What does Vladimir Putin want next?

Simferopol, Crimea (CNN) -- Is Russian President Vladimir
Putin an opportunist, grabbing at chances to poke the West
in the eye, or a clever strategist with the longer-term goal of
restoring a greater Russia? Is he simply riding a tide of
Russian patriotic fervor over Crimea? Is he a rational actor
aware of the delicate balances within the international
system, or as one observer put it, " drunk on power " and
oblivious to sanctions?
These are the questions preoccupying western governments
and Russia's neighbors, after the swift annexation of Crimea
and Russian military maneuvers close to the Ukrainian
border.
There were some tantalizing clues in Putin's pugnacious
speech to the Duma this week. He described the fall of the
Soviet Union as unfortunate -- because it had separated
Russians. "The Russian nation became one of the biggest, if
not the biggest ethnic group in the world to be divided by
borders," he said.
"It was only when Crimea ended up as part of a different
country that Russia realized that it was not simply robbed,
it was plundered ." He went on to say, "if you compress the
spring all the way to its limit, it will snap back hard."
Heady, populist rhetoric -- but it has propelled
the Russian President to his highest approval
rating -- 71% -- in recent years, according to
the Russian Public Opinion Research Center .
Putin said Russia had no intention of violating
Ukraine's sovereignty (beyond the 5% of its
territory it has absorbed this week.) "Do not
believe those who want you to fear Russia,
shouting that other regions will follow Crimea,"
he told Ukrainians.
But he then said this: " It should be above all in
Ukraine's own interest to ensure that these
people's rights and interests are fully protected.
This is the guarantee of Ukraine's state stability
and territorial integrity."
In other words, if the Kremlin believes Russians
are being discriminated against, Ukraine's
independence is no longer assured.
Those words will have echoed across parts of
the former Soviet Union with large Russian
populations: Moldova (10%), Lithuania (6%),
Latvia (27%) and Estonia (25%). Will the
Russian region of Transnistria in Moldova begin
agitating for its own referendum? Will oblasts (regions) of
eastern Ukraine demand their own vote?
Transnistria is already beyond the control of the Moldovan
government. Just as a statue of Lenin overlooks the main
square in the Crimean capital, Simferopol, so another stands
outside Transnistria's regional assembly in Tiraspol. In a
2006 referendum more than 95% of voters said they wanted
to be reunited with Russia.
The assumption at NATO headquarters is that Putin won't
stop at Crimea. Secretary General Anders Fogh Rasmussen
described the annexation of Crimea as "21st century
revisionism, attempts to turn back the clock, to draw new
dividing lines on our map, to monopolize markets, subdue
populations."
NATO has already stepped up air policing over the Baltic
states -- all members of the Alliance.
Nor does the White House see Crimea as Putin's end-game.
In imposing sanctions against figures close to Putin,
President Obama stressed Thursday that further Russian
incursions would trigger a third round of sanctions targeting
key sectors of the Russian economy.
One of Putin's reasons for ignoring the warnings so far is
history, as he made clear in front of the Duma. On Kosovo,
NATO expansion, Libya and other issues, he said, the West
had lied to and deceived Russia. He didn't use the word
payback, but he didn't need to.
Gradually, pro-Western governments have taken power
around Russia, across the Baltics, now in Ukraine --
feeding the age-old Russian fear of encirlement. Indeed
Putin asked the Duma this week: what if Sevastopol in
Crimea -- with its glorious place in Russian military history
-- had become a NATO base within Ukraine? A line had to
be drawn.
But that line has only hastened the signing of Ukraine's
association agreement with the European Union. In signing
the agreement Friday, the President of the European Council,
Herman van Rompuy, pointedly said it was a response to
"the popular yearning for a decent life as a nation, for a
European way of life." The subtext was that Putin's Russia
was on the wrong side of history -- anti-democratic,
corrupt, without values.
Putin's clique
Another reason for Putin's embrace of high-octane
nationalism, according to some analysts, is that he
increasingly relies on a small inner circle, where there are
few voices of caution or dissent. There was a sign of this
when Russian Foreign Minister Sergei Lavrov met US
Secretary of State John Kerry in London recently. U.S.
officials were surprised that Lavrov -- despite his enormous
experience -- had no mandate to negotiate or even discuss
aspects of the crisis. Lavrov announced Friday that the
President would personally supervize the reintegration of
Crimea.
Alexei Kudrin was known to speak his mind as
Finance Minister from 2000-2011. He believes
the consequences of sanctions and market
anxiety may cost Russia $200 billion this year
in capital flight. The ruble has already lost 10%
of its value this year and the credit rating
agency Fitch's said Friday that "Since U.S. and
EU banks and investors may well be reluctant
to lend to Russia under the current
circumstances, the economy may slow further
and the private sector may require official
support." Economists now expect the Russian
economy to stagnate and perhaps slide into recession.
That hurts people closest to the Russian President, the
billionaires who control large chunks of the Russian
economy. Major companies like Metalloinvest and state
banks like VTB need access to capital markets. Will Putin
feel their pain, or must the oligarchs also make patriotic
sacrifices?
Another unknown is whether the Kremlin feels the West has
the stomach for serious, lasting sanctions. After the
Russian incursion into Georgia in 2008, when South Ossetia
was essentially annexed, there was brief and mild
retribution. The list of individuals sanctioned by the U.S.
and European Union this time round may make a greater
impact. But the avenues for dialogue - through NATO, the
European Union, the G8, the United Nations -- are closing
down.
"Business as usual," says NATO chief Rasmussen, "is not
an option."
Perhaps the biggest question is whether Putin accepts that
Russia in the 21st century must be fully integrated into the
international economy -- as a member of the World Trade
Organization, with a convertible currency and a rule of law
that allows and encourages companies to do business
there. Or does he believe Russia is strong enough to stand
aloof in the knowledge that the world (and especially
Europe) can't do without its oil, gas and minerals?
Similarly, does he see the value of international co-
operation on Iran's nuclear program or Syria? Russia has no
desire to see a nuclear-armed Iran, nor Syria taken over by
jihadist militants. But co-operation with the West does not
follow.
Despite the fact that his "cashiers" are now sanctioned, and
his attempts to prevent Ukraine from drifting westward have
backfired, Putin's muscular defiance -- so popular at home
and in Crimea -- portrays the West as Russia's natural
adversary, not its potential partner.