Making Russia change its stance by way of sanctions is outdated thinking in an age when diversity of opinion is supposed to be appreciated, Foreign Minister Lavrov believes. He says Russia is already “doing more than anybody else” to help Ukraine.
Moscow can hardly be accused of non-facilitating the peace-process in Ukraine, as it is exerting all of the authority it can on the anti-government forces in eastern Ukraine to make sure they comply with the September Minsk peace agreements, Sergey Lavrov said in his Sunday interview to the Russian NTV channel. It’s the West, according to him, who could actually do more to resolve the Ukrainian crisis.
“Our Western partners… aren’t really using their influence on Kiev to persuade them that there’s no alternative to the agreements they’ve already reached with the self-defense,” the minister said.
The West is meanwhile ever ready to put additional pressure on Moscow in the form of sanctions, which in Lavrov’s point of view have little to do with the situation in Ukraine.
“You can essentially feel in their statements and actions the true goal of restrictions – to alter Russia, to change its position on key issues, the most fundamental for us, and make us accept the vision of the West. That is last-century, past-epoch, colonialist thinking.”
Whatever economic difficulties the sanctions entail, they are unlikely to divert Russia from its current stance, Lavrov believes.
Lavrov acknowledged current Russia-US relations are “difficult” and has accused Washington of only thinking of American interests when offering solutions to political problems. The Russian foreign minister would like to see more balance in proposals coming from the US.
“This is a common thing for the US – a consumerist approach to international relations. They believe that they have the right to punish the countries that act contrary to Washington’s vision, while demanding cooperation in other issues vital for the US and its allies.”
Balance on the international arena could have come from the EU, if it was more independent from Washington in its decision making, according to Lavrov.
“The EU with all of its current Washington leaning has the potential to act independently. This, however, remains almost totally unused. That’s sad, because the EU’s own voice could have added balance to international discussions and efforts to solve various problems.”
Friday’s talks between Russia and Ukraine in Milan which were mediated by the EU, proved “difficult and full of disagreements,” according to the Kremlin.
The German Chancellor Angela Merkel said “no breakthrough” was achieved.
One of the most essential issues the parties disagree on is gas supply. Kiev owes billions of dollars to Gazprom. There have been fears that the crisis-struck country won’t be able to pay, which could possibly lead to disruptions of gas supplies, including those to Europe via Ukraine.
The Milan negotiations have resulted in some progress on the issue – an agreement for winter supplies was reached, according to the Russian president. A new round of talks has been scheduled for October 21 and the EU will once again mediate the process.
Ukraine might meanwhile soon find itself forced to conduct similar negotiations with Poland. On Thursday, the country’s Deputy Prime Minister Janusz Pehochinsky expressed disappointment that Ukraine hasn’t yet paid for 100,000 tons of Polish coal.
US State Department spokesperson Jen Psaki and Pentagon Press Secretary Rear Adm. John Kirby have been challenged over the Department of Defense’s claims that the US must “deal” with “modern and capable” Russian armed forces on NATO’s doorstep.
Russian Defense Minister Sergey Shoigu expressed “grave concern” and “surprise” at a Wednesday speech made by US Secretary of Defense Chuck Hagel during the Association of the United States Army’s annual conference. Hagel declared that US armed forces “must deal with a revisionist Russia – with its modern and capable army – on NATO’s doorstep.”
During a State Department briefing on Friday, however, an AP journalist suggested that it would be more logical to say that “NATO has moved closer to Russia’s borders.”
“Is it not logical to look at this and say – the reason why Russia’s army is on NATO’s doorstep, is because NATO expands,” journalist Matt Lee said.
“That’s the way [Russian] President Putin probably looks at it, it’s certainly not the way that we look at it,” Kirby said in response to the journalist’s reasoning.
Though he eventually admitted that NATO has expanded, Kirby added that “NATO is not an anti-Russia alliance, it is a security alliance.”
“It wasn’t NATO that was ordering tons of tactical battalions and army to [the] Ukraine border,” Kirby added, before being reminded that Ukraine is not part of NATO.
Kirby then refused to agree with the point that the Russians could understandably perceive NATO’s expansion as a “threat,” especially given that the alliance existed as “anti-Soviet” for half a century.
“I’m not going to pretend to know what goes in President Putin’s mind or Russian military commanders… I mean, I barely got a history degree at the University of South Florida,” Kirby joked, dodging the question.
Kirby assured that NATO’s moves were not “hostile and threatening,” but rather a matter of security. He added that he was “worried about their [Russia’s] moves around Ukraine.” Psaki then cut in, saying that “other countries feel threatened,” and urged the conversation to move on.
In terms of new threats at NATO’s borders, Russian Defense Minister Sergey Shoigu said on Friday that it is the US which has been “stubbornly approaching… closer to our doors.”
