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Downing Flight MH17: Will the Europeans Get Tougher on Russia?

Commentary, 21 July 2014
Centre for Financial Crime and Security Studies, Europe
For Ukrainians who have shed blood in pursuit of closer ties with the EU, the reticence of European leaders to sanction Russia is at best incomprehensible, and at worst a betrayal. The downing of flight MH17 must finally bring a strong response if Brussels is to maintain any credibility.

Wreckage of flight MH17

On Wednesday 16 July both the US and EU announced their latest round of sanctions against Russia.  The widening stance in the resolve displayed on each side of the Atlantic is striking.  Whilst the US expanded the sanctioned entities to include banks and energy companies for the first time, the EU merely requested that the European Investment Bank and European Bank for Reconstruction and Development suspend new financing programmes for Russia and called for the ‘adopting of necessary legal instruments’ for ‘targeting entities…that are materially or financially supporting actions undermining or threatening Ukraine's sovereignty, territorial integrity and independence.’  The unwillingness of many European leaders to take a strong stance against the Kremlin, previously suspected, is now writ large and revealed by their continued weakness in response.  The lack of unity is surely not lost on Vladimir Putin as he continues to foment instability in Eastern Ukraine knowing that absent a catastrophic misstep he is unlikely to attract meaningful economic restriction.

24 hours later, Malaysia Airlines flight MH17 from Amsterdam to Kuala Lumpur plunged from the sky over the very territory in which Mr Putin has fanned and supplied the separatist aspirations of a very small minority, supplemented by agitators from across the nearby border in Russia.  Whilst proof remains inconclusive, the balance of probability, underlined by radio intercepts and separatist social media postings, strongly suggests that the plane was brought down by a missile launched from territory currently held by rebel forces, fighting against the Ukrainian military, supported directly or indirectly by Russian arms, advisors, and acquiescence.

On a recent ten-day research trip to Ukraine, a couple of themes united a wide spectrum of interviewees.  Firstly a strong desire for President Poroshenko to address the rampant corruption culture that blights activity at all levels of society from schools and medical centres to judges, police, and politicians.  Secondly, and of more importance for the international community, despite an initial surge of support via visits to Kiev by the likes of US Vice-President Joe Biden and former British Foreign Secretary William Hague, a sense that Ukraine has been deserted by the international community.  The disappointment is almost universal.  After all, Ukraine has overthrown its president and shed blood in pursuit of its desire for closer ties with Europe.  As evidence, they point to the lack of action taken against Russia in support of the strong yet empty words and threats emanating from European capital and Brussels.  Being seemingly ignored like this feels like a snub at best and a betrayal at worst – Wednesday’s weak response by the EU simply underlined the legitimacy of this belief.

Some may argue that with so much less at stake, the US can afford to take a stronger line with Russia.  The EU is by far Moscow’s most important business partner, worth close to €270 billion, over 40% of the international community’s trade in 2012.  The EU provides fully 75% of the foreign direct investment made into Russia.  In contrast, the US, contributed barely €19 billion to Russian trade.  Countries such as Germany depend heavily on their economic ties with Moscow.  According to the Committee on Eastern European Economic Relations, 300,000 jobs in Germany depend on trade with Russia, 6,200 German-owned companies are active in Russia, and those companies have €20 billion invested in Russia.  Yet despite the European dependence on Russian energy supplies, and Russia’s recent rapprochement with China, Vladimir Putin needs European and international markets, fundraising sources, and investment if he is to maintain the economic strength to which his electoral credibility is anchored.  In the face of the broad global economic upturn, Russia’s economy was already struggling in 2013.  It can hardly afford to suffer an extended period of sanctions-related isolation. 

Despite the bizarre attempts by separatists to absolve themselves of responsibility for the senseless loss of life aboard MH17 and the rhetoric from the Kremlin seemingly blaming everyone else for this tragedy the reality of this conflict is that training, weapons, and advice come across the border to sustain the separatists, a flow that Russia chooses not to inhibit.  President Putin has it in his gift to end this conflict, destruction of property, and loss of life by withdrawing materiel and personnel, and strangling the supply lines supporting the separatist fighters.  Thus far, the equation with which he is faced does not justify backing down.  As David Cameron states forcefully in the Sunday Times, ‘For too long there has been a reluctance on the part of too many European countries to face up to the implications of what is happening in Eastern Ukraine.’  It is surely now time for even those European leaders with vested interests in the Russian economy to realise that hoping this problem will resolve itself without their needing to take awkward, yet justifiable decisions, is fanciful, and to demonstrate support for those in Ukraine who view Europe as their future. 

A former investment banker, Tom Keatinge is now an analyst of finance and security and is an Associate Fellow at the Royal United Services Institute.

Author

Tom Keatinge
Director, Centre for Financial Crime and Security Studies, RUSI

Tom Keatinge is the Director of the Centre for Financial Crime and Security Studies at RUSI, where his research focuses on matters at... read more

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