#2
Kremlin.ru
June 29, 2015
Funeral ceremony for Yevgeny Primakov

Vladimir Putin visited the Hall of Columns at the House of Unions, where a funeral ceremony is taking place for Yevgeny Primakov.

The funeral service for Yevgeny Primakov took place in the church at Novodevichy Convent and was conducted by Patriarch Kirill of Moscow and All Russia. Mr Primakov was buried with military honours at Novodevichy Cemetery.

President of Russia Vladimir Putin: Friends, colleagues,

Today, we are saying farewell to Yevgeny Primakov. In these sorrowful and difficult moments, we realise more than ever what an important figure he was and, looking back over his life, we understand the tremendous value of his wisdom, experience, intellect, moral strength, and flawless professionalism.

He was without a doubt a great citizen of our country. Mr Primakov knew how to resolve difficult tasks calmly, constructively, and, most important, effectively. He achieved the best results in every post he held, as prime minister, as foreign minister, as head of the Foreign Intelligence Service, and as a State Duma deputy. His attitude towards his homeland and ability to resolve tasks and defend the country's interests were an example of genuine patriotism and complete devotion to our Fatherland.

Our people knew and respected Mr Primakov as a prime minister who got the country through a very serious crisis. His sense of responsibility and sensitive and sincere consideration for others left an indelible impression in our hearts. This was who Mr Primakov was - a decent and noble man.

He combined these lofty qualities harmoniously with his status as a prominent scholar and talented diplomat. He made a tremendous contribution to strengthening our contacts with the Middle East countries. His multifaceted international activities drew on his deep knowledge of the outside world, constant analysis of geopolitical issues, and a very rich experience of personal contact with other countries' leaders. This helped to strengthen our country's position, and there is no overestimating the role Mr Primakov had in this.

He had undeniable influence abroad and was always a centre of gravity for many people. Many spoke with him, sought his advice, shared with him their plans and actions. I can say that this applies in full measure to myself too.

Mr Primakov had global vision and was open and bold in his thinking. His position in life, ideas and views are reflected in numerous academic and philosophical works, in the books that he wrote for us and the generations to follow. Mr Primakov always thought about Russia's future, and worked and lived for its development and prosperity.

His loss is a huge sorrow for all us and for the country. We will do all we can to preserve his professional, creative and humanitarian legacy.
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 #3
The National Interest
June 30, 2015
How Yevgeny Primakov's Legacy Lives On
The Ufa 2015 summit is a testament to the late Yevgeny Primakov's lasting geopolitical vision.
By Nikolas K. Gvosdev
Nikolas Gvosdev, a professor of national security studies and a contributing editor at The National Interest, is co-author of Russian Foreign Policy: Vectors, Sectors and Interests (CQ Press, 2013). The views expressed here are his own.

Amidst the headlines blaring the Supreme Court's landmark ruling on gay marriage and the breaking-news coverage of the coordinated ISIS attacks on three continents, the death of Yevgeny M. Primakov understandably slipped through the cracks. Nevertheless, it is important to take a moment to assess his pivotal role in the reshaping of geopolitics in the twenty-first century.

The summit meetings that will be held in the Russian city of Ufa on July 8-9, 2015, between the two emerging organizations channeling the rising power of the non-Western world-the Shanghai Cooperation Organization and the Brazil-Russia-India-China-South Africa (BRICS) forum-are the sprouts of the seeds that Primakov helped to plant in the 1990s. As foreign minister and then as prime minister of Russia in the second Yeltsin administration, Primakov played a major role in reorienting his country's trajectory away from Atlanticism towards what he termed a multipolar approach-one that was premised on the idea that Russia's interests as a great power (and particularly its freedom of action) would be better served by forming a counterbalance to the Euro-American world and particularly its efforts to codify international rules and regulations.

The Russian elite defines a "great power" as a country that does not have to accept the agenda that is defined by others. The initial Atlanticist push westward under Boris Yeltsin's first foreign minister, Andrei Kozyrev, was guided by the hope that Russia would be admitted to the councils of the Western world with real opportunities to shape the agenda-and by shaping the agenda, this was understood not to simply mean a presence at meetings (like the G-8), but the ability to alter U.S. and EU behavior when it touched on matters of importance to Russia or Russian clients.

Primakov believed that Russia could get itself a better deal if it more closely aligned itself with the rising powers who would also be interested in revising elements of the Western order in their favor. Greater coordination among the key non-Western powers would strengthen their bargaining position, especially vis-a-vis Washington. Primakov thus pushed for a new strategic opening to both Beijing and New Delhi, calling for the formation of a Russia-India-China process as a loose association to balance Western predominance in global affairs.

Like the proverbial turtle in its race with the hare, Primakov never pushed for development of this triangle too quickly by jumping the gun in suggesting a binding military alliance. At first, it was merely a series of meetings to share information and search for coordinated positions at international fora like the United Nations. Primakov counted on India and China to suffer their own perceived slights and setbacks with the West, which would strengthen the potential appeal of non-Western coordinated action.

At the same time, Primakov pushed Russia along the path of reconciliation with the Chinese to settle lingering border disputes that had nearly brought Moscow and Beijing to war in 1969, inaugurating the Shanghai process with China and other former Soviet republics. What all of these processes did was begin to habituate the various nations to greater cooperation and coordination. More importantly, these initiatives were not tied up with Primakov as an individual or even with the Yeltsin administration, so after he was relieved of his duties as prime minister, what he had initiated continued to gain momentum. The Shanghai process for border delineation gave birth to the Shanghai Cooperation Organization, and the informal coordination of Russian, Indian and Chinese foreign ministers gradually become more institutionalized and began to take on new members. Today, the BRICS forum is a reality in world politics and is acquiring the building blocks of a defined international organization-including the development of a bank.

Moreover, these new relationships have been critical in blunting the impact of Western sanctions imposed on Russia for its actions in Ukraine. In fact, because the United States in particular has been unable to breech the solidarity of non-Western powers with Moscow to get them to join in efforts to isolate Russia, the Kremlin has been able to hold its position and demonstrate the validity of Primakov's approach. Indeed, as the center of global economic dynamism shifts to the Asia-Pacific, Primakov's vision of Russia sitting at the heart of a greater Eurasian integration takes on new life. Despite political pressure not to attend, the presence of a number of Western CEOs at this year's St. Petersburg Economic Forum testified to their concerns not to lose their foothold in Russia (even if they were hesitant in moving ahead with new, major investments), as the new Silk Road to the east increasingly moves from being a marketing slogan into a concrete reality.

Primakov did not live to see the Ufa summit. The massive gathering of non-Western leaders as summit participants and observers, however, serves as a memorial to his geopolitical vision-and to the challenge it poses to the West's ability to continue to guide the world's development along liberal lines.

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 #4
Russia Beyond the Headlines
www.rbth.ru
June 29, 2015
Russian reaction to same-sex marriage ruling in the USA
On June 26, the U.S. Supreme Court ruled that same-sex marriages were legal on the whole territory of the country. The ruling generated a strong reaction Russia, with some conservative politicians slamming it, while some liberals voiced support for the U.S. and the global LGBT movement. Experts point out that the negative reaction from government representatives could be an attempt to play Russia's "spiritual confrontation" card with the West.
Oleg Yegorov, special to RBTH

Last week's ruling by the U.S. Supreme Court to legalize same-sex marriages made an impression on more than just the American public: users all over the world took to the internet to express their attitude to gay marriages. On Facebook many Russian users updated their profile pictures with a tool putting a rainbow filter over them, in support of making same-sex marriages legal. Debates and arguments soon followed.
 
Critics of gay marriage

In Russia, the discussion spilled over from the internet and became a topic for politicians' comments. Vitaly Milonov, a member of the St Petersburg Legislative Assembly known for his homophobic statements, said in an interview with the Russian News Service radio station that he intended to ask the media-monitoring agency Roskomnadzor to block access to Facebook on Russia's territory. According to Milonov, having launched the tool to put a rainbow filter over profile pictures, Facebook has violated the Russian law banning the promotion of homosexuality among minors.

The Russian Orthodox Church also criticized the ruling by the U.S. Supreme Court. In an interview with the Interfax news agency, a prominent figure inside the church, Archpriest Vsevolod Chaplin, expressed concerns that America was trying to "impose its anti-natural and post-human view of marriage on other countries."
 
A different point of view

Criticism of the gay marriage ruling also came from many conservative commentators, as well as ordinary social network users. However, a different point of view was expressed as well. A large number of Russian internet users supported the Supreme Court ruling.

In particular, politician Leonid Volkov, a representative of the Democratic Coalition (a union of non-parliamentary liberal parties) and a close associate of opposition leader Alexey Navalny, wrote on his Facebook page: "Love is beautiful in all its manifestations, just as hatred is ugly in all of its appearances. Incidentally, I do not share the pessimism of those who say 'not in our lifetime' (will same-sex marriages become legal in Russia - RBTH). In America - which is far more conservative than Russia! - the whole process took about 20 years." Volkov was one of several public figures to put a rainbow filter over their profile picture.