Relations between Russia and NATO have been tense since the alliance accused Russia of becoming involved in the Ukrainian conflict – a claim Russia has continuously denied.
Following Crimea’s accession to Russia in March, the US and Europe bombarded Moscow with sanctions. NATO also significantly increased its military presence near Russia’s borders, especially in Poland and the former Soviet Baltic states of Latvia, Lithuania, and Estonia, which have expressed concern at the potential for Russian incursions into their territories.
The new law giving special status to troubled regions in eastern Ukraine is ‘not perfect,’ but might be used to finally stabilize the situation in the area, Russian President Vladimir Putin said after a meeting with his Ukrainian counterpart in Milan.
“Perhaps it’s not a perfect document, but it’s a step in the right direction, and we hope it will be used in complete resolution of security problems,” Putin said after closed-door talks with Ukrainian President Petro Poroshenko on Friday.
The two presidents met in Milan privately on the sidelines of the Asia-Europe Meeting (ASEM), a summit of Asian and European leaders.
The document on special status for the Donetsk and Lugansk regions was signed by Poroshenko on Thursday.
The legislation “defines temporary order of local government in certain districts,” according to the Ukrainian president’s official website.
The special order enacts governance “in the cities, towns and villages” to be “carried out by territorial communities through local government bodies under the Constitution and the Laws of Ukraine,” with local elections scheduled in the districts for December 7.
It also aims to restore the regions’ infrastructure and “create conditions” to stabilize the situation in the area.
The new law, which will be valid for three years from the date of its publication, is part of the agreement reached between Kiev authorities and eastern Ukrainian militias in Minsk on September 5.
The Minsk protocol, which also includes decisions on a ceasefire and the exchange of war prisoners, should be the guideline in Ukraine’s conflict management, Putin said.
“I’d like to point out that these agreements, unfortunately, are not fully implemented by either side,” added the Russian leader, speaking to journalists after the Milan talks.
Italy, France, Germany, and Russia have expressed willingness to use drones to monitor the situation in the region, Putin said. He added that the technical side of the plan will be discussed in the near future, when specialists gather at the OSCE (Organization for Security and Co-Operation in Europe) headquarters in Vienna.
‘Difficult, full of disagreements’
German Chancellor Angela Merkel said a breakthrough was not reached in Friday morning’s talks on Ukraine, Reuters reports.
“I cannot see a breakthrough here at all so far,” Merkel said after top EU leaders met with Putin and Ukrainian President Petro Poroshenko on the sidelines of an EU-Asia summit.
“We will continue to talk. There was progress on some details, but the main issue is continued violations of the territorial integrity of Ukraine,” she added.
A political solution to the conflict in Ukraine has not yet been found, President of the European Council Herman Van Rompuy commented after the meeting, according to RIA Novosti.
Rompuy said the participants have all agreed on the need to follow through on the peace agreement reached in Minsk, Belarus at the beginning of September.
“What we agreed was the protocol of Minsk on the ceasefire, and the peace plan is of crucial importance,” Rompuy said.
“We have to implement this. This would guarantee again a future for Ukraine. So implementation, implementation, implementation — those are the key words.”
Earlier Vladimir Putin described his meeting with the Ukrainian president on Friday as “positive.” The Russian president’s spokesman however noted some of the meeting participants were reluctant to understand the true situation in eastern Ukraine.
“It was good, it was positive,” a smiling Putin told reporters after the discussions at the margins of a summit of Asian and European leaders in Italy according to Reuters.
Putin’s spokesman, Dmitry Peskov, meanwhile acknowledged the negotiations were “difficult” ones due to a number of differences and misunderstandings among the participants.
“The negotiations are really difficult, full of disagreements, full of misunderstandings,” Peskov said. “Nevertheless they are still taking place. There’s an exchange of opinions.”
“The participants have discussed in detail the implementation of the Minsk agreements effectively enough,” Peskov said.
“Unfortunately, some of the breakfast participants demonstrated their complete reluctance to understand the real situation in the southeast of Ukraine.”
The presidents of Russia and Ukraine met on Friday morning in Milan. They were joined by German Chancellor Angela Merkel, French President Francois Hollande, British Prime Minister David Cameron and European Commission President Jose Manuel Barroso.
The meeting was hosted by the Italian Prime Minister Matteo Renzi, who said that while some progress had been made, “a lot of differences” still remain on the Ukrainian crisis.
There’s a possibility Putin and Poroshenko will hold a bilateral meeting at the summit, Peskov said, adding that Russia would like journalists to participate.
“[Journalist participation] will depend upon our Ukrainian partners. We are open – we hope they are too.”
Putin drew gas figures for Merkel
Russian gas supplies to Ukraine are expected to be one of the most difficult issues on the summit agenda. Kiev is due to pay out $3.1 billion debt to Gazprom until the New Year, according to the latest Russia-Ukraine agreement. There are fears, though, that the crisis-struck country will not be able to make the payment, possibly leading to disruptions of gas supplies, including those to Europe via Ukraine.
