Atlantic Review

Russian officials talk endlessly about geopolitics, expressing as much misplaced concern about NATO, the EU and the US today as Churchill spoke of regarding Germany in 1939. What drives Putin, however, is his desire to stay in power. After all the stealing and killing, he cannot retire in peace: "When you play the game of thrones, you win or you die." The Economist on the Kremlin:

...staying in power is its main goal. A study commissioned by Alexei Kudrin, a former finance minister, and conducted by a group of Russian sociologists led by Mikhail Dmitriev of the New Economic Growth, a think-tank, suggests that the roots of Mr Putin's actions in Ukraine lie in the Kremlin's need to solidify its legitimacy after the growing discontent that erupted into street protests during the winter of 2011-12.

Those protests were driven mainly by Russia's middle class, frustrated by its lack of prospects. After a decade of rapid income growth that boosted living standards, priorities shifted to such aspirations as better justice, education and health care that Mr Putin's regime of crony state capitalism could not provide. In the eyes of the middle class, Mr Putin was becoming a symbol of stagnation rather than stability-so his ratings began to fall. Trust in the state media also wobbled. Observers started to compare the situation to the mid-1980s, when a frustrated intelligentsia became a driving force behind Mikhail Gorbachev's perestroika. The protests in Russia's larger cities started to resonate with economic and social discontent in poorer provinces, and risked erupting into an open social conflict.

Russia's annexation of Crimea arrested this trend.

Basic principles for our Russia policy:

1. The West has to be vigilant and strengthen NATO's collective defense and rapid response capabilities, which is being done already, but should be increased.
2. The EU and the US need strategic patience and continue to raise the economic (and personal) costs to the Kremlin leadership, while also leaving open an offramp, an exit strategy. Eventually they'll want to have one. The Kremlin does not have a grand master plan set in stone. Putin is winging it. He is an opportunist, not a strategists. Further conflict is not inevitable. (If we would respond under the assumption of a sinister grand strategy towards the West, then we might undermine diplomacy and set further military escalation in motion. It seems that in history many powers saw their offensive actions as "reactions" to some other power's sinister moves and vice versa.)
3. Western unity is key. Moscow shall not divide us and exploit our weaknesses. We need to make the wider Russian elite realize that Putin is wasting national resources without any chance to succeed.

Russia is not a riddle and smart Russia policy is not rocket-science. It's so obvious, I did not want to write it down at first, but then realized it might contribute to calm policy assessment and to counter both the Putin Propaganda as well as the fear-mongering from the "24-hour politico-pundit-perpetual-panic-conflictinator".