Not all representatives of the authorities are uniform in their attitude to gay marriages either. Senator Konstantin Dobrynin from Arkhangelsk Region told Ekho Moskvy radio station that Russia should seek to reduce the level of aggression towards sexual minorities. He added that it was necessary to find a compromise and that lawmaking should take into account the interests of all Russians, both the LGBT community and conservatives alike.
 
Top-down conservatism

In an interview with RBTH, Valery Solovei, a political analyst and professor at the Moscow State Institute of International Relations, said the significance of this issue was being deliberately hyped up. "There would have been no reaction to that law had there not been an artificial hyping up, had not all media outlets been reporting it," says Solovei.
"This law is becoming a topic of public discussion only because of all this hype. With the exception of a small 'politically obsessed' section of the population, who make up no more than 5-7 percent, this law is of no interest to anybody."

Karina Pipia, a sociologist with the Levada Center polling agency and author of a report on homophobia in Russia, agrees with Solovei that the strong reaction from society, especially its conservative part, to the issue of same-sex marriages was primarily being promoted by the authorities. "Obviously, Russia and Western countries, including the U.S., are currently in a state of political confrontation," Pipia told RBTH.

"Russian politicians are trying to counterpose our 'conservative' values with those of the West, whom they accuse of eroding traditional morals. The general public is responsive to this kind of rhetoric. It is against this backdrop that homophobic sentiments are on the rise."

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 #5
Moscow Times
June 30, 2015
Russians See Western Sanctions as Plot to Weaken Them, Poll Shows
By Anna Dolgov

Two out of three Russians believe that Western governments want to "weaken and humiliate" Russia with their sanctions over the Ukraine crisis, and only 5 percent think the measures are aimed at ending the bloodshed in Ukraine, a new poll indicates.

Nearly half of Russians - 46 percent - believe that Western sanctions are aimed against Russia's population in general, while another 29 percent believe the measures target a "narrow circle of people who are responsible for Russia's policy on Ukraine," and 19 percent believe that Western governments do not care whom the sanctions might hit, a poll released Monday by the independent Levada Center indicated.

After months of rhetoric by Kremlin officials and state-run television channels claiming that Western nations were eager to crush Russia's renewed might, the view seems to be shared by the majority of the population: A total of 66 percent of respondents believe that the sanctions aim to "weaken and humiliate Russia," the poll showed. That figure was however lower than in December last year, when it stood at 72 percent.

Another 21 percent believe the sanctions aim at "restoring the geopolitical balance" that was upset by Russia's annexation of Crimea from Ukraine last year, and only 5 percent said that sanctions were aimed at "stopping the war, destruction and the loss of life in eastern Ukraine," according to the report.

Western governments accuse Russia of fueling the war between pro-Moscow separatists and Kiev government troops in eastern Ukraine. Russia denies accusations of supplying weapons and fighters to the insurgents.

The effect of Western sanctions is being felt at least to some degree by 33 percent of Russians, compared to 16 percent in September 2014, according to the Levada Center poll.

Despite economic troubles, the vast majority of Russians support the annexation of Crimea and believe that Moscow should continue its policies, the poll indicated.

A total of 87 percent of Russians fully or mostly support the annexation, according to the poll. Support for the move had shrunk slightly amid the economic turmoil at the start of this year, when Russians "started to worry about their economic future," but has since recovered, a deputy head of the Levada Center, Alexei Grazhdankin, was quoted by Kommersant newspaper as saying Monday.

A vast majority, or 70 percent, of Russians also believe that their country should "continue its policies, despite the sanctions," while 20 percent would prefer the government to seek a compromise to have the punitive measures rolled back, the report said.

The poll was conducted among 800 adults across the country. The margin of error did not exceed 4.1 percent.

 
#6
Gazeta.ru
June 29, 2015
New Russian blacklist to target more than 20 foreign NGOs - website

Amnesty International, Human Rights Watch and Freedom House may be included on a list of more than 20 non-governmental organizations (NGOs) that could be banned from operating in Russia in the next few months, popular Russian news website Gazeta.ru reported on 29 June.

According to the website, the Federation Council, the upper house of the Russian parliament, is currently drawing up a list of NGOs it believes may be in breach of a controversial new law, signed by President Vladimir Putin in May, which gives the Russian authorities powers to prosecute foreign organizations whose activities are judged to be "undesirable" on grounds of national security. The chamber intends to send the list, described by its initiators as a "patriotic stop list", to the Office of the Prosecutor-General, which, in conjunction with the Russian Foreign Ministry, is responsible for ruling on whether organizations fall foul of the new law. Gazeta.ru quoted sources as saying that the list includes more than 20 NGOs, and could include Amnesty International, Human Rights Watch and Freedom House.

Addressing the Federation Council on 24 June, Konstantin Kosachev, chairman of the chamber's international affairs committee, called on members of the upper house to draw up "a patriotic stop list" of non-Russian NGOs that are "manipulating Russian ideals and society". He named the Soros Foundation, the National Endowment for Democracy, the MacArthur Foundation and the National Democratic Institution as organizations that should be included.

In remarks reported by Russian state news agency RIA Novosti on 29 June, Andrey Klishas, chairman of the Federation Council's committee on constitutional law, said that the chamber had invited representatives of the Russian Foreign Ministry, the Federal Security Service, the Office of the Prosecutor-General and the lower house State Duma to a meeting on 3 July to discuss the list. Following that meeting, a resolution will be drawn up for members of the Federation Council to vote on at a plenary session on 8 July, Klishas added, although he refused to be drawn on the document's precise content. "At the moment, it would be unprofessional and inappropriate to speak about what will be included in the resolution, before the committees hold their discussions and meetings," he said.

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 #7
Russia Direct
www.russia-direct.org
June 26, 2015
Turning Russia into an innovative country is still a challenge
RD Event: In New York, thought leaders on Russian technology and innovation discussed the challenges and prospects facing Russia's innovation sector during a time of economic isolation from the West.
By Pavel Koshkin
 
Amidst the warnings that Russia will face increasing technological challenges, with prolonged sanctions and economic isolation from the West, Russia Direct conducted a panel discussion "Future of Russian Hi-Tech/Science Cities and Innovation," on June 25, in New York, shortly after the release of its new report "Insider's guide to Russian high-tech hubs." The big challenge, said participants, was how to transform Russia's technical expertise and know-how into the types of goods and services that will be competitive globally.

One of the panel speakers, Axel Tillmann, the head of RVC-USA, the U.S. subsidiary of Russian Venture Company, points out that Russia has a number of strong points, including its affinity for research and development (R&D) and a significant talent pipeline in mechanical engineering and mathematics, both of which can contribute to developing innovation.

Likewise, Cathleen Campbell, the CEO of CRDF Global, says that, "One of the greatest strengths that Russia has is brains. The scientists [and entrepreneurs] are wonderful."
 Also read Q&A: "Meet Russia's innovator who brings facial recognition technology to the US"

However, the problem is that Russia doesn't have "any loud success stories" that would be known globally, according to Taras Polischuk, an HR technology expert and an investment professional, a board member for Talent Tech Labs, a New York-based incubator. He believes that what Russia needs now is "more and more success stories."

Campbell and others echo this view. She argues that more scientists and entrepreneurs need to focus on "listening to the market" and sharing their experience. Some technologies are separated from this market and this is the challenge that hampers the successful commercialization of the most innovative ideas.

Indeed, despite the big role of Russia's science and its potential, today it seems to be lagging behind in cultivating high-tech technologies and innovating the economy. Although it's one of the leaders in developing space, defense and nuclear technologies (almost everything that aims at national intimidation), Russia is drastically falling behind in producing consumer technologies such as smartphones, laptops and cars. This was one of the conclusions the audience and speakers came up with as a result of the discussion.

Brain drain is still a challenge

While some participants of the RD discussion-such as Mikhail Kalugin, head of the Economic Section at the Russian Embassy in the U.S-tried to explain Russia's lagging innovation potential with the concept of the international "division of labor," others focused on the underlying reasons why Russia is falling behind. One factor, they say, is the brain drain, spurred by the Kremlin's controversial domestic policies and legislation.

Indeed, the human capital outflow was spurred by the Ukraine crisis and recent events in Russia (the adoption of the "law on undesirables," the relentless search for foreign agents and the so-called "fifth column"). Among those who recently fled Russia are prominent academics and economists (Sergei Guriev, the former rector of New Economic School, and Konstantin Sonin, a professor of the Higher School of Economics).

In addition, entrepreneurs (Pavel Durov, the founder of VKontakte social network, Russia's counterpart of Facebook) and patrons of science such as Boris Zimin, the founder of the non-profit Dynasty Foundation, which fosters science projects and publishes popular natural science literature, have also left the country. After the Foundation was fined and accused of being a foreign agent, it is on the brink of the closure, with its future in limbo and Zimin now living abroad.

