by Jared Brow
G7 – Canada, France, Germany, Italy, Japan, Britain, the U.S., and representatives from the European Union – met earlier this week in Brussels for the first time in the Group’s history.The agenda covered an array of complex issues including the global economy, trade, energy security, and climate change and development. During the two-day summit, world leaders discussed concerns over increased tension in the East and South China Seas, declaring that they reject a state’s “territorial and maritime claims through the use of intimidation, coercion, or force.” In terms of security, they displayed their resolve to protect international security and punish those who threaten international order. On the issue of Iran, they expressed their desire in finding a diplomatic resolution to the Iranian nuclear conflict, calling for Iran to cooperate with the IAEA. On Libya, they reiterated their support for the construction of a free and democratic nation and encouraged Libyans to engage in the political process peacefully.
Nevertheless, the most pressing issue discussed was undoubtedly Russia’s involvement with the current Ukrainian crisis. Noticeably absent from the talks, for the first time in seventeen years, was Russia itself, whose membership in the group was suspended as punishment for its annexation of Crimea. This marks the first G7 meeting since March in The Hague, where the Group moved their June summit from Sochi to Brussels, a rather symbolic meeting place for the G7 summit: it is the headquarters of both the European Union and NATO, two entities that have very publicly extended their support to the Ukraine.
During the previous March summit, G7 agreed upon implementing targeted sanctions against Russian individuals and companies with links to Vladimir Putin, but determined that these sanctions could vary by country and primarily include asset freezes and visa bans by both the EU and the USA, especially in the financial and energy sectors. These sanctions were intensified in April, after the West identified what they believe to be Russian-supported militant separatist groups actively destabilizing Ukraine. However, Russia traces many of its roots back to Kiev, the current capital of Ukraine, and the majority of the Russian people believe that Crimea rightly belongs to Russia. And, for Putin and many Russians, the “militant separatist groups” are instead freedom fighters responding to the injustices of anti-Russian nationalists that have taken control of Crimea. They see Russia’s annexation of Crimea as returning the land to its rightful owner.
G7 disagrees, and following the summit, they released a statement protesting the intervention in the Ukraine crisis, declaring that they “strongly condemn Russia’s illegal attempt to annex Crimea in contravention of international law and specific international obligations” and declared their “support for Ukraine’s sovereignty, territorial integrity, and independence.”[i] Around this time, Vladimir Putin began withdrawing Russian troops from the Eastern Ukrainian border; such withdrawals have recently increased conveniently close to the time of the Brussels Summit and currently only a few thousand troops remain. Despite this withdrawal, the smooth Ukrainian elections free from Russian intervention in late May, coupled by Vladimir Putin’s expected attendance at Friday’s commemoration of the Normandy landings in France, the Kremlin has still shown no signs of resigning Russian claims over Crimea. Meanwhile, volatile conflict still spans along the eastern Ukrainian border as militant groups, believed by the West to have Russian affiliation, continue to attack Ukrainian officials and occupy state buildings.
Shortly before the arrival of G7 in Brussels, President Barroso of the European Commission set the tone for the summit, emphasizing cooperation between like-minded states valuing freedom and democracy and set clear expectations for the conference itself. First, in regards to the Ukrainian crisis, the summit should confirm its two-track policy: providing economic and political support to Ukraine and continuing to pressure Russia to end its interference in Ukrainian internal affairs. Second, the Group identified four areas in capacity building and deterrence where actions in Ukraine should be maintained and intensified: continuing Ukrainian constitutional reform and encouraging a national dialogue; demonstrating the benefits of a strong relationship with the European Union; ensuring that Russia does not use energy security as a political weapon; and coordinating international support for Ukraine.
Entering into the summit, a joint statement issued by G7 leaders once again condemned Russia’s violation of Ukraine’s territorial sovereignty and made very clear that further deliberate Russian intervention to destabilize Ukraine and a lack of effort to build greater stability along the eastern Ukrainian border would be met with further targetsanctions.[ii] If Russia remains unreceptive and makes no progress in stabilization efforts near the border, G7 leaders confirmed that they would “consider meaningful additional restrictive measures to impose further costs on Russia should events so require.” In addition to publicizing their support for Petr Poroshenko, Ukraine’s newly elected president who has urged closer ties with the EU and seeks stability in the disrupted eastern region of Ukraine, G7 leaders expressed interest in continuing their three-step approach to the crisis: supporting Ukraine economically, encouraging talks with Russia, and pursuing additional sanctions on Russia if they continue intervention in Ukraine.
