Russian breakout
Even after the Russian's rolled over the Georgian army, landing a strangle hold on Europe's oil and gas, the EU, characteristically divided, remained powerless. However they did began to grasp that they were again subjugated by the Kremlin. The Cold War, like a mammoth in a block of ice, never really melted, it was just in cold storage.
The timing was faultless. It began on August 8, 2008, when the rest of the world had its back turned on Russia and many statesmen were away watching the opening of China's Olympic opening ceremony. The conflict was not spontaneous; the Kremlin laid the tinder for the encounter some time ago, covertly influencing the political stance of South Ossetia by installing their own cronies, to persuade their leaders to breakaway from Georgia. Putin stacked the deck in his favor well in advanced by snaring the West into cooperating in various international affairs and holding them dependent on him for collateral security.
Leaders from Western Europe stammered prudence while those from the East cried for action. They were stunned to discover they had precious little leverage to broker a ceasefire on account of their crippling dependence on Russia for their energy needs. America found itself overly indebted to Russian cooperation regarding Iran to seriously challenge Moscow. Shamefully, very few statesmen even imagined such a Kremlin power play, even though it was pretty obvious to those with any knowledge of the Kremlin's ways.
From the very start of his presidency Bush was ill-advised by Condoleezza Rice over what Putin was all about; subsequently, the White House hopelessly mismanaged its diplomatic transactions with him. Putin, no fool, took advantage of his professed stature at every opportunity, even up to the day the invasion began, with him seen in a friendly conversation with Bush during the Beijing games as the bombs began to fall.
As a result, the West was lulled into believing that this "born-again Russia" was a responsible, righteous country to be encouraged and to invest in. They believed the Russian army was weak, outmoded and irrelevant for years to come (all their attention was on China's military buildup). Moscow did little to dispel such beliefs, in fact even subtly propagated those ideas. Rather than develop their own pipelines Europe sacrificed their security by allowing Russia to provide nearly all their energy needs. By the time they woke up to the danger that would incur, and decided to build a pipeline from Georgia bypassing Russia, the Kremlin ruthlessly punished Georgia, and as a signal to its vulnerability, nearly hit the U.S. financed pipeline carrying oil from Central Asia and the Caspian, snuffing out Europe's dream of pipeline independence. Once more, the West was lulled into thinking the Russian bear was tame.