When asked about the increasing brain drain and the controversy over the Dynasty Foundation, one of the panel speakers, Nikolay Vasilyev, a staff scientist at the Division of Surgery at Harvard Medical School and a co-founder and current president of the Russian American Science Association, described such a trend as "an alarming example."

Vasilyev argues that such a problem stems from the fact that science in Russia is primarily funded by the government, with no private funds involved in supporting science. He believes private funds should contribute more to science.

"If the government is the only source for Russian science, it is really an alarming practice," he argues. "We have to make sure that private funds are allowed to support science."

According to Vasilyev, some Russian professors are leaving country because they want to work in a foreign university and Russia has to encourage such mobility, and this mobility needs to happen in both directions.

"Not only to allow people to leave the country and work abroad, but also to attract [foreign] professors to Russia," he said, describing such practice as "a two-way road."

Meanwhile, Kalugin point out the importance of a greater role from the government in attracting and keeping Russian and foreign talent in the country.

"Attracting innovation and preventing the brain drain is a bumpy road," said Kalugin. "There are ups and downs. In general, we [the government] try to attract foreigners and keep Russian professors in Russia. And that's why Skolkovo was founded completely from scratch."

Kalugin prefers to focus on the positive experience of Russia's science and innovation sector. In particular, he shares experience of the innovation working group within the U.S.-Russia Presidential Commission that was very active during the reset between two countries.

U.S.-Russia inter-university exchange programs are also a shining example in a time of differences and political standoff. Kalugin mentions the exchange program between Lobachevsky Nizhny Novgorod State University and University of Maryland, which gives an opportunity to Russian young and promising innovators to come to the U.S. for three weeks to work on different start-ups.

Likewise, Campbell points to positive aspects, including U.S.-Russia cooperation in space and the need to foster science diplomacy regardless of politics differences.
"And, fortunately, we see the same sort of mentality and interest among the entrepreneurs," she said, adding that this creates "tremendous opportunities" for future cooperation. "The entrepreneurs we work with- they are so eager to absorb and share knowledge and learn from their colleagues in Russia and around the world."

However, Vasilyev keeps focusing on the problems that affect Russian science and, thus, its innovative potential. These challenges include the deficit of multi-disciplinary science programs in universities, a weak intellectual property legal framework, the lack of "transparent rules" and, again, private funding. Russia's science should be "open to the world," attractive and spark exchange mobility, he argues, adding that "Russian universities should be open and part of global science," like Skoltech.
No innovation without liberation

Meanwhile, Dominique Fache, the administrator of Sophia Antipolis (SA) Foundation, a prominent French technological park, argues that innovation comes out of the everyday world and, as a result, innovators have different approaches for changing societies. And this, according to Fache, often contradicts how things are done in Russia.

"It [innovation revolution] is a very difficult for the Russian society, which is based on vertical and very strong power to go for innovation, because innovation needs what former Russian President Dmitry Medvedev described as raskreposchenie [liberation in English] ," Fache told Russia Direct via skype. "There is no modernization, no innovation without raskreposchenie. And this is not really present in the Russian society. Russian economy is based on big companies which are not ready to innovation, because the rules of the game [in case of innovation] are different. It's not innovation coming from the government."

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 #8
Christian Science Monitor
June 30, 2015
Anti-Americanism provides big boost to Russia's small IT businesses
Russia's economic conditions seem like they couldn't be less hospitable to starting a new company. But small software firms are starting to thrive, in part because of Western sanctions.
By Fred Weir, Correspondent

MOSCOW - At a glance, starting a company amid Russia's perfect economic storm of Western sanctions, bottoming oil prices, and a devalued ruble seems like a bad idea.

But that's what Sergei Sherstobitov did, launching Angara, a small Internet security company, in February. And he thinks the prospects for Russian IT firms such as his are quite good.

His optimism is not due to much-hyped but largely mythical government assistance to small business. Rather, he insists, things are looking up mainly because of a bad news cocktail that includes Western sanctions, a 30 percent devaluation of the ruble, the growth of anti-American sentiment, and burgeoning suspicion toward all foreign digital goods and services in the wake of the Edward Snowden revelations. That has made Russia's IT sector surprisingly fertile ground.

"Every coin has two sides, and it's true that this crisis has tightened the market, there's less money in people's pockets, and the competition has become really fierce," says Mr. Sherstobitov, sitting in his central Moscow office. About a dozen young employees are spread around the casual workplace, hunched over computers or seemingly staring out the windows.

"On the other hand, the market for IT services is really opening up, and people only want Russian goods and expertise - even if the quality isn't quite as good as the Western ones everybody had gotten used to. There are a lot of new niches appearing, and I aim to move in to some of them."

It's not an unusual story. The share of small business and self-employment in the Russian economy is astoundingly low - about 20 percent, compared to up to 70 percent in developed Western economies - but experts say there is a new wave of 30-something entrepreneurs coming up.

"They are people who are not encumbered by the Soviet experience, and they have no illusions," says Nikolai Solabuto, an analyst with FINAM, a Moscow-based investment firm. "They're not looking for fast profits. They know they have to work hard, count their kopeks, and brave a lot of risks. We see a lot of them going into business now, and they are surviving."

Sherstobitov fits that bill. He says he pondered long and hard before giving up his secure job of many years and taking the plunge. "The biggest obstacles for me were internal ones; I had to overcome my self-doubts and prepare myself to accept all the uncertainties," he says. "But it's a chance to own and manage something that's mine. That's already an achievement my parents couldn't dream of. So, whatever else you want to say, that's really a qualitative change in this country."

The limits of Kremlin aid

Barely a day goes by without some top Russian leader declaring that the government must promote small entrepreneurship, slash red tape, provide tax holidays, and encourage "import substitution" to defeat Western sanctions. But most small business people seem hard pressed to name any state program that has actually assisted them.

"There are some programs run by the Moscow government, and even the Central Bank, to help small and medium businesses connect with financing," says Maria Barbakadze, director of Leaders' Lab, an employment agency for professionals. "But it seems that very few businesses know about these programs, or make any use of them."

The complicated process of registering a new business has become easier in recent years, experts say. By July 1, it will be possible to do the whole thing online, says Alexei Darkov, deputy director of Rulex, a consulting firm that provides legal and logistical advice to small businesses.

"Bureaucracy is a machine that changes slowly, but there is a gradual tendency to streamline these procedures," he says. "Now much of the information can be found online, and increasingly you can get things done online. The number of small business startups is definitely on the rise, particularly in the IT sphere."

One thing everyone mentions are the big state-sponsored high technology "incubators," which include the Kremlin-funded international technopark Skolkovo and the Moscow government's huge Technopolis complex, where tax privileges and streamlined bureaucratic procedures are among the benefits extended to nurture high-tech startups. Those advantages may be particularly attractive for foreign firms that find it hard to navigate Russia's business jungle, where the hazards can still include exorbitant rents and capricious landlords, corrupt officials, byzantine paper work, endless state inspections, and the occasional visit from gangsters.

Sherstobitov, whose business would qualify, says he has been mulling the option of moving to one of those protected zones. "I know they do provide some services, and make things easier in general. But so far we're doing fine where we are," with premises in a spacious, modern office complex near Moscow's Victory Park, he says. "I just don't feel any specific urge to move at the moment."

'Fresh energy'

Though the economic crisis and the new emphasis on made-in-Russia solutions may be goosing the domestic IT sector just now, some experts say the basic engine of growth is the global information revolution of recent decades, which is belatedly beginning to penetrate deeply into Russia's economy.

"Over the past couple of years, traditional economic sectors, like construction, banking, and energy have really begun to engage with the Internet," says Sergei Ponomarenko, CEO of Ingenious Systems, a small business consulting firm that bills itself as a "startup factory."

"Our business doubled last year alone, and a lot of it is about businesses adopting Internet-based strategies," he adds.

By next year, Sherstobitov says he wants to start producing his own line of security software that would be designed to protect his clients from targeted attacks. Though he isn't thinking of going up against state-sponsored hackers, such as those who - according to Mr. Snowden - have attacked Russia's leading security firm Kaspersky, there are plenty of other cyber-dangers facing Russian businessmen, and nowadays they want Russian specialists to provide the solutions, he says.

"There are a lot of gaps to be filled, we're still behind the rest of the world," he says. "But a lot of fresh energy is out there; people are developing new technologies and totally new products. It'll take some time to work its way into reality, but come back in two or three years and Russia's IT landscape is going to look completely different."

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 #9
Business New Europe
www.bne.eu
June 29, 2015
Russia's state banks are rotten
Ben Aris in Moscow

Banks epitomise capitalism, but not in Russia. The financial industrial empires of men like JP Morgan, Rockefeller, Rothschild and Harriman are intimately tied up with creating the vibrant no-holds-barred capitalism in the US. In Russia the top five banks are all state-owned and their power comes largely from one man - Russian President Vladimir Putin.

The Russian economy is in recession and most of the important state-owned banks are under sanctions imposed by the US and Europe. Never particularly well run, the current environment means the tide has gone out for Putin's "state capitalism" system and it is apparent that several of these banks were not wearing swimming trunks. As the first quarter reporting season comes to an end, all Russia's large state-owned banks admitted they are struggling.

