Recently, I had the pleasure of sitting next to Herman Van Rompuy, President of the European Council. I asked him why European foreign policy is so 'naive', like the misplaced courtship with Libyan leader Gaddafi and deposed Egyptian President Morsi. Van Rompuy reacted irritably and praised soft power: being nice, starting up dialogue and financing under certain conditions. This approach runs upon its limits in the Ukrainian crisis. The Kremlin only knows hard power.
The difference between the EU and Russia is that the first can make vague, often unattainable promises such as EU membership, while the second has instant, tangible coercive measures. Ukraine has to (re)pay 24 billion euro of loans and unpaid gas bills to Russia this year. Ukraine is on the verge of bankruptcy. According to Dutch Minister Timmermans it will take at least another 30 years before Ukraine joins the EU. Ukrainian EU membership in 2044 versus Putin who has the fate of the Ukrainian economy in his hands: who is the strongest?
A bankruptcy of Ukraine returns to roost in the face of the EU; who will need to pay the 35 billion euro to keep the country on its feet? The EU is struggling with low growth and high unemployment. Citizens need to tighten their belts and are not keen on financing Ukraine - a sort of Great Greece. European leaders are calling for help from the International Monetary Fund (IMF) that only comes up with loans under strict conditions. These will lead to a deeper recession at the expense of heavy industry and mining in the Russian-speaking part of Ukraine. This reinforces the divergent forces in the country.
In Crimea, the EU can't do anything. The Russian Black Sea Fleet has been there as an instrument of Russian power politics for more than 200 years, now even in the Mediterranean Sea. For Moscow, the Crimea has the same connotations as Gibraltar has for the British, or the naval base in Hawaii for the Americans. The Kremlin won't give that that up.
The European Union weakened itself in the balance of power because it swapped strategy and tactics. Putin has been working since 2000 on the Eurasian Union, a customs union, to regain Russia's great power status. Control of Ukraine is the jewel in the crown of that ambition, but the cultural divide between East and West runs through the country. Brussels only noticed the geopolitical impact of Putin's goal too late. From 2012, the EU negotiated with Ukraine on an association agreement, including intensive military cooperation. That is an empty shell because the EU has no army, though it likes to pretend to have one. Moscow on the contrary feared that the EU wants to steer Ukraine into NATO through the backdoor.
Brussels also demanded that Ukraine release former Prime Minister Julia Timoschenko. The EU made its strategic goal (the Western anchoring of Ukraine) dependent upon an individual case, moreover one not without controversy. Ukraine has no Western-style parties, but political formations surrounding some billionaires with economic power. Politicians are their pawns, like the deposed president Janukovitsj and former Prime Minister Timoschenko. As Prime Minister she became a billionaire because her energy company had a monopoly on gas trade with Russia. Putin literally bought the "gas princess". Julia Timoschenko is no Nelson Mandela. The economically ideal solution for Ukraine is free movement of goods with the EU and a similar arrangement with the Eurasian Union. Ukraine as a production and transit country between East and West would be a 'win-win' situation. But in the grip of revolutionary turmoil, rationality is replaced by emotions.
The Ukrainian crisis is a powder keg because the chain of causality houses the danger of major escalation. An economic conflict between Brussels and Moscow unleashed a political power struggle in Ukraine, now culminating in geostrategic jousting. The Crimea is a flammable factor that can cause civil war in Ukraine.
Russian hard power versus European soft power. The European Union is talking about sanctions. But which ones? Germany, Europe's strongest economy, imports 60% of its gas from Russia. The EU has made itself too dependent on Russian energy. Tough sanctions against Moscow will turn out to be EU sanctions against... the EU. All roads lead to Moscow; a negotiating partner that is as artful as it is unpredictable, always with an iron fist in a velvet glove. If you never develop a strategy, you quickly find yourself without options.