Ukraine Conflict Monitor, March 7-14, 2017

Ukraine 101:

  • No significant developments.

West’s leverage over Russia:

  • A recovery in U.S. oil output may deter OPEC and non-OPEC producers from extending production cuts beyond June and might lead to a new price war, Russia's Rosneft said on March 13. "It became evident that U.S. shale oil output has become and will remain a new global oil price regulator for the foreseeable future," Rosneft said in a written response to Reuters. (Reuters, 03.13.17)
  • Russia’s state-owned gas producer, Gazprom, has agreed to a series of concessions to address the European Union’s concerns about its market dominance in the supply of energy to Eastern Europe. The EU’s Commission said March 13 that Gazprom has agreed to price gas at market competitive prices. It will allow countries in the region to re-sell the gas they buy—something that became a political issue in recent years when some EU countries were selling their gas to Ukraine, to which Russia had cut off supplies during the war there. (AP, 03.13.17)
  • The European Union's antitrust regulator said it would ask market participants about commitments Gazprom has offered for addressing concerns that the Russian energy giant had violated competition rules in eight European countries. (Wall Street Journal, 03.13.17)

 Russia’s leverage over West:

  • Bulgaria’s United Patriots, a nationalist coalition that’s poised to hold the balance of power after this month’s snap election, would seek to end European Union sanctions against Russia if it makes it into government. (Bloomberg, 03.14.17)
  • Hungary pushed back against criticism that it’s acting like Russia’s Trojan horse in the European Union, with its top diplomat going on the record that the nation won’t veto sanctions against Russia if the rest of the trading bloc agrees to extend them. Unlike its peers in Eastern Europe, Hungary doesn’t see Russia as an “existential threat,” Foreign Minister Peter Szijjarto said, though the government “understands and respects that the Polish and Baltic states”—Hungary’s allies in NATO—“see Russia as just that.” (Bloomberg , 03.08.17)

Russia’s leverage over Ukraine:

  • No significant developments.

Casualties and costs for Russia, West and Ukraine:

  • Philip Hanson, an associate fellow at Chatham House, wrote: “The main costs to European countries have been estimated in a recent State Department study. The loss of exports to Russia resulting from Western sanctions and Russian counter-sanctions (calculated as a percentage of GDP for EU states) has a median value of 0.13% of GDP and a highest value (for Lithuania) of 2.73%. For no other country does the loss exceed 1% of GDP, and for the great bulk of the European population the cost is tiny.” (Chatham House, 03.10.17)
  • A steady uptick in shelling along front lines in eastern Ukraine is threatening numerous industrial facilities that, if damaged, could trigger severe environmental and humanitarian consequences, according to a new report by the Geneva-based Zoi Environment Network and the Toxic Remnants of War Project. (The Washington Post, 03.13.17)
  • Ukrainian opposition lawmakers have demanded an explanation from authorities after the arrests of several dozen activists who were blocking trade with eastern areas held by Russia-backed separatists. Ukraine's main security agency, the Security Service of Ukraine, said that it arrested 43 "blockader" activists at three sites on March 13 after they refused to surrender weapons. Ukrainian premier Volodymyr Groysman has warned that if the blockade stopped the trade for good, it could cost the country $3.5 billion and up to 75,000 jobs. Valeria Gontareva, governor of Ukraine’s central bank, warned last week that if the blockade continued for the rest of the year, it could cut the country’s 2.8% forecast economic growth by half. (Financial Times, 03.08.17, RFE/RL, 03.14.17)
  • The European Union has extended for six months sanctions against 150 Russia-linked people over the territorial disputes in eastern Ukraine. Sanctions against the former Ukrainian president, Viktor Yanukovych, and senior members of his administration were introduced in March 2014 and have been extended annually since. (AP, 03.13.17)

Impact of Russia’s actions vis-à-vis Ukraine on other countries:

  • Defense spending by European NATO states inched up for the first time in seven years in 2016, the military alliance said on March 13, but remained below the threshold new U.S. President Donald Trump said was crucial to achieve. NATO said the U.S. defense spending last year stood at 3.61% of its GDP, compared to 3.58% in 2015. That compares to 1.47% for NATO's European allies last year and 1.44% the year before. (Reuters, 03.14.17)
  • The Swedish government and part of its political opposition agreed on March 13 to boost defense spending by 500 million crowns ($55.7 million) this year to bolster military capabilities in the face of growing security concerns in the region. (Reuters, 03.13.17)
  • An idea, once unthinkable, is gaining attention in European policy circles: a European Union nuclear weapons program. (New York Times, 03.06.17)

Red lines and tripwires:

