The Ukraine And Crimea Crisis As The Reason Of Sanctions Against Russia

Ukraine has always been of special interest and significance to Russia, creating many topics to concern in the international relations. However, the Ukrainian Crisis in 2013 is one of the most important events happening in the history of the EU – Russia relationship. With the annexation of Crimea and invasion into the East of Ukraine, the European Union decide first to 'warn' and later 'punish' Russia's actions and the sanctions became the key policy tool in the EU's response. This paper will touch on the most important events and dates related to the implementation of sanctions, the stages, their effectiveness, the impact and consequences for Russia, EU, and Ukraine and also the possible future perspective. The main questions uniting the texts are: “What impact do the sanctions have on Moscow?” and “Are they effective enough to create changes in Russia’s behavior?”

The first important thing is the necessity to understand the events leading to the crisis and following sanctions, what we can find in every analyzed text. It all started in 2013, with the refusal of the President Viktor Yanukovych in signing the association agreement with the EU, which created suspicion concerning his loyalty for the Russian President – Putin. The occasion led to opposition protests in the Independence Square of Kyiv, and under mediation, the President with opposition leaders were forced to sign the “Ukraine crisis mediation agreement”. The next day Yanukovych left to Kharkov, and his place was taken by Turchinov. The coup arose among the whole country, except the Russian speaking and orientated citizens, who were mostly in the Autonomous Republic of Crimea, dominated by separatists in the population, as they were against the new regime. The key events in March the following year, when Putin sent troops to Crimea. Russia smartly used the situation into her own favor, and on March 16 a referendum was held, with two main questions: “Do you support the reunification of Crimea with Russia with all the rights of a federal subject of the Russian Federation?” and “Do you support … the status of Crimea as part of Ukraine?”. The referendum showed the results that 96. 77% of voters in Crimea and 95. 6% in Sevastopol were willing to split from Ukraine and join Russia. 

On March 18, the “Treaty on the Accession of the Republic of Crimea to Russia” had been signed. Later, on March 21, State Duma proved the relevant treaties of the reunification of Crimea and Sevastopol with Russia, signed by Putin. However, the vote held by the United Nations General Assembly showed that only 11 countries recognize the result, while 100 do not. However, Crimea was not the only part suffering from Russia's invasion. In Donetsk, Luhansk, Kharkov (eastern pro – Russian regions of Ukraine) the fights between pro – Russian and anti – Russian forces broke out. On July 17, the Malaysia Airlines MH17 was shot down, demonstrating the beginning of a serious conflict. After all of these events, the EU decided to 'warn' and 'signal' Russia about the illegal actions by imposing sanctions. 

The texts describe the present set of sanctions around the triangle between EU – Ukraine – Russia, which represent the opposition of the two major global actors. Francesco Giumelli in the EUISS Chaillot Paper 129/2013 explains the three set of goals the sanctions pursue. First, to signal to foreign target countries or domestic audiences dissatisfaction with certain policies. Second, to constrain the target countries from undertaking actions. Third, to coerce a government into changing or reversing existing policies. Most of the texts mention these goals and agree upon them. 

All of the literature revolves around the restrictions today and their impact. By 2015 they included: 1) asset freezes and visa bans on 132 persons and 28 companies; 2) the suspension of preferential economic developments loans to Russia by the EBRD; 3) a ban on trading bonds and equity; 4) a ban on loans to five major Russian state-owned banks; 5) a two – way arms embargo; 6) a ban on exports of dual-use items; 6) a ban on exporting certain energy equipment. 

They were implemented into six stages, but most of the texts focus around the first three, that were not that effective. The text by Fischer shows that the three stages were related to the diplomatic sanctions, 'measures' against individuals and legal entities, and the sectoral economic sanctions. The main result expected was to complete economic isolation of Crimea and Sevastopol from the European Union. It was hoped that the pressure from outside (concerning economic and economic restrictions) and the inside (actors affected by sanctions) will lead to the change of the cost-benefit calculations of the political leaders and also change and create a more constructive policy and Ukraine. Closer attention is paid by Wang, who concludes that due to furthering the force on Russia, the other three rounds were imposed. On July 31 and September 5, the Member States of the Permanent Representatives Committee of the EU added restrictions related to the energy, finance and defense sectors of Russia. EU and US companies were not allowed to cooperate with Russian companies and the main oil companies (Gazprom, the Russian oil transportation company and Rosneft) were prohibited from issuing financing products that have terms longer than 30 days. Apart from this, on December 18, a new round of sanctions was launched. They were related to the ban of trade and investment in Crimea and Sevastopol and the prohibiting of travel agencies from conducting business in Crimea. 