Russia's state-owned banks (SOBs) have the veneer of real banks. They have the posh offices and an army of men in nice suits. They have trading desks and tight security. But unlike their peers in the West, they also have access to free government money and have to take calls from ministers with a pet project to fund. Thanks to state support none of these banks is likely to go bust, and the implicit state guarantee that they all enjoy (an explicit guarantee in Sberbank's case) gives them a real competitive advantage in the form of a lower cost of borrowing.

But state-directed lending also means they will never be particularly efficient or profitable either, especially in leaner times. It is notable that the bulk of the RUB1 trillion (€16bn) the government has allocated to helping out struggling banks has gone to SOBs and all of it is tied to supporting specific "import substitution" sectors.

Chink in the armour

Russia's banking system has long been considered the weakness in the state capitalism system that Putin has been busy building. The generally underdeveloped nature of Russian banks is precisely why Western sanctions targeted them.

Four of Russia's largest banks (Sberbank, VTB, Gazprombank and Rosselkhozbank, also known as the Russian Agricultural Bank) have been on the US Treasury department's "sectoral sanctions" list for the better part of a year. Officially, the sanctions prohibit "transacting in, providing financing for, or otherwise dealing in" either equity or any debt with a maturity longer than 90 days. Essentially, they cut off Russian banks from the Western financial system, which previously acted as a major source of cheap, long-term funding. Now that all of the 2014 full-year financial reports have been published, we have a chance to survey the damage absorbed by the Russian financial sector. The results aren't pretty.

While Sberbank managed to remain profitable in 2014, VTB's profit for the year was negligible and Gazprombank and Rosselkhozbank actually fell into loss. But headline figures do not adequately describe just how bad the situation has gotten - something that can be gleaned from the performance of the shares in the two listed state banks, Sberbank and VTB.

The shares of both banks have been hammered by the selloff that accompanied Russia's litany of woes in recent years. Of the two, the fall in VTB's shares has been the more dramatic, with its share price down by 61% from the high they hit in 2011, when Russia's economy was sailing along and the banking sector booming. Sberbank's shares are down 32% from the high they posted in 2011.

Charity case

VTB Bank takes the biscuit as the worst offender. It reported a 56% decline in profits in the first quarter year on year that led to a loss of $370mn, after spending massively on charitable projects. That follows on from a terrible 2014 when the bank's return on equity - a key measure of profitability - fell to 0.1% from 11.8% in 2013. The bank reported a profit of a mere RUB800m ($13mn) for the whole of 2014 - lunch money.

Russia's second biggest lender, VTB spent a massive RUB15.5bn ($300mn) on charities while booking losses of RUB5.1bn, according to the business daily Vedomosti. The bank's balance sheet is in such a mess that it has asked the state for a RUB300bn ($5.6bn) bailout - the first state bank to formally ask for help - which is a third of the RUB1 trillion that the government has put aside to help struggling sector.

Accounting is never particularly transparent to outsiders, but looking at banks' financial statements can be especially tricky. Banks are strongly impacted by many factors (such as relative changes in the value of foreign currencies) that don't really give much insight into their "true" profitability. But ultimately, a bank's fundamental business model depends on taking money from depositors and loaning that money out at a higher interest rate.

The graph below shows net income for the four largest state banks that has been adjusted to remove the distortive impact of foreign exchange translations. Additionally, a one-time book gain in VTB's 2014 income statement (RUB99bn from a loan from the deposit insurance authority) has been removed. As should be clear, outside of Sberbank, 2014 was basically a disaster for the other three banks.

VTB spent wildly throughout the worst of last December's crisis, with the bulk of the expenditures on good works being booked in the fourth quarter of 2014. In something of an understatement, VTB CEO Andrei Kostin called the period "one of the most difficult" in the bank's history.

The bank does not disclose who the lucky recipients of its largesse were, but the database of state tenders shows about a third of the spending went on a sponsorship package for football club Dynamo Moscow, which VTB owns, and it is due to spend another RUB4.5bn on the club this year, Vedomosti reported. Another RUB750mn is due to be spent on sponsoring the hockey club Dynamo Moscow, as well as smaller sums on other sports sponsorship deals.

That leaves another RUB10bn of VTB charitable spending unaccounted for, and it is exactly this opaqueness that makes letting state-owned banks rule the roost so dangerous and has earned VTB the title of "Russia worst bank" in some circles.

Retail resilience

The picture at Sberbank, which reported its first-quarter figures only a few days after VTB, is considerably better, even if its results still weren't that great. Profits in the first quarter were down by 19% year on year, which wasn't bad given the battering the Russian economy received in December and was a lot better than analysts had been expecting.

"The difference between the two banks is enormous," says one senior investment bank research officer, who didn't want to be named. "Sberbank has its own problems, but its commitment to corporate governance and transparency is reflected in the way it is run and makes all the difference."

As Russia's biggest retail bank, Sberbank's core business of loaning people money and charging them interest remained profitable and significant. After accounting for provisions, Sberbank's net interest income went from RUB727bn (€11.7bn) in 2013 to RUB658bn in 2014, a less than 10% decrease (in comparison, VTB's net interest income after provisions fell by a whopping 57%).

Provisioning for pain

Still, falling profitability at the state banks is to be expected in the broader context of the crisis that is squeezing the entire financial system. A slowdown in growth and investment, compounded by a currency crisis, has predictably led to a serious deterioration in the loan portfolios of the entire Russian banking sector.

Adjusted for revaluation, the sector's corporate lending growth slowed to 6.4% year on year in April from 7.6% in March, but retail lending - which drove the explosive growth in banking sector assets for years - has completely collapsed. The Central Bank of Russia (CBR) tightened regulations at the start of 2014 to head off an obvious consumer credit bubble that was starting to form. The growth in retail lending contracted again in April, falling to 3.2% from 5.8% in March. What that means in practical terms is the number of loans issued in Russia in the first quarter fell by more than half (58%) compared with the same period in 2014, according to Russia's United Credit Bureau.

However, the decline in loan portfolios has not been uniform across the Russian financial sector. The graph below shows the provisions that banks had to record as a percentage of the net interest income their received in 2013 and 2014. A "provision" is a technical accounting term that basically means the amount that a bank expects it will eventually be unable to collect. So if a bank receives $100 in interest income but its provision is $50, it basically means that the bank thinks that it won't be able to collect on $50 of other loans on which it is eventually due payment. It's an effective proxy for loan portfolio strength. Sberbank was by far the best performer by a substantial margin, while Rosseklhozbank, which finances Russia's farms, was the worst.

As bne IntelliNews has reported, Russia's agricultural sector is struggling as farmers find themselves in a vice between falling grain prices and the rising cost of things like fertilisers. This is putting Rosseklhozbank under even more pressure than its peers. "The Rosseklhozbank loan book is rotten to its core," says one agricultural fund manager, adding that the due diligence the bank makes on loans is not particularly rigorous.

Comparing Sberbank's and VTB's respective provisions: VTB's provisions wiped out 72% of the interest income it received in 2014, while for Sberbank the equivalent figure was only 35%.

At first glance, then, Sberbank's loan portfolio held up much better than VTB's. But digging a little deeper into the weeds and even Sberbank's numbers look a bit iffy too. The bank reports three tiers of assets with Level 1 the best and Level 3 the most risky and illiquid - things like buildings or artworks for which there is no obvious market. The problem is how to assess the value of these questionable loans and assets for the accounts, which are, by definition, "not based on observable market data".

At the end of 2014, Sberbank had RUB25,200bn of all three tiers of assets, of which it disclosed fair values for RUB18,196bn. Of that, RUB16,791bn (or 92%) were Level 3. In other words, the management were free to basically make up any value it liked for two-thirds of its total assets.

Sberbank's liabilities tell a broadly similar (if slightly less extreme) tale. Of the RUB21,660bn of liabilities for which the bank disclosed fair values, fully RUB13,540bn (or 62%) were Level 3. The bank's liabilities, then, were a bit more liquid and predictable than its assets, but there was still a high degree of uncertainty about their value. Exactly the same story is repeated at the other three state banks; directed lending and funding of government-backed projects means all the banks, but especially Rosseklhozbank, have made loans on Level 3 assets that have some value on paper but little in the real world.

None of this is illegal or even particularly unusual to Russia. But what it does mean is that the opacity and subjective nature of the state bank's accounts is an excellent way of sneaking very nasty surprises into the banks' books. That is the certain route to a banking crisis during the next shock. If you wanted to write a novel on how to blow up an emerging market's financial sector, then this is probably the best mechanism you could choose for the plot.

Not much security

In addition to their core business of taking in money and lending it out, modern banks also routinely engage in the proprietary buying, selling and trading of various kinds of securities with their spare cash. As you might expect given the turbulence in Russia's stock and currency markets, 2014 was not terribly kind to this line of business and all Russia's state banks (even the generally well-run and conservative Sberbank) saw a sharp deterioration in the profitability of their investments.

