What the downing of the Malaysian plane reveals yet again is how shallow Cameron is as a political leader. He only does posturing: witness his cant that the French should not deliver the warships they are contracted to build for the Russians. Imagine if the contract were with a British company, for example BAE Systems.
At least the other EU leaders don’t go in for much bluster and posturing. It’s not the Merkel style. They will almost certainly shrink from doing anything that might cause Putin to think again, though: too dependent on Russian energy supplies, not to mention exports to Vlad’s little empire. But if they need some ideas about what would really hurt, then this blog post by Paul Mason should help.
The USA’s sanctions prevent four major Russian companies – Gazprombank, VEB bank, Rosneft and Novatek – from issuing bonds to borrow money long term (longer than 90 days). The EU does not yet even do that. But if applied to a wide list of Russian companies, combined with a ban on actually trading either the shares or the debts of those companies, a freeze on market access would quickly bring the Russian economy to its knees. Its stock market would collapse, its banking system probably suffer a Lehman style moment.
In addition, any major and comprehensive crackdown on money laundering in London – with balaclava and kevlar-clad cops raiding the homes and offices of key people – would probably achieve the same effect just by being announced. London would seize up as a conduit for the tax-dodging billions of the Russian oligarchs.
And this encapsulates the problem. When a major state transgresses international law again and again, the only deterrents or remedies are major, unilateral actions by states that host global markets. The only thing you can do that is not for show is actually something quite massive.