Ukraine Crisis: Summary and Explanation
How Ukraine's Crisis Threatens the EU
On September 12, 2014, Ukraine approved a trade deal between it and the European Union. The deal removes export tariffs. It agreed to delay its implementation a year to avoid further Russian energy sanctions and even attacks. Ukraine President Poroshenko wanted to maintain the cease-fire. NATO has not protected Ukraine, since it is not a member. (Source: "EU Deal Triggers Backlash in Kiev," The Wall Street Journal, Sept 15, 2014.)
On April 7, 2016, a Netherlands referendum rejected the deal. It was not binding since the Dutch Parliament already ratified the deal. But it does signal declining confidence in the EU itself. (Source: "Netherlands Rejects EU-Ukraine Deal," BBC, April 7, 2016. "Europe Awaits Dutch Vote on Ukraine Pact," The Wall Street Journal, April 5, 2016.)
Both sides are following President Vladimir Putin's seven-point plan. It gives eastern Ukrainian rebels time to regroup. It is highly unlikely that Ukraine can defeat the Russian-armed separatists. It is more likely that eastern Ukraine will more aligned with Moscow, even though it won't secede. (Source: "Putin Announces 7-Point Plan," The New York Times, September 3, 2014.)
Earlier that month, NATO revealed satellite photos showing Russia's invasion of Ukraine's eastern border. An EU emergency meeting added further sanctions on Russia's oil and banking sectors.
That occurred shortly after Russia sent a convoy of trucks over the border. They were bearing aid to Ukraine's eastern cities, held by pro-Russian rebels. But several of those trucks entered without approval. A few days later, Ukraine reported that several military vehicles were near the Russian border at the port of Azov.
It claimed that Russia was creating a second front for the rebels. Russia also wanted a land access through southern Ukraine. It wanted a shorter route to Crimea.
Ukraine had also destroyed a convoy of Russian military vehicles. They were bringing arms to the rebels. It was the first time that Ukraine attacked Russian forces directly. (Source: "Ukraine Forces Destroy Russian Military Vehicles," The Washington Post, August 15, 2014.)
In July, Russia built up its military force on the border. There were 19,000 to 21,000 troops, 14 advanced surface-to-air missile units, and 30 artillery batteries. It was a battle-ready force that could launch an attack into eastern Ukraine at a moment's notice. Russia had already launched rockets across the border in support of Ukrainian rebels. (Source: "Build Up Makes Russia Battle Ready for Ukraine," The New York Times, August 5, 2014.)
Putin responded to the February 23 overthrow of his ally Viktor Yanukovych. The pro-West faction of Ukraine's Parliament took over the government. It set up new elections for May 25, 2014. It installed Oleksandr Turchynov as the country's temporary leader.
The crisis occurred because Yanukovych mismanaged the budget. He forced Ukraine to ask for financial help.
First, it appealed to the EU, then Russia. The political unrest occurred at this point. Those who want to be closer to the EU objected when that solution was abandoned. Russia's military strike supported Yanukovych's return to Kiev and closer ties to Russia.
Sanctions Against Russia
The United States and the EU extended sanctions against Russia on July 29, 2014. They wanted to convince Putin to stop supporting those in eastern Ukraine who want to break up the country. The United Stated had proof that Russia supplied separatists that shot down a Malaysia Airlines commercial jet over eastern Ukraine on July 17, killing 298 people.
The sanctions severely limit five out of the six major Russian banks' ability to obtain medium and long term financing from Europe. The United States also restricted technology exports to Russia's deep-water Arctic offshore or shale oil production.
Russia had already been ousted from the Group of Eight.
As a result of U.S. sanctions, BP is worried about its profits. Bank of America cut its exposure to Russia by 40 percent. Boeing and United Technologies started hoarding titanium. Russia's VSMPO is the world's largest producer of this rare metal.
In response, Russia banned imports of U.S. and European foods for one year. This included $300 million of U.S. poultry products.
After the sanctions, foreign direct investment in Russia dropped by $75 billion. That's roughly 4 percent of the country's gross domestic product. Its stock market plummeted 20 percent. Its currency, the ruble, fell percent. To head off inflation, Russia's central bank raised interest rates (Source: "Russia's Economy," The Economist, May 3, 2014.)
