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U.S. could start energy war with Russia – Winnipeg Free Press

U.S. could start energy war with Russia – Winnipeg Free Press.

By: Washington Post

Posted: 03/23/2014 1:41 PM |

A woman holds a banner that reads:

Enlarge Image

A woman holds a banner that reads: “Putin is Occupier” during a rally against the breakup of the country in Simferopol, Crimea, Ukraine, Tuesday, March 11, 2014. (DARKO VOJINOVIC / THE ASSOCIATED PRESS FILES)

Debate has raged over whether the United States can fight Vladimir Putin on the Russian president’s most favourable ground: energy politics. It can, and it should, particularly because there’s an obvious path forward that coincides with American — indeed, world — economic interests. That path is lifting irrational restrictions on exports and making it easier to build natural gas export terminals.

For years, Putin has used his nation’s wealth of oil and natural gas as a cudgel to bully his neighbours. At present, the European Union’s large imports of Russian natural gas discourage a forceful Western response to Russia’s aggressive actions in Ukraine. Meanwhile, the United States is tapping massive reserves of unconventional natural gas. That has not only made the U.S. self-sustaining in gas, but also driven down the price of U.S. gas to a point well below what Europeans are paying for the Russian stuff. If the federal government allowed more of it to be liquefied and exported, would the Russians lose a share of the European market?

The story is more complicated than that. Russian gas, which doesn’t need to be liquefied to move (by pipeline) into the European market, would enjoy significant price advantages over imported U.S. gas. The interaction of private buyers and sellers would probably direct U.S. exports to places where gas is more profitable to sell, such as Japan and Korea. The result would be a bounty for the U.S. economy and an improved American trade deficit — but not much direct displacement of Russian gas in Europe.

But that’s also not the end of the story. The U.S. entry into the Asian market would diminish Russia’s opportunity to profit there, as it aims to do. Contributing to an already widening and more diverse global supply of liquefied natural gas (LNG) would also give European importers more flexibility in sourcing their fuel — from the United States, Qatar, or others — the sort of market conditions that have already enabled Europeans to renegotiate gas contracts with Russia. The Council on Foreign Relations’ Michael Levi points out that Putin might end up with an uncomfortable choice between maintaining market share in Europe and slashing his prices more.

Ramping up U.S. exports would take years, but the effects would not only be long-term, as some critics charge. Action that communicates a certain intent to allow more LNG exports would send a signal that “the U.S. is open for business,” as the Eurasia Group’s Leslie Palti-Guzman puts it. That could deter Putin from playing the energy card and help many buyers in negotiating long-term contracts.

The economic case for allowing natural gas exports is compelling on its own. Doing so would bring money into the country and uphold the vital principle that energy resources should flow freely around the globe, making the markets for the fuels the world economy needs as flexible and robust as possible. The more major suppliers there are following that principle, the less control predatory regimes such as Putin’s will have over the market.

Obama Demands Russia Leave G-8; June Summit Cancelled While Ukraine Deploys Army Along Borders | Zero Hedge

Obama Demands Russia Leave G-8; June Summit Cancelled While Ukraine Deploys Army Along Borders | Zero Hedge.

UK Prime Minister David Cameron stated that it is “absolutely clear” that the G-8 Summit scheduled for June in Sochi, Russia will not go ahead. But it is President Obama that appears to be pressing the hardest for major changes:

  • OBAMA SAID TO PRESS ALLIES TO SUSPEND RUSSIA FROM G8: WSJ

This comes at a time when Ukraine forces are being withdrawn from Crimea and deployed to North, South, and East borders of the region.  Meanwhile, Ukraine is taking its soldiers pulled from Crimea and deploying them along all other borders.

  • UKRAINE’S PARUBIY: PRIORITY IS TO PROTECT BORDERS, LEAVE CRIMEA
  • UKRAINE DEPLOYS ARMY TO NORTH, SOUTH, EAST BORDERS: PARUBIY
  • UKRAINE HAS MOBILIZED MORE THAN 10,000 PEOPLE, PARUBIY SAYS

David Cameron says G-8 Summit Scrapped…

There will be no G8 summit in Russia this year, David Cameron said in a further ign of efforts to isolate Moscow over the Ukraine crisis.

The Prime Minister said it was “absolutely clear” the meeting could not go ahead.

