How Putin’s Sochi dream was shattered by Ukraine's nightmare

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Vladimir Putin has a dream – and for the past two weeks, the world has been helping him to live it.

In this dream, Russia is rich again, a place where the reported $51-billion cost of the Winter Olympics in Sochi is no object. It's a nation of impressive architecture and smiling volunteers who speak English but think like Russians. "Russia – Great, New, Open!" brag the billboards around the Olympic city. ("Open"? Sochi has high fences, surveillance balloons and warships off the coast; every phone call and e-mail is monitored.)

Mr. Putin sees a Russia that is once more a global centre of gravity, indispensable on the world stage. Soon, if his plans come to fruition, Moscow will stand as the leader of a new bloc of nations – the Eurasian Union – with borders that look a lot like those of the Soviet empire, whose fall he has openly mourned.

Vladimir Putin also has a nightmare. And this week, it looked a lot like the burning heart of Kiev, the Ukrainian capital where tens of thousands of protesters battled police to bring down their Kremlin-backed, authoritarian government. Dozens died before a tentative truce Friday interrupted the hostilities, but anger remains so high that there is no guarantee it will hold.

Kiev and its malcontents pose a challenge to everything Mr. Putin has built, perhaps even his grip on power.

The protesters have fought security forces with rocks, Molotov cocktails and live ammunition, threatening to explode the illusion of Russia's resurgence, exposing it as a country with little appeal even to its nearest neighbours. They raised the possibility that the political system its President has built and exported – an authoritarian capitalism known simply as "Putinism" – is much more fragile than it may seem.

It's not just that Mr. Putin fears the fall of President Viktor Yanukovych and the rise of a pro-Western government in Kiev, although that would be a heavy geopolitical blow. He needs Ukraine to take part if his Eurasian Union – currently set to launch next year with only Russia, Kazakhstan, Armenia and Belarus as members – is to look like anything more than a tiny dictators' club.

The standoff began when the Kremlin used its massive economic leverage to force Mr. Yanukovych to abandon a proposed free-trade agreement with the European Union in favour of closer integration with Russia. The opposition not only rejected that kind of interference, it turned up its nose in December when the Kremlin tried to play nice, offering $15-billion in economic aid – plus a one-third cut in the price of the Russian natural gas that powers their homes and factories – to help Ukrainians out of a fiscal crisis set to pinch hard this year.

Such handouts had allowed Mr. Putin to buy off enough fighters in Chechnya that he could largely extinguish the first and fiercest uprising he faced upon coming to office. But unlike the Chechens, his foes from the western (and Westernized) half of Ukraine occupying the centre of Kiev are in no hurry to be bought off. They stayed in the streets even after economic aid started to flow, defying both Mr. Yanukovych and his paymasters in Moscow.

The clashes that came this week have been inevitable ever since, with the Kremlin unsubtly pushing Mr. Yanukovych to use force to clear the fortified tent city on Independence Square, known to Ukrainians simply as the Maidan.

Last month, when he made a series of concessions to the opposition, including the resignation of Prime Minister Mykola Azarov, the Russian aid was put on hold. On Tuesday, shortly before the fighting began, Moscow announced it would pay the next $2-billion tranche. Then, when Mr. Yanukovych agreed to an initial truce and said he would meet three European foreign ministers who'd flown to Kiev, the money was halted again.

Why? Because, to the Kremlin, this has never been just an ordinary protest in Eastern Europe. Ukraine is central to Russia's sense of itself, the birthplace of the Kievan Rus, the empire that rose in the 10th century to embrace Orthodox Christianity and become what modern Russia considers its direct ancestor. Ukraine was the one republic whose decision to leave when the Soviet Union collapsed truly bothered Russians.

"Everybody knows that Ukrainians are Russians," Kremlin adviser Sergei Markov told me when we met in Moscow ahead of the Olympics. "Except for the Galicians," he added, referring to western Ukrainians, who lived under Austro-Hungarian and Polish rule before being absorbed into the Soviet Union after the Second World War.