Sanctions Caused Russia's Recession
The International Monetary Fund cut its 2014 growth forecast for Russia from 3.8 percent to 0.2 percent. Even though Putin continues to be popular at home, these sanctions are hurting the country's economy. (Source: Wall Street Journal, U.S., EU Significantly Expand Sanctions, July 30, 2014)
Many small countries bordering Russia worried that if Ukraine falls, they would be next. The EU is unlikely to defend them, since it depends on Russia for half of its gas. Many European businesses have profitable operations in Russia. Others sympathize with Putin, who is defending Russia's borders from encroachment by NATO.
Why Is Ukraine So Important to Putin?
Putin's standoff over Ukraine boosted his popularity rating to 80 percent. This support strengthened when Russia extended its grip over Ukraine in April 2014. It supported local rebels who took over city halls and police stations throughout the east. That area is home to ethnic Russians who don't want to be part of the EU. But those Russians were moved there by Joseph Stalin 50 years ago to strengthen the Soviet Republic's hold on the area. (Source: "Ukraine Crisis: What Is Happening Where?" BBC, April 14, 2014.)
This follows Russia's annexation of the Crimean peninsula in March. Russia claimed it was protecting its port access to the Black Sea. Putin estimated it would cost Russia more than $20 billion through 2020 to integrate the area. Ukraine planned to develop Crimea's natural gas reserves in two years in a partnership with U.S. companies. If Ukraine did this, Russia would have lost one of its largest customers.
But annexation worries 260,000 Muslim Tatars in Crimea. They were subjected to ethnic cleansing during the Soviet rule. They were forced to move to Central Asia, where half of them died. Crimean Tatars peacefully supported Ukraine's Orange Revolution. (Source: "Crimea's Tatars Try to Keep Their Resistance Peaceful," The Wall Street Journal, March 11, 2013. "Interview with former Georgia President Saakashvili," Fox Business News, March 4, 2014.)
Russia is one of the emerging markets that suffered a currency meltdown in 2014. Forex traders abandoned these markets when the Federal Reserve began tapering its quantitative easing program. That reduced credit around the world.
Russia waged wars in Chechnya in the early 2000s. Putin annexed Ossetia in Georgia in 2008, and the Western world didn't really intervene. He also successfully launched a cyber-attack on Estonia. But Ukraine is larger and borders the EU directly. (Source: "Interview with Chairman of House Intelligence Committee Mike Rogers (R-Mich.)," CNN.)
Over a month after a revolution in Ukraine's capital overthrew the government, the country's new leaders have watched Russia claim a region for its own, wage an "information war", and mass an estimated 40,000 troops at the border, all while pro-Russian protests have bloomed in eastern cities.
Kiev's interim government faces a possibility of invasion or civil war, and has struggled to wrangle with Russian influence in protests and politics. Moscow remains cagey, denying the west's accusations that President Vladimir Putin has provoked unrest, while also refusing to acknowledge Kiev or any wrongdoing. The US and EU sanctioned Russians with close ties to Putin, and threatened further moves to hurt Russia's economy. After new, increasingly hostile protests flared Sunday in cities near the border with Russia, Ukraine's interior minister said Wednesday that whether by negotiations or force, "a resolution to this crisis will be found within the next 48 hours." How did we get here?
•Revolution on Maidan
•Sanctions and the 'information war'
•The latest unrest in east Ukraine
Revolution on Maidan
Last November, Ukraine's president, Viktor Yanukovych, with his country barreling toward economic catastrophe, faced a choice. He could make a long-term, initially painful deal with the EU to bolster integration and trade, or he could take a $15bn loan from Russia and move his country toward a planned "Eurasian Union", with Belarus, Kazakhstan and Russia. After months of waffling, Yanukovych, who was ousted from office in 2004 over corruption and has a long history with Putin, chose the money.
The decision sparked protests on Kiev's Independence Square, aka the Maidan, and after Yanukovych tried to quash them and assert control, protesters fortified, literally. Thousands joined, especially after fighting with police turned deadly, and the movement gained new purpose: fighting the endemic corruption that Yanukovych's government symbolized. As clashes grew more violent, disparate factions joined, uniting liberals, moderates, technocrats, pro-European and far-right nationalists.
More than 100 people died in the protests, many apparently killed by snipers on Yanukovych's orders, or beaten by the Berkut, the riot police later disbanded and offered Russian passports following the revolution. Eventually, Yanukovych fled to Russia, and a coalition government formed out of the opposition, agreeing to hold new elections on 25 May.