  • Stephen Pifer, a senior fellow at the Brookings Institution, wrote: “Red lines are about deterrence. The point of drawing a red line is to signal a strong, if not vital, U.S. interest and that, if the line were crossed, severe consequences would ensue. The point of making red lines clear to Moscow is to prevent Russia from making a costly miscalculation.” “The first red line involves NATO security,” according to Pifer. “The Trump administration should reinforce a nuclear red line and make clear that any use of a nuclear weapon, no matter how small or discriminate, would open a Pandora’s Box full of unpredictable and nasty consequences. Drawing a red line in Ukraine is difficult, because Russia has already violated the country’s borders.” (Russia Matters, 03.09.17)

Factors and scenarios that could cause resumption of large-scale hostilities or lead to accident between Western and Russian forces in Europe:

  • “As part of an overall approach to its collective security, the Alliance seeks to improve transparency and reduce the risk of escalation by engaging in meaningful dialogue with Russia,” NATO Secretary General Jens Stoltenberg said in his third annual report. (NATO, 03.13.17)
  • Richard Sokolsky, a senior fellow in Carnegie’s Russia and Eurasia Program, wrote: “Increased military-to-military communication, information exchange and transparency measures could help reduce the risk of an unintended NATO-Russian conflict as a result of an accident, misunderstanding or miscommunication.”  (Task Force on U.S. Policy Toward Russia, Ukraine, and Eurasia Project, 03.13.17)
  • James Kirchick, a fellow with the Foreign Policy Initiative, has outlined an imaginary scenario, in which Russia seizes Estonia in a manner not unlike its 2014 occupation of Crimea, this new move facilitated by U.S. President Donald Trump’s removal of U.S. troops from the Baltic States. Right-wing populist parties are gaining ground or even running governments across the continent, helped along by an $11 million loan given in 2015 from a Russian bank to France’s National Front party, and the EU is well on its way towards disbanding. (Foreign Policy, 03.06.17)

Arming and training of Ukrainian forces by Western countries:

  • No significant developments.

Strategies and actions recommended:

  • Stephen Pifer, a senior fellow at the Brookings Institution, wrote: “There is little probability of Minsk II’s implementation in the near term. The Ukrainians’ frustration is understandable, but Kiev has little choice other than to stick with the agreement. No viable alternative is on the table.” (Brookings Institution, 03.10.17)
  • Kimberly Marten, a professor of political science, recommends that NATO and Russia establish regional military and arms control negotiations, especially in the Baltics. “If relatively narrow military-to-military dangerous incident agreements prove workable, it would be a sign that Moscow might genuinely be receptive to reopening larger arms control negotiations,” she wrote. (Council on Foreign Relations, March 2017)


  • Philip Hanson, an associate fellow at Chatham House, wrote: “One route to the easing of sectoral sanctions is, in principle, the full implementation of the Minsk II agreement. In practice, full implementation would require a miracle. Kiev will not grant the special status to the people’s republics of Donetsk and Luhansk that Moscow and the insurgents would accept. Moscow will not surrender control of the Donbas border to Kiev.” (Chatham House, 03.10.17)

Other important news:

  • Russian President Vladimir Putin told visiting German Foreign Minister Sigmar Gabriel on March 9 that he would like to improve ties between the two countries that were soured by the Ukraine crisis. Putin and Gabriel discussed bilateral issues, as well as the conflict in eastern Ukraine and how to ensure compliance with a cease-fire agreement between the Ukrainian government and separatist rebels that Germany and Russia brokered. Gabriel warned about the danger of a new arms race spiral with Russia and called on all sides to work to end the violence in eastern Ukraine as a first step towards broader disarmament efforts. Gabriel also said on March 7 that a decision by Russia to permanently station Iskander missiles in Kaliningrad would mark a setback for European security. (AP, 03.09.17, Reuters, 03.09.17, Reuters, 03.08.17)
  • A European Parliament committee has voted to scrap visa requirements for Ukraine in a further step to give Ukrainians easier access to EU countries. (RFE/RL, 03.09.17)
  • Ukraine expects to start supplying electricity to the European Union via its planned “energy bridge” as early as 2019, and to complete the project by 2025, the head of the country's nuclear power plant operator said last week. (World Nuclear News, 03.10.17)
  • Ukrainian President Petro Poroshenko has proposed a bill that would ban dual citizenship. The discussion of dual citizenship has come to the fore in Ukraine following unconfirmed media reports saying that suspended tax and customs service chief Roman Nasirov, who has been arrested on suspicion of corruption, holds foreign passports. (RFE/RL, 03.14.17)
  • Early on March 14, Ukrainian nationalists attempted to impede activities of Russia's Sberbank’s central office in Kiev. Moscow expects Kiev to use the necessary procedures without political motivation to protect Sberbank's offices in Ukraine, Russian Foreign Minister Sergey Lavrov said. (TASS, 03.14.17)