Category: Russia & Former USSR

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Chaos in Eastern Ukraine rebel government

From Christian Neef at Der Spiegel:

….the disputes between leaders in Donetsk and Lugansk are growing — a development Moscow views with dismay. Their citizen militias are disintegrating into different groups that are each pursuing different agendas. Some are refusing to recognize the leaders of the People’s Republics and others don’t want to accept the terms of the Minsk Protocol. One of the biggest problems is the Cossacks, who control 80 percent of the Lugansk region and have now proclaimed their own state, the Lugansk Democratic Republic. The situation in Lugansk itself is especially complicated given that the city is partly under the control of criminal gangs.

Resistance is even stirring in Donetsk. Three weeks ago, a party calling itself “New Russia” held a protest in the city center and pilloried leaders of the separatist republic for agreements they had made with Kiev. Speakers at the demonstration said the cease-fire must be ended immediately and that attacks against Ukrainian positions should resume. A short time later, assailants perpetrated an assassination attempt against New Russia’s leader, who as recently as this spring had been the “people’s governor” of Donetsk….

Read more at The Chaos Republics: The Real Test for Rebels Will Come in Winter – SPIEGEL ONLINE.

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The Menace of Unreality: Combatting Russian Disinformation in the 21st Century

Hosted in cooperation with the Atlantic Council and the US Department of State, this panel discussion examined the extent of Russia’s disinformation campaign and its impact on Ukraine and Europe. In particular it looked at why this effort has been a success, how it is undermining European democracy and what possible solutions may exist. Speakers included: Geoffrey Pyatt, US Ambassador to Ukraine; Oleksander Scherba, Ambassador at Large, Ministry of Foreign Affairs, Ukraine; Michael Weiss, Editor-in-Chief, The Interpreter and Peter Pomerantsev, Journalist and Documentary Producer. LI’s Anne Applebaum served as moderator. #RussiaVsReality

This is Vladimir Putin’s response to the wave of democracy movements that spread through the Arab world and Eastern Europe. Totalitarian states are particularly vulnerable to these movements. Their response is to attack the vector on which the “virus” is borne — mainstream and social media — in order to destroy its effectiveness.

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Europe’s Energy Essentials by Ana Palacio | Project Syndicate

Ana Palacio on Europe’s energy challenge:

Energy’s emergence as a focal point for European leaders makes sense, given that it lies at the confluence of the three existential threats facing the European Union: a revisionist Russia, the declining competitiveness of European businesses, and climate change.

….The most tangible element of the EU’s emerging energy-policy framework is the internal energy market, which, once completed, will allow for the unimpeded flow of energy and related investments throughout the EU. Such an integrated energy market would lead to significant savings – estimates go as high as €40 billion ($51 billion) annually by 2030 – thereby providing a much-needed competitiveness boost.

The internal energy market would enhance Europe’s energy security as well…. individual countries are often excessively dependent on a single source and, more dangerously, a single supplier: Russia. Unrestricted energy flows within the EU would mitigate the risks of supply disruptions or shocks.

Read more at Europe’s Energy Essentials by Ana Palacio – Project Syndicate.

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Russia’s Ruble in a world of pain

Russia’s ruble is in a world of pain, having lost one-third of its value against the Dollar over the last 40 months. The down-trend is accelerating, emphasized by two large 13-week Twiggs Momentum peaks below the zero line.

RUBUSD

Vladimir Putin has backed himself into a corner and has no way out but to escalate. His current strategy in Eastern Europe of one-step-back-two-steps-forward is becoming predictable and the European Union is likely to run out of patience, responding with further sanctions. Increasingly threatening behavior in the Baltic is also unlikely to intimidate, merely strengthening alliances and resolve.

George Soros on the Ukraine crisis:

https://twitter.com/andersostlund/status/525183504066560000

Former Swedish PM Carl Bildt seems to agree:

Ambrose Evans-Pritchard weighs in on Russia’s economic woes:

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In Milan, Germany’s leader strikes the right note on Russian sanctions | Washington Post

Opinion from the Washington Post:

To her credit, Ms. Merkel is staking out a firm position, perhaps because she has spent more time than any other Western leader talking to Mr. Putin about Ukraine. On Monday she said, “There’s a long way to a cease-fire, unfortunately,” and added that Russia would have to respect Ukraine’s territorial integrity “not just on paper” before sanctions could be lifted. That added weight to comments last week by Secretary of State John F. Kerry, who — even as he tried to promote U.S.-Russian cooperation on other issues — said Russia would have to withdraw “heavy equipment” and allow its border with Ukraine “to be properly monitored and secured” to win sanctions relief.

