(Co-authored with Tatyana Malyarenko. Originally published in The Conversation.)

The Geneva Agreement appears to be dead in the water. Achieved only a week ago, it was widely considered a surprising breakthrough, albeit one which offered major concessions to Russia.

One week on, however, it seems as if very little happened in terms of actual implementation. Daily updates from the OSCE’s Special Monitoring Mission in Ukraine, on the one hand, attest to the continuation of the status quo with protesters continuing to occupy buildings in about a dozen urban centres in eastern Ukraine and refusing to disarm – two key points of the Geneva Agreement.

On the other hand, these daily updates also demonstrate a pattern of local violence. On Sunday, a gunfight between as yet unidentified groups led to three people being killed. Two days later, the body of a pro-Kiev local councillor was found with signs of torture near Slaviansk.

This prompted the country’s interim president, Oleksander Turchinov, to order the resumption of an “anti-terrorist” operation in eastern Ukraine, which had been called off after Ukrainian forces failed to make any progress in regaining ground in the Donetsk region and which was later extended as an “Easter truce”.

As a result, it now appears that Ukrainian forces have retaken the City Hall in the southern port city of Mariupol and that an advance into the city of Slaviansk has killed at least five pro-Russian gunmen. Simultaneously, the Regional Council of Deputies of Donetsk has urged Kiev to withdraw its troops and stop further military operations in the region.

At the same time, there is mutual recrimination over the failure of the Geneva Agreement has engulfed Ukraine, with Russia and the United States in another war of words, accusing each other of failing to abide by the terms of the agreement. The US has threatened further economic sanctions, while Russia has hinted, yet again, that it will “defend” its interests in eastern Ukraine and ordered new military exercises in response to Ukraine’s resumption of its security operations.

The EU, in turn, has been largely absent from this escalating row. After welcoming the Geneva Agreement on April 17, it took the EU’s foreign policy chief, Baroness Catherine Ashton, another week to issue her next official statement, expressing concern over the escalation in Ukraine and calling on all sides to abide by the agreement.

This degree of timidity, unusual even for the EU, of course, needs to be seen in the context of impending tri-lateral energy talks between the EU, Russia and Ukraine, scheduled for later this week. And it also reflects continuing and long-standing divisions within the Union over how to deal with Russia in general and the Ukraine crisis in particular.

Flashpoint Ukraine

Given the lack of clarity and fluidity of the situation in Ukraine and beyond, what happens next remains everybody’s guess. In Ukraine itself, tensions are likely to persist and flare up into local violence at flashpoints in the east of the country as they have for several weeks now. A heavy-handed Ukrainian response, which comes with its own challenges given the weak capacity of the state, is unhelpful at this stage.

Rather than trying to re-take occupied buildings by force, Ukraine should focus on containing the spread of the occupations and support OSCE efforts to defuse local stand-offs. Any further military escalation would not only be futile in terms of east-west relations in Ukraine but also play straight into Russia’s hands and potentially provide a pretext for another Kremlin-style “humanitarian intervention”.

At the same time, the EU and the US need to work towards a more joined-up approach to the crisis. The US is far less dependent on Russian energy than the EU – especially Germany. This gives Washington more scope for sanctions, while Brussels simply does not (yet) have sufficient alternatives to its energy dependence on Russia.

The EU and US must therefore not only make it clear in word and deed that they are united in standing against Russia’s brazen subversion of Ukrainian sovereignty but must also prepare for a potentially long period of deteriorating relations with Russia.

Tough stand required

This preparation needs to be threefold. First, it needs to offer assurances to EU and NATO member states at Russia’s borders and send clear deterrent signals to Russia. It also needs to work closely with allies such as Georgia and Moldova and offer them continued Western support as they balance their own complex regional interests and dependencies.

Second, the EU in particular needs to prepare for the impact of an escalating sanctions regime against Russia. Short of military action, economic sanctions, and the threat thereof, remain the most effective tool that the EU has at its disposal – but only if they can be sustained as long as necessary and if threats of further escalation are credible.

This will require, above all, the development of energy alternatives for the EU. Yet, even this may not be sufficient as Russia could find alternative markets that might allow it to weather the impact of EU sanctions. Hence the US and EU need to work together to convince OPEC (above all, Saudi Arabia) to increase their own output, which would not only provide alternative supplies for the EU but also lower oil and gas prices and thus hit Russian revenues even if the country found alternative markets for its main export.

Finally, managing deteriorating relations with Russia also requires a consideration of any impact on the broader international system. Not only are there potentially detrimental impacts on the ability of the UN and other major international organisations to function effectively but poor relations with Russia will make progress on Iran, North Korea, the Middle East, the South China Sea and a whole host of other current and latent crises more difficult to achieve, not least because Russia now offers a more potent anti-Western power centre than at any time in the past 30 years.

The Ukraine crisis may thus yet turn out as an event with consequences as momentous as the end of the Cold War or 9/11.