It seems clear that he does not believe that the West can or will do very much to stop him.
After his abrogation of the Budapest memorandum, through his invasion of Crimea, he has now essentially abrogated the conventional forces treaties that govern the movement of troops in Europe. He has also said that he know longer feels bound by the nuclear limitations of either the strategic arms reduction treaties or the intermediate weapons treaties. He has essentially repudiated several of the key arms control and confidence building measures that the Russian Federation has signed up to in the course of the past 20 years.
From the Western perspective the initial shock of the Crimean occupation has given way to an increasingly grim mood. Put simply Vladimir Putin is not a man that the West can do business with. He will not keep any bargain that we make with him.
In the meantime, Russian money has corrupted and eroded our own morality- as the disgusting intervention of Gerhard Schroder reveals all too clearly (Relevant information: Schroder receives tens of millions a year from Russia).
Nevertheless, the invasion of Ukraine and the undisguised power politics of the Kremlin have caused a deep and permanent rupture that can not be repaired for as long as Putin is in power. In the past few days Putin has forced a major reappraisal of Western strategic priorities. Russia had been regarded as a troublesome but necessary interlocutor. Now it is regarded as an essentially hostile power. The result has been huge changes. The trans-Atlantic trade and investment partnership is now back on. BP, the largest tax payer to the UK Treasury, formerly blacklisted by the US government after Deep Water horizon is now reopened for business. long running disputes across the Western alliance have been quietly settled.
All of this has been part of President Obama's quiet diplomacy to meet the challenge of Russian sabre-rattling. It is just as well, because even an intervention in Eastern Ukraine may not be the end of this crisis. The policy of NATO is now awake to the vulnerability that Russian aggression now reveals. The Baltic states are at a high level of alert, with repeated Russian air force incursions and cyber attacks underway. The Russian live-fire exercises that took place in the Baltic Sea show a Russia that is practicing an invasion of the region, and the dispatch of US Air Force jets to Poland and Lithuania will not be enough to resist a determined attack by Russian forces.
This is not just about Ukraine.
The bloody stalemate in Syria came about because the West believed the expressed Russian fears over their naval base in Tartus and was unwilling to intervene. Now it is likely that the Syrian opposition will be more actively supported and the removal of Putin ally Assad will become an express goal of Western policy. Russia has not faced a determined challenge from the West. Now it will.
If Putin moves into Eastern Ukraine he will not face sanctions, he will face economic warfare. It is Spring and a buyers strike for Russian gas would be a body-blow for an economy that is already under considerable strain. Asset freezes will include most if not all of the access points where Russia gains the capital it needs. As it is Russian investment is collapsing, and within a few months the damage could be crippling- even as things stand. Outright bans on capital transfers- as in Iran- will inflict a deep recession on Russia.
Will that be sufficient?
The Ukrainian army is in a pretty weak state, yet it is quite large and will be highly motivated to defend the territory of their country- and they are far more prepared than they were even two weeks ago. An incursion by Russia may not be quite the same thing as the 2008 invasion of Georgia, where the Georgian troops were mostly still in Afghanistan and those in Gori were caught in a surprise attack. A war between Russia and Ukraine would be inevitable, but any attempt to occupy Ukraine would lead to a long term conflict which the Russians- under direct international pressure from China as well as the West- might have to give up.
Putin is an old Communist. He does not understand the economy damage that he will inflict upon his people. The closure of all free and independent media in Russia and the absurd censorship and propaganda which the regime has tried to replace it with has not eliminated challenges to the Putin tyranny. Neither has the arrest of most of the opposition leaders in Russia. The blow-back from Putin's repression will come eventually. The question for the West is now to limit the damage from Putin's warmongering until the regime of thieves and crooks can be overthrown from within.