The gas issue was among things the Russian president discussed with the German chancellor during their meeting on Thursday.
“Yesterday Putin informed Merkel in detail about the gas issues,” Putin’s spokesman said. “He literally took a pen and drew figures on a piece of paper to explain the situation.”
More gas discussions are to follow, as Russian Energy Minister Aleksandr Novak and head of Gazprom Aleksey Miller are part of the Russian delegation in Italy.
According to Peskov, Thursday’s reports from Poland have shed much light on the gas conflict between Russia and Ukraine.
“Our Polish partners have reacted in such a lively way to news of Ukraine wanting to get Polish coal almost free of charge,” Peskov said. “This is the best illustration of what’s going on in the gas sphere. The Poles were greatly impressed and did not conceal their shock. But still they can fully understand the desire to have gas free of charge.”
The Russian president has signed into law a bill, which sets the maximum foreign stake in Russian mass media companies at 20 percent.
The law will come into force on January 1, 2016, and media companies must submit reports on their stockholders before February 15, 2016.
The bill was drafted by opposition MPs in September and passed by parliament very quickly. Apart from lowering the maximum share in Russian mass media companies allowed for foreign citizens and firms from the current 50 percent to 20 percent, the draft bans foreigners from being founders of Russian mass media companies. The same restrictions apply to residents without citizenship and Russians who have citizenship of other nations.
There are exceptions for media derived from state-level international treaties, like Mir television, which was founded jointly by several CIS nations.
The sponsors of the motion said the main reason behind it was the desire to provide maximum information security. They also noted that the 20 percent limit was chosen because a 25 percent share would enable a powerful veto possibility, allowing its owners to exert serious influence on the information policy of any media outlet.
“Those who own information own the world. It is obvious that when foreigners enter the mass media market of any country they practically gain access to people’s minds, to forming public opinion. And we must draw a clear line here – what are the reasons behind such purchases? Do they want simply to do business or do they want to enforce their policies and to change the situation inside the country?” asked MP Vadim Dengin of the nationalist LDPR caucus.
Other lawmakers claimed that the need for restrictions became obvious after the recent crisis in Ukraine demonstrated that some sectors of the Russian press can be biased in their coverage of important topics.
The new Russian law is in line with international practice as many countries in the world have already protected their informational space from excessive foreign influence. For example, Australia has set a 30 percent limit of foreign ownership in national mass media and Canada has a law limiting foreign ownership in electronic mass media by 46 percent. The United States allows foreigners to control not more than 25 percent of American TV and radio stations, while Japan has set this limit at 20 percent. France will not allow non-EU citizens and companies to possess more than 20 percent of its mass media. In the UK, the shares of foreign stockholders in mass media corporations cannot exceed those owned by British investors.
Current foreign ownership in Russian mass media is fairly high, especially in the magazine and newspaper business where 60 percent of companies have significant foreign shareholders. Some print media companies are owned by businessmen, who hold dual citizenship, and these individuals will, under the new law, become ineligible to continue as owners.
Russia is ready to resume gas deliveries to Ukraine only after it pays $2 billion of its debt and makes a $1.9 billion advance payment for future supplies, Russian Minister of Energy Aleksandr Novak said.
“There will be no new supplies if part of the debt is not paid. Otherwise, it turns out to be a game with only one goal, where we deliver the gas and the debt payment is postponed,” he argued.
Novak said that Ukraine is prepared to pay $3.1 billion of its Russian gas debt.
“They calculated the cost at their own virtual price at $268.5 [per thousand cubic meters of gas],” the Minister said.
However Russia is happy to sell its gas at $385 which amounts to $1.9 billion for the 5 billion cubic meters Ukraine wants to purchase. Together with the debt payment it amounts to $3.9 billion.
Prepayment will likely be made every month, according to the needs of Ukraine. The amount of $3.1 billion has to be paid in two tranches: $2 billion before supplies are resumed, and the remainder – by the end of the year, Novak said.
Russia is ready to fulfill the agreements reached on Friday in Berlin and is waiting for a Ukrainian response, Novak said answering a question concerning the possibility of sealing the deal this week.
All the agreements of the so-called “winter plan” worked out on September 26 were verbal, and the gas price remains an unresolved issue.
The money for this plan has already been provided to Ukraine by the International Monetary Fund (IMF), Novak said.
Lost among the talk of Ukraine’s Civil War and the ISIL threat is the coming Russia vs. West clash in Moldova.
The country is sandwiched between Romania and Ukraine, and the region of Transnistria has been de-facto independent for about two decades already.