Speaking in The Hague ahead of a meeting of G7 leaders, he said: “We should be clear there’s not going to be a G8  summit this year in Russia. That’s absolutely clear.”

Preparations for the planned June summit in Sochi had already been suspended as a result of Russia’s actions in neighbouring Ukraine.

And Obama is calling for Russia to be kicked out of the G-8.

  • OBAMA SAID TO PRESS ALLIES TO SUSPEND RUSSIA FROM G8: WSJ

Obama Demands Russia Leave G-8; June Summit Cancelled While Ukraine Deploys Army Along Borders | Zero Hedge

Obama Demands Russia Leave G-8; June Summit Cancelled While Ukraine Deploys Army Along Borders | Zero Hedge.

UK Prime Minister David Cameron stated that it is “absolutely clear” that the G-8 Summit scheduled for June in Sochi, Russia will not go ahead. But it is President Obama that appears to be pressing the hardest for major changes:

  • OBAMA SAID TO PRESS ALLIES TO SUSPEND RUSSIA FROM G8: WSJ

This comes at a time when Ukraine forces are being withdrawn from Crimea and deployed to North, South, and East borders of the region.  Meanwhile, Ukraine is taking its soldiers pulled from Crimea and deploying them along all other borders.

  • UKRAINE’S PARUBIY: PRIORITY IS TO PROTECT BORDERS, LEAVE CRIMEA
  • UKRAINE DEPLOYS ARMY TO NORTH, SOUTH, EAST BORDERS: PARUBIY
  • UKRAINE HAS MOBILIZED MORE THAN 10,000 PEOPLE, PARUBIY SAYS

David Cameron says G-8 Summit Scrapped…

There will be no G8 summit in Russia this year, David Cameron said in a further ign of efforts to isolate Moscow over the Ukraine crisis.

The Prime Minister said it was “absolutely clear” the meeting could not go ahead.

Speaking in The Hague ahead of a meeting of G7 leaders, he said: “We should be clear there’s not going to be a G8  summit this year in Russia. That’s absolutely clear.”

Preparations for the planned June summit in Sochi had already been suspended as a result of Russia’s actions in neighbouring Ukraine.

And Obama is calling for Russia to be kicked out of the G-8.

  • OBAMA SAID TO PRESS ALLIES TO SUSPEND RUSSIA FROM G8: WSJ

Ukraine Leader In New Leaked Recording: 8 Million Russians In Ukraine "Must Be Killed With Nuclear Weapons" | Zero Hedge

Ukraine Leader In New Leaked Recording: 8 Million Russians In Ukraine “Must Be Killed With Nuclear Weapons” | Zero Hedge.

While the NSA is busy justifying its spying of every American its existence thanks to famous Moscow resident Edward Snowden, its Russian counterparts have been busy intercepting even more phone Ukrainian conversations.

After a month ago a leaked phone call between US assistant secretary of state Victoria Nuland and the US envoy to the Ukraine, Geoffrey Pyatt confirmed that it was the US that was pulling the strings in what was about to be a violent coup overthrowing Ukraine’s president Yanukovich, “someone” has just leaked another phone conversation, this time between parliamentarian Nestor Shufrych and former PM and ideological leader of the Ukraine “revolution” Yulia Tymoshenko and most probable future president of West Ukraine, in which Tymoshenko is makes the following threats, “It’s going too far! Bugger! We must grab arms and go whack those damn katsaps [a Ukrainian word used to refer to the Russians in a negative tone] together with their leader”, “I’ll use all my connections, I’ll raise the whole world – as soon as I’m able to – in order to make sure.. Bugger!.. not even scorched earth won’t remain where Russia stands” although all her empty threats collapse in the last sentence of the phone conversation in which she says, regarding the Crimea annexation, that “we are going to take it to the Hague International Criminal Court.” Good luck with that.

But the smoking gun, and where Putin once again shows just how masterful of a chess player he is, is the following statement by Tymoshenko, after asked, rhetorically, by her counterparty, “what should we do now with the 8 million Russians that stayed in Ukraine. They are outcasts“… to which she replies: “They must be killed with nuclear weapons.

Needless to say, that is not how you make Russian friends, or diffuse geopolitical tensions with your superpower neighbor, who just happens to be set on recreating USSR 2.0. Because just like that Putin has his provocation carte blanche, as the second something, anything happens to any ethnic Russian in east Ukraine, Putin can point to precisely this conversation as proof of how Ukraine’s “government” feels toward the ethnic minorities in the east, and why “they deserve to be protected” the Russian bearhug. Which has been precisely Putin’s plan all along.

