September 3, 2014 | By

Are EU Sanctions Working?

My friends at the European Center for International Political Economy (ECIPE) posed a serious question on Twitter this morning as part of their #ECIPEdebates: Are EU sanctions on Russia working? Constrained to 140 characters, I offered a flippant response: If goal is to annoy Russians and make symbolic gesture, then yes. Otherwise, no. It may be worth addressing the question a little more carefully, particularly because it touches on the foreign policy topic of the week, following the President’s press conference remarks on Syria and ISIS– what is a strategy and do we have one? In the aftermath of the Presidents’ gaffe, there were some interesting interpretations of just what a strategy might be from his supporters. From Vox:

Viewed in context with the rest of his remarks, Obama's point might be that there is no good strategy available for fully defeating ISIS in both Iraq and Syria — which is both consistent with his approach to the crisis in those countries, in which he has primarily avoided risky escalation, and perhaps true.

An actual authority on strategy, Lawrence Freedman, tweeted:

Better to be tentative about strategy when there are no easy answers than claiming to have strategy when don't. — Lawrence Freedman (@LawDavF) August 28, 2014

This seems to reveal some semantic confusion. A strategy need not mean a committed invasion plan, nor is it defined as a measure which guarantees the full achievement of all goals. Instead, a strategy demands careful thought about the objective that an implementer is trying to achieve and then picks the approach that works best according to that objective. The approach itself might be quite intricate, prescribing different actions (or inaction) according to the way events play out. The choices would depend on an analysis of how an adversary is likely to react to each move. But there would be a plan. Note that by this definition, resolving to work on one’s putting game and hoping the problem goes away is a strategy, just not a very good one. This is where Vox and Freedman go astray. They equate strategy with easy success. In fact, the optimal strategy may well mean choosing the least bad option. But a failure to engage in that process can make things even worse. This was at the heart of the President’s debacle over Syria a year ago, when he was considering air strikes. It was never clear what the objective was. There were a number of plausible candidates:

  1. Remove Assad from power.
  2. Defend international restrictions on chemical weapons use.
  3. Protect the Syrian populace.
  4. Back up Presidential threats (red lines) to ensure credibility.

The core of the problem was that it was never clear which goal the White House was pursuing. Nor could one claim that a policy such as air strikes would be optimal, no matter what the ultimate objective. Different objectives called for different actions. Back to Russia and the EU. We can ask the same sorts of questions. What are the United States and the EU trying to achieve? Here are some candidates:

  1. Compel Russian withdrawal from Crimea and the Eastern Ukraine.
  2. Ensure that international accords, such as the 1994 Budapest Memorandums on Security Assurance, are credible. [This was the one in which Russia, the United States and the UK promised to defend Ukraine’s territorial integrity if Ukraine gave up nuclear weapons].
  3. Make sure Russia goes no further, e.g. by threatening NATO Article V allies such as Estonia (where the President just visited).
  4. Signal displeasure.

Which of these is the objective of U.S. and EU strategy? The answer would help one assess the efficacy of the strategy. None of the measures so far have pushed Russia out of Crimea nor blocked interference in Ukraine. They have imposed serious economic costs on Russia, so one might argue that it is just a matter of time, but for the moment Russia seems determined to bear these costs. The sanctions might serve as a warning shot, a means of saying: You may go that far, but no further. But the disarray over the imposition of sanctions cannot be sending that signal very clearly. To really draw a line will require actions of the sort called for by my colleague, Chicago Council President Ivo Daalder, including new defense capabilities within NATO and advanced weaponry to Ukraine. So far, the U.S. and EU sanctions have just signaled displeasure.

About

Phil Levy is senior fellow on the global economy at The Chicago Council on Global Affairs. Previously he was associate professor of business administration at the University of Virginia’s Darden School of Business. He was formerly a resident scholar at the American Enterprise Institute and taught at Columbia University’s School of International and Public Affairs. From 2003 to 2006, he served first as senior economist for trade for President Bush’s Council of Economic Advisers and then as a member of Secretary of State Rice’s Policy Planning Staff, covering international economic matters. Before working in government, he was a faculty member of Yale University’s Department of Economics for nine years and spent one of those as academic director of Yale’s Center for the Study of Globalization.

His academic writings have appeared in such outlets as The American Economic ReviewEconomic Journal, and theJournal of International Economics. He is a regular contributor to Foreign Policy magazine’s online Shadow Government section and writes on topics including trade policy, economic relations with China, and the European economic crisis. Dr. Levy has testified before the House Committee on Foreign Affairs, the Joint Economic Committee, the House Committee on Ways and Mean, and the US-China Economic and Security Review Commission. He received his PhD in Economics from Stanford University in 1994 and his AB in Economics from the University of Michigan in Ann Arbor in 1988.

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