As Moldova leaps towards the EU (it signed the Association Agreement at the end of June), it is also running towards NATO, and the US has pondered whether or not to grant it major non-NATO ally status via the tentative ‘Russian Aggression Prevention Act of 2014’ floating around Congress.
The problem is that Transnistria does not want to go along with Moldova’s vision of the future.
Instead, it has expressed its desire to politically and economically integrate with Russia, and over 1000 Russian peacekeepers are currently stationed there.
Its Russian-speaking and Russian-friendly population fears cultural and ethnic cleansing if Moldova moves closer to the West, since nationalists have been agitating for supposed ‘reunification’ with cultural cousin Romania.
After observing events in the run-up to and during Ukraine’s Civil War, Transnistria’s population surely has reason to worry about its fate. Unlike the people of Donbass, however, they will have no friendly, neighborly state to seek refuge in.
Worse still, tensions are already beginning to heat up. The Russian Foreign Ministry has accused Moldova and Ukraine of organizing a de-facto blockade over Transnistria, thereby placing its citizens in an uncomfortable economic position.
Also, Deputy Prime Minister Dmitry Rogozin’s plane was forced to turn around in May after visiting the region when Ukraine denied it air transit rights, in a previously unheard of application of diplomatic aggression that would be unthinkable if Rogozin was American.
As it stands, Transnistria is now surrounded by NATO-member Romania and vehemently pro-NATO Moldova and Ukraine, and each of these neighbors is conspiring against it to their own (and Washington’s) advantage.
Placed under such circumstances, the future looks dim for Transnistria, but Russian peacekeepers (and Moscow’s track record in protecting them) present a tangible guarantee for its security.
Finland – In a groundbreaking study Awara Group reveals that the real GDP growth of Western countries has been in negative territory for years. Only by massively loading up debt have they been able to hide the true picture and delay the onset of an inevitable collapse of their respective economies. The study shows that the real GDP of those countries hides hefty losses after netting the debt figures, which gives the Real-GDP-net-of-debt.
The moral of the study is that GDP growth figures as such reveal very little about the underlying dynamics of an economy if one does not simultaneously attempt to analyze what part of the growth is credited to simply artificially fueling the economy with new loans.
The study has found that the Western countries have lost the capacity to grow their economies. All they have left is a capacity to pile up debts. By massively accumulating new debt, they are able to keep up a semblance of at least sluggish growth, or of hovering around the zero growth mark.
If this massive debt would go towards investments, then there would be nothing wrong with it. But, it is not. The debt is going towards financing the losses in the national economies and essentially it all is wasted on consumption that the countries in reality cannot afford. The Western countries act like a 19th century heir to aristocratic wealth, borrowing from year to year to keep up the former lifestyle, while the estate is relentlessly dwindling. Sooner or later the prodigal heir would be forced to face reality and sell the remaining property to stave off the creditors, downgrade his dwellings, and rein in spending. Inevitably, the European countries and the USA will have to curb their excessive consumption, too, but for the time being they are putting off the final reckoning with new debt rather the way a drunkard reaches for the morning after drink to put off sobering up. In the case of the EU and the USA, we are speaking about a debt binge that has been going on for a decade.
While the situation has been generally bad for the last decade or so, it took a dramatic turn for the worse, or should we say for the catastrophic, following the onset of the global financial crisis in 2008. The shocking figures depicting the virtual crippling of the Western economies from 2009 to 2013 are illustrated in Chart 1. It depicts the development of real-GDP-growth per country in years 2005 to 2013. The chart shows that during this period Russia has been able to deliver real non-debt fueled GDP growth, whereas the Western countries are running huge deficits. The accumulated growth of the Russian economy from 2005 to 2013 was 147% while the Western countries accumulated losses from 16.5% (Germany) to 58% (USA). In the case of Russia, the real-GDP-net-of-debt figure is also corrected to adjust for the calculation error caused by an erroneous GDP deflator that Russian Statistics Agency (Rosstat) has used. We have discussed the persistent problem of Russia’s GDP growth having been underestimated due to the use of a wrong GDP deflator in the study Awara Group Research on the Effects of Putin’s Tax Reforms 2000-2012 on State Tax Revenue and GDP
Chart 2 shows the real GDP growth net-of-debt after deducting the growth of public debt from the GDP figure. Net of debt we see the scale of the Western economies, for example the Spanish economy, which amounts to the staggering figure of minus 56.3%. This while the conventional official method of crediting GDP growth with growth of debt would give only minus 6.7%.
The analysis shows that by these measures Russian economic growth, unlike that of the Western countries, has been comparatively healthy and not debt-driven. Russia has in fact a resoundingly positive ratio by these measures, where GDP growth has exceeded growth of debt by a staggering 14 times (1400%). The figure is astonishing when compared with the Western countries that have been flooded with new debt.