Both Sberbank and VTB have investment banking divisions, but while other banks lost more money on an absolute basis, VTB Capital's relative performance stands out as being particularly bad.

VTB's investment banking arm was set up in the crisis year of 2008 and has sold itself as Russia's leading investment bank. Indeed, it does lead the tables for things like M&A transactions, bond issues and IPOs, but thanks to this emphasis, no other bank saw a more dramatic swing from year to year. At this scale the question doesn't turn on particular investments or individual decisions: it's not as if someone at VTB Capital made a bad stock pick or bought a particularly ill-advised corporate bond. Rather, it was a broad-based deterioration across the bank's entire portfolio.

What now?

With the banks in such a terrible state, the question is what happens now? The CBR's emergency hike in interest rates to 17.5% in December made the cost of capital unaffordable to potential borrowers and while the central bank has reduced the rate several times since then into the low teens, it is still very expensive. Bank's lending business, their main form of income, has collapsed as a result.

So far, the CBR has stepped in to provide funding and seen its share of liabilities rise to 11% of the banking sector's total (in 2008 at the peak of the crisis the CBR accounted for only 3% of total funding). And the lucky few that have access to the state-directed loans are enjoying subsidised loans well below market rates. But the CBR can't keep this up forever.

The Russian economy has been surprisingly robust in the face of Western sanctions and the ruble's collapse, and it could even return to growth by the start of next year, so there is light at the end of the tunnel. If there is a "snap-back", then many loans that were previously impaired could, once again, look profitable. On the other hand, if the outlook for the Russian economy remains bleak, then the situation in the financial sector could spin further out of control.

In the meantime, the non-performing loans (NPLs) ratio is rising in both the corporate and retail banking segments: corporate NPLs surged 50 basis points (bp) month on month in April to 5.4%, the highest level since 2010, while retail NPLs rose at the steady pace set in the last year of 20bp on month to 7.1%. However, neither of these results is at the level where they threaten the stability of the banking sector.

The banking sector's losses are also manageable: the banks reported RUB23bn ($435mn) of net losses in April, but this is tiny compared with total assets of RUB74 trillion rubles ($1.5 trillion) at the beginning of April.

Out of all the results, the really crucial number to watch is the capital adequacy ratio (CAR) of the banking sector - the share of cash that banks hold back to pay out to depositors on demand. Cut off from wholesale funding, Russian banks are being forced to dip into their own capital to make loans and the CAR has fallen steadily from the low 20s to touch a low of 12% in December-January. However, the CBR has been doing its job and the recapitalization of the sector had lifted the CAR back up to around 13% by May. "Overall, it seems that the situation will normalize, in a fashion similar to that seen in 2009," reckons Alfa bank's chief economist, Natalia Orlova. "However, some banks will struggle with funding that is beyond their means, particularly those that offered longer-term deposits during the winter months at the rate peak."

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 #10
Interfax
June 29, 2015
Russia-China pipeline to be largest infrastructure project in world - premier

Russian Prime Minister Dmitriy Medvedev has announced that the Power of Siberia gas pipeline, which is set to run from Russia to China, will be the world's largest infrastructure project, privately-owned Russian news agency Interfax reported on 29 June.

Speaking at a ceremony dedicated to the start of construction of the Chinese part of the pipeline, Medvedev said that a "new phase" had begun in realizing "the largest infrastructure project in the world".

He lauded the "very high level of cooperation" between Russia and China, which, he said, made the Power of Siberia project possible. He added that the pipeline would "significantly broaden" cooperation between the two countries, "not only in the energy sphere, but in related industrial sectors".

The pipeline's construction, the prime minister said, "is going according to schedule".

According to the prime minister, Russia and China plan to cooperate in a wide range of sectors, including atomic energy, the coal industry and the development of new energy sources, Interfax reported later that day.

Medvedev also expressed hope for a speedy agreement with China on the construction of a second gas pipeline, this time along the so-called "Western route", according to a separate Interfax report published the same day.

"I am confident that in the near future we will reach a final agreement on the construction of a second Sino-Russian gas pipeline, for the supply of gas along the 'Western route'," Medvedev said.

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 #11
Reuters
June 29, 2015
Historic Meeting of Pope and Russian Orthodox Head 'Draws Nearer'

ROME - An historic meeting between Pope Francis and Patriarch Kirill of the Russian Orthodox Church is "getting closer every day," a senior Orthodox prelate has said in an interview.

The unprecedented meeting would be a significant step towards healing the 1,000-year-old rift between the Western and Eastern branches of Christianity, which split in the Great Schism of 1054.

"Now such a meeting is getting closer every day but it must be well prepared," Metropolitan Hilarion, the head of the Russian Orthodox Church's foreign relations department, said in an interview on Sunday with Italy's Corriere della Sera newspaper.

He said the meeting between the head of the 1.2 billion-member Roman Catholic Church and the head of Russian Orthodox Church - which counts some 165 million of the world's 250 million Orthodox Christians - would take place in a "neutral" country, not in Moscow or the Vatican. Austria or Hungary were possibilities, he said.

Hilarion, one of the most influential people in world Orthodoxy, said he could not say if the meeting could take place as early as this year, but there was currently "a good dynamic" between the two Churches.

Francis told reporters on the plane returning from a trip to Turkey last year that he had sent word to Kirill that he was willing to meet the Russian patriarch "wherever you want, you call me and I'll come."

The Russian Orthodox Church has accused Catholics of using their new freedoms of religion following the break-up of the Soviet Union in the early 1990s to try to convert people from the Orthodox, a charge the Vatican has denied.

One of the biggest bones of contention is the fate of many church properties that Soviet dictator Josef Stalin confiscated from Eastern Rite Catholics, who worship in an Orthodox rite but owe their allegiance to Rome.

Stalin gave the property to the Russian Orthodox Church but after the fall of communism, Eastern Rite Catholics took back many church properties, mostly in western Ukraine.

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 #12
Russia Beyond the Headlines
www.rbth.ru
June 29, 2015
Press digest: Greek default and its potential impact on Russia
RBTH presents a selection of views from leading Russian media on international events, featuring reports on the impact the unfolding situation in Greece could have on Russia, an update on the unrest in Armenia and the possibility of Montenegro joining NATO.
Darya Lyubinskaya, RBTH

1. How will Greece's default affect Russia?

Greece's talks with its international creditors have ended in failure, the business magazine Expert reports. As a result, it says that the European Central Bank has suspended its program of emergency liquidity assistance to the country's banks. In response, the Greek government introduced controls over capital movement and shut down banks.

Expert points out that this situation will have an impact on all financial markets, in particular foreign exchange ones. It quotes analyst Vladislav Antonov of Alpari Group, a currency exchange broker, as saying that on June 26 the Russian ruble strengthened against the euro. This came on the heels of the news that the Greek government had rejected the rescue plan proposed by its creditors, which had been conditional on Greece carrying out reforms.

On June 30, Greece is due to pay back 1.6 billion euro to the IMF. If it fails to make the payment, IMF Managing Director Christine Lagarde will officially notify that organization's Board, meaning that Greece has defaulted on its debts.

Oleg Shagov, director of the analytical department of the Solid Investment and Financial Company, told Expert that since Western markets are largely closed to Russian companies at the moment, the Greek crisis would have a limited direct impact on the Russian economy.
 
2. Compromise offered in Armenia

The Russian business newspaper RBK Daily reports that President Serzh Sargsyan has offered a compromise to protesters gathered in central Yerevan. President Sargsyan said that he thought it would be wrong to cancel the decision to raise electricity rates. He said that until the audit of the Electric Networks of Armenia company was completed, the government would cover the difference between the new and the old rates from the budget. If the audit concludes that the power grid's demands are unjustified, the president did not rule out the possibility that the company could be nationalized, RBK reports.

"At first, the authorities thought that it would be possible to disperse the young protesters," the paper quotes Manvel Sarkisyan from the Armenian Center of National and Strategic Studies as saying. "However, having realized that it could result in major complications, they have taken a time out. The scale of the protests is too big, so the authorities have opted for a compromise. However, the concessions are such that they could be easily reversed." Sarkisyan went on to say that the latest events show that young protesters not associated with any traditional opposition forces represent a new force on Armenia's social and political scene.

"Civic activists' movements like these require the use of resources from the government and ruling authorities to establish a dialogue with them," political analyst Alexander Markarov told RBK. Markarov believes that these activists, if they themselves do not want to form a political force, could have a serious impact on the balance of power in the next electoral cycle in 2017.
 
3. Next in line for NATO could be Montenegro

The Kommersant business daily reports that NATO has determined that if it does expand, an ideal candidate to join the alliance would be Montenegro. According to opinion polls, last week the number of supporters of joining NATO in Montenegro for the first time exceeded the number of those that are opposed.

"Montenegro is the only non-NATO link in a chain of NATO countries," a source in the country's government circles told Kommersant, explaining the republic's motives. "All of our neighbors on the Adriatic coast are NATO members and we have no other way of ensuring our security. Furthermore, NATO membership is the safest guarantee for investors, on whom we are quite dependent."

