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I am not sure that I agree with Peter’s analysis.
Peter suggests “Even if Russia annexes the Crimea and the Don Basin, the response of the rest of the Ukraine will be to closely ally with the West.” I don’t think that will be the response of the rest of the Ukraine – it may be the response of the West of the Ukraine, but let’s look (before the recent troubles) at the result of the 2010 election. Russian supporting Yanukovych show a lot of support in the East of the Ukraine, not just in the Crimea, and we know this is due to ethnic and linguistic factors.
Russia is holding out for either a short term civil war spliting the country in two, providing the buffer that Putin wants and needs, and if not then Russia will play the long game by trying to have Ukraine federalised as a solution to the crisis with a Pro Russian puppet in play in the East.
Regardless of the wider outcome it looks like Russia has already managed to annex the Crimea, providing security to it’s Black Sea fleet at Sevastopol, which as one of Peter’s readers points out is the Russians only warm water port.
Hardly a loss just yet. There is a lot more to play for in the Ukraine than just crumbs Peter.