This blog takes no pleasure in vindication of earlier posts that Putin was serious about engulfing Ukraine “heim ins Reich” (see: Na Zapad—Westward Ho!) or the limp attempts to curb the sewer of Russian kleptocrat money sloshing around London (see My Beautiful Laundrette-ski). The other show—or should we say jackboot—has dropped. The portion of humble pie we must eat is saying he would not do it during the current rasputitsa (mud) period.
Putin used Russia’s history of invasions from the West to achieves plausibility from Russian folk memory. But the man is not stupid; he knows there was no military threat from NATO and certainly none from Ukraine. His problem is socio-economic, the same problem that East Germany had with West Germany during the Cold War. The proximity of a nation enjoying the wealth and freedom of a western-style economy is what Ukraine aspired to become, whether it joined NATO or not. If it had succeeded in this, as it was doing, that in itself would undermine his Trump-esque “Russia is great!” propaganda and so destabilise his hold over the people.
Putin’s recognition of the Donetsk and Lugansk provinces as “independent” triggered a flurry of indignation in the West as they announced sanctions against Russia.
However, despite protestations that some had to be held in reserve unless the Russians went further, informed opinion was those announced would not deflect Putin from hiss plans. Continued aggressive Russian announcements and actions to back them up gave credence of this. The West believed Putin operates on western values and could be deflected by measures that would have caused any western democracy to desist.
Clearly, this was delusional.
What Putin understands is power and its application. The contempt he has shown to agreements in 2008 and 2014 means playing by rules plays into his hands. To date, he has given a master class in brinkmanship, using the military as threat. The West could have try all the reasonable diplomacy they liked. To win, they must beat him at his own game, applying serious gambits such as listed here.
1. A Wunch of Bankers
Sanctions against Putin’s Russia are not new. On the heels of his pantomime establishment of an “independent” Crimea that immediately asked for incorporation into Russia in 2014, several sanctions have been in place since. International payment systems Visa Inc. and MasterCard stopped service of credit cards issued by the Rossiya Bank. Non-cash transactions of SMP Bank and Sobinbank (subsidiary of Rossiya) were also frozen.
The UK sanctions are against three individuals (Gennady Timchenko, Boris Rotenberg and Igor Rotenberg) and five banks (Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank), with restrictions on Russian use of UK financial services and UK business trade with the disputed provinces.
Sounds good, except it smacks of tinkering. This does NOT include the wealthiest banks in Russia: Sberbank (~£300bn), VTB Bank (~£160bn), Gazprombank (~£76bn), Alfa-Bank (~£42bn), Rosselkhozbank (~£35bn), Credit Bank of Moscow (~£29bn). To get Putin’s attention, you need to use a bigger cudgel—one he will notice
Such as cutting Russia off from SWIFT (Society for Worldwide Interbank Financial Telecommunication). This is the Gmail of global banking, delivering 42 million secure messages a day among 11,000 financial institutions and companies, in over 200 countries and territories. The messages make payments, trades and currency exchanges.
Cut off from Swift, Russia would suffer significant economic pain. This happened to Iran in 2012, when its banks lost access to Swift as part of sanctions targeting their nuclear program and its sources of finance. The West threatened Russia’s access to Swift in 2014, estimating it could reduce Russia’s gross domestic product by 5% in a year.
As there are no easy alternatives and Russia needs access to international finance as a major oil, gas and wheat exporter, this one could grab Putin where it hurts and make his and his kleptocrat buddies’ eyes water.
2. Putin in Dire Straits
The Russian people have been blessed with many advantages—a massive country, extensive natural resources, inbred toughness and strength of character from its bitter winters. But in one major geo-political factor, they are crippled; despite a coastline as long as the circumference of the earth, it is land-locked. Most of the coast is on the Arctic and frozen most of the year. Its only ice-free ports are on the Baltic and Black Seas.
Both seas have access to the open ocean only through two restricted channels, controlled by a NATO member: Turkey in the case of the Bosphorus and Denmark in the case of the Kattegat. Various treaties down the years have permitted unrestricted passage through either. But, if Putin is prepared to flout international laws and conventions, why must NATO be so punctillious?
In the case of the Bosphorus, the Montreux Convention Regarding the Regime of the Straits was agreed in 1936 giving Turkey control over the Bosporus regulating the transit of ships. The Convention has been a source of controversy over Russian military access to the Mediterranean
Historically, the Danish Straits linking the Kattegat with the Baltic Sea were internal waterways of Denmark. The Copenhagen Convention of 1857 made all the Danish straits an international waterway and Øresundstolden (shipping tolls) were abolished.
While the Freedom of the Seas is a principle in international law. It was promulgated by US President Woodrow Wilson, stressing freedom to navigate oceans. It is incorporated in the United Nations Convention on the Sea under Article 87(1). But this applies outside territorial waters, which both the Bosphorus and Danish Straits clearly are.
Since the Russians have prevented access of Ukrainian shipping to the Sea of Azov because they control a similarly narrow Kerch Strait between Crimea and Taman, there is ample justification for NATO to blockade and Russian shipping from using either the Bosphorus or Danish Straits. Since virtually all Russian trade passes through one or the other, this would but an ever more severe crimp in Putin’s style in a language he understands.
3. Upping the Ante
If the above two draconian measures still fail to drag Putin to negotiate seriously, there are other options that would bring him down politically, even if he survived economically, such as:
- Threaten to close tax havens down altogether if they do not decline Russian business and publish all Russian names with material interest in businesses registered there.
- Offer asylum, residency and employment in the West to any currently serving Russian serviceman
- Shut down all internet links in and out of Russia
- Embargo all trade in telecomm, computer, aerospace, semiconductor or military equipment or technology.
- Put the squeeze on the Kaliningrad encave. This former slice of East Prussia became Russian after WW2 but is now cut off by Poland and Lithuania.
- Ban all direct flights to or from Russia
- Instigate a virulent, hacking program, such as Russia has directed at the West, with the intention of dislocating government, financial, conglomerate, oligarch and military establishments, especially those with close link to Putin.
Since Putin obviously enjoys playing hardball, let’s see how long he lasts if others use his dystopian set of rules.