Chart 3 shows how much the accumulation of debt in the Western countries exceeds the official GDP growth. The USA is leading the pack with an increase in the debt load in years 2004 to 2013 of USD 9.8 trillion (in the chart in euros, EUR 7 trillion). In those years, the growth of the USA public debt exceeded the GDP growth 9 times (900%), which is illustrated by Chart 4, comparing the proportion of growth of debt to that of growth of GDP.
The comparison of growth of debt to growth of GDP reveals the UK, as the country that has amassed the most amount of new debt relative to GDP growth, having a new-debt-to-GDP-growth ratio of 9 to 1; in other words UK has taken on 900% new debt relative to the GDP growth. But the picture is grim for all the Western countries surveyed, less so for Germany, while Russia’s debt increase amounts to only a fraction of the GDP growth.
The analysis shows that by these measures Russian economic growth, unlike that of the Western countries, has been comparatively healthy and not debt-driven. Russia has in fact a resoundingly positive ratio by these measures, where GDP growth has exceeded growth of debt by a staggering 14 times (1400%). The figure is astonishing when compared with the Western countries that have been flooded with new debt.
The above figures are adjusted taking into account public debt (general government debt), but the situation is even worse when we consider the effect of private debt on the GDP. New debt of corporations and households have at least doubled private debt of most of the Western countries since year 1996 (Chart 5).
Reviewing these figures, it becomes evident that in reality Western economies have not grown in the past decade, rather the countries have massively inflated their debt load. With these levels of debt reached this cannot continue for long. There is a real risk that the bluff will be called sooner rather than later dropping the Western economies to GDP levels that they can carry without debt leverage. But in that situation they will not be able to serve the accumulated debts leading to catastrophe scenarios.
We have not included Japan and China in the analysis due to the difficulties attributed to finding consistent data for all the input variables. For those countries we have come across problems of fractured data that do not capture all the relevant years; inconsistent data across the samples we looked at; and uncertainties about conversion of the input data into euros. (We are sure that major research houses could overcome such problems, having greater and more sophisticated resources than ours). This exclusion of Japan and China is regrettable as Japan is the country worst affected by the problem of debt-fueled GDP growth, having a public debt to GDP ratio of well above 200%, and would therefore have been very instructive for our purposes.
Japan has been essentially living on debt since the early 1990’s. However, some of the more irrational Western analysts want to take Japan as a prime example to follow, arguing that since Japan has been able to pile up debt for some 25 years now, all the Western countries would be able to do it as well for the foreseeable future. In this they fail to grasp that Japan earlier had the luxury of being the sole country living on such exorbitant levels of debt. Japan has enjoyed great support from the Western countries to be able to continue that practice, not least for political reasons. Another important consideration against the idea that Western countries could continue to accumulate debt is that they have, since the early 1990’s, rapidly lost their economic hegemony in terms of share of world trade and global GDP. I have written about this in a recent article entitled Why the West is Destined to Decline.
The West is fast shrinking in economic significance relative to the rest of the world. This is demonstrated by comparing the GDP of the Western powers as represented by the G7 countries (USA, Japan, Germany, France, UK, Italy and Canada) with the GDP of emerging powers. As recently as 1990, the combined GDP of the G7 was overwhelming in relation to that of today’s 7 emerging powers: China, India, Russia, Brazil, Indonesia, Mexico and South Korea (not necessarily constituting one political block). In 1990, the G7 countries had a combined GDP of USD 14.4 trillion and the emerging 7 had a GDP of USD 2.3, but by 2013 the tables had been turned, as the G7 had USD 32 trillion and the emerging 7 had USD 35 trillion. (Chart 6).
With the challenge of the ever increasing share of world economy belonging to the emerging countries, it becomes clear that the Western countries will not be able to profit sufficiently from world trade to service their debt loads.
For the time being the Western countries benefit from the privilege of having currencies that the rest of the world still largely trusts as reserve currencies. In essence, the USD and the euro enjoy a kind of monopoly status. This is what allows Western countries to gain access to cheap debt and fuel their economies with central bank financing (quantitative easing or “printing of money”). But the risk is that, with the deteriorating debt situation and diminishing share of the global economy, they will forfeit this privilege, perhaps even in the near future. What would follow from this is sharply more expensive financing and inflation, with hyperinflation as the eventual outcome. In this scenario – which I consider inevitable over the next 5 to 10 years – the economies of Western countries would essentially collapse.
The problem is that there is no way of averting this scenario, because the Western powers have lost their competitive advantages as economic powers. Eventually, their economies must shrink to match their resource and population bases. (I have written about this in the article referred to above). But it seems that the ruling Western elites have no intention of facing up to these realities. They will try to keep up a semblance of prosperity with ever new debt, as long as they can. The political parties of the West have been essentially converted into voting machines with one singular concern – that of winning the next elections. To do that they will continue to engage in what amounts to bribing of the electorate – creating new debt that fuels the national economy.
