For sure, Putin did not want developments to unfold in the way they have done.
The rebels had, shortly before the Malaysian airliner was downed, just
boasted about their prowess in picking Ukrainian military planes from the
sky. They ended up picking the wrong target. Their minders in Moscow will be
furious with them, knowing that the events of the past 48 hours will set
back the rebels’ cause.

In recent weeks, as the Ukrainian authorities had regained a few footholds in
the East, the attention of the international media had moved elsewhere. Now
it has refocused on the region. Movements of Russian military kit will be
more closely monitored. Putin cannot afford another mistake. In the
short-term at least, the rebels and their masters will have to watch their
step.

Putin has no end game in Ukraine. He knows what he doesn’t want – a
functioning, Western leaning, democratic state. He hated the idea that in
May Ukraine conducted presidential elections, which contained clear choices
and produced an undisputed outcome – at least in areas he couldn’t reach.
His only purpose is to destabilise, as he has done in other former republics
of the Soviet Union, whose demise he has publicly lamented. Nor does he have
a grand plan for Russia, apart from restoring its “dignity”, after the
“humiliations” of the 1990s.

Some of his resentments are justified. Russia was taken for granted in the
early 2000s. The post-9/11 logistical support it provided for America’s war
in Afghanistan, and its agreement not to hinder the war in Iraq were banked,
with nothing given back in return. Putin could be forgiven for becoming wary
of the West. Indeed, with power shifting to Asia and with emerging countries
looking for points of reference beyond the United States, he could have
developed a more subtle foreign policy that might have posed an interesting
challenge. Instead he fell into a mind-set that was part Soviet era and part
Latin American dictator of the 1970s.

His land grab in Crimea was hugely popular back home; his poll ratings reached
an all-time high. Although it squealed, the West did not particularly object
to the snatching back of a peninsula that had traditionally belonged to
Russia and was ostentatiously handed over to Ukraine by a drunken Nikita
Khrushchev in 1954 – at a time when demarcations between Soviet states were
largely irrelevant anyway.

The crisis in eastern Ukraine is different. It will further damage Russia’s
flat-lining economy and is costing lives. Families in the region are being
torn asunder as they are forced to make choices about allegiances. Yet,
miserabilist that he is, Putin will not call off the dogs of war, because
that will look weak.

Back in Moscow, in the sushi bars and the five-star hotels, business goes on
as usual. Russia has the veneer of a modern state. The wealthy are driven
from plush office to suburban dacha in their tinted-windowed Mercedes, not
quite impervious to events in Ukraine, but confident that it won’t affect
them.

With each month, the United States has shown greater determination. Europe is
divided. Some leaders want tougher action; others, mindful of their
dependency on Russian gas, continue to hold back. President Obama is
contemplating a further set of sanctions against named individuals and
companies deemed to be close to Putin. For all the denials, the earlier
rounds have hurt – a little.

The British government’s denunciation of Russian foreign policy and supine
embrace of its money is hypocritical and self-defeating. Apart from one or
two individuals who have stood up to the Kremlin – and usually ended up in
jail – Russia’s billionaires have been his de facto ambassadors, providing
glamour to Russia’s international image. They know which side of the fence
they are on.

In September 1983 when the Soviets shot down a Korean passenger jet that had
strayed into their air space, the Cold War was at its height and Russia was
a closed country. Politically and militarily, the Kremlin may not have moved
on, but economically the world is very different. Russia’s wealth is tied up
in Western banks. Its companies are listed on global stock exchanges. Its
oligarchs own prestigious properties in London, Courchevel and the Cote
d’Azur. The country that helped them become rich is led by one of the most
sinister politicians of the modern age.

This is both Putin’s strength and his weak spot. And this is where the West
needs to act.

John Kampfner was the Telegraph’s Moscow bureau chief 1991-94. His
latest book, The Rich, is published in October