Is no one in the West trying to do a deal with Putin?

Obama and Cameron should show more courage and seek to reassure the Russian leader of their intentions

The conviction of Alexei Navalny, right, and his brother, Oleg, is a return of KGB practices of old (Reuters) (Reuters)

The conviction for fraud of opposition leader Alexei Navalny last week displayed all that is rotten in Putin's Russia. The charges were a sham, the trial a farce, the sentencing re-timed to coincide with the Russian holidays. And the sentences themselves – a suspended sentence on Navalny (to avoid demonstrations in his support) but jail for his co-defendant brother – were a nasty resurrection of the KGB practice of pressurising dissidents by persecuting their families.

Navalny's real crime? To have publicised the massive graft which is at the heart of the way Russia works.

It is hard not to cheer when things go sour for such a regime. In the past month the impact of Western sanctions on Russia has been massively reinforced by the collapse in price of its key export – oil. The rouble has plummeted. Russian banks are queuing for government support. President Barack Obama has contentedly observed that Putin now looks "not so smart". The mood in Washington and Whitehall is to let Putin stew. Sooner or later he must buckle over Ukraine, or fall.

As with much Western policy towards Russia, this won't work. The economic pressures on Putin may well intensify, but they won't bring him down. In fact the expected hit to the Russian economy this year roughly matches that in the UK in 2009 – bad, but no apocalypse. Meanwhile, the Russian people are tough (they experienced much worse as recently as 1998), and in a mood of dogged hostility to the widely advertised anti-Russian machinations of the West. That mood may fade as recession bites, but even then the Russian constitution offers no real scope to remove a president.

Boris Yeltsin, 20 years ago, with the economy tanking and his popularity in single figures (by contrast with Putin's current 85 per cent), brushed aside several impeachment attempts. And the alternative – a palace coup – is very unlikely too. The West has helpfully reinforced regime solidarity by sanctioning most top Russians. And, as demonstrated by the near implosion of the regime when Putin announced he was quitting the presidency in 2008, they can't manage without him. He is the essential equilibrator of their mutual feuds and hatreds. He didn't go in 2008, and won't now.

But the ultra-cautious Putin is undoubtedly looking for reinsurance. As unhappy witness of the fall of Communism and Europe's "colour" revolutions he knows how brittle public opinion can be. Hence the caution with which he has handled the Navalny sentencing. Hence, too, the widespread suggestion that he might seek to bolster his nationalist credentials by extending the war in east Ukraine or subverting the Baltics. This picture of the wounded bear out for blood – largely propagated by commentators who until very recently were arguing that it was a strong Russia that was a menace to international security – has nostalgic appeal. But it doesn't fit the facts.

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The seizure of Crimea and support for the insurgency in east Ukraine were illegal and destabilising, but were the response to a unique set of historical and political circumstances. Given the morass they have led Russia into I suspect their authors feel significantly less triumphalist than they did at the time. All the signs are that Russia wants to get the temperature down. For a nation obsessed with reciprocity their retaliation to sanctions has been strikingly limited. They continue to cooperate closely with the West on a range of crucial international business from Iran to Islamic State. And they seem at last to be trying to make the Minsk agreement (intended to settle the conflict in east Ukraine) work. The ceasefire may finally be taking hold, and the prisoner exchanges of the past few days have been awaited for months.

So maybe Putin is on the run? If so he shows little sign of it. He knows that Russia's economic travails stem much more from the oil markets than from sanctions. And he has been strident in his resistance to Western "destabilisation". Russia has two key demands. First, Ukraine must not join Nato; a stance enragedly reiterated by the Kremlin last week in response to a pro-Nato vote in the Ukrainian Parliament. And second, power must be decentralised to the rebel provinces of east Ukraine. This is now enshrined in the Minsk agreement and so has notional Ukrainian acquiescence. Putin cannot back down on these points. His current stratospheric standing with the Russian people depends precisely on their view of him as the man who will stand up to the West when the chips are down.

Two thoughts emerge from all this. First, that a solution is tantalisingly close. Ukraine, whatever its Parliament votes, is not going to join Nato anytime soon. Is the UK, let alone more geographically exposed Nato members, going to take on a Nato commitment to defend Ukraine against Russia? Of course not. Someone should have the political courage to say so. And the principle of decentralising power to east Ukraine has now been conceded. Negotiating the details will be difficult, but that is what diplomats are for.

The second thought is less optimistic. There is no sign, at least in London and Washington, that anyone is planning any negotiating at all. Obama and Cameron seem content to watch Russia's crisis take its course. There are real costs to this. Ukraine's agony continues, and probably gets worse as economic collapse looms. And while nobody much thinks in geopolitical terms any more, it must be of some concern that an increasingly embittered, nationalistic, nuclear-armed Russia grows more and more hostile to Europe and links itself more and more closely with China.

But let's turn back to Alexei Navalny. He represents the best of today's Russia, and his reaction to Western policy has been nuanced. He welcomes the sanctioning of the "crooks and thieves" (his phrase) who run Russia. But he has opposed Western action which could hurt the Russian people. He is right. Russia fundamentally remains a European country. Since the fall of Communism it has seen the rise of an increasingly travelled, prosperous, sophisticated middle class concerned for their rights. And it has been edging uncertainly, and with many reversals, closer to European normality. Current western policy, by uniting the Russian people in support of their awful regime, has brought that evolution to a halt. We need to help get them back on that road. And that above all means finding a sensible solution to the Ukraine crisis.

Tony Brenton was Britain's ambassador to Moscow, 2004-8