But there is no way to turn back this historical tide. Just as the aristocrat of the old regime eventually squandered his legacy, so will the Western powers. This inevitability of the process is what makes it really scary, because I am afraid that the Western elite might be tempted to bail itself out from this doomsday scenario with a war of epic proportions. We are now truly approaching the Armageddon between the West, with its desperate economic circumstances, and the emerging world powers.
Jon Hellevig is a business consultant and economic and political observer. He is the co-editor and co-author of Putin’s New Russia and several books on philosophy and political and social sciences.
The costs of the mainstream U.S. media’s wildly anti-Moscow bias in the Ukraine crisis are adding up, as the Obama administration has decided to react to alleged “Russian aggression” by investing as much as $1 trillion in modernizing the U.S. nuclear weapons arsenal.
On Monday, a typically slanted New York Times article justified these modernization plans by describing “Russia on the warpath” and adding: “Congress has expressed less interest in atomic reductions than looking tough in Washington’s escalating confrontation with Moscow.”
But the Ukraine crisis has been a textbook case of the U.S. mainstream media misreporting the facts of a foreign confrontation and then misinterpreting the meaning of the events, a classic case of “garbage in, garbage out.” The core of the false mainstream narrative is that Russian President Vladimir Putin instigated the crisis as an excuse to reclaim territory for the Russian Empire.
While that interpretation of events has been the cornerstone of Official Washington’s “group think,” the reality always was that Putin favored maintaining the status quo in Ukraine. He had no plans to “invade” Ukraine and was satisfied with the elected government of President Viktor Yanukovych. Indeed, when the crisis heated up last February, Putin was distracted by the Sochi Winter Olympics.
Rather than Putin’s “warmongering” – as the Times said in the lead-in to another Monday article – the evidence is clear that it was the United States and the European Union that initiated this confrontation in a bid to pull Ukraine out of Russia’s sphere of influence and into the West’s orbit.
This was a scheme long in the making, but the immediate framework for the crisis took shape a year ago when influential U.S. neocons set their sights on Ukraine and Putin after Putin helped defuse a crisis in Syria by persuading President Barack Obama to set aside plans to bomb Syrian government targets over a disputed Sarin gas attack and instead accept Syria’s willingness to surrender its entire chemical weapons arsenal.
But the neocons and their “liberal interventionist” allies had their hearts set on another “shock and awe” campaign with the goal of precipitating another “regime change” against a Middle East government disfavored by Israel. Putin also worked with Obama to resolve the dispute over Iran’s nuclear program, averting another neocon dream to “bomb, bomb, bomb Iran.”
The Despised Putin
So, Putin suddenly rose to the top of the neocons’ “enemies list” and some prominent neocons quickly detected his vulnerability in Ukraine, a historical route for western invasions of Russia and the scene of extraordinarily bloody fighting during World War II.
National Endowment for Democracy president Carl Gershman, one of the top neocon paymasters spreading around $100 million a year in U.S. taxpayers’ money, declared in late September 2013 that Ukraine represented “the biggest prize” but beyond that was an opportunity to put Putin “on the losing end not just in the near abroad but within Russia itself.”
The context for Gershman’s excitement was a European Union offer of an association agreement to Ukraine’s elected President Viktor Yanukovych, but it came with some nasty strings attached, an austerity plan demanded by the International Monetary Fund that would have made the hard lives of the average Ukrainian even harder.
That prompted Yanukovych to seek a better deal from Putin who offered $15 billion in aid without the IMF’s harsh terms. Yet, once Yanukovych rebuffed the EU plan, his government was targeted by a destabilization campaign that involved scores of political and media projects funded by Gershman’s NED and other U.S. agencies.
Assistant Secretary of State for European Affairs Victoria Nuland, a neocon holdover who had been an adviser to Vice President Dick Cheney, reminded a group of Ukrainian business leaders that the United States had invested $5 billion in their “European aspirations.” Nuland, wife of prominent neocon Robert Kagan, also showed up at the Maidan square in Kiev passing out cookies to protesters.
The Maidan protests, reflecting western Ukraine’s desire for closer ties to Europe, also were cheered on by neocon Sen. John McCain, who appeared on a podium with leaders of the far-right Svoboda party under a banner honoring Nazi collaborator Stepan Bandera. A year earlier, the European Parliament had identified Svoboda as professing “racist, anti-Semitic and xenophobic views [that] go against the EU’s fundamental values and principles.”
Yet, militants from Svoboda and the even more extreme Right Sektor were emerging as the muscle of the Maidan protests, seizing government buildings and hurling firebombs at police. A well-known Ukrainian neo-Nazi leader, Andriy Parubiy, became the commandant of the Maidan’s “self-defense” forces.
