Yu Xiaoqiu: US and Russia Mean To 'Soften' Ukraine Crisis?

Indications show that Russia seems to have “softened” its attitude after taking over Crimea with hard power, and is seeking a way to resolve a series of issues caused by the Ukraine crisis through diplomatic solutions with the U.S. and EU.

On March 28, Russian President Putin reached out to U.S. President Obama with a phone call and offered diplomatic consultation about problems with Ukraine. This was the first conversation between these two countries’ presidents since the Ukraine crisis erupted. The following day, a statement posted on the Kremlin’s official website said, “The president of Russia suggested examining possible steps the global community can take to help stabilize the situation.” On the same day, Russian Foreign Minister Lavrov indicated that Russia had “no intention of” or “no interest in” ordering Russian troops to go across the border of Ukraine. This seems to demonstrate that the difference in opinion between Moscow and the West on how to handle the Ukraine crisis is dwindling. These signs indicate that Russia seems to have softened its attitude after the takeover of the Crimea region with hard power and is now seeking ways to resolve a series of issues caused by the Ukraine crisis through diplomatic methods with the U.S. and EU.

From March 17-18, Putin signed a decree recognizing Crimea as an independent state, and official documents joining Crimea to the Russian Federation entered into force. The U.S. and EU imposed the first round of sanctions on Russia immediately. On March 21, Putin signed the treaty approved by Russia’s state Duma. The treaty included provisions of Crimea’s federal status as well as federal constitutional law regarding its borders. This finalized the legal process of Crimea and Sevastopol’s integration into Russia as two new regions. Hereafter, the U.S. and EU imposed further sanctions against Russia by adding 20 and 12 individuals to the lists, respectively. Meanwhile, they introduced sanctions that froze Russian bank assets in the U.S., prohibiting U.S. citizens and companies from business contacts with Russia. In the same day, the credit agencies Fitch and Standard & Poor’s revised Russia’s rating to negative, only one step from a sovereign rating downgrade. Visa and MasterCard announced that they had stopped providing service to four banks in Russia including the Bank of Russia, in cooperation with the sanctions.

On March 24, seven leaders of the G-8 bloc had an extraordinary meeting in The Hague. They announced the suspension of Russia as a member of the G-8 and decided to cancel the upcoming G-8 summit in Sochi. They changed the location of the 2014 G-8 summit to Brussels and warned Russia that they will impose more sanctions if Russian troops enter eastern Ukraine. However, they didn’t mention further details in order to leave space for diplomatic dialogue. In response to the U.S. and EU sanctions, Russia set off anti-sanctions in return and expressed that suspension from the G-8 would be no big deal.

Meanwhile, the U.S. and EU took other actions to isolate Russia. On March 25, President Obama indicated that he will request that Congress amend trade regulations, which will make it easier to export oil and natural gas to the EU and help them maintain their energy needs without dependence on Russia. He also appealed to expedite the free trade talk with the EU and open the channel of U.S. energy export. On March 27, the International Monetary Fund promised to grant Ukraine $14-18 billion of economic aid with the stringent term that Ukraine must reduce fiscal expenses. In the same day, the United Nations passed a resolution considering Ukraine’s problem, led by the U.S. and EU, and declared the Crimean referendum invalid. On March 21, Ukraine became an EU “member-to-be” by signing a core association agreement with the EU. Meanwhile, Ukraine is preparing for a new presidential election in May.

Based on over ten days of friction between Russia and the U.S.-EU, the following conclusions can be made:

First, the U.S. and EU have introduced escalated ways of sanctioning Russia regarding the Ukraine crisis and Crimean situation. With the support of a powerful military, they pressured Russia economically and financially, isolated Russia diplomatically, and impaired Putin’s political status. These sanctions may lead to President Putin softening his tone on the Ukraine crisis.

Second, considering the effects, the U.S.-EU and Russia all benefit from the entire situation. Russia annexed Crimea, and the U.S.-EU gained control of a domestic political situation in Ukraine. Ukraine joined the United Nations as hoped, and will hold a presidential election on time. However, the loss of Crimea led to continuous conflict between Ukraine and Russia regarding the attribution of Crimea.

Third, the U.S.-EU will go back to the path of negotiation with Russia. During a phone call, U.S. President Obama and Russian President Putin agreed that foreign ministers of the two countries would meet and discuss solutions to alleviate the crisis in Ukraine. However, these two parties had very different standpoints and did not come to an agreement. The U.S. and EU don’t seem willing to revoke sanctions against Russia any time soon. Dialogue and negotiations between Russia and Ukraine will take place after the U.S. and Russia reach an agreement, but they may have to wait until the formation of a new Ukrainian government in May.

Lastly, there are other potential crises along with the Ukraine crisis. Whether or not these crises occur depends on if consultations between the U.S. and Russia go well — they might make essential progress toward resolving the crisis, fall into a stalemate or continue to fight. Until then, it is hard to predict what will happen.