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After Crimea, what's Putin's next move? Will he call NATO's bluff?

“They cheated us again and again, made decisions behind our back, presenting us with completed facts,” he said. “That’s the way it was with the expansion of NATO in the East, with the deployment of military infrastructure at our borders. They always told us the same thing: ‘Well, this doesn’t involve you.’ “

That was what President Vladimir Putin told hundreds of his country’s most senior leaders in the Grand Kremlin Palace last week, as he announced Russia’s annexation of Crimea. 

In a long and emotional speech, Putin talked about the indignities Russian people were forced to endure at the hands of America at the end of the Cold War. 

Putin has stirred the sleeping giant of Great Russian Nationalism.

The audience was moved to tears, many clutching their hands to their hearts. They cheered and clapped, in noisy and heartfelt endorsement of all that Putin had done to reclaim Russia’s greatness, and in joyous anticipation of what he will do next.

It was clear from Putin’s speech that for him and his audience the Crimea annexation is a crowning moment of personal and national triumph. The president has stirred the sleeping giant of Great Russian Nationalism.

Putin believes he is righting the wrongs done to his beloved Mother Russia after the collapse of the Soviet Union, which he called the greatest geostrategic tragedy of the 20th century.

It was obvious from his remarks that the fall of the Soviet Union was also the pivotal and formative event in Putin’s life.

When Putin was a boy the USSR was a superpower astride the world. His country helped defeat the Nazis, in a long, bloody and hard fought war, where Russia bore most of the casualties.

The Soviets emerged from World War II controlling all of Eastern Europe. They were first to launch a satellite, and then human being, into space.

Many, even some in America, thought Russia was winning the Cold War, and represented the wave of the future.

But by the 1990’s, when Putin was in his 30s the Soviet Union had collapsed, seemingly overnight, leaving the Russian people bereft and humiliated. Within days, Russia had gone from superpower to super-poor, with barely enough food to feed their people through the winter. And it left Putin, a young man on the rise, embittered, resentful and determined to reverse his country’s fall.

Within a few years, Putin had written his doctoral dissertation laying out his plan for Russia to reclaim its greatness by consolidating and exporting its oil and natural gas resources.

For the last fifteen years Putin has been following that plan to the letter, rebuilding Russia’s political, economic and military power. The Russian president believes he has almost single-handedly restored Russian power and regained Russia’s dignity.

The Sochi Olympics were a symbol to the world that Russia is back. 

It is once again the major player in the Middle East. 

In the final piece of the plan, Russia is now poised to reclaim lands lost at the end of the Cold War, either by annexing them, or at a minimum by having political dominion over them.

Putin has even enjoyed a few very lucky breaks along the way. 

Fifteen years ago he couldn’t have foreseen America’s ten year preoccupation with unsuccessful wars in the Middle East. He hadn’t counted on Europe’s recent economic distress, which has left the region's leaders reluctant to take strong economic measures against Russia.

And he never dreamed how easy it would be to outmaneuver a weak and feckless American president. While President Putin is busy redrawing the map of Europe, President Obama is busy filling out his brackets.

When seen together the body language between the two leaders says it all. While Obama lectures him, Putin looks bored and picks lint off his sleeve. It’s like he’s saying to himself, ‘I wish I had a more worthy adversary like Nixon, or Reagan or the Iron Lady. But Obama? It’s like taking candy from a baby.’

So what is Putin’s end game? Despite wishful thinking inside the White House, Putin isn’t going to stop with Crimea. 

He sent in tanks to seize eastern Georgia, and no one stopped him. 

Crimea was quick, relatively bloodless and easy; it quit Ukraine and joined Russia in less than two weeks. 

Russian troops are positioned just across the border from eastern Ukraine and Moldova. 

Putin once told former Georgian President Saakasvilli that he planned to reclaim the Baltic States of Estonia, Latvia and Lithuania.

This is where things get tricky. Article V of the NATO Treaty stipulates an armed attack against any NATO member will be considered an attack against them all. Would Russia dare attack a NATO country and risk retaliation from the likes of Germany and the USA?

Perhaps Putin thinks he won’t have to invade to get what he wants. Economic blackmail and political intimidation, with troops massed across the border, could be enough to convince those countries into some form of accommodation with Russia, rather than count on America and European troops to come to their defense.

So far the U.S. and European response to Russian aggression has been to threaten serious consequences rather than actually carry them out. Denying visas and freezing empty bank accounts of a handful of Russian oligarchs and officials are trivial. Even if the Obama administration were to impose serious sanctions on Russia’s energy and banking sectors, it’s doubtful Putin will waiver. 

Financially bereft Europeans are reluctant to impose serious sanctions because their own economies will suffer. They know Russia holds the whip hand because it controls a large segment of Europe’s energy through their natural gas exports.

Similarly, it is hard to see how a war-weary United States and largely demilitarized Europe would fight for countries most of their citizens couldn’t find on a map.

So far, Putin has gauged American and European public reaction accurately. He just might be willing to risk calling NATO’s bluff.

If that happens, NATO would be finished, and the U.S. and Europe inclined to go their separate ways. European, especially German, economies would become even more integrated with Russia as manufactured goods went east and natural gas went west.

Is there anything the U.S. and Europe can realistically do to stop Putin from reclaiming the Soviet Empire? 

President Obama and Secretary Kerry keep repeating their mantra that, “Putin must understand that his actions are not in Russia’s long term interest.” 

Really? One thing is clear, Vladimir Putin isn’t taking advice from President Obama on what is in Russia’s best interests. He’s deciding that for himself. And the Russian people are wildly supportive of what he has done.

While there may be little we can do to stop Putin right now, there is there is quite a bit we could start now that would make him pay a very high price down the road. Were the U.S. to use our energy leverage we ultimately devastate Russia’s economy and emasculate Putin’s political power.

President Obama is in Europe for a series of meetings with heads of state this week. He should call for a U.S.-European energy summit and pledge America’s support to help free our European allies from the grip of Russian energy resources. 

He could accelerate U.S. production of our oil and natural gas, and remove obstacles for their export. 

He could encourage American cooperation to develop Europe’s indigenous energy resources, especially in Poland and Ukraine. 

He could support new oil and gas pipelines from the Eastern Mediterranean and Central Asia to Europe, which would bypass Russia.

If President Obama committed the U.S. and Europe to energy independence, it would send a signal to the Kremlin that its days of economic power and energy blackmail are numbered.

President Obama could couple that with a pledge to throw every conceivable roadblock in the way to stop American technology and investment going to develop energy resources in Russia’s eastern provinces.

Putin seems determined to start Cold War II: The Sequel. And he intends to win this time around. There may be little we can do to stop him now. But we can let him know this is a trilogy, and Cold War III will lead to Russia’s ultimate economic collapse.

Kathleen Troia "K.T." McFarland is a Fox News National Security Analyst and host of FoxNews.com's "DefCon 3." She served in national security posts in the Nixon, Ford and Reagan administrations. She was an aide to Dr. Henry Kissinger at the White House, and in 1984 Ms. McFarland wrote Secretary of Defense Weinberger's groundbreaking  "Principles of War " speech.  She received the Defense Department's highest civilian award for her work in the Reagan administration.