The West has, of course, imposed a raft of diplomatic and economic penalties, notably by suspending Russia from the G8. But the telltale sign is that the biggest sticks have been kept in the locker. So far, no sanctions have been imposed on the key sectors of the Russian economy; America and its allies have instead confined their countermeasures to enforcing travel bans and asset freezes on selected individuals. On Monday, they explicitly threatened to target the Russian economy if the Kremlin “continues to escalate this situation”. That phrase is highly significant. It means that if Putin takes the next step and invades eastern Ukraine, then the pressure will escalate. But if he sits tight and keeps Crimea, there might be no further punishment.
So we have reached an equilibrium of sorts. If – and it is a big if – nothing happens to upset the status quo, this crisis could subside. The great risk is that Putin will now decide that his project to challenge the post Cold War order demands the invasion of eastern Ukraine. If that happens, all bets are off. But if he contents himself with keeping Crimea, the steam might go out of this crisis.Makes some sort of sense to me. But what about the question of moral hazard: should Putin be allowed to get away with the annexation of Crimea? And what happens the next time he tries it on?
No easy answers.