Behind the scenes, Assistant Secretary Nuland was deciding who would take over the Ukrainian government once Yanukovych was ousted. In an intercepted phone call with U.S. Ambassador Geoffrey Pyatt, Nuland crossed off some potential leaders and announced that “Yats” – or Arseniy Yatsenyuk – was her guy.
On Feb. 20, as the neo-Nazi militias stepped up their attacks on police, a mysterious sniper opened fire on both protesters and police killing scores and bringing the political crisis to a boil. The U.S. news media blamed Yanukovych for the killings though he denied giving such an order and some evidence pointed toward a provocation from the far-right extremists.
As Estonia’s Foreign Minister Urmas Paet said in another intercepted phone call with EU foreign affairs chief Catherine Asthon, “there is a stronger and stronger understanding that behind snipers it was not Yanukovych, it was somebody from the new coalition.”
But the sniper shootings led Yanukovych to agree on Feb. 21 to a deal guaranteed by three European countries – France, Germany and Poland – that he would surrender much of his power and move up elections so he could be voted out of office. He also assented to U.S. demands that he pull back his police.
That last move, however, prompted the neo-Nazi militias to overrun the presidential buildings on Feb. 22 and force Yanukovych’s officials to flee for their lives. Then, rather than seeking to enforce the Feb. 21 agreement, the U.S. State Department promptly declared the coup regime “legitimate” and blamed everything on Yanukovych and Putin.
Nuland’s choice, Yatsenyuk, was made prime minister and the neo-Nazis were rewarded for their crucial role by receiving several ministries, including national security headed by Parubiy. The parliament also voted to ban Russian as an official language (though that was later rescinded), and the IMF austerity demands were pushed through by Yatsenyuk. Not surprisingly, ethnic Russians in the south and east, the base of Yanukovych’s support, began resisting what they regarded as the illegitimate coup regime.
To blame this crisis on Putin simply ignores the facts and defies logic. To presume that Putin instigated the ouster of Yanukovych in some convoluted scheme to seize territory requires you to believe that Putin got the EU to make its reckless association offer, organized the mass protests at the Maidan, convinced neo-Nazis from western Ukraine to throw firebombs at police, and manipulated Gershman, Nuland and McCain to coordinate with the coup-makers – all while appearing to support Yanukovych’s idea for new elections within Ukraine’s constitutional structure.
Though such a crazy conspiracy theory would make people in tinfoil hats blush, this certainly is at the heart of what every “smart” person in Official Washington believes. If you dared to suggest that Putin was actually distracted by the Sochi Olympics last February, was caught off guard by the events in Ukraine, and reacted to a Western-inspired crisis on his border (including his acceptance of Crimea’s request to be readmitted to Russia), you would be immediately dismissed as “a stooge of Moscow.”
Such is how mindless “group think” works in Washington. All the people who matter jump on the bandwagon and smirk at anyone who questions how wise it is to be rolling downhill in some disastrous direction.
But the pols and pundits who appear on U.S. television spouting the conventional wisdom are always the winners in this scenario. They get to look tough, standing up to villains like Yanukovych and Putin and siding with the saintly Maidan protesters. The neo-Nazi brown shirts are whited out of the picture and any Ukrainian who objected to the U.S.-backed coup regime finds a black hat firmly glued on his or her head.
For the neocons, there are both financial and ideological benefits. By shattering the fragile alliance that had evolved between Putin and Obama over Syria and Iran, the neocons seized greater control over U.S. policies in the Middle East and revived the prospects for violent “regime change.”
On a more mundane level – by stirring up a new Cold War – the neocons generate more U.S. government money for military contractors who bestow a portion on Washington think tanks that provide cushy jobs for neocons when they are out of government.
The worst losers are the people of Ukraine, most tragically the ethnic Russians in eastern Ukraine, thousands of whom have died from a combination of heavy artillery fire by the Ukrainian army on residential areas followed by street fighting led by brutal neo-Nazi militias who were incorporated into Kiev’s battle plans. [See Consortiumnews.com’s “Ukraine’s ‘Romantic’ Neo-Nazi Storm Troopers.”]
The devastation of eastern Ukraine, which has driven an estimated one million Ukrainians out of their homes, has left parts of this industrial region in ruins. Of course, in the U.S. media version, it’s all Putin’s fault for deceiving these ethnic Russians with “propaganda” about neo-Nazis and then inducing these deluded individuals to resist the “legitimate” authorities in Kiev.
Notably, America’s righteous “responsibility to protect” crowd, which demanded that Obama begin airstrikes in Syria a year ago, swallowed its moral whistles when it came to the U.S.-backed Kiev regime butchering ethnic Russians in eastern Ukraine (or for that matter, when Israeli forces slaughtered Palestinians in Gaza).