It is not surprising that after this recording was leaked, that Tymoshenko admitted the validity of the recording except for this part, because she knows just how greatly it can and will be used against her once Putin decides it is time to expand a little further beyond just Crimea.

??????? ????, ??? ??? 8 ??? ?????? ? ??????? – ??????. ????????? ???????: ??????? ? ??????? – ?? ????????.?????? ???:) ??????? ?? ??????????

— ???? ????????? (@YuliaTymoshenko) March 24, 2014

Some of the other statements, transcribed by RT, confirming just how powerless Ukraine truly is in this struggle between David backed by the world’s most insolvent and natgas hungry countries, and an ascendent Kremlin goliath:

Tymoshenko, who plans to run in Ukraine’s presidential election, expressed confidence that she would have found “a way to zap those assholes [Russia].”

“I’ll use all my connections, I’ll raise the whole world – as soon as I’m able to – in order to make sure.. Bugger!.. not even scorched earth won’t remain where Russia stands,” she promised.

Despite being incapacitated by spinal disc hernia the ex-PM stressed she’s ready to “grab a machine gun, you know what I’m saying, and go shoot this bastard [Putin] in the forehead.”

Full recording below:

Ukraine Leader In New Leaked Recording: 8 Million Russians In Ukraine “Must Be Killed With Nuclear Weapons” | Zero Hedge

Ukraine Leader In New Leaked Recording: 8 Million Russians In Ukraine “Must Be Killed With Nuclear Weapons” | Zero Hedge.

While the NSA is busy justifying its spying of every American its existence thanks to famous Moscow resident Edward Snowden, its Russian counterparts have been busy intercepting even more phone Ukrainian conversations.

After a month ago a leaked phone call between US assistant secretary of state Victoria Nuland and the US envoy to the Ukraine, Geoffrey Pyatt confirmed that it was the US that was pulling the strings in what was about to be a violent coup overthrowing Ukraine’s president Yanukovich, “someone” has just leaked another phone conversation, this time between parliamentarian Nestor Shufrych and former PM and ideological leader of the Ukraine “revolution” Yulia Tymoshenko and most probable future president of West Ukraine, in which Tymoshenko is makes the following threats, “It’s going too far! Bugger! We must grab arms and go whack those damn katsaps [a Ukrainian word used to refer to the Russians in a negative tone] together with their leader”, “I’ll use all my connections, I’ll raise the whole world – as soon as I’m able to – in order to make sure.. Bugger!.. not even scorched earth won’t remain where Russia stands” although all her empty threats collapse in the last sentence of the phone conversation in which she says, regarding the Crimea annexation, that “we are going to take it to the Hague International Criminal Court.” Good luck with that.

But the smoking gun, and where Putin once again shows just how masterful of a chess player he is, is the following statement by Tymoshenko, after asked, rhetorically, by her counterparty, “what should we do now with the 8 million Russians that stayed in Ukraine. They are outcasts“… to which she replies: “They must be killed with nuclear weapons.

Needless to say, that is not how you make Russian friends, or diffuse geopolitical tensions with your superpower neighbor, who just happens to be set on recreating USSR 2.0. Because just like that Putin has his provocation carte blanche, as the second something, anything happens to any ethnic Russian in east Ukraine, Putin can point to precisely this conversation as proof of how Ukraine’s “government” feels toward the ethnic minorities in the east, and why “they deserve to be protected” the Russian bearhug. Which has been precisely Putin’s plan all along.

It is not surprising that after this recording was leaked, that Tymoshenko admitted the validity of the recording except for this part, because she knows just how greatly it can and will be used against her once Putin decides it is time to expand a little further beyond just Crimea.

??????? ????, ??? ??? 8 ??? ?????? ? ??????? – ??????. ????????? ???????: ??????? ? ??????? – ?? ????????.?????? ???:) ??????? ?? ??????????

— ???? ????????? (@YuliaTymoshenko) March 24, 2014

Some of the other statements, transcribed by RT, confirming just how powerless Ukraine truly is in this struggle between David backed by the world’s most insolvent and natgas hungry countries, and an ascendent Kremlin goliath:

Tymoshenko, who plans to run in Ukraine’s presidential election, expressed confidence that she would have found “a way to zap those assholes [Russia].”