Ukraine is in Mr. Putin's nightmares because of who has been on the streets. These are not Egyptians or Syrians or Thais challenging their government, but fellow Slavs, Russian-speakers and former Soviet citizens. Although the protests are driven by ethnic Ukrainians from the west of Ukraine, many in Independence Square are ethnic Russians simply tired of the kleptocracy that rose when the USSR fell.

In other words, if it can happen in Kiev, it can happen in Moscow. It almost did two years ago when much of the liberal intelligentsia in Moscow and St. Petersburg took to the streets to protest against Mr. Putin's return to the Kremlin for a third term as president, after four years in the theoretically junior post of prime minister (a token nod to Russia's post-Soviet constitution).

We have been here before, of course. During the Orange Revolution of 10 years ago, I stood on Independence Square for weeks as protesters peacefully overturned an election the Kremlin had helped to rig in Mr. Yanukovych's favour. The mood then was one of elation, a people previously stereotyped as apolitical realizing they had a shared ambition to change their country. There were nightly rumours of an impending crackdown by security forces, but the armoured personnel carriers never came. To the Kremlin's consternation, Ukraine had proved itself different from its neighbours.

The Orange Revolution panicked Russia, especially as it came just a year after Georgia, another former Soviet republic plagued by corruption and interference by Moscow, had staged its own peaceful uprising, known as the Rose Revolution.

The Kremlin recovered its geopolitical balance after the "colour revolutions" by squeezing Ukraine and humiliating Georgia. By 2010, Ukrainians were so tired of infighting between the Orange coalition of Viktor Yushchenko and Yulia Tymoshenko (the former now a marginal figure and the latter in jail on charges many view as trumped up), as well as Russia's constant threats to cut off the gas, that they elected Mr. Yanukovych fairly this time. Russia also smashed Georgia's tiny army in a nine-day war that began at the same time as the 2008 Summer Olympics in Beijing.

At home, the response was only scarcely more subtle. The Kremlin pushed through a 2006 law forcing non-governmental organizations that received funding from abroad to register as "foreign agents," a tarring and feathering that warned ordinary Russians to steer clear of anything affiliated with the West. It also stirred up a dangerous ethnic nationalism by forming a pro-Putin youth group known as Nashi, or "Ours," suggesting that anyone against Mr. Putin was not a true Russian.

By the time he returned to the Kremlin in 2012, Nashi claimed more than 100,000 members, most of them angry young men certain that all of Russia's problems could be blamed on the West. During the protests surrounding Mr. Putin's re-election, Nashi often rallied nearby, trying to shout down the opposition's cries of "Russia without Putin!" with its own chant: "Putin! Russia!"

The Russian dissidents didn't have the staying power, or fury, that Ukrainians have mustered. The economic progress Mr. Putin has delivered over 15 years in office has insulated him from wider discontent and kept the protest hub of Bolotnaya Square from becoming Russia's Maidan.

But fear of a repeat has never subsided. To Mr. Putin and those around him, Ukrainians are pulling away from Moscow now for the same reason they did during 10 years ago – because the West is meddling in a country he considers an eternal part of Russia's sphere of influence. "This is a coup d'état!" Sergei Markov, the Kremlin adviser, shouts over the phone when we speak again on Thursday. "This is entirely funded from abroad, and entirely organized from abroad."

Mr. Putin sees a Western hand in Ukraine (a notion reinforced by an audio recording posted online, almost surely by the Russians, in which U.S. diplomats in Kiev discuss which opposition politicians should be in a post-Yanukovych government), just as he believes the West paid for the Orange Revolution and encouraged the street protests in Moscow.

Foreign agents are everywhere he looks. Gay-rights activists are part of a Western-backed effort to depopulate Russia, the archpriest responsible for relations between the Kremlin and the Orthodox Church told me. The court that tried the members of punk band Pussy Riot insinuated that they were foreign provocateurs because one of them, Nadezhda Tolokonnikova, has a Russian-Canadian husband and an Ontario health card.