But do these restrictions have that much influence and are there more weaknesses or strengths? – this question is still a gap in all of the texts analyzed, as it is difficult to come to the conclusion on whether they can truly influence the behavior and who feels the effect more – Russia or the EU itself. 

Apart from the Western sanctions, one text mentions the interesting issues about the opposite – Russia's sanctions on Ukraine, which is missing in the other literature. Emerson shows that these sanctions have been extensive for Ukraine. They include: ban on Roshen chocolate (July 2013), severe customs delay for Ukraine exports to Russia (August 2013), ban on Ukrainian supplies for railcars (October 2013), ban on supplies from the largest Ukrainian poultry producer (February 2014), ban on cheese supplies from five Ukrainian companies (April 2014), ban on Ukrainian potatoes and stoppage of gas supplies to Ukraine (June 2014), ban on Ukrainian dairy products (July 2014), and ban on Ukrainian supplies of alcoholic products. Apart from this, the author mentions one important event, not brought up before – the Mistral affair. It shows that two huge warships are the ideal instruments used by Russia to deploy its military power, first in the Black Sea as a threat to Ukraine and Georgia. The contradiction in principle with EU sanctions strategy was initially glossed over by the exclusion of preexisting contracts. In August 2014, Russia banned imports of meat, fruit, vegetables and dairy products to the countries that supported the sanctions, including the US, Canada, Australia, Norway and most countries of the European Union. 

As for the strengths, the authors agree with each other. Dolidze concludes that the main advantage is the wide-ranging sectoral nature as compared to the individuality – targeted ones of before, which were still restricting but were also restricted. Also, the EU used a beneficial cherry-picking technique, which means that individuals and entities under sanctions are selected individually, and sensitive sectors are intentionally left aside. Finally, yet importantly, Russia would stop into the further invasion into Ukraine, Moldova, and Georgia.

Nevertheless, there is also weakness for the European Union concerning the imposed restrictions. The sanctions did not really change the status – quo since looks like Russia is not afraid and Crimea is still under control together with the forces in the Eastern part of Ukraine. To the opposite – the sanctions created the rise of patriotism and improved the image of Putin among the residents of Russia. Most of the texts show that they helped Putin uniting Russians behind him in very short terms, and pushed him closer to the arms of China. The data shows that from 2013 until 2014 the support for Putin averaged to 81. 5%, what is higher amounting to 15. 75% to the previous year. Only one text opens this topic showing all the real consequences. Wang demonstrates that Russia shifted towards the East – China, India, Vietnam, and North Korea. In May 2014, Putin visited China on a state visit with the aim to attend the Conference on Interaction and Confidence – Building Measures in Asia (CICA) summit. Later, in Shanghai, the leaders signed 'People's Republic of China and the Russian Federation Joint Declaration on a new stage of comprehensive strategic partnership'. In addition to this, they reached a “Memorandum on China – Russia Natural Gas Cooperation Project at the East Line” and signed the “Sino – Russian east gas purchase and sales contracts”, which agreed that starting from 2018 Russia would be providing natural gas through the east gas pipeline. 

But one of the most negative effects is the not full support of some European countries, that do not want to lose the ties with Russia. For example, Viktor Orban – Hungarian Prime Minister – believes that the EU is “shooting itself in the foot”, as the sanctions turn against the EU more than Russia. He also shows that Hungary is not planning to “go along” with such decisions, rather the opposite – Hungary is tending to strengthen the ties with Russia by signing the deal to build additional reactor blocks. A similar position has Slovakia, after signing a 15 – year Russian oil – supply deal. The Czech Prime Minister Bohuslav Sobotka even used a metaphor 'Iron Curtain' to fully express the disagreement with the imposed sanctions. Surpassingly that Poland, who always had close ties with Ukraine and an opposite attitude towards Russia, keeps on the soft line, switching to a “pragmatic policy”. Also, the Serbian PM Aleksandr Vucic does not feel any responsibility for the dispute in Ukraine. All of this can be explained by the dependence of some European states on Russia, and their willingness to keep the middle – way position between Brussels and Kremlin and playing with two cards. 

