Carnegie Moscow Center
The Kremlin now sees the U.S. goal as the toppling of the Putin regime. That said, expecting Putin to back off betrays a lack of understanding of the gravity of the situation. It is no longer just a struggle for Ukraine, but a battle for Russia.
Ukraine’s position as an important transport corridor for Russian gas has resulted in various periods of conflict between Ukraine and Russian-state owned gas companies. But, even though both recognize they will not reach a long-term agreement quickly, one can easily see that the number of disagreements between them is not great. Both realize the need to compromise.
The fundamental dilemma of Moscow’s policy lies in whether it is worth cooperating to achieve a comprehensive agreement with Iran, which would primarily be a success for the United States, under conditions of confrontation with the West over Ukraine.
Russia could use the U.S.-led sanctions to begin its long-delayed re-industrialization and to start building a modern economy.
There are few if any reasons for Russia to worry about an immediate negative impact on trade and economic interests of signing of the AA/DCFTA by Ukraine, Moldova, and Georgia. The Russian government’s position is more likely to reflect concerns about the loss of geopolitical influence rather than trade and economic relations.
The initiatives outlined by Putin in his speech at the St. Petersburg International Economic Forum may lay the groundwork for radical changes in economic policy.
Russia must know that an exclusive alliance with China will incur its own cost.
A number of complex questions remain unresolved as negotiations on Iran’s nuclear program enter their final stage. The main question is whether the cooperation between Russia and the West would continue at the previous levels in the midst of the crisis in Ukraine.
Ukraine looks set to sign a free trade deal with the European Union. However, the EU and Russia have fundamentally different ideas about what its impact will be. Now it is time for an independent study in order to fill out the political argument with some real economic data.
Even as relations sour between Russia and Ukraine, Russian-Ukrainian defense-industrial cooperation remains very important for both countries. They both stand to lose if it wanes.