Big Bets and Black Swans 2014: A Presidential Briefing Book

Putin’s Russia Goes Rogue

45 Memorandum To: President Obama From: Fiona Hill and Steven Pifer Date: January 23, 2014 Subject: Putin’s Russia Goes Rogue Summary and Recommendations Vladimir Putin seeks to secure Russia’s primacy in its neighborhood and now views the European Union as a threat to that objective. In November, EU leaders held a summit in Vilnius with the Eastern Partnership countries— Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The EU initialed Association Agreements, including deep and comprehensive free trade area (DCFTA) agreements, with Georgia and Moldova. Azerbaijan and Belarus did not pursue agreements; Russia successfully pressured Armenia to drop its bid and Ukraine to defer the formal signature of its already initialed agreement. Putin will not want to jeopardize the February Sochi Winter Olympics, but Russia has threatened to punish Ukraine if it signs an Association Agreement and is also unhappy that Georgia and Moldova are drawing closer to the European Union. We should expect Moscow to follow through in some fashion. In past disputes with all three countries, Russia has cut gas exports or raised gas prices, imposed embargoes on imported goods, and stoked inter-ethnic conflicts. When Tbilisi pushed for a NATO Membership Action Plan (MAP), Russia’s retaliatory measures set the two states off on the path to the brief war that broke out in August 2008. Georgia, Moldova and Ukraine look to the United States, not just the European Union, for support. A joint U.S.-EU stance has the greatest prospect of countering Russian actions. We recommend that you instruct the State Department to coordinate policy steps with the European Union and key members, including France, Germany, Italy, Poland, Sweden and the United Kingdom, to bolster the “targeted” states and assist them as Russia increases its economic and political pressures. BLACK SWANS 46 fiona hill and steven pifer We should formulate joint messages to Moscow emphasizing our support for the rights of Georgia, Moldova and Ukraine to choose their own political course, and protesting behavior that is inconsistent with Russia’s OSCE and WTO commitments. While you will not be traveling to Sochi for the Olympics, a few European leaders may. This provides the opportunity for a coordinated message to Putin. June’s G-8 meeting is also scheduled for Sochi, and we should look for other opportunities to amplify our message between these two Sochi events. We should build on Secretary Kerry’s successful December 4 visit to Chisinau and coordinate a series of high-level U.S. and European visits to both Moldova and Georgia for 2014. Ukraine presents a difficult case, given our concerns about democratic regression, but European leaders will travel to Kyiv and can take the initial lead there. We recommend asking the State Department to develop a plan for tailoring current U.S. assistance to support the goals and implementation of the EU’s Association Agreements. The EU’s Eastern Partnership Program is the logical mechanism to engage this group of countries. Concrete programs and funding to promote energy security in Moldova and Ukraine are most urgent. If the Eastern Partnership countries are prepared to implement serious reforms, the U.S. and EU executive directors at the IMF should encourage the Fund to adopt more generous programs, particularly if Russia imposes trade sanctions on the Association Agreement countries. We should also discuss with the European Union the possibility of bringing states with Association Agreements into the ongoing Trans-Atlantic Trade and Investment Partnership consultations. Unfortunately, we have few credible sticks to deter Moscow from retaliating against Moldova, Georgia or Ukraine. In conjunction with the European Union, we could consider reviewing visa policies. The Russian political elite prizes its ability to travel freely. Any action that threatens to complicate that, such as returning to a policy of issuing Russians visas valid only for a single entry, would alarm Moscow. Background Putin perceives the European Union as a genuine strategic threat. The threat comes from the EU’s potential to reform associated countries in ways that pull them away from Russia. The EU’s Association Agreements and DCFTAs are incompatible with Putin’s plan to expand Russia’s Customs Union with Belarus and Kazakhstan and create a “Eurasian Union.” Putin’s goal is to secure Putin’s Russia Goes Rogue 47 markets for Russian products and guarantee Russian jobs. He also sees the Eurasian Union as a buffer against alien “civilizational” ideas and values from Europe and the West...