Some NATO members are rather reserved in their enthusiasm at the prospect of further expansion, thinking that it may create a new source of tension in relations with Russia, Kommersant continues. However, even with these reservations taken into account, many politicians and experts believe that the small mountainous country's chances of joining NATO are high.

Kommersant's source in the Montenegrin government circles believes that accession to NATO will not spoil the republic's relations with Russia. "First off we have never hid our plans from Russia. Secondly, Moscow is strongly opposed primarily to its neighboring countries joining NATO," the source said. "And lastly, Russia sees a threat in the alliance's military infrastructure approaching its borders, but Montenegro does not plan to deploy bases on its territory."

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 #13
Only concerted efforts will overpower terrorist Islamic State - analysts
By Tamara Zamyatina

MOSCOW, June 29. /TASS/. No single country in the world will be able to cope on its own with the struggle coming from the so-called Islamic State, and only concerted action, including that by Russia and the United States, can overpower that terrorist group, polled experts told TASS.

Last Friday, a string of terrorist attacks in Tunisia, Kuwait, Syria and France shocked the world. At Tunisia's tourist resort of Sousse a gun attack staged by one militant claimed the lives of 39 people and left tens of others injured. Inside a Shiite mosque in the capital of Kuwait a suicide bomber triggered an explosive device to kill 24 people.

The Islamic State claimed responsibility. The IS says it is responsible for the one and half hundred killed in the Syrian city of Kobane. And in Saint Quitin-Fallavier two terrorists attacked a local chemical plant and displayed on the fence the IS flag and the head of the transport company's manager they had killed.

Last Saturday, Russian President Vladimir Putin and his US counterpart Barack Obama held a telephone conversation to discuss the whole range of issues stemming from the dangerous spread of the Islamic State group in the Middle East. Putin and Obama agreed to instruct Russian Foreign Minister Sergey and John Kerry to hold a special meeting to discuss this theme. Lavrov said the meeting would take place in Vienna on Tuesday.

Russian presidential aide Yuri Ushakov said after the presidents' phone contact that "in view of the current extremely dangerous situation it would make sense to forget the past insults, eliminate the existing contradictions and take joint action in the struggle against the Islamic State."

Putin on Monday urged Syria and other countries in the region to unite in the struggle against the Islamic State, while Russia, he said, would be prepared to help establish a dialogue among these countries.

The deputy director of the Russian Academy of Sciences' Institute of US and Canada Studies, Viktor Kremenyuk, believes that the discussion Putin and Obama held over the need for joint struggle against the terrorist Islamic State will have a practical impact. "The United States is taking part in the combat operations against Islamic State militants, while Russia refrains from this. Approaches are different, but Moscow and Washington may start joint struggle against the Islamic State with exchanges of information about the spheres, methods and scale of terrorists' operations in order to resist an upsurge in their activity. Russia will most certainly bring up the issue of the need for promoting a dialogue between the Syrian leadership and the countries involved in the struggle against radical Islamists," Kremenyuk told TASS.

"Against the background of the bloody Ukrainian crisis many countries participating in settlement efforts are expecting that Russia and the United States will find a common language at last and resume cooperation on topical issues on the global agenda, including the struggle against the Islamic State. It is to be hoped that the latest telephone contact between Putin and Obama will have a positive continuation and their conversation ended with a comma, not a full-stop," the analyst said.

A member of the science council at Moscow's Carnegie Center, Alexeyi Malashenko, believes that Putin and Obama sent a message to different governments around the world to the effect the terrorist threat coming from the Islamic State is a global problem that concerns one and all. "Friday's massacres in Tunisia, Kuwait, Syria and France are just the beginning. Washington and Moscow are aware that the United States and Russia will be unable to cope with the problem of radical Islamism on their own. For this reason Putin and Obama, who started the discussion over how to present a common front against the Islamic State with the search for a common political approach have made it clear to all other countries that they are not going to use the IS factor in the struggle against each other, because otherwise the line of confrontation will have to be drawn not across Ukraine, but across the Middle East. And this is extremely dangerous for all," Malashenko told TASS.

"Politicians are aware that airstrikes against the Islamic State alone will not win victory. In the longer term Putin and Obama may instruct their secret services to establish cooperation for the identifying persons who may try to penetrate from the Islamic state-controlled territory into other countries and, the other way round, to keep an eye on potential militants the Islamists have recruited in various parts of the world. In Georgia I've been to just recently, there is real panic very many people are getting attracted by the ideas of a "society of social justice" the IS recruiters propagate. Fears are strong about the Islamic State's ideological expansion in Turkey, Eastern Europe, the North Caucasus and even Crimea. That's a common threat and only joint efforts are capable of eradicating it.

Damascus is prepared to support the idea of an international coalition involving the United States and Turkey for the struggle against the Islamic State, but achieving that is a no easy task, Syria's Foreign Minister Walid Muallem said after Monday's talks with his Russian counterpart Sergey Lavrov in Moscow.

"I am perfectly aware that Russian President Vladimir Putin and Russia have achieved real miracles," he said. "But creating a coalition of Turkey, Saudi Arabia, the United States and Qatar will require a far greater miracle, because these countries have been encouraging terrorism instead of fighting it. Yet we would like to see them take concerted action," he said.

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 #14
Russia Direct
www.russia-direct.org
June 29, 2015
The Armenian protest is not another Maidan
Here are several reasons why the ongoing protests in Armenia should not be seen as another Maidan.
By Sergey Markedonov
Sergey Markedonov is an Associate Professor at Russian State University for the Humanities based in Moscow (Russia). From May 2010 to October 2013, he was a visiting fellow at the Center for Strategic and International Studies (Washington, DC, USA). In April-May 2015 he was a visiting fellow at the Center for Russia and Central Asia Studies, Institute of International Studies (IIS), Fudan University (Shanghai, China)

The recent mass protests in Armenia have focused the attention of both Russian and Western politicians and experts on this country.In the post-Soviet period Armenia was one of Moscow's most loyal allies, not only in the South Caucasus, but across the entire post-Soviet space.

Armenia is a member of the Collective Security Treaty Organization (CSTO) and the Eurasian Economic Union (EEU). In this regard, the outburst of civil activism under the banner of the "No Robbery" movement against the government's social policy is considered by many as nothing short of a challenge to Russia's presence in Armenia and the Transcaucasia region as a whole.

After all, it was the current Armenian leader Serzh Sargsyan who, in September 2013, led his country first into the Customs Union and then the Eurasian integration project. The mass rallies in the center of the capital Yerevan have drawn comparisons with Ukraine's Maidan movement.

The June protests have already been dubbed «Electromaidan», since they were provoked by a hike in electricity tariffs.

Some of the outward signs do present the picture of events as a possible descriptive model. However, a closer look reveals flaws that need to be addressed. It is necessary to unpick a few of the myths about the week-old Armenian protest.

The first myth is that the Yerevan rallies are a carbon-copy of Ukraine's Maidan. Let's start with the fact that in the past quarter century Armenian history is second to none in terms of protest movements. In 1988-1991 the country was shaken by rallies in support of the Armenians of Nagorno-Karabakh. Virtually no presidential election has ever been held in Armenia without "street legitimation." So it was in 1996, 2003 and 2008.

Take the events of the last year as a case study. In January Yerevan saw two rallies by opponents of the new pension reforms, one of which gathered together no fewer than 10,000 people. Similar events also took place in May.

Then in late December Armenians held mass demonstrations against price hikes on goods and the depreciation of the national currency. The protesters demanded a boycott of supermarkets and retail chains belonging to big businessmen with government connections. But they were civil protests.

On top of that, there were opposition marches. On October 24, 2014, for instance, four opposition parties held a rally demanding the resignation of President Serzh Sargsyan.
Dissatisfaction with the authorities was still lingering at the outset of the June events. It was unrelated to geopolitics, and focused instead on domestic issues. As for "Electromaidan," the Russian thread was linked to Inter RAO UES, a Russian energy giant, which requested its Armenian subsidiary Electric Networks of Armenia to raise its tariffs.

However, this does not mean that the protest is first and foremost against Moscow. That is perhaps the case only for a narrow group of journalists, non-governmental activists and experts known for being critical of Russian policy. As in the past three years, they lack the political weight to shape the mood of the protest.

The ideology of Ukraine's Maidan was diffuse, combining a mishmash of anti-corruption, liberal and nationalist slogans. However, the main thrust of the movement was towards Europeanization as the fundamental basis for solving Ukraine's problems. The "flight from Russia" ethos was seen as a means of achieving that cherished goal.

June 2015 in Yerevan was not about searching for geopolitical alternatives. The EU flags caught on camera were, the participants say, an unfortunate coincidence. Interviewees with various media were at pains to dissociate themselves from any pro-Western ideological and political tendency.