But will increased sanctions work? G7 appears to believe they will, but we must question the effectiveness of current sanctions in changing Putin’s behavior. Although the Russian economy began slowing before sanctions were imposed, sanctions have caused increased capital to flee Russia’s economy. The Ruble has plunged, GDP is falling, and foreign credits to Russian companies have waned. Standard and Poor’s lowered Russia’s sovereign debt rating to just one level above junk status.[iii] However, the Western assumption that Russia will release Crimea and encourage stability in Ukraine as a response to economic hardship is misguided, and there is no guarantee that Putin will respond as the West hopes he will. While sanctions make citizens poorer, hinder economic growth, and decrease the overall quality of life in Russia, its annexation of Crimea is also a matter of national interest and pride, something that supersedes economic interests. If this is the case, economic sanctions, while effective in disrupting Russia’s economy, may have very little impact on Putin’s decision-making and ultimately, risk further isolating Russia from the West. And, with Putin’s propaganda, it is probable that he will present these new economic difficulties to the Russian citizenry as the fault of the West, fostering greater anti-Western sentiment among the population.
Moreover, while the United States has urged a greater united front on sanctions from the G7 countries against Russia, the EU has much more at stake with increased sanctions than does the U.S. Twelve member states rely on Russia for more than fifty percent of their gas supply; if sanctions continue and are increased, Russia could decrease gas flow to the Ukraine and European countries, causing shortages and heavily increased natural gas prices. Additionally, the European private sector, along with the EU, has longstanding trade and business relations with Russia that they would like to maintain; according to a Eurostat study, in 2012, the EU conducted almost €270 billion worth of trade with Russia, while the U.S. conducted not even €20 billion.[iv] In direct opposition of the United States and its allies, France still plans to fulfill its $1.6 billion contract with Russia to supply Mistral helicopter carriers and training, a deal which, if not fulfilled, would result in substantial financial penalties for France. Many companies in Germany also have strong trade which reached €77 billion in 2013.[v] Thus, it is unsurprising that Germany and France especially emphasize dialogue before instituting greater sanctions.
Most likely because of existing economic and energy dependence on Russia, the leaders of France, Germany, and Britain will meet Putin in Normandy on Friday after the Brussels summit to stress the importance of Russian efforts to deescalate the volatile border conflict in Ukraine and to urge Russia to end its support of militants near the Ukraine/Russia border. Ultimately, they hope that this meeting will encourage a renewed cooperation between nations. Because Russia has yet to respond to sanctions, closed-door discussions appear to be a viable option to catalyze further dialogue. Especially as both Russia and Ukraine have expressed a readiness for talks to begin, it is also possible that Poroshenko could begin talks with Putin as well, as soon as his visit to Normandy. If these talks prove successful, in accordance with statements made by G7, no further sanctions will be implemented and current asset freezes and visa bans will likely be reviewed and revoked. With pressing issues ahead beyond the Ukraine, including Middle Eastern stability and energy security and the US commitment to the Asia “pivot”, that will require the West to further engage with Russia, it is crucial that G7 can find an amicable and timely solution to the crisis. Resolution of the conflict will ideally result in stronger Russian relations with the West and a renewed membership in the club whose members constitute the world’s largest economies that is not only beneficial, but also necessary.
[i] European Commision. The Hague Declaration following the G7 Meeting on 24 March. Europa. 24 Mar. 2014.
[ii] “G7 Warns Russia of Fresh Sanctions”, BBC News. 04 June 2014.
[iii] Andrianova, Anna. “Russia Debt Rating Cut to Step Above Junk at S&P”. Bloomberg. 25 Apr. 2014.
[iv] “Russia’s Trade Ties with Europe.” BBC News. Russia’s Trade Ties with Europe, 4 Mar. 2014.
[v] “Russian Federation: Economic Relations.” Federal Foreign Office. Mar. 2014.