I’ve seen a few articles giving serious thought to recent sanctions against Russia. These have been touted by American politicians as significant concrete measures to impose a cost on Putin’s regime for its recent actions in Ukraine. However, the measures have been relatively modest, and have not seemed to match the rhetoric of Western politicians.

One of the more absurd instances was Canada’s highly-publicized sanctions against unnamed individuals and businesses in Russia. The mismatch between the rhetoric and the concrete actions is considerable.

US oil companies have actually increased investments in Russia since sanctions were first announced. The most recent round likely dampened the moods of some elites who are close with Moscow, but their effect on decision making at the Kremlin is likely less pronounced that Western leaders have claimed.

Nonetheless, reports of currency devaluation and capital outflow should not be dismissed. While the sanctions are not devastating in the same fashion as other US-led sanctions regimes, they have had an appreciable effect on Russia’s economy.

Why have the sanctions been so toothless?

Part of the reason is Europe’s dependence on imported Russian energy. Russia supplies Europe (especially Germany) with natural gas that is much cheaper than they can get elsewhere. If the EU joins the US in placing major sanctions on Russia, then they will be encouraging Moscow to respond with economic warfare of its own. Doing so would certainly be damaging to Russia, since their economy is largely based on these energy exports, but Merkel clearly has no appetite for testing Russian resolve. In other words, meaningful EU sanctions against Russia could cause an escalation that might send both Europe and Russia into hard economic times.

The US is no stranger to using sanctions, often to great effect. One problem is this: they already have a huge sanctions regime against Iran. Russia is cooperating with the sanctions against Iran. If the US starts putting serious sanctions on Russia, Russia may be able to undo what the past 10-15 years of sanctions have been working toward. Right now Iran is out in the cold, and the US is offering to let it back in if it puts the brakes on its nuclear program. If the US sends Russia out into the cold too, then Iran suddenly has Russia and its former-Soviet allies to trade with, and the sanctions lose their teeth.

Aside from these factors, there is the (remote) possibility of escalation into actual warfare, and the extensive involvement of American oil companies in Russia’s energy sector. Something I had not considered, which Friedman mentions, is the possibility of destabilizing a nuclear-armed country. The prospect of Putin’s regime being toppled from within is unlikely almost beyond consideration (he is extremely popular and runs a well-honed security apparatus). However, the potential consequences compel consideration even of unlikely possibilities that may only manifest in the medium- or long-term.

Whatever the appropriate weighting of each reason may be, what is clear is that the EU nations in particularly are decidedly unenthusiastic about imposing real costs on Putin’s regime. Meanwhile, in their rhetoric, US and other Western leaders continue to mythologize their sanctions regimes to absurd, almost comical, degrees.

For further reading, Fred Kaplan discusses the most recent round of US sanctions. George Friedman has an article at Stratfor.