In the words of the protesters, it is primarily about improving the quality of governance in the country. Criticism of Russia in that regard is somewhat oblique. The protesters are merely indignant about Moscow's unilateral support for the current government, as well as Russian companies' failure to exercise adequate control over their subsidiaries in Armenia.
The second myth is that all the protest actions are well organized and prepared. It bears repeating that social protest in Armenia has its own traditions. Rallies in Yerevan are not news. And a gathering of several thousand is not difficult to arrange even without the help of the Kremlin or the State Department.

But attention should be paid to the fact that the protest was not led by any of the four opposition parties of Armenia. It sprang from the "No Robbery" civil movement with no deliberate tactics. Some activists were inclined to politicize the protest, while others were generally uninterested in wringing changes in the corridors of power.

The same applies to the talks with the authorities, and the future direction of the protests. At present, the movement has no broad vision of what needs to be done in the social sphere and the economy. In the words of 19th-century Russian writer and essayist Alexander Herzen, activists operate on the principle of "we are not doctors, we are pain."

Looking ahead, much will depend on the authorities. The ball is now in their half of the court. Despite clashing with police on June 23, the protesters have not gone away. On the contrary, their ranks have been bolstered by new recruits.

But it is also true that they did not feed the offensive against the government. And while there are no new clashes, the conflict can still be "routinized," i.e. regulated through negotiations and agreements - and perhaps an adjustment of social policy.

The hope remains that the authorities and street protesters alike understand the potential consequences of a conflagration. Armenia is already involved in the unresolved Nagorno-Karabakh conflict, and any escalation of violence in Armenian society could be exploited by opponents of Yerevan to weaken it.

During the June protests in the Armenian capital many words have sounded about independence and autonomy. Overcoming the current impasse will be a test of Armenia's claim to being a mature independent state in which strategic thinking is more important than short-term tactical gain.

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 #15
Business New Europe
www.bne.eu
June 29, 2015
'Electric Yerevan' protesters settle in for war of attrition with Armenia government
Monica Elena in Yerevan
 
On Marshal Baghramyan Prospect, Andrenik Grigoryan smiles at the young crowd lounging in the shade to escape the heat as Yerevan swelters. His remarkable white moustache and a paling tattoo on his forearm betray the 84-year-old's young spirit.

"They are brave, but this is what we need if we want change, brave young Armenians to stand up for what they believe in," he says laconically, gesturing animatedly while fellow senior citizens nod in agreement.

Now the first flush of excitement and the thousands-strong crowd of protesters has passed, the government and people of Armenia are settling into the next phase: a war of attrition to see who will cave first.

There is no thrilling party among the morning crowd of the so-called Electric Yerevan - the protest that has gripped Armenia's capital for over a week following the government's controversial decision to hike domestic electricity tariffs by 16.7%.

The government has already announced that it will "absorb" the increases until an international audit of the power companies can be organised. "But that is still tax payers' money - our money - being used to pay the bill," says one protester. "We don't want our money wasted in this way."

The government is obviously hoping to take the wind out of the movement's sails in the hope that the protesters will give up and go home. While many left, enough still remain to keep a handhold on media headlines at home and abroad.

 A hard core of protesters remains on the streets, students, children, and older people who lounge, nap, play cards, and draw mandalas on the boiling tarmac of Marshal Baghramyan Prospect, determined to see the stand-off through to the end, and force the government to back down on plans to increase the tariffs for the already impoverished population.

The scorching summer sun may be one reason most of the protestors went home for a break, as well as work and the need to get some rest. At lunchtime on June 29 relatively few demonstrators remained from the thousands still gathered the previous evening, whose smartphones and flashlights dotted like stars the dark thoroughfare after streetlights went off just after midnight. Their banners now rested on the pavement, and hoarse throats waiting to resume after sunset.

June 28 produced a tense evening after recent days that saw riot police with batons and water cannons dispersing the crowds, with arrests of some 240 people on June 23. This time, the government's reaction was to dig in its heels in and order the protesters to clear the streets at dusk, while people anxiously awaited the appearance of the rows of helmeted police with shields. But not wanting to inflame the situation further the authorities stood back and the night wore on peacefully. Electric Yerevan had won the first round, calling the government's bluff and waiting for its next move.

"I've been here from day one, but my parents do not allow me to sleep here overnight," grunts 16-year-old Mary, who did not give her last name. "So I leave at midnight and come back at 9am, there must be people all the time to send a signal: that things must change and there is no place for corruption or monopolies in our Armenia."

Beside her, Paylak, 21, pats her proudly on the back, while his T-shirt does most of his talking for him. It shows Armenian national hero Garegin Ter-Harutyunyan, the nom de guerre of Garegin Nzhdeh, who looks as defiant of today's authorities as he did when in 1921 he challenged the Bolshevik regime and established the independent Republic of Mountainous Armenia.

It didn't last long, but that's not the point: "It's his spirit. He fought for his ideas, like us," Paylak says resolutely.

But for all the talk of moves and regrouping, the protest has now essentially fragmented. The hard core that will spend yet another night sleeping under the stars has dwindled to a few hundred, but the so-called "morning crowd" will be back; those with families and job commitments, who return to swell the numbers in the early evening. Just how determined the crowds are to see this showdown through to the bitter end remains to be seen, but the creative minds of the young Armenians behind Electric Yerevan is already apparent: the appereance in the city centre of a shiny yellow lamp with a prominent middle-finger gesture depicted makes feelings about the proposed electricity hike abundantly clear.

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#16
Irrussianality
https://irrussianality.wordpress.com
June 29, 2015
Spontaneous protests?
By Paul Robinson
aul Robinson is a professor in the Graduate School of Public and International Affairs at the University of Ottawa. He is the author of numerous books and articles on Russian history, military history, military ethics, and international security, and he blogs at www.irrussianality.wordpress.com.

I don't often agree with anything in The Interpreter magazine, an online publication whose content is almost uniformly hostile to Russia and its government, but it has recently had some sensible things to say about the protests in Armenia against electricity price increases. The magazine failed, however, to push its argument through to its logical conclusion, perhaps because doing so would have forced it to reassess some of its own preconceptions. Let me give two examples.

First, The Interpreter cites Russian sociologist Igor Eidman (a cousin of the murdered opposition politician Boris Nemtsov), as saying that members of the Russian government, particularly the so-called siloviki (representatives of the military and security and intelligence services), 'simply cannot imagine that people are capable of protesting against a government of their own free will to seek changes, democracy and so on. In their picture of the world, the special services of competitor countries must stand behind all such events.'

Second, Paul Goble remarks that, 'Many Russian analysts are hurrying to suggest that this week's protests in Yerevan and their suppression by the Armenian government are the opening round of a new Maidan, an anti-Moscow action that is being promoted and exploited by the West as part of a broader geopolitical struggle.' Goble argues that this point of view is mistaken. Viewing the Armenian protests as engineered by the United States could lead Moscow into counter-productive policies, he concludes.

This is all true enough, but it isn't the full story. The phenomenon which The Interpreter describes is not an exclusively Russian one; indeed The Interpreter itself has been guilty of it. For it and many others who oppose the current Russian government and who also oppose the rebellion in Ukraine, have consistently refused to accept that the protests in Donbass which led to the current war were expressions of popular will. They do not accept that the people of Donbass people are 'capable of protesting ... of their own free will.' By contrast, most Russians do accept this, and thus it isn't true that they cannot imagine such a thing. Whether people believe that protests are spontaneous or the product of outside forces depends very much on whether they support the protests in question.

Thus, the Russian government and its supporters regard the Maidan protests in Kiev which led to the overthrow of Ukrainian president Viktor Yanukovich as having been directed by American puppet-masters, whereas they view protests in Donbass as having been spontaneous in nature. The current Ukrainian government sees it the other way around: spontaneous protest at Maidan, and Russian puppet-masters in Donbass.

Both sides are wrong. It is obvious that foreign forces gave encouragement to both sets of protests, but it is naïve to imagine that the diplomats or intelligence services of any country can simply push a few buttons and incite rebellion wherever they wish. Local initiative, pushing from below, is essential in all cases, and is the primary driver of events.

Yet, while refusing to give too much credit to outside agencies, one should also avoid overstating the degree of popular support which underlies such protests. The people who occupied Maidan did not represent Ukraine as a whole; had they done so, there would not now be civil war there. Similarly, the initial demonstrations in Donbass in spring 2014 attracted no more than a few thousand people. Street protests provide a mechanism through which radicals can bypass normal legal procedures. Even if tens of thousands of people participate, they are not democratic in nature.

Overall, therefore, the conspiratorial model which describes mass demonstrations primarily in terms of external intervention is inaccurate, but one should be careful not to idealize such demonstrations as the true voice of the people either.

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 #17
Wall Street Journal
June 30, 2015
Editorial
Putin's Armenia Shock
Protests break out against a Russian ally in the Caucasus.

Ten thousand protesters over the weekend poured into the streets of Yerevan, the capital of Armenia, defying the government's crackdown. Russian-media reactions suggest the Kremlin is nervous, as Armenian President Serzh Sargsyan is a close Moscow ally.