However, beyond the death and destruction in eastern Ukraine, the meddling by Nuland, Gershman and others has pushed all of Ukraine toward financial catastrophe. As “The Business Insider” reported on Sept. 21, “Ukraine Is on the Brink of Total Economic Collapse.”
Author Walter Kurtz wrote:
“Those who have spent any time in Ukraine during the winter know how harsh the weather can get. And at these [current] valuations, hryvnia [Ukraine’s currency] isn’t going to buy much heating fuel from abroad. …
“Inflation rate is running above 14% and will spike sharply from here in the next few months if the currency weakness persists. Real wages are collapsing. … Finally, Ukraine’s fiscal situation is unraveling.”
In other words, the already suffering Ukrainians from the west, east and center of the country can expect to suffer a great deal more. They have been made expendable pawns in a geopolitical chess game played by neocon masters and serving interests far from Lvov, Donetsk and Kiev.
But other victims from these latest machinations by the U.S. political/media elite will include the American taxpayers who will be expected to foot the bill for the new Cold War launched in reaction to Putin’s imaginary scheme to instigate the Ukraine crisis so he could reclaim territory of the Russian Empire.
As nutty as that conspiracy theory is, it is now one of the key reasons why the American people have to spend $1 trillion to modernize the nation’s nuclear arsenal, rather than scaling back the thousands of U.S. atomic weapons to around 900, as had been planned.
Or as one supposed expert, Gary Samore at Harvard, explained to the New York Times : “The most fundamental game changer is Putin’s invasion of Ukraine. That has made any measure to reduce the stockpile unilaterally politically impossible.”
Thus, you can see how hyperbolic journalism and self-interested punditry can end up costing the American taxpayers vast sums of money and contributing to a more dangerous world.
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).
China will never support any sanctions against Russia and will never join them, Valentina Matviyenko, speaker of the Russian parliament’s upper house said, citing Chinese President Xi Jinping, with whom she met on Tuesday.
Both Russia and China believe the sanctions are illegal, ineffective and counterproductive, according to Matviyenko. They are nothing but an attempt “to exert pressure on sovereign states to change their position and to weaken them and suppress their development,” she stressed.
Matviyenko thanked Beijing for its public position towards Western sanctions imposed on Russia over the Ukrainian conflict. China has offered an “absolutely objective” assessment of what is now going on in Ukraine. Moreover, no sanctions will affect the long-term strategic partnership between Moscow and Beijing, which reflects the interests of both peoples, she noted.
Cooperation of Russia and China remains a serious factor in international politics, Matviyenko said, adding that the two states have no disputable issues. Their positions are either close or coincide on major problems, including how to settle international and regional conflicts or deal with new challenges and threats.
The Ukrainian conflict was just a trigger for the sanctions, which demonstrated the failure of all previous efforts to set up healthy relations between Russia and the West, Russian tycoon and head of Rusal, Oleg Deripaska, told RT in Sochi.
“I think the sanctions have nothing to do with Ukraine. Ukraine was just a reason. [The sanctions] were a failure of any attempt which was taken in the past to build normal relations between Europe and Russia – from both sides,” Deripaska told RT at the Investment Forum in Sochi.
Oleg Deripaska said the West started pressing Russia before the first sanctions were imposed – just ahead of the Sochi Olympics.
“We should give a lot of credit to Sochi, [as it showed] a different world, [despite] whatever appeared in the Western press,” he said.
Asked if people across the globe are more anti-Russia than ever, Deripaska answered that “it’s not people, it’s [about] various lobbying groups and various interests.”
“You remember all the complaints before the Olympics. They’ve been intentionally stopping any efforts from the Russian side to be normal, to look normal in the West. My view is we should go down as deep as possible, as quick as possible, and then touch the bottom and go up, and think what’s actually common between us, if there is any chance to have this Portugal-Vladivostok trade zone and opportunities to live together.”
The Japanese government has pushed back imposing new sanctions on Russia, which it planned to impose on Friday, in expectation of a possible meeting of foreign ministers next week.
The Japanese media reported Thursday of Tokyo’s intention to issue additional sanctions against Russia. The move was discussed on Tuesday at a National Security Council meeting and was expected to be announced on Friday, but according to The Japan Times the government is yet to make a final decision.
The implementation could be postponed until at least next week, when Japanese Foreign Minister Fumio Kishida may meet his Russian counterpart Sergey Lavrov on the sidelines of the UN General Assembly in New York. Tokyo wants to give Moscow more time to respond to the reports of the looming sanctions, the newspaper said.
Japan imposed sanctions on Russia in March as a gesture of solidarity with the US and the EU, which are championing a policy of punishing Russia for its stance on the crisis in Ukraine. Tokyo suspended talks with Moscow over visa restrictions, investment, space cooperation and military tension prevention. It also targeted 40 individuals from Russia and Ukraine with asset freezes and travel bans.
The new round of sanctions was expected to be individual rather than sectorial.