In general, the effects can be concluded as intended or unintended. There are three factors that undermine the intended effect of the Western sanctions: 1) the progressive disconnection of state and society over a period of years has fostered social passivity; 2) systematic marginalization and repression means that opposition can be expressed only far from the political mainstream; 3) the narrow concentration of the political decision – making process isolates its center from the weak societal and expert discourses, together with reducing the numbers of options taken into consideration. 

As seen earlier, the restrictions had a serious impact on the diplomatic strategies of Russia, however, there are many other spheres that felt the influence. The texts mention the mostly the economic and military impacts. Starting from the economic said, it is claimed that the economy was hit hard. Moreover, the weakness is directly felt in numbers. In June 2014, the global price of oil fell from $115 per barrel to $65 in December; the countries stock market or the Russian Trading System index had also dropped by 40% since the middle of July 2014. The Russian Ministry of Economic Development had reduced the growth forecast to 0. 5%. Also, it was estimated that $130 to $140 billion is lost annually, $40 billion of which is because of the restrictions. 

Veebel and Markus, who take the economic and social development in Ukraine itself to understand the impact of the sanctions, use a compelling method of comparison. They write that more sense can be made by looking at the “hidden agenda” from both sides. It is concluded, that the main aim can be to change the relative economic cost of the conflict in favor of the Ukrainian central government. If taken from the perspectives of the separatists and Russian Federation – the hidden agenda is to succeed by keeping on a high level the social and economic costs of Ukraine, so that the latter would be forced to withdraw from conflict to avoid fiscal breakdown. 

What is for the military sector, the sanctions directly affect the implementation of the plan for the modernization of Russia’s armed forces. Responding to all the events in 2014, Russia also introduced a plan that would lead to the complete replacement of the production of imported armaments with domestically produced equipment in the following years. The challenges that appeared in front of Russia would be to prepare the human resources, expand and build modern factories. All of this would lead to the delay of the already set targets in the program of development of Russia's military and industrial complex by 2020 and would cost around €10 billion. Apart from this, in June 2014, Petro Poroshenko – Ukrainian President – ordered a complete break of cooperation in the defense industry with Russia, meaning that Russia would have to replace the military equipment produced in Ukraine, and that would happen not earlier than in two years. 

Dryer and Popescu come to an interesting conclusion, that in all of these events, Russia is acting like a sprinter, and Europe – the long – distance runner, as the restrictions are about turning the confrontation over Ukraine from an unwinnable dash into a winnable marathon. 

Summing up, we know that Russia is afraid of losing influence in Ukraine and will not give up the positions, what leads to the thought that this would still undermine the relationship between the EU and Russia. However, in March 2019 new elections are to be held in Ukraine. The surveys show that people are more likely to choose the candidate, who is pro-European. If Ukrainian policy after March 2019 is even more oriented on Europe, can it be supposed that the country will receive more support from the EU, including stricter sanctions on Russia and will Russia react with even more force and violence in order not to lose Ukraine?

References:

• CWIEK-KARPOWICZ, J. , & SECRIERU, S. (2015). Sankcje i Rosja. 
• Dolidze, Tatia (2015) EU Sanctions Policy towards Russia: The Sanctioner-Sanctionee’s Game of Thrones. CEPS Working Document No. 402/January 2015. [Working Paper]
• Dreyer, Iana & Popescu, Nicu (2014): Do sanctions against Russia work? Brief no. 35
• Emerson, Michael (2014) The EU-Ukraine-Russia Sanctions Triangle. CEPS Commentary, 13 October 2014. [Policy Paper]
• Fischer, Sabine (2015) European Union Sanctions Against Russia. Objectives, Impacts and Next Steps
• Veebel, V. , & Markus, R. (2015). Lessons From The EU-Russia Sanctions 2014-2015, Baltic Journal of Law & Politics, 8(1), 165-194. doi: https://doi. org/10. 1515/bjlp-2015-0015
• Wang, Wan. (2015). Impact of Western Sanctions on Russia in the Ukraine Crisis. Journal of Politics and Law. 8. 10. 5539/jpl. v8n2p1.