When German Chancellor Angela Merkel was scheduled to meet Vladimir Putin in Milan on October 16, the Russian president didn’t bother to turn up on time. Instead, he lingered on a state visit to Serbia, where he was given full military honors and lavished with praise by his hosts.

At one stage during the afternoon, Merkel postponed her talks with Putin. When he finally turned up late in the evening, Merkel reconsidered. She and Putin then spent two and a half hours locked in difficult discussions.

Merkel is the one Western leader who has been talking constantly to Putin ever since the Ukraine crisis began in February. She is also the one leader who knows what she is up against when dealing with the Russian head of state. Several months ago, after one of her discussions with Putin, she said he was living in another world.

In fact, it’s more than that: Putin has constructed a number of myths about Russia and Ukraine. Despite Merkel’s efforts, Russia remains shrouded in four particular illusions that make it increasingly difficult to see how relations with the West can be improved.

The first myth is Putin’s consistent claim that Russia has not been supporting in any way the pro-Russian rebels who have taken over parts of eastern Ukraine. That assertion is hard to square with Putin taking center stage during talks on September 5 in Minsk, where he and his Ukrainian counterpart, Petro Poroshenko, agreed to a ceasefire between the rebels and Ukrainian government forces. And it is even harder to square with evidence of Russian soldiers working with the rebels and of Russian combatants having been killed in Ukraine.

Putin has used the presence of thousands of Russian troops along the border with Ukraine to intimidate the government in Kiev. Russia’s state-run media reported that the soldiers were on exercises. Days before the Milan meeting on October 16, Moscow announced that the troops would return to their barracks—just as it had announced the same thing before the September 4–5 NATO summit and before Putin’s June 24 visit to Vienna.

#Russia is shrouded in illusions that make it hard to see how relations with the West can improve.
 
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A second myth is the Kremlin’s repeated denials that it uses energy as one of its main foreign policy instruments. The EU’s Eastern European members have seen through that claim for some time.

During his visit to Belgrade on October 16, Putin warned that Europe faced “major transit risks” to gas supplies from Russia if Ukraine siphoned off gas from transit pipelines. That threat certainly puts paid to any idea that Russia is a reliable supplier of energy to Europe, which depends on Russia for almost a third of its gas.

Putin also said Russia was prepared to reduce Ukraine’s gas debt by $1 billion to $4.5 billion by retroactively offering a lower gas price. Kiev would have to pay up front and not by credit. Since the country is strapped for cash, the EU is expected to step in.

This price offer shows the arbitrary way in which Russia prices its energy and uses such prices as political pressure. The more dependent a European country is on Russian gas, the more Moscow can threaten it. That is why Europe needs to wean itself off Russian energy as quickly as possible.

A third Russian myth is that EU and U.S. sanctions are not adversely affecting the Russian economy. The reality is different.

As the Financial Times reported on October 15, six of Russia’s biggest state-connected banks, which account for more than half of Russian banking assets, have been cut off from Western financing. The newspaper argued that if sanctions remained in place over the long term, “the situation could grow more acute, creating a tightening noose on banks – and Russia’s economy.”

If Putin can so easily dismiss the impact of Western sanctions, he cannot ignore the impact of falling oil prices. According to the U.S. Energy Information Administration (EIA), a statistical agency, Russia needs an average price of crude oil of between $110 and $115 a barrel to maintain a balanced budget. In early October, the price slipped to below $90 a barrel and is expected to remain at that level for some time, according to the EIA.

The impact of falling oil prices on the Russian economy should not be underestimated. The trend shows how Russia needs Western markets more than ever for its energy exports.

If #Putin is so self-assured, why is he so afraid of the past and the present?
 
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The fourth myth is Putin’s aura of self-confidence, boosted by opinion polls that jumped when he annexed the Crimean peninsula in March. If he really is so self-assured, why is he so afraid of the past and the present?

Putin’s fear of the past was visible earlier in October, when Russia’s justice ministry called for the closure of Memorial, one of the country’s most important human rights associations. Memorial was established in 1989 by the late dissident and Nobel Peace Prize laureate Andrei Sakharov. The organization’s aim was to uncover the repression of Russia’s Communist and Stalinist eras. Putin, however, has made no attempt to address the country’s ignominious past, the suffering of millions who were sent to the gulags, and the torture and executions meted out to so many.

As for the present, the Kremlin is now going after Lyudmila Bogatenkova. This leading human rights activist was working with the Soldiers’ Mothers of Saint Petersburg, a nongovernmental organization that defends the rights of soldiers. Bogatenkova was investigating the deaths and disappearances of Russian soldiers in Ukraine. By doing so, she was also proving that Russia was directly involved in Ukraine.

Vladimir Putin’s Russia has become a country wrapped in myths. Even Angela Merkel’s persistent attempts to keep talking to Moscow will not be enough to dispel those illusions.