Putin wants chaos, not invasion, in eastern Ukraine: analysts

MOSCOW - President Vladimir Putin is seeking to maintain influence in Ukraine by fomenting instability in its Russian-speaking eastern regions but will stop short of sending troops there in a Crimea-style swoop, analysts said.

Ever since the Kremlin took control of Ukraine's Russian-speaking peninsula of Crimea last month and has massed tens of thousands of troops on Ukraine's border, Europe has been on tenterhooks expecting Putin to occupy eastern Ukraine.

But the intractable Russian strongman has been playing a diplomatic cat-and-mouse game with the West, inflaming tensions with his pledges to protect Russian speakers in Ukraine's east without following up on his threats so far.

Ukraine's former Soviet master Russia is now pushing Kiev and its allies in Brussels and Washington to grant more powers to the country's eastern regions through federalisation that would elevate the status of a Russian language.

But the Kremlin conspicuously did not support pro-Russian militants who have over the past days occupied government buildings in key eastern Ukrainian cities including Donetsk and declared independence.

In a move signalling his unwillingness to ramp up confrontation with the West, Putin expressed hope on Wednesday that upcoming four-way crisis talks with the European Union, the United States and Ukraine will bring positive results.

On Thursday, the Russian president sent a letter to the leaders of 18 European countries that receive Russian gas, warning them that Russia could cut natural to Ukraine and interrupt transit supplies to Europe if Kiev did not settle its US$2.2 billion (S$2.75 billion) bill.

But he also suggested that Moscow and Brussels work together to restore Ukraine's battered economy, in what might be an effort to step back from the brink of military confrontation.

"There will not be a repeat of a Crimean scenario," Konstantin Kalachev, head of the Political Expert Group, told AFP.

Moscow will most likely limit itself to providing only logistical and moral support to pro-Russian separatists, said Kalachev.

'Managed chaos'

The occupation of eastern Ukraine, where a majority does not support succession, is fraught with huge political and economic risks, analysts said.

The EU and the United States have already slapped targeted sanctions against some of Putin's closest allies.

US President Barack Obama said Thursday that the United States and its allies should prepare new sanctions against Russia if it escalates the crisis over Ukraine.

A new round of Western sanctions could target Russia's entire political elite and would deal a wounding blow to Russia's stuttering economy.

The cost of seizing Crimea is already expected to be a major drag on the economy, hitting gross domestic product and intensifying capital outflows.

World Bank President Jim Yong Kim warned that the crisis would also have far-reaching effects on Russia, forcing it into recession this year.

"This is a very serious issue for Russia - a very serious issue for its growth prospects," Kim told reporters in Washington Thursday. "So we simply urge all of the parties to continue with negotiations and find a peaceful means of moving forward."

Become a fan on Facebook