03/28/2014 09:13 am ET Updated May 28, 2014

Ukraine. Putin's Next Step

Having misjudged Russia's and Putin's intentions prior to the annexation of Crimea, will the US and the EU repeat their mistake?

Friday 28th of March 2014 brought two major news stories about the ongoing crisis around Ukraine's future. The International Monetary Fund (IMF) and Ukraine agreed a credit of USD 18 billion to be formally approved by the fund next month. The next one was disturbing even alarming reports of Russian forces massing at the eastern border of Ukraine -- not only troops, but crack units allegedly fiercely loyal to President Putin and capable of doing what they are being asked to do, well-equipped and well-trained.

These two news item must be seen through the same prism. Only then can an opinion be formed of what is in store for the world still flabbergasted and shell-shocked by Russia's annexation of Crimea. What catches the eye is the similarity to the crisis about four months ago pivoting around Ukraine seeking a loan of USD 15 billion. The EU offered such a loan. Ukraine, under pressure from Russia, rejected this offer relying instead on a Russian credit line. That triggered off the unrest or revolt in Ukraine opening the Pandora's Box for what we have seen over the preceding four months.

The point is that the EU offer was conditioned on Ukraine reforming and restructuring its economy. It was not supposed to be money just thrown into a hole to keep a dysfunctional political system and rotten economic model afloat. The Russian offer was conditioned on exactly the opposite namely keeping the existing Ukrainian model unchanged -- no reforms, no structural changes.

The battle lines are drawn. It is about societal changes in Ukraine.

The Russian political system under President Putin's leadership has come to the conclusion that if Ukraine discards a model analogous to the one they sit on top of and reap the benefits of, they will be next in line. They have no illusions. They cannot afford Ukraine to get moving as was the case for Poland and other countries in Central -- and Eastern Europe after 1991. A prosperous and well-functioning Ukraine would encourage and give ammunition to those inside Russia waiting for a chance to put Russia back on tracks towards a modern, open society. They may or may not believe the propaganda that Ukraine was hijacked by the Wests and right wing, extremists ousted President Yanukovych by what they term an illegal coup. It is irrelevant because the issue is first line of defense of Russia's political system and their political survival.

President Putin has let the US and the EU know that Ukraine is a red line not to be crossed. A neutral Ukraine more or less dependent on Russia was acceptable, but not a Ukraine turning towards the West. The US and the EU have ignored these signals while at the same time doing very little for Ukraine and therefore partly to blame for the crisis unfolding since November 2013.

Seen from the Kremlin it is incomprehensible that the West still doesn't get it. The annexation of Crimea was the strongest signal Russia and Putin could send. If the US and the EU continues to be tone deaf in the Russian perspective, Russia's leaders will feel that they have no choice, but to put the screws harder on Ukraine.

The Russian military buildup is no bluff. If necessary to get the message across Russia and Putin will act. It is difficult to guess exactly when and how. But a kind of limited military action is a distinct possibility. Putin is no gambler so he will act in a calibrated way. The Russians are chess players not acrobats!

It is a striking example of asymmetrical policy objectives and options. Ukraine is close to Russia making a military posture and a military operation logistically comparatively easy and 'cheap'. Military support to Ukraine, if the political will to consider such a step is found, from the US and the EU, is logistically difficult and time consuming. It will be veritable impossible to get troops on the ground in the first stages when the possibilities for containing the conflict is still at hand. For Russia the question is of vital importance, maybe the most vital political question, for President Putin plus his followers. For the US and the EU it is important, but is it vital? That is highly doubtful; the conclusion to draw is obvious: Russia is willing to run a much higher risk, pay much more politically and economically, and go further than the US and the EU.

Analyzing and digesting the crisis it is difficult see any other outcome than Russia and President Putin willing to do 'whatever it takes' to torpedo the Ukraine/IMF agreement, especially bearing in mind that the Ukraine-EU agreement, which President Yanukovych rejected at the last moment in November 2013 is back on the agenda. If these two agreements are signed and implemented, Russia and President Putin will suffer a major even catastrophic strategic defeat despite the apparent victory gained when annexing Crimea -- a small thing compared to losing Ukraine.

It is unlikely that Russia and President Putin will just sit and wait for this to happen.