I too doubt the consensus that the Putin people blew it on this one and have lost credibility in the EU (as well as G8). The Putin people may of course be simply incompetent. He misread public reaction to the sinking of the Kursk, for example. Or perhaps they're as hubristic as the Bushies, based on energy supplies rather than the Bushies' military dominance (now stuck fast in the sands of Iraq). But just as the Bushies had thought through at least a few things (albeit unrealistically), I doubt that the Putin regime didn't anticipate reaction from the EU in their gas pressure on the Ukraine. In fact, maybe they were counting on it.

Consider the fact that the only card (aside from unusable nukes) that the Putin people hold is energy. Their economy is a dwarf among the big countries. The EU and the US thus encourage him to join the big-power club based on their convenience: "sell us your supplies cheaply and we'll treat you like one of the club." If I were the Putin regime, I wouldn't want to be sitting at the big-power table merely by grace of offering up cheaply and eagerly the lifeblood of my regime. That smacks of the pathetic, fawning role of a 19th century Indian local worthy invited to tea (outside of course) at some colonial British club in Bangalore. The stiff smiles on the white faces and the tentative seat at the table might have been enough back then, making the Indian a very big man among the locals in Bangalore and thus one very willing to help grease the wheels of empire.

But the Putin people aim to rebuild a state-capitalist superpower with global reach. Now they can sit at the G8 table feared for the very visible power they wield (and their evident willingness to use it) more than they are loved, so to speak, for their willingness to be the waterboy, the waiter, the loyal sepoy. After several years of watching the Bush regime put their Coles Notes reading of Machiavelli into practice, we should hardly be surprised that the Putin people are signalling that energy supplies are the functional equivalent of the American military and potentially a much more effective tool of foreign policy (and a money-maker to boot).