoeconomics has its costs and must not overshadow democracy. This is a balance that only governments and politics can redress; leaving Russia policy to the private sector will only worsen the relationship.