“It’s the economy, stupid” is a large part of what’s going on in Russia. Putin didn’t have to take the Crimea away from Ukraine. Hopefully it will be returned peacefully, not like what happened in Kuwait when another dictator took it over.

Putin has an image problem. The Russian People need assurance their country is strong otherwise they will save more which means buy less which means the Russian Ruble weakens and the Russian economy tanks.

Russia made two strategic mistakes. Number one: the destabilization of its neighborhood, in particular annexing Crimea. The second is they still rely on fossil fuels for economic growth, and that is an impediment to modernizing their economy.

Russia lives on coal and sells it’s oil because it’s easier and cheaper to transport. Geopolitics is often that simple.

The West need to reassess relations with Russia … A lot of effort to integrate Russia into western institutions was somewhat idealistic, believing,- hoping really, that Russia could become a normal, free market culture that respects international institutions. So far that hasn’t quite happened and the takeover of the Crimea has poisoned the well even more.

Putin’s Achilles heel is the Russian economy … So he needs external crises to keep up the appearance that Russia matters in world affairs. Of course it does. It’s far to big to ignore but Putin must find ways to appear to be more important than he and Russia are.

Peace threatens his domestic economy so he responded in a particularly wrong way in the Crimea. It was an expression of weakness and fear the Russian self-perception would weaken even more. Putin is insecure. That’s why he has so much concern about his public image as a tough guy. His economy is living on borrowed time so he continues to bully and threaten the neighboring countries but it’s mostly bluff and bluster.

The Crimea takeover cost Russia far more than it anticipated in terms of forfeited investment, devaluation of the ruble, lost trade and higher prices caused by sanctions. The falling oil price is also causing serious economic damage. Ironically, with relations with the US at a low point, and China interested in Russia only for cheap energy and raw materials, Moscow needed the EU more than ever. The economy is getting worse, the oil price is killing them. Russia needs Europe but these are the very people they are alienating. Putin has miscalculated far too often but the West has been distracted so he got away with the Crimea –for the moment.

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