On November 2^nd, Ukraine’s rebel-held provinces of Luhansk and Donetsk – backed by Russia, despite President Vladimir Putin’s assertions to the contrary – went through with their plan to hold their own unauthorized elections. Unsurprisingly, the separatist candidates won in both regions, demonstrating that the forces in control of Ukraine’s breakaway east are using the current ceasefire to consolidate their gains rather than to negotiate a good-faith settlement with Kiev. 

But even more importantly, the illegitimate elections have laid bare the extent to which Putin’s overtures to accommodation with Europe are little more than tactical gambits in his quest to undermine Ukraine’s central government and fracture the country. 

{mosads}The Minsk Agreement of September 5th, in particular, now seems like nothing but an attempt to forestall further US and EU pressure in order to allow rebel forces to regroup. That agreement called for a ceasefire in exchange for early local elections under Ukrainian law, and the granting of more autonomy for the east under a new “special status” arrangement. 

Ukrainian President Petro Poroshenko upheld his end of the bargain, suspending the military campaign in the east and backing the special status legislation in Parliament. 

But while the separatist forces largely held to the ceasefire, they have been working closely with Russia to undermine the spirit of the Minsk accord. NATO leadership, including General Phillip Breedlove, the NATO Supreme Allied Commander, has repeatedly sounded the alarm over the extent of direct Russian involvement. Breedlove estimates that there are hundreds of Russian military advisers currently operating in Ukraine, and in advance of the elections Russia had seven battalions – nearly 10,000 troops – holding at the border. 

The state of that border tells the bigger story. While the ceasefire line in eastern Ukraine has become a de facto national boundary, the demarcation with Russia has all but been erased. “The Ukraine-Russia border is wide open,” General Breedlove has warned. “It is completely porous. Russian equipment, resupply, training flows back and forth freely.” 

In other words, Putin is succeeding in shifting Russia’s borders westward, while offering the EU just enough concessions to keep its leaders off balance. Soon, Luhansk and Donetsk could become permanent enclaves, like Abkhazia and South Ossetia in Georgia – all “frozen conflicts” that are a key part of Russia’s efforts to block further European integration. 

US and European leaders must recognize the game Putin is playing and take firmer measures to keep it from going any further. Encouragingly, even the relatively weak sanctions levied thus far on Russia have already had a major impact.  These sanctions should be intensified to increase domestic pressure on Putin. 

The Russian economy is entering a downward spiral based in large part on the financial disruption caused by its deteriorating relations with the West. Capital flight has hit the country hard, with major US and European banks withdrawing from the market and interest rates rising. Major Russian banks, which rely on international financing are struggling, while the central bank has spent over $200 million to prop up a plunging rouble. 

As many of his associates and political allies feel the pinch, Putin is attempting to maintain his internal support with proposed measures like the “Rotenberg Law,” which would provide direct compensation to companies and individuals hit by sanctions. But the state budget is highly dependent on oil and gas, and with oil prices plunging, Russia is quickly running out of the cash necessary to finance such generous expenditures. 

Amidst budget crisis, stagnant growth, and evaporating foreign investment, Moody’s took the step in October of downgrading Russia’s sovereign debt rating by issuing a negative outlook. Meanwhile, inflation has reached a three year high of 8.3 percent. 

Much of this economic disarray flows from the consequences of Russia’s intransigence in Ukraine, and European leaders must make sure not to let off the gas (no pun intended). Despite the short term political boost he gained at home from his foreign adventures, Putin is playing a dangerous and unsustainable game.  The West must take a longer view. 

In that light, the immediate response of European leaders to eastern Ukraine’s sham elections has been heartening. Via her spokesman, German Chancellor Angela Merkel, a very reticent European leader when it comes to imposing additional penalties on Russia, made clear that Germany finds Russia’s support for the polls “incomprehensible” and that further sanctions may be necessary if the situation worsens. 

That is a good start, but Chancellor Merkel and her counterparts must realize that the situation has already deteriorated, and continues to worsen. Indeed, the separatist elections are indisputable evidence that the situation worsens every day that Putin’s forces are allowed to continue operating under the cover of plausible deniability. 

With the Russian economy teetering, now is the time to send a more decisive message to the country’s leadership. The sanctions are working, and lawmakers need to take the next step and make them broader and deeper.  

Painter is a member of the Truman National Security Project’s Board of Directors and COO of Blue Star Strategies. Views expressed are her own.