Even more troublesome are the liberal leanings of many Russian journalists. As the protests in Ukraine have unfolded, the Kremlin has launched a full-scale campaign to control the media more tightly. First came the reorganization of the state-owned RIA Novosti news agency, which had become less a state bugle and more a professional newswire during the relatively liberal presidency of Dmitry Medvedev. RIA Novosti has been now merged into a new company with the official Voice of Russia radio, which repeatedly uses the word "terrorists" to describe the protesters in Ukraine.

Next came heaving pressure on Russia's lone independent news channel, TV Dozhd (TV Rain). It was officially labeled "unpatriotic" in late January, and cable and satellite providers got the message, dropping the channel en masse.

The lonely Echo of Moscow radio station – a democratic bastion since the days of Mikhail Gorbachev's glasnost – was finally brought into line this week, with the dismissal of veteran chief executive Yuri Fedutinov, who was replaced with Yekaterina Pavlova, a former Voice of Russia executive.

Echo of Moscow and TV Rain were problematic for the Kremlin because their sympathetic coverage of the Ukraine protests was reaching a Russian audience. That they were also criticizing the Sochi Games was intolerable. Echo of Moscow's troubles escalated quickly after it posted a blog on its website comparing the Sochi Games to the 1936 Olympics in Hitler's Germany.

For the first 10 days of the Olympics, Mr. Putin's dream Russia almost seemed real. His opponents had gleefully anticipated disaster. Some had predicted political protest; others, a terrorist attack, given the lingering Islamist insurgency not far away in the same Caucasus Mountains where the Olympians were competing.

Neither has happened so far. After some early griping about missing shower curtains and cubicles with two toilets, Sochi has been hailed by the International Olympic Committee and most athletes as a success. The women of Pussy Riot repeatedly outsmarted and embarrassed the President and his police – shouting their newly released song, Putin Will Teach You To Love The Motherland, as police and Cossacks providing Olympic security clumsily used violence to stop them. But their kamikaze performances also served to underscore how few other Russians were protesting.

Meanwhile, the Caucasus Emirate, the main Islamist group that had vowed to attack the Games, now seems but a shadow of the movement that for 15 years made Russians fearful to board a train or an airplane. They tried – the foreign minister of neighbouring Abkhazia (a Kremlin-backed ministate) told me two weapons caches, including rockets, were found near Sochi – but the massive Olympic security operation appears to have worked.

Ukraine, however, was the variable Mr. Putin couldn't control. This week, TV sets in the Olympic village started to click over to coverage of the fighting, and some of the world's media accredited to attend Sunday's closing ceremony boarded planes to Kiev.

"Up until a few days ago, it looked like the stream of negative coverage was subsiding into coverage of the actual sports and appreciation for how Sochi looks," says Masha Lipman, scholar-in-residence at the Carnegie Moscow Centre.

In other words, Mr. Putin had almost succeeded in impressing the world with the Potemkin Russia he had constructed in Sochi. Then Ukraine blew up. "Sochi is now being overshadowed by Ukraine, no question about that," Ms. Lipman adds.

Which is no coincidence to Mr. Markov. "They hate Putin," he says, claiming that Western politicians chose to escalate the violence. "So they decided to spoil this holiday in Sochi."

On Thursday, at least two Ukrainian athletes here said they would no longer compete, a gesture seemingly aimed at both their President and their Olympic hosts. Black ribbons were added to Ukrainian flags flying from athletes' balconies in the Olympic village.

Even Mr. Putin, who last weekend bobbed around during surprise visits to the Canadian and U.S. quarters in the village, slapping backs and trading jokes, has been forced to shift his attention away from Sochi. Notably absent from Bolshoy Arena when Finland ended Russia's hopes for a hockey medal on Tuesday, he was, according to his spokesman, on the phone with Mr. Yanukovych.

The nightmare of Kiev invaded his dream world and spoiled his party, so Mr. Putin is now wide awake. Even if there is a truce in Kiev and the bloodshed stops, he is almost surely in no mood to forgive those he considers responsible.