“I’ll use all my connections, I’ll raise the whole world – as soon as I’m able to – in order to make sure.. Bugger!.. not even scorched earth won’t remain where Russia stands,” she promised.

Despite being incapacitated by spinal disc hernia the ex-PM stressed she’s ready to “grab a machine gun, you know what I’m saying, and go shoot this bastard [Putin] in the forehead.”

Full recording below:

Russian Bank Impacted By US Sanctions Hit By Mini Bank Run Over The Weekend | Zero Hedge

Russian Bank Impacted By US Sanctions Hit By Mini Bank Run Over The Weekend | Zero Hedge.

Last week, after western sanctions against Russia expanded to include not only the first financial institution, Bank Rosiya, but also SMP bank whose main shareholders were on the sanctions list, unexpectedly both Visa and MasterCard halted providing transaction services to the two banks, without providing an explanation. Over the weekend, one of the banks got its full credit card functionality back after Visa Inc and MasterCard both resumed services for payment transactions for clients at Russia’s SMP bank.

As a reminder, SMP, which has about 100 branches covering more than 20 Russian cities, has co-owners Boris Rotenberg and older brother Arkady,  who received large contracts in the Sochi Winter Olympics, and who were both added to the expanded US sanctions list, and as we reported before, SMP had said on Friday that Visa and MasterCard had stopped providing services for payment transactions for clients at Russia’s SMP bank. The bank said the decision to stop providing services by Visa and MasterCard was unlawful because the sanctions were imposed on shareholders, not the bank, which said it has no assets in the United States.

“We are glad that the two biggest international payment systems have heard our arguments and reversed their decision to block (SMP bank transactions),” SMP bank CEO Dmitry Kalantyrsky, said in a statement.

What was the purpose of this escalation? Simple: as Reuters reports, SMP Bank said on Monday around 9 billion roubles ($248 million) had been withdrawn by depositors since U.S. sanctions were announced last week.

Washington imposed sanctions on Thursday against 20 Russians close to President Vladimir Putin over Moscow’s involvement in the Ukraine crisis, including Boris Rotenberg and his older brother Arkady, the co-owners of SMP Bank.

SMP CEO Dmitry Kalantyrsky told a news conference that an estimated 4 billion roubles had been withdrawn by individuals and 5 billion by organisations.

In other words, the staggered escalations against Russian banks, to which credit card processors have joined without any specific reason, were meant solely to incite a bank panic and to promote bank run conditions. With SMP this succeeded partially, with quarter of a billion withdrawn, however hardly enough to cripple the bank. At least for now.

As Bloomberg reports, as the new Cold War escalates between the West and Russia, the next most likely event is a Russian recession:

Banks including state-run VTB Capital say the world’s ninth-biggest economy will shrink for at least two quarters as penalties for annexing Crimea rattle markets, curb investment and raise the cost of borrowing. Sanctions that have so far focused on individuals via visa bans and asset freezes may be expanded to target specific areas of the economy.

President Vladimir Putin sent his popularity surging to a five-year high by making Crimea a part of Russia again after 60 years and says he won’t be swayed by foreign retaliation. Even so, the costs of the decision are starting to unfold, with Russian stocks this year’s worst performers and the economy set to suffer more than the West, said Mircea Geoana, Romania’s government representative for diplomacy and economic projects.

“We’re witnessing the start of a new geopolitical and economic Cold War and I think it will take at least two to three years to establish some sort of equilibrium,” he said. “The ones who’ll pay the bill for this aggression, no matter how popular and patriotic it looks, will be the Russian people because there’s a huge difference between the economic force of the EU and the U.S. and that of Russia.”

* * *

Russia will probably dip into a recession in the second and third quarters of this year as “domestic demand is set to halt on the uncertainty shock and tighter financial conditions,” according to Moscow-based VTB.

Russia’s central bank unexpectedly raised its benchmark interest rate by 150 basis points after the armed takeover of Crimea triggered a rout in the ruble. Putin completed his annexation of the Black Sea peninsula March 21.

Russia may shun foreign debt markets in 2014 because of higher borrowing costs, according to Finance Minister Anton Siluanov. He expressed frustration at disruptions to MasterCard Inc. and Visa services for cards issued by banks on or linked to persons on the U.S. sanctions list.

“Some people say these sanctions won’t affect Russia’s financial system but they already are,” he said March 21.

