Of course, Russia has (or perceives itself to have) far more at stake in Ukraine than do EU countries. So, the imbalance of costs and benefits does not mean that Russia will necessarily be the first to give in. Still, among the threats available to Putin in this crisis, that of a gas embargo is one that he would be well advised to keep as a threat, rather than making it a reality.
However, Putin may not be the one who decides this. Ukraine owes Gazprom nearly $2 billion for previous gas purchases, most of which is already overdue. If Ukraine refuses to pay up until the crisis is resolved, Russia will have the choice of cutting off supplies, thereby hitting the EU as well as Ukraine, or extending potentially unlimited credit to a government it regards as illegitimate. This is not an appealing choice.
John Quiggin is a professor of economics at the University of Queensland, Australia and adjunct professor at the University of Maryland, College Park. He is author ofZombie Economics: How Dead Ideas Still Walk Among Us.
Image: Flickr/Remco van der Meer. CC BY 2.0.