Can Sanctions Hurt Putin Enough to Make Him Give up Crimea?

From Professor Daniel Drezner, a week or so back, at Foreign Policy, "Bringing the Pain":

The first thing to understand about sanctioning Russia over its incursion into Crimea has nothing to do with the impact of the sanctions and everything to do with what is being demanded of Moscow. The United States wants Russia to withdraw military forces from a piece of territory they have long coveted. However much Russia has contravened international law over the past week, they've changed the facts on the ground. They control Crimea, and public opinion in that autonomous republic is pretty Russo-friendly. The current status quo for Russia is that they control that territory. In world politics, there is no greater demand to ask of a government than to make de facto or de jure territorial concessions. The domestic and international ramifications of such a concession are massive -- especially after force was used to occupy the territory. So recognize that the demand being attached to the sanctions is so large that success is extremely unlikely.

The only case of economic coercion succeeding in a similar case in history was the 1956 Suez crisis. In that case, Britain, France, and Israel withdrew their forces from the Suez Canal following a U.S.-inspired run on the pound sterling. Except that the Suez case is not at all similar to Russia/Crimea. Britain was a treaty ally of the United States; not so much with Vladimir Putin's Russia. The Suez was far away from British soil; Crimea is just across the Sea of Azov. And, perhaps most importantly, Britain was in a fragile economic state trying to protect a fixed exchange rate. Russia's economy has its problems, but a shortage of hard currency reserves ain't one of them.

So the conditions under which sanctions would force Russia's hand in Ukraine are far from ideal. The proposed sanctions coalition is equally flawed, however, as my FP colleague Colum Lynch has noted. European Union leaders are not exactly keen on the idea of broad-based economic sanctions, for understandable reasons. Britain needs Russian finance capital; the rest of Europe needs Russian energy. France is traditionally the most hawkish country in Europe, but that country is too busy planning to export warships to Russia to organize European sanctions. As a result, there's been nary a peep out of Paris. If Russia continues to jerry-rig a Crimean referendum to pry it free from Ukraine, then the EU, led by its eastern members, might come around to sanctions. But that will take time -- both to organize and to take its toll on Russia -- and the more time that passes, the more that Russia can do to try and "normalize" the status quo.

The United States, on its own, has limited levers on economic influence over Russia. Financial sanctions and asset freezes sound good, part of the newfound policymaker faith in "smart sanctions" as a way squeezing a country's elite without hurting the population. It's likely that targeted financial sanctions could, if well designed, impose some costs on Russia's oligarchs and officials. But this assumes that Putin needs the support of Russia's plutocrats rather than vice versa. The past 15 years of Russian history have demonstrated that the current Russian president has little compunction with exercising state power at the expense of Russia's 1 percent. As for opening up U.S. energy exports as a way of diluting European dependence on Russian natural gas, it's not a bad idea -- it's not going to generate much pain in the short term.

Sorry, but the fact remains that sanctions will not force Russia out of Crimea...

More at the link.

But I think that passage puts things in perspective, considering how the U.S. and Europe have now agreed on something nearing heightened economic sanctions on Moscow. See the Washington Post, "U.S., E.U. announce sanctions following vote in Crimea." And at the Christian Science Monitor, "US and allies slap more sanctions on Russia. Will they work?"