New sanctions unlikely to force Putin's hand on Ukraine

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The latest sanctions against Russia rolled out by the White House on Monday seemingly did little to force Russian President Vladimir Putin to change course in Ukraine, as President Obama openly questioned whether the financial punishments would alter the Kremlin's thinking and much of Washington said the penalties lacked teeth.

Though the U.S. widened the list of those on the receiving end of asset freezes and travel bans -- the Obama administration issued sanctions against seven additional Russian officials and 17 companies with close ties to the Kremlin -- it stopped short of the wide-ranging sectoral penalties demanded by Ukraine and those pressing for a more forceful western response in the wake of the annexation of Crimea.

“We don't yet know whether it's going to work,” Obama admitted Monday during a press conference in the Philippines. “And that's why the next phase if, in fact, we saw further Russian aggression towards Ukraine could be sectoral sanctions, less narrowly targeted, addressing sectors like banking or the defense industry.”

The latest sanctions were triggered in response to Russia not abiding by a peace deal reached April 17 with Ukraine in Geneva, the White House said.

But the moves have become common for the West since Russia seized Crimea: condemn Russia's actions and then levy sanctions against senior Russian officials, but reserve the most stinging penalties only for greater aggression by Putin in southern and eastern Ukraine.

Though the Obama administration insisted that the Russian economy had been damaged by U.S. sanctions, the Russian stock market rallied immediately after the latest penalties turned out to be less severe than some expected.

The administration remains reluctant to use a bigger stick to deter Putin partly because European allies are heavily reliant on Russia for oil and gas imports. And severe economic sanctions against Russia would certainly create more problems for European nations than their Western partners.

Still, GOP critics accused the White House of playing into Putin's hands.

“After a week of rhetoric from the administration, I had hoped we would have responded to Russia's blatant violations of its commitments to cease efforts to destabilize Ukraine with more than just a slap on the wrist,” said Sen. Bob Corker, R-Tenn. “Until Putin feels the real pain of sanctions targeting entities like Gazprom, which the Kremlin uses to coerce Ukraine and other neighbors, as well as some significant financial institutions, I don't think diplomacy will change Russian behavior and de-escalate this crisis.”

Even some Democrats criticized the White House for appearing flatfooted following continual Russian aggression in Ukraine.

“It's hard to see any real punishment here,” said a senior Senate Democratic aide given anonymity to candidly discuss the White House strategy. “The message to Russia is basically, 'Just don't do anything else, please.' ”

The aide, and a growing chorus of critics in Washington, said the U.S. should move ahead with industry sanctions rather than wait for European nations to come along. The White House has resisted such calls, saying Russia would exploit any fissures in the U.S.-European response.

For his part, Obama counters that most of his critics are simply itching for military action in Ukraine, an option the White House swiftly took off the table.

But the question the White House, at least thus far, has been unable to answer is why Putin would alter his calculus on Ukraine at this stage.

“We don’t expect there to be an immediate change in Russian policy,” one senior administration official conceded on Monday.

In addition to the asset freezes and travel bans, the Obama administration also restricted licenses for U.S. exports to Russia related to the nation's military industry. But the energy and banking sectors have yet to be slapped with significant sanctions.

Republicans are using the White House response to paint Obama as a bystander on the global stage.

“The administration's tepid, incremental sanctions are insufficient given Russia's continued occupation of Crimea and ongoing actions to fuel unrest in eastern Ukraine,” said Sen. Kelly Ayotte, R-N.H.

“Putin will not be deterred until the U.S. takes swift action to impose sanctions now on Russia’s financial sector – and authorizes more severe sanctions, such as on Russia’s energy sector,” she added.

The White House, however, implored critics to give the sanctions time to work.

“What we need to do is to steadily show the Russians that there are going to be much more severe economic pain, much more severe political isolation, and frankly, that Russia stands far more to lose continuing these actions over time than pursuing de-escalation,” a senior administration official said. “And ultimately, we believe that that can affect Russia’s calculus over time and give them the incentive to de-escalate this situation.”

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