Of course, as we reported last week, any dramatic deterioration in the Russian economy will simply push it closer to China, which for all intents and purposes is the provider of funding for Western “discretionary spending” anyway, so why not just cut the middleman, and the petrodollar, entirely?

Russian Bank Impacted By US Sanctions Hit By Mini Bank Run Over The Weekend | Zero Hedge

Russian Bank Impacted By US Sanctions Hit By Mini Bank Run Over The Weekend | Zero Hedge.

Last week, after western sanctions against Russia expanded to include not only the first financial institution, Bank Rosiya, but also SMP bank whose main shareholders were on the sanctions list, unexpectedly both Visa and MasterCard halted providing transaction services to the two banks, without providing an explanation. Over the weekend, one of the banks got its full credit card functionality back after Visa Inc and MasterCard both resumed services for payment transactions for clients at Russia’s SMP bank.

As a reminder, SMP, which has about 100 branches covering more than 20 Russian cities, has co-owners Boris Rotenberg and older brother Arkady,  who received large contracts in the Sochi Winter Olympics, and who were both added to the expanded US sanctions list, and as we reported before, SMP had said on Friday that Visa and MasterCard had stopped providing services for payment transactions for clients at Russia’s SMP bank. The bank said the decision to stop providing services by Visa and MasterCard was unlawful because the sanctions were imposed on shareholders, not the bank, which said it has no assets in the United States.

“We are glad that the two biggest international payment systems have heard our arguments and reversed their decision to block (SMP bank transactions),” SMP bank CEO Dmitry Kalantyrsky, said in a statement.

What was the purpose of this escalation? Simple: as Reuters reports, SMP Bank said on Monday around 9 billion roubles ($248 million) had been withdrawn by depositors since U.S. sanctions were announced last week.

Washington imposed sanctions on Thursday against 20 Russians close to President Vladimir Putin over Moscow’s involvement in the Ukraine crisis, including Boris Rotenberg and his older brother Arkady, the co-owners of SMP Bank.

SMP CEO Dmitry Kalantyrsky told a news conference that an estimated 4 billion roubles had been withdrawn by individuals and 5 billion by organisations.

In other words, the staggered escalations against Russian banks, to which credit card processors have joined without any specific reason, were meant solely to incite a bank panic and to promote bank run conditions. With SMP this succeeded partially, with quarter of a billion withdrawn, however hardly enough to cripple the bank. At least for now.

As Bloomberg reports, as the new Cold War escalates between the West and Russia, the next most likely event is a Russian recession:

Banks including state-run VTB Capital say the world’s ninth-biggest economy will shrink for at least two quarters as penalties for annexing Crimea rattle markets, curb investment and raise the cost of borrowing. Sanctions that have so far focused on individuals via visa bans and asset freezes may be expanded to target specific areas of the economy.

President Vladimir Putin sent his popularity surging to a five-year high by making Crimea a part of Russia again after 60 years and says he won’t be swayed by foreign retaliation. Even so, the costs of the decision are starting to unfold, with Russian stocks this year’s worst performers and the economy set to suffer more than the West, said Mircea Geoana, Romania’s government representative for diplomacy and economic projects.

“We’re witnessing the start of a new geopolitical and economic Cold War and I think it will take at least two to three years to establish some sort of equilibrium,” he said. “The ones who’ll pay the bill for this aggression, no matter how popular and patriotic it looks, will be the Russian people because there’s a huge difference between the economic force of the EU and the U.S. and that of Russia.”

* * *

Russia will probably dip into a recession in the second and third quarters of this year as “domestic demand is set to halt on the uncertainty shock and tighter financial conditions,” according to Moscow-based VTB.

Russia’s central bank unexpectedly raised its benchmark interest rate by 150 basis points after the armed takeover of Crimea triggered a rout in the ruble. Putin completed his annexation of the Black Sea peninsula March 21.

Russia may shun foreign debt markets in 2014 because of higher borrowing costs, according to Finance Minister Anton Siluanov. He expressed frustration at disruptions to MasterCard Inc. and Visa services for cards issued by banks on or linked to persons on the U.S. sanctions list.

“Some people say these sanctions won’t affect Russia’s financial system but they already are,” he said March 21.

Of course, as we reported last week, any dramatic deterioration in the Russian economy will simply push it closer to China, which for all intents and purposes is the provider of funding for Western “discretionary spending” anyway, so why not just cut the middleman, and the petrodollar, entirely?

