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What Vladimir Putin really wants
Russia's powerful oligarchs are feeling the pain of Western sanctions, something not lost on their leader, Richard Lourie writes

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Saturday, July 21, 2018 – Page O1

Richard Lourie's most recent book is Putin: His Downfall and Russia's Coming Crash. He was Mikhail Gorbachev's translator for The New York Times and served as a consultant on Russia to Hillary Clinton.

The world was reduced to educated guesswork this week when U.S. President Donald Trump and Russian President Vladimir Putin began their summit with two hours of private talks. This made the aftermath of the Helsinki meeting even more murky, since the two principals are both liars, Mr. Trump by nature and Mr. Putin by profession.

For Mr. Putin, the summit has already proved a double victory.

The very fact that it even took place, that Russia was treated as an equal by the United States, was a win for him. Mr. Putin also had the satisfaction of defeating Mr. Trump in their man-to-man, mano-a-mano struggle behind the scenes. Having kept Mr. Trump waiting for almost an hour, a classic alpha-male dominance move, Mr. Putin emerged from the meeting with a strut and the cheerful charisma of the victor. Mr. Trump was vague, deferential - "abject" as U.S. Senator John McCain called him.

These were welcome and important victories for Mr. Putin.

This is what he wanted, but not what he needs. What he needs is relief from economic sanctions.

In 2015, when Turkey shot down a Russian warplane that had strayed into Turkish airspace from Syria, Mr. Putin's reaction was to slap Ankara with sanctions. That tells us that Mr. Putin appreciates the power of sanctions as an instrument of punitive diplomacy. Combined with low oil prices, the sanctions imposed on Russia by the United States and European Union have bitten hard.

Now, budget shortfalls are forcing Mr. Putin to raise the retirement age, a deeply unpopular move.

The Russian masses shy away from political action but aren't afraid to take to the streets when it comes to bread and butter. In a bitter irony, in more than half Russia's regions, life expectancy for men will be less than the new retirement age. "I don't want to die at work" is a placard frequently seen at street protests.

The sanctions are now also opening up fissures in Mr. Putin's inner circle. The oligarchs are being forced to sell their private planes because they can no longer obtain service or spare parts for them. Much more than a yacht, the private jet symbolizes the power of wealth: to go wherever you want whenever you want, and super fast. To give up that symbol and that power has to be a humiliating diminishment. Many oligarchs identify Mr. Putin as the source of their wealth and will identify him as the source of its curtailment. Mr. Putin knows that any rival to him will emerge from the elite inner circle of the rich and the powerful.

For that reason in 2016, Mr. Putin created the Rosguard, which is in effect his own 400,000-man private army. Its head, Mr. Putin's former bodyguard, does not report to the Defence Minister but directly to the President himself.

Mr. Putin may well be worried about the Defence Minister, who consistently polls right behind him as the most trusted man in Russia. It was mostly officers of Military Intelligence (the GRU) who were charged by U.S. special counsel Robert Mueller in the indictments made public just before the Helsinki meeting. Sergei Skripal, the ex-spy poisoned in Britain with military-grade nerve agent Novichok, was himself a former GRU officer. Attempting to kill him on the eve of the Russian presidential elections and the World Cup may have been a GRU message to Mr. Putin that not all major forces are under his control. So, Mr. Putin needs money to keep the populace and the elite content, thereby preventing any conspiracies involving the military.

Mr. Putin's dilemma is that he can't resolve the issue that gave rise to sanctions in the first place: Crimea. Mr. Putin just spent US$4-billion to build a bridge from the mainland to the Crimean peninsula. It was finished ahead of schedule, a sign of the importance he places on Crimea.

Mr. Putin himself was the first person to drive over that bridge.

Even the opposition leader Alexei Navalny is on record as saying Crimea is part of Russia. It would be political suicide for Mr. Putin to give up Crimea.

But Mr. Putin could satisfy one of Mr. Trump's immediate needs by promising not to meddle in the 2018 U.S. midterm elections. It is essential for Mr. Trump that attention be taken off the issue of Russian meddling in general and the 2016 election in particular, whose validity he feels is under siege. He also can't afford to lose Congress in 2018.

If there is demonstrable Russian interference in the 2018 midterms, that will be seen by many Americans, of both parties, as tantamount to a declaration of war. Free elections are a vital interest of American democracy.

Anyone who attacks that vital interest declares himself the enemy of the United States. Enemy assault cannot be with chumminess. The response has to be at a minimum a blow of equal force.

The United States is vulnerable politically because it has an open political system. Russia is not vulnerable in the same way because its political system, and most of its other systems, are closed. But Russia is vulnerable economically because Mr. Putin blew his great historical chance to change Russia from a gas and oil economy to a a high-tech one in 200408, when oil prices were sky high and Russia had been stabilized. If the United States wants to strike back at Russia with a blow of equal force, it should arrange to sell large quantities of American LNG to Germany. Russia is dependent on German money for its economic survival, and Germany is dependent on Russia for gas.

The price to Germany would be higher because of liquefaction and shipping costs, but that difference could be considered as defence spending and go toward Germany's pledge of spending 2 per cent of GDP on defence. The United States makes money, Germany frees itself from energy dependence on Russia and pays up its NATO dues, and Russia learns that vile acts have long and painful consequences.

So the question remains: Was there are any sort of sanctions-relief-for-non-meddling deal made between Mr. Trump and Mr. Putin in their private talk? Cybermeddling is something that Mr. Putin can rescind with a single phone call. It's less easy for Mr. Trump, though there are plenty of Europeans who have suffered from Russian counter-sanctions and want to start winding sanctions down. Mr. Trump also needs Congress's co-operation to reduce sanctions, but that of course is one of his selling points to Mr. Putin for not meddling in 2018. If there is a sudden drop in Russian meddling in the next few months, it will be a sure sign that Mr. Putin has Mr. Trump's word that sanctions relief will be forthcoming.

The silence of the computers will reveal the secret of Helsinki.

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