Another End Game on Ukraine Approaches

I have gotten into the habit of announcing an approaching end game in Ukraine for months. When the uprising in the Donbass started in April and it looked like the Kiev junta was going to sue for peace because it couldn't field a military response, I thought a rational conclusion to the putsch crisis -- namely, federalization and neutralization of Ukraine -- was nigh. Somehow, probably with ample support from the U.S. and her European allies, the Kiev junta put its newly created national guard, the one filled with Right Sector fascists, front and center and the assault on the southeast continued.

Then there was the thought that once the chocolate king was elected president in May Russia would have a willing bargaining partner to bring the fighting to an end. Once elected, Poroshenko expanded the "anti-terror operation" (ATO).

Finally, this month, there was Gazprom's suspension of gas deliveries to Ukraine because of non-payment. I thought that would hasten the junta to the bargaining table, but nothing of the sort happened. It is summer now and fuel tanks are topped out.

Now it is time for me to announce that yet another end game is upon us. Friday European leaders meet to debate and decide whether to support an effort by the United States to increase sanctions on Russia. The U.S. position is that Russia is not doing enough to tamp down the Donbass uprising, even though Putin has recently said that he will ask the Russian Parliament to rescind its authorization allowing military intervention in Ukraine.

Peter Baker has the story, "Doubting Putin, Obama Prepares to Add Pressure," which is quite good. (Baker is a cut above the normal mercenary scribe. Reporters like David Sanger, Rick Gladstone, Michael Gordon generally do nothing to inform; they act merely as receivers of official talking points. But Peter Baker can write. And while he sticks to the government-sanctioned narrative there is usually something in his stories that illuminates what is really going on.)

Even as the Kremlin voices support for a cease-fire in eastern Ukraine, American officials remain unconvinced that it has backed up words with deeds. Russia has moved troops back to the border and positioned heavy artillery there in what American officials consider an effort to help the separatists, who on Tuesday shot down a Ukrainian military helicopter. 

But President Obama faces hurdles as he tries to keep the pressure up on the government of President Vladimir V. Putin. European Union leaders, who are scheduled to meet Friday in Brussels, are reluctant to go along if it looks like Mr. Putin may be backing down. And American business leaders objecting to unilateral actions that would hurt their companies are kicking off an advertising campaign to oppose Mr. Obama’s plans. 

Mr. Obama spoke with Mr. Putin on Monday to urge him to take more tangible steps to defuse the crisis, and the Russian leader on Tuesday seemed to respond by asking his Parliament to rescind formal authorization to intervene militarily in Ukraine. American officials considered the move positive but symbolic, assuming that it was really meant to undercut European support for additional sanctions.

The sanctions themselves will go after Russian banking, military and energy:

The Obama administration has developed three options for further actions, according to government officials: banning any interactions with some of Russia’s largest banks; cutting off technology transfers to Russian energy and defense firms; and shutting down business with Russian defense companies. 

Believe it or not, the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) are about to launch a big public offensive against Obama's New Cold War. The reason is obvious. U.S. corporate interests will lose out to European competitors if Obama leads with new sanctions without Europe in tow:

The drive for more sanctions comes as American businesses are growing more vocal in protesting the possibility that the United States may act on its own. While lobbying the White House and Congress quietly until now, leading business groups plan to start a wide advertising campaign voicing their concerns. 

“With escalating global tensions, some U.S. policy makers are considering a course of sanctions that history shows hurts American interests,” reads an advertisement to be placed in major newspapers on Thursday. “We are concerned about actions that would harm American manufacturers and cost American jobs." 

The ad, signed by Jay Timmons, president of the National Association of Manufacturers, and Thomas J. Donohue, president of the U.S. Chamber of Commerce, will be placed in The Financial Times, The Hill, The New York Times, Politico, Roll Call, The Wall Street Journal and The Washington Post. A copy was provided on Tuesday by someone not directly affiliated with either sponsoring organization. 

Linda Dempsey, the vice president for international economic affairs at the manufacturers association, would not discuss the ad campaign but said American businesses would be unduly harmed if Washington proceeded with sanctions that were not matched by Europe. 

“Unilateral sanctions by the United States end up with other countries and their industries filling the void,” she said. “The harm and the real impact of those unilateral sanctions is on U.S. industries and U.S. workers. It’s not that we’re out of the market for a year or two. We could get out of the market for decades.”

Europe could end this charade here and now by forcefully stating that no further sanctions will be considered and that Putin has been a good-faith actor since the Kiev coup in February sent the elected president fleeing for his life.

But don't count on strong, principled action from European leaders. Their conduct in all of this has been feckless. Nonetheless, the ad roll out by NAM and the U.S. Chamber says that this is about to change. Friday Europe could very well stand upright on its hind legs and seriously bring an end to the fighting in Donbass.

But the U.S. is wily. Assuming that they can't reach consensus this Friday, the Obama administration is looking for Europe to sign off a set of sanctions that will go into effect if Russia is perceived to have begun backsliding:

If the Europeans are not willing to impose new sanctions after Friday’s meeting, the American side hopes to reach agreement on a package that would be ready to use if Mr. Putin does not follow through on his recent positive statements or reverts back to more hostile actions once the meeting has passed. In effect, that would make the sanctions package a deterrent.

This of course opens the door for a false-flag provocation, the kind of dark art in which the USG specializes. So it could very well be that I will be back here in another couple weeks or a month announcing another end game.