•Read our full piece on how Ukraine and the west's standoff with Russia began here
During the final days of protests, Putin ordered surprise military drills on the border with Ukraine, and at Russia's Black Sea base on Ukraine's Crimean peninsula. Almost simultaneous to the exercises, armed men in unmarked uniforms, most wearing masks, seized airports and regional government buildings around Crimea. (Though some admitted being Russian, most, and Russia, denied any affiliation and characterized them as "local self-defense groups".)
With armed gunmen surrounding the regional parliament, Crimea, heretofore a part of Ukraine with slightly more independence than other regions, voted in a new government of pro-Russian figures (including a man nicknamed 'Goblin') and decided to hold a referendum on Crimea's future. Russia's parliament authorized deploying troops in Ukraine, should Putin see fit. On the ground, a de facto stealth invasion had already taken place, with Russian-plated vehicles blocking roads, the Russian fleet trapping Ukrainian warships, and pro-Russian forces in tense standoffs around every major Ukrainian base.
With strong ties to Russia's history and culture, the Crimean peninsula looms large in Russia's national imagination, and has a large ethnic Russian population and significant pro-Russian sentiment. When the referendum rolled around on 16 March – denounced by Ukraine, the US and EU as illegal – officials reported a 97% vote to join Russia. (The referendum was only meant to "confirm" a parliamentary vote to secede, and only had two options: join Russia or enhance Crimea's independence.)
Days later, Putin signed a treaty formally annexing Crimea and delivered two speeches, in which he decried western hypocrisy and celebrated a victory "without a single shot fired and no human casualties". (A Ukrainian soldier died later that day as the only military victim of the conflict so far; it remains unclear who killed him.) In the second speech, on Red Square, Putin glorified Crimea's "return home". With its local bases besieged and pro-Russian Crimeans celebrating, Ukraine authorized its troops to use weapons in self-defense, ending its policy of restraint. The deposed president, Yanukovych, called Crimea's annexation to Russia a "tragedy", from Russia.
•Read our full piece on Crimea's importance to Russia and Ukraine here
•Read our full piece on the Crimean referendum here
Sanctions and the 'information war'
After weeks of warning Russia about consequences, the US and EU ordered sanctions, so far mostly limited to Putin's allies and people linked to events in Crimea. The EU blacklisted 33 Russians and Ukrainians, and US sanctions have fallen on a bank and 31 people, including powerful businessmen such as Gennady Timchenko, of the Gunvor oil group, and the Rotenberg brothers, who grew up with Putin and now own contracting companies worth billions. A number of politicians are also on the list, as is Bank Rossiya, which the US claims holds senior officials' money.
The sanctions order assets frozen, visas revoked and a ban on US companies' business with the targets. Russia's participation in the G8 and European Council was also suspended, though the Kremlin quickly pointed "no one gives out any membership cards."
Moscow returned in kind, placing sanctions on US officials, but the list – including John McCain and White House adviser Dan Pfeiffer – was almost purely symbolic. In contrast, the ruble briefly tumbled, Russian markets shuddered, and Standard & Poor's downgraded the country's credit rating. The EU and US have promised Ukraine a $16bn loan as part of an effort to rescue its economy.
American secretary of state John Kerry has said "all options are on the table," including "energy, mining, banking". EU nations have also said they will extend sanctions, but disagree how to do so; Britain's long relationship with wealthy Russians, and Germany and France's reliance on gas imports, mean starkly different priorities.
As western warnings to relent went unheeded, Nato resuscitated operations in Baltic countries and severed co-operation with Russia, as did Nasa, the US military and several European countries. The UN roundly condemned Russia's actions, and for weeks, top diplomats from Russia, the US and EU have been meeting in Europe. John Kerry and his Russian counterpart, foreign minister Sergei Lavrov, have largely led these talks, but consistently to no results. Each has stuck to his country's official line.
The US insists Russia is behaving "in a 19th century fashion" and has deployed "agents" to sow "chaos" in an "incredible act of aggression". The US conceded that Russia has "complete operational control" over Crimea. The Kremlin insists that "radicals", including "anti-Semites, fascists and ultra-nationalists" staged a coup in Kiev – with murky western backing – and now continue to destabilize Ukraine. Moscow continues to say that Crimea's referendum is analogous to Kosovo's independence movement of the 1990s, and that Kiev's illegal government threatens ethnic Russians – whom Putin has vowed to protect.
