Chalk Up a 'W' for Great Satan and Expect the Fighting to Rage On

Before getting to the Russian sanctions postmortem, the shape of a future geopolitical order is becoming discernible. The world is to be divided between the United States on the one hand and the Saudis, as the principal Gulf Sheikhdom controlling Islamic State as it stretches from the Mediterranean to Pakistan, on the other. A Greater Israel will be part of the mix. The chief adversaries to be twisted and broken will be the BRICS.

As for the sanctions that Europe approved yesterday, Obama took to the airwaves to announce Russia's isolation from the international community. Certainly Europe pressed harder than in the past. Russian majority-owned banks will be cut off from Western medium- and long-term loans. But the Chinese have plenty of capital. The dual-use technology ban that Europe put into place is being touted on the front page of the Gray Lady as damaging to Russia's ability to tap its Arctic fossil fuel reserves. No one but the West apparently has the know-how and tools to deal with drilling in shale or at deep sea or in the Arctic.

But it seems to me that the technology moratorium is largely a public relations stunt. The big BP and ExxonMobil deals appear to be untouched, and Europe included an exemption for any items that pertain to the gas industry. This is from "Coordinated Sanctions Aim at Russia’s Ability to Tap Its Oil Reserves," by Peter Baker, Alan Cowell and James Kanter:

The American and European actions were intended to largely, though not precisely, match each other. The United States cut off three more Russian banks, including the giant VTB Bank, from medium- and long-term capital markets and barred Americans from doing business with the United Shipbuilding Corporation, a large state-owned firm created by Mr. Putin. The Obama administration also formally suspended export credit and development finance to Russia. 

The European Union adopted similar restrictions on capital markets and applied them to Russian state-owned banks. It imposed an embargo on new arms sales to Russia and limited sales of equipment with both civilian and military uses to Russian military buyers. Europe also approved new sanctions against at least three close Putin associates, but did not identify them publicly.

European governments moved ahead despite concerns that Europe would pay an economic price for confronting the Kremlin more aggressively. While their actions went far beyond any previously taken against Russia over the Ukraine crisis, they were tailored to minimize their own costs. The arms embargo, for instance, applies only to future sales, not to the much-debated delivery by France of Mistral-class helicopter carriers that resemble bigger aircraft carriers. And the energy technology restrictions do not apply to Russian natural gas, on which Europe relies heavily.

Still, Great Satan has to be given his due. The United States was able to stampede Europe, notably Germany's Angela Merkel, into adopting its position. I didn't think this possible. I thought Germany's economic interests were too great and the U.S. too heavy handed, but I was wrong. The only thing that I can hang my hat at the end of the day is that Germany did not go "all in." Gazprom has been shielded.

What was critical in shifting Europe was MH17. Even though as the crash date of July 17 recedes it appears that the Kiev junta was certainly responsible, the traumatic event is what pitched the EU into the U.S. camp. Neil MacFarquhar, the Gray Lady's minister of propaganda stationed in Moscow, reports today in "As Sanctions Pile Up, Russians’ Alarm Grows Over Putin's Tactics" that

“They were not anticipating the West to make radical moves, costly moves,” said Nikolai Petrov, an independent political analyst. “What is happening is different from what they wanted and what they expected.” 

He and others pointed to the downing of the Malaysia Airlines Boeing 777 over embattled southeastern Ukraine on July 17 as upsetting the balancing act that Mr. Putin had managed to pull off to maintain support from the public, hard-line nationalists, the security services, the oligarchs and the more liberal business community. 

“Until this catastrophe, Putin’s calculations were pretty good in terms of being able to win any tactical battle,” Mr. Petrov said.

***

“In my opinion, we face a critical situation today,” Lev Gudkov, the director of the Levada Center, an independent polling organization, told a weekend seminar audience. “But our society does not realize it against a backdrop of patriotic and chauvinistic euphoria.” 

That euphoria was rooted in the relatively bloodless, seemingly costless annexation of Crimea in March. The public expected that the rest of the crisis in Ukraine would be resolved with similar ease. 

“The situation began changing dramatically after the crash of the Boeing,” Mr. Gudkov said. “According to our research, reaction inside the country was quite weak, but the Western European public has drastically changed its attitude towards Russia.”

Indeed, poll results released Tuesday by the Levada Center showed the Russian public barely concerned about sanctions. More than 60 percent of respondents thought they would have little or no impact on them. Mr. Putin remains hugely popular.

Note that the content of MacFarquhar's reporting actually refutes the headline to his story. Russians are unperturbed about the possibility of greater sanctions. This happens more often than you would expect at "the newspaper of record," a sure sign of propaganda.

As fighting rages around the wreckage of MH17, and the junta baldly lies that it is not violating the ceasefire governing the crash site, word is that Kiev has given carte blanche to a contingent of armed Dutch and Australian military personnel to roam the crash site war zone. Niqnaq has the story, "this is the scenario i have in mind":

… ITAR-TASS is reporting that Kiev has cut a deal with the Dutch to allow them to mount a 700-member armed investigation force of military and non-military specialists, and allow them free rein to move through Ukraine. The Ukrainians don’t even need to send a sniper to deliberately shoot at the investigators on-site. Just the fact that 700 angry and armed Australians and Netherlanders marching into a war zone from the enemy side will inevitably provoke a violent response from the rebels. As soon as blood hits the ground, an ‘outraged’ NATO will come charging in, and total war will erupt. It’s pretty clear now why Poroshenko didn’t stick to the ceasefire. Who needs a false flag operation when you have such compliant pawns to sacrifice …

So while Great Satan can celebrate a victory, his work of despoliation is not yet through. Novorossiya still has to be smashed to pulp. Here is where the United States best proceed with caution, something that MH17 proves it is not prone to do. Russia will not accept a Western military garrison or an ascendant Nazi junta on its border. So expect the fight to continue.