Interpreting Putin’s Decision | The Diplomat

Interpreting Putin’s Decision | The Diplomat.

Interpreting Putin’s Decision
Image Credit: Wikimedia Commons

Interpreting Putin’s Decision

From Western weakness to its Eurasian Union project, a look at the factors that drove the annexation of Crimea.

By Wei Zongyou
March 23, 2014

People around the world were astounded by Vladimir Putin’s rapid decision to annex Crimea in response to the latter’s referendum to secede from Ukraine and join Russia, which Kiev and the West view as illegal. The decision also drew worldwide criticism and vehement condemnation by the West and Ukraine, and triggered a second wave of economic sanctions from the United States, and soon afterwards Europe. Relations between Russia and the West are at their chilliest since the end of the Cold War.

So why has Putin risked Russia’s economic welfare and political space to swallow Crimea, push Ukraine out, and alienate the entire Western world? Is Putin “in another world” as German Chancellor Angela Merkel claimed he is? In my opinion, there are at least two considerations behind Putin’s decision.

The first is the realist, geo-political consideration. In Putin’s world, since the collapse of the former Soviet Union, Russia has lost nearly one fourth of its geography, one half of its population, and more than half of its GDP. Among the “lost” territories are those that are strategically important or militarily advanced, such as Ukraine and the Baltic states. With the eastward expansion of NATO, and the integration of former Soviet satellite states and republics in Eastern Europe and the Baltics into Europe, the traditional buffer zone between Russia and the West is increasingly squeezed and Russia’s space for strategic maneuvering becomes smaller with each year. When Russia craved for entry into the West, this might not have been particularly worrisome or embarrassing for Moscow. But since Russian leaders decided long ago that joining the West was neither particularly helpful to Russia’s political standing nor particularly attractive in terms of economic gains, it has begun to view the expansion of the West at its own strategic expense as both ill-intentioned and threatening.

Ukraine holds a unique position in Russia’s geo-strategic consideration. First, it is crucial territory in the passage of Russia’s oil exports to Europe. Each year more than one third of the oil Russia ships to Europe travels via the Ukraine pipeline. Second, Crimea gives Russia’s Black Sea Fleet access to the Black Sea. If the pro-West Kiev government were to have decided to end its lease to the Russian naval base in Crimea, Russia would have lost its strategic gateway to the Black Sea and the Mediterranean Sea. Third, Ukraine is deemed the most crucial member of Russia’s Eurasia Union project, an economic and strategic plan to closely connect Russia, Belarus, Ukraine, and Central Asia. If all goes according to plan, this union will integrate these former Soviet republics and now independent countries economically, politically, and diplomatically with Russia, and go some way to restoring the glory of the Soviet empire at its peak. The “coup d’état” in Kiev and the political orientation of the new government put all these things in jeopardy, if Russia remains disinterested and passive.

The second consideration is more psychological in nature. Following the end of Cold War, embracing the West was the first priority of Russian foreign policy. But to Moscow’s dismay, it found that the West still harbored strong reservations and considerable distrust. Years spent courting and wooing provided little of what Russia craved most: equal membership in the West and economic prosperity. Though Russia became part of the exclusive G8, it never enjoyed the full status and say of the other seven members, always remaining an “other.” Economically, the shock remedy proposed by the West and faithfully implemented by Boris Yeltsin didn’t bring the expected economic benefit. Instead, it took Russia’s economy into freefall, leaving the average Russian worse off than before. Russia’s look West ended in humiliation and disaster.

It was Putin who saved Russia from its miserable condition. He readjusted both Russia’s domestic and foreign policies, and distanced the country from the West, instead seeking opportunities to resurrect past Soviet glories. As the Russian economy improved, the West found that its time was passing. The 2008 economic crisis hit the U.S. and Europe hard and they found themselves more reliant on the emerging powers, Russia included. It is Britain, France, and even Germany who are now busy appealing to Russian oil barons to buy more and invest more. The balance of power between Russia and the West has shifted. The small war in Georgia in the summer of 2008 only strengthened this trend and the response from the West impressed Russia greatly: Europe is rotten and the U.S. has become too weak to lead. Then came the Arab Spring and the Syria crisis. In the former case, the U.S. “led from behind,” and in the latter it was Russia that decided the course of the Syria civil war.

