Imagine

No, this is not a tribute to that famous John Lennon song. 

Everything Is Not AwesomeImagine that you are a businessman with a long history of sales to one customer. Because of long-standing ties you even give the customer a 30% discount. But the customer is not paying your bill promptly, often not paying it at all. The amount owed keeps growing and growing. What do you do? At some point you place the customer on a cash only basis. You have no choice. Why should you continue to offer discounts to that customer? I have been in this situation a number of times, in fact I am in this situation right now. Everything is not awesome. (Cheesy reference to the Lego Movie.) 

While the parallel is not exact, this is the situation that the Russian Federation is in right now with Ukraine. Why should Russia continue to sell gas to Ukraine if they are not being paid? Why should they offer discounts under what they can get for the gas in the rest of Europe? Would you? 

Imagine further that this customer was also a wholesaler that took your product and resold it and kept that money. That was the situation the last time the darling of the West, Yulia Tymoshenko, the once and future Prime Minister of Ukraine, was in charge. Ukraine is a "choke point" for natural gas sales to Europe. The Ukraine government used this fact to steal gas from the pipelines as most Russian gas sales to Europe flows through the pipelines in Ukraine. While Gazprom is frantically building new pipelines, they will not be completed before 2016. 

So in that situation what would you as a businessman do? 

Keep these facts of the situation in Ukraine in mind as whatever unfolds over the next few days. I doubt any nation-state would act any differently than what the Russian federation will do, and soon. So, while Russia is not rainbow unicorns, sweetness and light, and puppies, it will act in what it perceives as its own vested interests. All nation-states do the same.