So, Europe and the US have sent a message to Russian President Putin after the downing of the Malaysian airliner and ongoing military interference in eastern Ukrain. Heightened sanctions. What will Putin do?
There is quite a bit of media speculation, and some of it is a bit silly. That discussion is about whether heightened sanctions will work at all. Why is this silly? Think about it. The west could have done nothing, and left open the possibility that Putin will see this as capitulation. Sounds like a bad option. Or the west could militarily intervene. That could escalate out of control if neither side backed off. Also sounds like a bad idea. Sanctions are the only other serious option. And we cannot know what effect they will have. So we need to wait and see.
But what would you do if you were Putin? One option might be to cut off gas supplies to Europe as a “tit for tat” move. Would it help Russia? Well, it would hurt financially and politically. Would it be worth it? It might if it could end western interference with what Russia wants to do in Ukraine. But that is not likely. The other benefit would be to placate the hardliners in the Kremlin. But it would also cause more concerns among the more moderate factions who are doing their cost/benefit calculations to decide how far Russia should go to get what it wants in Ukraine.Thinking rationally, this option has drawbacks.
But here is the key strategic point. If you are a European or American policy maker, you have to prepare for the worst case – that Putin may just do this anyway. Why? So you are prepared with your counter-move.
Managing Conflict 
The US and EU *presentation* of the story generally rests on the foundation that Russia has crossed a red line, by responding to a legitimate regime change in Kiev, with an illegitimate regime change in Crimea and an attempt to do another one in Donbass.
The Russian *presentation* of the story generally rests on the foundation that the US has crossed a “red line”, not only by the regime change in Kiev, but also by the unusual result that ultra-extremists, essentially fascists, were put in power right on Russias border. For historical reasons, this threatens the Russians more than anything the US has done in a long time. They also deeply believe that nurturing fascist governments is, in and of itself, the most illegitimate thing anyone could do.
(Considering how US support for Syrian rebels last year helped the ISIS extremists take over Iraq, I think this concept is at least open to debate).
Anyway, both the US and Russian foundations for their beliefs are pretty strong, in the context that they come from. So there’s no reason to expect one side to “persuade” the other that it is right, through reason. It’s down to muscle and direct negotiation, free of moral considerations.
In that light, what would be the purpose of sanctions? I think it is simply a very aggressive negotiating strategy, a form of intimidation in essence. You don’t need a degree in psychology to realize that this is a way to make enemies for life, who will then try to sabotage you at every turn (hint: Middle east. hint: China).
Very unwise.
Thanks for your thoughts! You make the good point that Russia has legitimate security concerns about the political unrest in Ukraine. The question is whether the west can accept those concerns as a justification for unilateral military intervention to re-draw the European map . Saying that this is ok could destabilize the entire region. From this perspective, the conflict is not just about Ukraine and friendship. It goes much deeper. And this is why friendship with Russia is taking a back seat to pushing back with sanctions in order to get a political settlement that the west can live with. And btw, I think this will happen.