Russians, and especially Putin learned a hard lesson from the post-Cold War romance with the West: For all the talk of democracy and freedom, the fact remains that the strong dictate to the weak.

With Europe rotten and United States weakened, a resurgent and confident Russia will definitely not let a geo-strategically important former Soviet republic fall entirely into the West’s camp. By annexing Crimea, Putin not only secured Russia’s naval base and its strategic gateway to the Black Sea, he also sent a powerful message to Ukraine and the West: Ignore Russia’s legitimate strategic concerns at your own peril.

Wei Zongyou, is Professor and Vice Dean of the Institute of International and Diplomatic Affairs, Shanghai International Studies University, Shanghai, China. His main research interests cover Sino-U.S. Relations, american foreign policy, humanitarian intervention and R2P

Interpreting Putin’s Decision | The Diplomat

Interpreting Putin’s Decision | The Diplomat.

Interpreting Putin’s Decision
Image Credit: Wikimedia Commons

Interpreting Putin’s Decision

From Western weakness to its Eurasian Union project, a look at the factors that drove the annexation of Crimea.

By Wei Zongyou
March 23, 2014

People around the world were astounded by Vladimir Putin’s rapid decision to annex Crimea in response to the latter’s referendum to secede from Ukraine and join Russia, which Kiev and the West view as illegal. The decision also drew worldwide criticism and vehement condemnation by the West and Ukraine, and triggered a second wave of economic sanctions from the United States, and soon afterwards Europe. Relations between Russia and the West are at their chilliest since the end of the Cold War.

So why has Putin risked Russia’s economic welfare and political space to swallow Crimea, push Ukraine out, and alienate the entire Western world? Is Putin “in another world” as German Chancellor Angela Merkel claimed he is? In my opinion, there are at least two considerations behind Putin’s decision.

The first is the realist, geo-political consideration. In Putin’s world, since the collapse of the former Soviet Union, Russia has lost nearly one fourth of its geography, one half of its population, and more than half of its GDP. Among the “lost” territories are those that are strategically important or militarily advanced, such as Ukraine and the Baltic states. With the eastward expansion of NATO, and the integration of former Soviet satellite states and republics in Eastern Europe and the Baltics into Europe, the traditional buffer zone between Russia and the West is increasingly squeezed and Russia’s space for strategic maneuvering becomes smaller with each year. When Russia craved for entry into the West, this might not have been particularly worrisome or embarrassing for Moscow. But since Russian leaders decided long ago that joining the West was neither particularly helpful to Russia’s political standing nor particularly attractive in terms of economic gains, it has begun to view the expansion of the West at its own strategic expense as both ill-intentioned and threatening.

Ukraine holds a unique position in Russia’s geo-strategic consideration. First, it is crucial territory in the passage of Russia’s oil exports to Europe. Each year more than one third of the oil Russia ships to Europe travels via the Ukraine pipeline. Second, Crimea gives Russia’s Black Sea Fleet access to the Black Sea. If the pro-West Kiev government were to have decided to end its lease to the Russian naval base in Crimea, Russia would have lost its strategic gateway to the Black Sea and the Mediterranean Sea. Third, Ukraine is deemed the most crucial member of Russia’s Eurasia Union project, an economic and strategic plan to closely connect Russia, Belarus, Ukraine, and Central Asia. If all goes according to plan, this union will integrate these former Soviet republics and now independent countries economically, politically, and diplomatically with Russia, and go some way to restoring the glory of the Soviet empire at its peak. The “coup d’état” in Kiev and the political orientation of the new government put all these things in jeopardy, if Russia remains disinterested and passive.

The second consideration is more psychological in nature. Following the end of Cold War, embracing the West was the first priority of Russian foreign policy. But to Moscow’s dismay, it found that the West still harbored strong reservations and considerable distrust. Years spent courting and wooing provided little of what Russia craved most: equal membership in the West and economic prosperity. Though Russia became part of the exclusive G8, it never enjoyed the full status and say of the other seven members, always remaining an “other.” Economically, the shock remedy proposed by the West and faithfully implemented by Boris Yeltsin didn’t bring the expected economic benefit. Instead, it took Russia’s economy into freefall, leaving the average Russian worse off than before. Russia’s look West ended in humiliation and disaster.