Meanwhile, Russian officials have declared an "information war". Russian media, almost totally controlled by the state, and until recently ubiquitous in east Ukraine, tells a number of hazy, alternate versions of the Kiev and Crimea stories. These stories play on half-truths, like the presence of far-right nationalists at Maidan, and reasonable doubt, like skepticism of western meddling. Some of these skewed stories have seeped into western media as well, such as the notion that Ukraine is divided by language between a pro-Russian east and a pro-Ukrainian west (the country is filled with "multiethnic, multilingual families" throughout).
Adding even more confusion, the Russian foreign ministry said Greystone, a private security contractor of Blackwater's mold, was operating disguised as Ukrainian law enforcement. The US ambassador dismissed the allegation as "rubbish", and both Greystone and Blackwater deny any involvement. (In 2012 Greystone did report "new business in Russia" on its site.) The story, already filled with subtle distinctions and murky manipulations, was thus made more complicated still.
•Read our full piece on Russian propaganda here
• Read a comment piece piece on propaganda accusations by Dmitry Kiselyov, Kremlin-appointed editor-in-chief of Russia Today
• Read a comment piece piece on the state of Russian journalism by Tikhon Dzyadko, owner of the independent station TV Rain
East Ukraine as it stands today
Though 40,000 Russian troops and armored unites, according to estimates, have massed at the border with Ukraine, the eastern cities of Donetsk, Kharkiv and Lugansk had all experienced a few weeks of calm before pro-Russian protests erupted this weekend. The Guardian's Alec Luhn reports that 43 ex-Berkut members have occupied a building in Lugansk, where they are negotiating with authorities. Security services said the 56 people had been briefly held captive, but the former Berkut denied this, saying "Russia won't help us if we take hostages."
In Kharkiv, Ukrainian police detained 70 demonstrators who had taken the headquarters of local security services. Protesters also reportedly seized the opera house before realizing it was not city hall, lending some credence to the presence of "protest tourists" – Russians affiliated with the Kremlin who arrived to stoke dissent. (Further evidence of "Russian agents" to which Kerry alluded include the identification of a number of "local" protesters in Ukraine, found to be Russians who frequented Kremlin-sponsored events at home.)
In Donetsk, pro-Russian protesters seized a government building and began building fortifications in the city's central square – a neat inversion of the Maidan protests, even co-opting the Kiev protesters' imagery and using the hashtag "anti-Maidan". Mirroring events in Crimea, those who seized the government building proclaimed Donetsk a "people's republic" and demanded a referendum before 11 May. But protests in Donetsk and Lugansk are smaller than those in Crimea a month ago, and a recent poll says 65% of locals want to stay with Ukraine. Furthermore, reports from outside Donetsk's central square suggest most of the city would prefer to carry on without the drama.
On Wednesday, Ukraine's interior minister, Arsen Avakov, said : "A resolution to this crisis will be found within the next 48 hours … For those who want dialogue, we propose talks and a political solution. For the minority who want conflict, they will get a forceful answer from the Ukrainian authorities." Both Ukraine and Russia say that authorities have arrested "provocateurs" trying to infiltrate the respective countries and stage attacks. Local negotiations in the eastern cities are ongoing, and Kiev has offered amnesty to separatists if they turn themselves in. By Friday, the offices in Donetsk were still occupied, while armed rebels in Luhansk were refusing the offer of amnesty.
But international diplomacy remains at an impasse, though representatives from Russia, the EU, US and Ukraine plan to meet this week – possibly signalling the first time Moscow recognizes Kiev's interim government. (Putin said he hopes Kiev won't do anything that "can't be fixed later".) The Kremlin is pushing for constitutional reform, namely the "federalization" of Ukraine's regions, giving each greater autonomy – and thus allowing Russia greater influence in regions, which would not have to follow an anti-Russian Kiev government. Moscow has also announced an 80% hike in gas prices; a gas war would cripple Ukraine's economy even further.
Though Nato and the US warned Russia could strike without warning, Putin and Lavrov have said Russia has "no intention" to invade; similar rhetoric came right after the revolution toppled Yanukovych. Moreover, Russia does not need to invade if it can coerce Ukraine into co-operating and accepting its influence – as it did during Yanukovych's tenure. As Masha Lipman, an analyst the Moscow Carnegie Center,