Difficult diplomatic decision

July 31, 2014 01:26 am | Updated November 16, 2021 05:31 pm IST

The tragic loss of more than a couple of hundred European lives in the horrific >downing of Flight MH17 appears to have been the final provocation for the European Union and the United States to impose >sanctions on Russia for backing the Ukrainian separatists. But penalties against Moscow would cause considerable economic pain at home. The sweeping measures that Washington and Brussels have announced will bar hundreds of Russian companies from accessing European capital, and banks from raising funds in Europe. They are also intended to undercut Moscow’s technological capability to tap its vast natural resources. But the potential of the latest measures could well be limited by the disproportionately large pile of new Arctic, deep-sea and shale resources under Moscow’s control. The country holds the largest combined oil and gas reserves in the world, assets which Western economies are keen to exploit. An estimated 350,000 German jobs depend directly on trade between Berlin and Moscow of nearly €80 billion in 2013 according to the Committee on Eastern European Economic Relations, an influential German business lobby. It points out that 25,000 jobs in the country are at risk under the ongoing sanctions and that many more would be in jeopardy following the latest round. British and European energy companies have been cautious in endorsing the sanctions, even as they emphasise the extent of Russian dependence on their technology. Similarly, the embargo on European arms sales would be applicable only to future contracts.

The EU and the U.S. have insisted that the sanctions announced on Tuesday, described in European jargon as Tier III or red alert stage, do not amount to a return to the Cold War days. But the steps announced are the harshest since the collapse of the Soviet Union. These are a clear indication of the growing frustration across the Atlantic over Moscow’s alleged supply of arms to rebels in eastern Ukraine and the crash of the Malaysian aircraft in rebel-held territory. But the deep economic and trade ties built with Russia in the past two decades and the geopolitical imperatives of regional stability and security present difficult choices for the Western powers in fashioning a coherent response. In specific terms, it calls for the adoption of a calibrated approach, one that weighs the implications of economic penalties on the one hand, and addresses political and democratic sensibilities on the other. The task before EU leaders and their counterparts in national capitals is to garner political support among their populations at every stage. The domestic constituency cannot be taken for granted in matters of foreign policy.

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