It was Putin who saved Russia from its miserable condition. He readjusted both Russia’s domestic and foreign policies, and distanced the country from the West, instead seeking opportunities to resurrect past Soviet glories. As the Russian economy improved, the West found that its time was passing. The 2008 economic crisis hit the U.S. and Europe hard and they found themselves more reliant on the emerging powers, Russia included. It is Britain, France, and even Germany who are now busy appealing to Russian oil barons to buy more and invest more. The balance of power between Russia and the West has shifted. The small war in Georgia in the summer of 2008 only strengthened this trend and the response from the West impressed Russia greatly: Europe is rotten and the U.S. has become too weak to lead. Then came the Arab Spring and the Syria crisis. In the former case, the U.S. “led from behind,” and in the latter it was Russia that decided the course of the Syria civil war.

Russians, and especially Putin learned a hard lesson from the post-Cold War romance with the West: For all the talk of democracy and freedom, the fact remains that the strong dictate to the weak.

With Europe rotten and United States weakened, a resurgent and confident Russia will definitely not let a geo-strategically important former Soviet republic fall entirely into the West’s camp. By annexing Crimea, Putin not only secured Russia’s naval base and its strategic gateway to the Black Sea, he also sent a powerful message to Ukraine and the West: Ignore Russia’s legitimate strategic concerns at your own peril.

Wei Zongyou, is Professor and Vice Dean of the Institute of International and Diplomatic Affairs, Shanghai International Studies University, Shanghai, China. His main research interests cover Sino-U.S. Relations, american foreign policy, humanitarian intervention and R2P

Spanish 'Anti-Austerity' Protesters "Sick Of This System They Call Democracy" | Zero Hedge

Spanish ‘Anti-Austerity’ Protesters “Sick Of This System They Call Democracy” | Zero Hedge.

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“I’m here to fight for my children’s future,” exclaims one father as Spaniards rallied in Madrid against poverty and EU-imposed austerity. As Reuters reports, the largely peaceful protest latermarred by violent clashes in which police fired rubber bullets. The so-called “Dignity Marches” brought hundreds of thousands to the capital with banners making it clear what their feelings about record 26% unemployment were – “Bread, jobs and housing for everyone” and “Corruption and robbery, Spain’s trademark.” One protester summed up the people’s views of the government,“I’m sick of this system they call democracy… I want things to change.”

 

 

 

Via Reuters,

The so-called “Dignity Marches” brought hundreds of thousands to the capital, according to estimates of Reuters witnesses. Travelling from all over Spain, they were protesting in support of more than 160 different causes, including jobs, housing, health, education and an end to poverty.

 

 

…Spaniards rallied in Madrid on Saturday against poverty and EU-imposed austerity in a largely peaceful protest later marred by violent clashes in which police fired rubber bullets.

 

 

Some protesters started to throw stones and bottles at the large numbers of riot police present and attacked cashpoints and hoardings. The police fired rubber bullets to disperse them, according to video footage seen by Reuters.

Central government representative Cristina Cifuentes said 19 protesters had been arrested and 50 police officers had been injured, one of them very badly, in the clashes.

Once again the issue is government corruption combined with austerity (or at least slowing growth in spending to be perfectly clear) – a combination that we have discussed numerous times tends to end in social unrest…

A housing bubble burst more than five years ago, forcing a 41-billion euro ($56 billion) bailout of Spain’s banks, squeezing homeowners and throwing millions out of work.

 

 

The government introduced public sector austerity to whittle down the deficit, provoking widespread anger amongst middle- and low-income families as dozens of cases of corruption in the ruling class are investigated by judges.

The people’s feelings were clear as the OECD says the economic crisis has hit Spain’s poor harder than in any other country in the euro region.

Banners urged the conservative government not to pay its international debts and to tackle Spain’s chronically high unemployment of 26 percent.

 

Bread, jobs and housing for everyone“, read one banner, “Corruption and robbery, Spain’s trademark,” said another.

 

I’m here to fight for my children’s future,” said Michael Nadeau, a 44-year-old entrepreneur.

 

For those who are in power we’re just numbers. They value money more than they value people,” he said, shouting to be heard above the din of chanting, whistling and drumming.

 

“(I’m here because) I’m sick of this system they call democracy,” said Jose Luis Arteaga, a 58-year-old teacher whose wage has been cut 20 percent. “I want things to change.”

It seems that almost record low bond yields and high stock market levels did not appease the people of Spain either…Time for that IMG income inequality equalizing wealth redsitriburion it would seem…

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