The simmering Ukrainian crisis took a sharp new turn with Russian President Vladimir Putin declaring diplomatic recognition to breakaway regions in east of Ukraine – Donetsk and Luhansk and collectively known as Donbass – and announced deploying Russian peacekeeping forces there. While the United States has said that there would be sanctions against dealings in these regions, Britain’s Home Secretary Sajid Javid said that Ukraine’s invasion has begun. But Ukrainian President Volodymyr Zelenskiy said at a press conference in Kyiv that he would consider breaking off diplomatic ties with Moscow, and he was sure there would be no war between Russia and Ukraine.

The Ukrainian president it appears is taking the last stance, and he seems reconciled to the independence of the breakaway region. Ukraine is not going to wage a war to bring back the regions that have seceded. China wanted all sides to show restraint. Russian Foreign Minister Sergey Lavrov was not perturbed by the news of Western sanctions developments in the region. He said, ““Our European, American, British colleagues will not stop and will not calm down until they have exhausted all their possibilities for the so-called punishment of Russia,” he said.

It seems Putin has taken a strategic detour by recognising the breakaway Ukrainian regions and deploying Russian army there as a peace-keeping force. The move has provoked the West but it did not amount to invasion of Ukraine as predicted by Western security experts. One of the American security experts said that sanctions against Russia would have to be proportional. China has said all sides should eschew force and should engage in diplomatic discussions. Japan was willing to declare sanctions if Ukraine is invaded. Putin has then pushed back the boundaries as it were, and Moscow has stuck to its demand that Ukraine should not be made a member of the Western military alliance,

There is no war over Ukraine but there is a war-like situation. This stresses the diplomatic channels of communication no doubt but it does not mean breaking off of diplomatic relations between the two sides. The Western countries seem to believe that the diplomatic recognition of the breakaway Ukrainian region keeps the option of Ukrainian invasion open to Russia.

There has been considerable debate on whether Russia would gain any advantage if it were to invade Ukraine. The general consensus among the European watchers is that Russia would not gain much by it. The repercussions have however begun. Germany’s Chancellor Olaf Scholz has freezed the Nord2 gas pipeline from Russia to Germany. Russia’s foreign exchange earnings are mostly from the sale of Russian gas to Europe. It is most likely that European nations like Germany would use the sanctions weapon in a nuanced way than the other Americans would. It is most likely that the Russia-Ukraine-West standoff would linger longer and it would not necessarily break into a war anytime soon. The tense situation arising from the situation in Ukraine will keep the world on tenterhooks.

The stalemate in Ukraine will have a negative impact on European and other markets. The oil prices have already shot up, touching $100 per barrel, the highest in eight years. It is the economic implications of the unresolved standoff over Ukraine that cloud the prospects of global economic recovery. This is not good news for the global markets. Putin it seems is ready to up the stakes as it were. It is possible that due to the economic troubles at home, Putin perhaps finds it easier to distract the attention of Russians by taking a tough stance over Ukraine. But this is not going to help the Russian economy, either in the short term or in the long term.