Mr. Putin is unlikely ever to meet those terms. To do so would doom Novorossiya, which can’t survive without military and material support from Russia. As the sanctions bite, he is as liable to escalate his aggression as to offer concessions….

Further escalation is not likely — it’s inevitable. Decisive action now will save much pain later. Read Putin’s Coup, Ben Judah’s piece on how Vladimir Putin has consolidated his hold on power. The parallels with Germany’s NSDAP in the 1930s are chilling — using fear to quell dissent.

Read more at In Milan, Germany’s leader strikes the right note on Russian sanctions | The Washington Post.

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It’s Time To Drive Russia Bankrupt — Again

Interesting view from Louis Woodhill on Forbes:

Over the past 64 years, real gold prices have averaged $544.91/oz in 4Q2013 dollars, and real crude oil prices have averaged $38.85 bbl. This means that an ounce of gold will typically buy about 14 barrels of oil.

If we fully stabilized the dollar today, we could expect gold prices to fall toward $550/oz, and oil prices to fall toward $40.00/bbl. The huge dollar premiums that gold and oil currently command reflect the value that these easy-to-store commodities have as hedges against dollar instability. If we reformed our monetary control system to guarantee the real value of the dollar, we would eliminate this risk. The risk premiums currently enjoyed by oil and gold would then decline toward zero, as the new monetary system gained credibility.

Are the current gold and oil premiums simply a hedge against an unstable dollar?

Read more at It's Time To Drive Russia Bankrupt — Again.

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Anna Politkovskaya & Alexander Litvinenko

https://twitter.com/andersostlund/status/519381785080524801

Alexander Valterovich Litvinenko (1962 – 2006) was a fugitive officer of the Russian FSB secret service who specialised in tackling organised crime. In November 1998, Litvinenko and several other FSB officers publicly accused their superiors of ordering the assassination of the Russian tycoon and oligarch Boris Berezovsky. Litvinenko was arrested twice before fleeing to the United Kingdom where he was granted asylum.

Alexander_Litvinenko

During his time in London, Litvinenko wrote two books, Blowing Up Russia: Terror from Within and Lubyanka Criminal Group, wherein he accused the Russian secret services of staging the Russian apartment bombings and other terrorism acts in an effort to bring Vladimir Putin to power. He also accused Putin of ordering the murder in October 2006 of the Russian journalist Anna Politkovskaya.

On 1 November 2006, Litvinenko suddenly fell ill and was hospitalised in what was established as a case of poisoning by radioactive polonium-210, resulting in his death on 23 November. A British murder investigation pointed to Andrey Lugovoy, a member of Russia’s Federal Protective Service, as the prime suspect. The United Kingdom requested the extradition of Lugovoy, but the request was refused.

Extracted from Wikipedia.

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Ukrainian Soldiers Provide More Evidence of Russian Military Participation in Eastern Ukraine

Matthew Aid reports that captured Ukrainian soldiers offer new evidence of direct Russian military involvement in eastern Ukraine:

Stepping out of a bus on at dusk on Sunday during a prisoner exchange, Alexei Koshelenko said he was captured during heavy fighting on Aug. 24-25 near the town of Ilovaysk, east of the separatist stronghold of Donetsk…..

“We were hit by multiple rocket launcher Grads and after that the troops just swept us away. We were completed defeated within 20 minutes. Many of us were killed, others are missing,” Koshelenko told reporters.”They were Russians,” he said, standing among unshaven and exhausted-looking soldiers being counted before the swap was completed. Referring to a city 300 km 200 miles northeast of Moscow, he said: “They said they were an airborne assault battalion from Kostroma.”

Read more at 2 Ukrainian Soldiers Provide More Evidence of Russian Military Participation in Fighting in the Eastern Ukraine – Matthew Aid.

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Trouble in the East

Expect a continued arm wrestle between Russia and the West over influence in the Ukraine. Russians obviously view their shrinking sphere of influence as a threat to future security. But Vladimir Putin’s actions in Georgia, Moldova, Crimea and the Ukraine — straight from the KGB playbook — are the biggest threat to their security.

A war-weary US and pacifist Europe may be slow to react, but their capacity when provoked to subdue any threat from the East, through their combined economic might, is immense. One should not be fooled by Putin’s macho posturing. He is playing a very weak hand.

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