RUSSIA

Putin's Ultimatum to the Next U.S. President

OCT 4, 20 16 12: 30 P M EST

By
Leonid Bershidsky

The next U.S. administration will inherit the worst relationship with Russia
since Ronald Reagan called the Soviet Union an evil empire. Judging from
the list of grievances that President Vladimir Putin has laid out, even a
relatively Putin-friendly Donald Trump will have a hard time satisfying him.

Putin delivered his message to the future U.S. president Monday, just as the
U.S. State Department announced it was suspending negotiations with
Russia on a ceasefire in Syria and Russia-backed Syrian troops moved to
take more ground in Aleppo. In a bill submitted to parliament, Putin
threatened to end a joint U.S.-Russian disarmament program -- in which
surplus weapons-grade plutonium is processed into fuel -- unless the U.S.
meets certain conditions:

Roll back North Atlantic Treaty Organization infrastructure and

reduce NATO personnel to September 2000 levels;
Repeal the Magnitsky Act, which imposed sanctions on Russian
officials involved in human rights violations;
Repeal all U.S. sanctions against Russian individuals and businesses;
Compensate Russians for damages incurred by U.S. sanctions and by
Russias forced countersanctions;
Present a clear plan of irreversible destruction of U.S. surplus
plutonium.

Putin might as well have said the program will resume when hell freezes
over. He asked for too little, Leonid Volkov, an anti-Putin
politician, wrote sarcastically on Facebook. He should have asked for
Alaska back, eternal youth, Elon Musk and a ticket to Disneyland.

Even if a U.S. administration were suddenly prepared to lift sanctions

introduced in response to the Russian aggression in Ukraine, not even
President Trump would agree to the humiliating and nonsensical demand for
compensation -- particularly for Russias spiteful decision to ban Western
food imports, a move that primarily hurt domestic consumers. The NATO
cuts, too, are a non-starter.

The plutonium deal was largely symbolic and on its last legs anyway. It
applied to just 34 tons on each side, a small share of each countrys nuclear
arsenal. The Obama administration put its side of the program "on cold
standby in 2014, after a series of disagreements over such issues as how to
dispose of the plutonium and the high cost of converting it into fuel for
nuclear plants. The move indicated that the U.S. was prepared to see Russia
abandon its side of the bargain, too.

Putins choice of venue appears aimed at reminding the world that Russia
remains a nuclear power with plutonium to spare, unlike most countries in its
immediate neighborhood. Ukrainian President Petro Poroshenko bitterly
regrets that his country gave up its nuclear arsenal in the mid-1990s in
exchange for a now-worthless guarantee from Russia, the U.S. and the U.K.
that it wouldnt be attacked. Poroshenko wants to convince Washington that
Ukraine deserves lethal U.S. weapons, having been duped into stripping
itself of a powerful deterrent that probably would have kept it intact in 2014.

Putins message is that Russia will start acting as an equal, whether or not
the U.S. wants to treat it as one. Its a reminder to the presidential candidates
that pacifying Russia will have a price tag, and that Russias starting position
in any negotiations will be arrogantly high. Since the outgoing U.S.
administration is unlikely to step up military activity in Syria, Russia is doing
its best to make sure President Bashar al-Assads troops win a decisive
victory at Aleppo before the next U.S. president is inaugurated. The U.S.
decision to withdraw from talks means little to Putin, who has been playing
for time rather than talking anyway.

Putin is aware that his belligerent stand will be costly. On Monday, the
finance ministry suggested boosting the classified part of the budget -- which
includes military and security expenditures -- by about 680 billion rubles
($10.9 billion), a move that will require cutting other expenditures and
increasing the deficit. Putin knows from experience that Russians will put up
with more economic hardship if they feel he is standing up to the U.S.

Its hard to see how Barack Obama can respond seriously to Putins
demands. The next U.S. president, though, will need to decide what to do
with an intransigent Russia. One option is to ratchet up sanctions and wait
for a weakening economy to undermine the Kremlins position, yet such an
approach could have immediate and unpredictable consequences in the
Middle East and elsewhere.

This column does not necessarily reflect the opinion of the editorial board or
Bloomberg LP and its owners.

To contact the author of this story:

Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor responsible for this story:

Mark Whitehouse at mwhitehouse1@bloomberg.net