The so-called Electric Yerevan protests erupted this month after the state utilities commission announced a 17% rise in electricity rates, and they have steadily grown. At issue isn't merely the electricity price-hike in a country with 17% unemployment but the Russian domination of the local economy and the corruption and cronyism that are hallmarks of the Kremlin business model.

The local electricity provider, the Armenian Electricity Network, is a subsidiary of Russia's Inter RAO, whose chairman, Igor Sechin, is a close friend of President Vladimir Putin. The protesters allege the company is corrupt, and on Saturday Mr. Sargsyan conceded their demand for an audit. He also suspended the price hike, which was set to begin in August, until the audit is complete.

The Armenian leader and his Russian patrons seem to have grasped the depth of national feeling. The Kremlin over the weekend lent $200 million in military aid to Armenia, which has a long-standing territorial dispute with neighboring Azerbaijan. Moscow also agreed to move the trial of a Russian soldier suspected of murdering an Armenian family in January to an Armenian court.

At stake for Mr. Putin are his military investments in Armenia. Home to some 3,000 troops, the 102nd Military Base in Gyumri, Armenia, is a crucial Russian beachhead in the South Caucasus corridor, without which Moscow can't control the Caspian Sea and Central Asia. Mr. Putin considers the Caucasus part of Russia's imperial domain, and the Kremlin carved out bits of sovereign territory in the region in its 2008 assault on Georgia. Mr. Putin also wants stability in his Eurasian Economic Union, which Armenia joined this year.

The U.S. and Europe should aim to deny further Russian encroachments by encouraging westward steps. But no such determination is in evidence. The European Union last month diluted its commitment to the Eastern Partnership countries, which include the South Caucasus states of Armenia, Azerbaijan and Georgia. By denying such states a clear path to association, Europe pushes them into Mr. Putin's sphere.

The U.S., meanwhile, took a stance on Twitter. "Concerned by tense situation downtown," the U.S. Embassy in Yerevan tweeted over the weekend. "Urge all sides to display peaceful, restrained behavior befitting democratic values." That's nice.

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 #18
Sputnik
June 30, 2015
Perceived Russian Threat to Baltics is 'Raving Nonsense' - Moscow

The Russian government's chief of staff Sergei Ivanov has rejected the idea that Moscow poses a security threat to the Baltic states, saying that talk of Russian military intervention in Estonia, Latvia and Lithuania is "nothing but raving nonsense" amid a build-up of NATO forces in the region.

Referring to the increase in NATO military resources in eastern Europe, and in particular the Baltics, Ivanov told the Financial Times that it was hypocritical for the West to accuse Russia of inflaming tensions.

"I find it funny to hear how Russia is being accused of military aggressiveness," he said.

"There is an expression, 'this is nothing but raving nonsense'. It is a psychological disorder to claim Russia will invade the Baltic States."

Defense Budgets: 'We are Talking About an Elephant and a Pug'

Leaders of the Baltic states have been highly critical of Moscow over what they perceive to be 'Russian aggression' in eastern Europe, with officials publicly saying they view Russia as a threat and are concerned about their national security.

British Secretary of State for Defense Michael Fallon also joined the criticism, accusing Vladimir Putin's government of trying to stir tensions in the Baltics, by appealing to the countries' significant ethnic Russian minorities.

However, Sergei Ivanov said political leaders were seriously overplaying the perceived threat that Russia posed to the Baltics, while saying that Russia's defense budget was a fraction of NATO's.

"This is of course being done consciously by the Baltic States themselves in order to receive money from NATO member states," he said.

"We are talking about an elephant and a pug, a behemoth and a house cat. That is the comparability of our military budgets. We have very different military assets, but the most important question is, why would we do this? Do you seriously think that we want to unleash war with NATO? Are we suicidal?"

Concern Over NATO's European Build-Up

The comments come amid an ongoing build-up of NATO military resources in eastern Europe as the military alliance re-directs its attention eastwards.

Along with large-scale NATO training exercises close to Russia's borders, US officials last week announced that the Baltic states, along with Bulgaria, Romania and Poland will temporarily host heavy weapons, tanks and other forms of artillery as the West steps up it military presence in the region.

The NATO build-up has been viewed as a particularly aggressive step towards Moscow amid the recent tensions between Russia and the West, with fears it may lead to another arms race, following the announcement that Russia would add 40 intercontinental ballistic missiles to its nuclear capacities.

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 #19
www.rt.com
June 30, 2015
Russophrenia - an illness in need of a cure
By Bryan MacDonald
Bryan MacDonald is an Irish writer and commentator focusing on Russia and its hinterlands and international geo-politics.

Russophrenia - a condition where the sufferer believes Russia is both about to collapse, and take over the world. Since 2013, instances of this ailment have reached epidemic-like proportions in certain parts of Washington, London and Brussels.

It's been a grim summer in Ireland so far. The warm sunshine of the previous couple of years is absent, replaced by sticky, humid mist which lends itself to a melancholic air. Hence, thoughts have turned to Russia and memories of balmy June evenings there.

However, when I was actually living in Russia, I got so caught up in the place that I completely forgot how little fellow Westerners know of the country. It frustrated me when I returned to Europe, giddy with enthusiasm for my temporary home, to meet attitudes to Russia that haven't changed much since the Cold War and the days of "reds in the bed."

The reason for this is rather simple. Due to the vast distances involved, Russia is an expensive and time consuming holiday option. From Western Europe, a quick flight down to a Spanish resort is a hell of a lot easier than an, often logistically difficult, trek to Russia. Hence, the mass media are the gatekeepers of sentiment and this is a privilege they've vigorously abused.

This partly explains why the Russian government was so keen to secure the right to host the 2018 World Cup. FIFA's flagship event dominates the global news cycle for a full month. What better advertisement for the revitalized nation than a successful tournament?

Berlin's soccer success

The 2006 renewal, which I attended despite Ireland's disheartening failure to qualify, is frequently cited as having transformed extraneous perceptions of Germany. The hostile stereotype of self-absorbed, arrogant Krauts was exchanged for one of a cool, laid-back bunch of 'funsters'. However, far more importantly, it seemed to profoundly alter German self-awareness. In a few short weeks, I witnessed a 60-year-old cloud lift from the country.

Many anti-Russia activists are well aware of the fairy dust sprinkled on Germany in 2006. That explains why they are so determined to see Russia stripped of the 2018 installment. These diatribes from The Daily Telegraph's Rupert Myers and The Interpreter's Paul Goble are instructive in this regard.

The idea of hundreds of thousands of middle-class soccer fans (predominantly from Europe) mingling with Russians and sojourning in their cities scares anti-Russia activists senseless. For too long they've been the sentinels of coverage in the Western media, collectively blocking writers and broadcasters who stray from the consensus. Currently, practically all corporate and state media in Europe and North America is closed to anyone remotely sympathetic to Russia's position.

Furthermore, most Western correspondents in Moscow are hapless amateurs, selected because they are cheap hires and media outlets just don't have the resources these days to properly staff foreign bureau. Thoughts of real journalists descending on Russia en masse are enough to keep these greenhorns awake at night. Maintaining the lazy narrative the Moscow hack-pack favors won't be so easy when capable professionals form their own opinion of the country.

The harbingers of a false doom

Which brings me to this strange condition I call Russophenia. During the years I lived full-time in Russia, from 2010-2013, something frequently confused me. When reading English-language news about the country, there were an inordinate amount of op-eds and news pieces predicting its imminent collapse. As my time of residence coincided with the most financially prosperous years in the nation's history, this always seemed bizarre.

Here are a few prominent examples from over the years. Anders Aslund, who is still taken seriously as a Russia-analyst by some, predicted the nation would combust back in 1999. Two years later, The Atlantic was drinking the same kool-aid. Julia Ioffe came on board last year with a doom-laden, lengthy tirade. In 2008, this piece by the Guardian's Luke Harding had Russia "close to economic collapse." Harding also claimed (in 2007) that Vladimir Putin was the richest man in Europe.

A year after Harding alleged that Russia's economy was about to croak it, he warned that the Kremlin was launching a "new arms race."

This is classic Russophrenia, believing that Russia is about to threaten the world while on fiscal life-support. Then there's our old friend Ben Judah, who wrote a whole book predicting the demise of Putin's Russia, terming it a "fragile empire." However, last year Judah used the pages of the New York Times to warn that the Kremlin was trying to take over Russia's western borderlands. Later, he misrepresented former Polish Foreign Minister Radoslaw Sikorski in a now-infamous Politico interview, suggesting that Putin had offered a Hitler-Stalin style division of Ukraine to Poland. As it happens, Politico has never corrected that erroneous story.

Harding might be an experienced and dexterous operator, but amateur hacks get in on the act too. Here's Mashable's Christopher Miller celebrating the 'downfall' of the ruble and Russia's wider economy last December with a, frankly disgraceful, set of tweets.

Nevertheless, a few months later Miller was stricken with Russophrenia as he warned of Russia's military dominance in Eastern Europe and the vast sums the Kremlin was allegedly spending in Ukraine.

However, the most famous victim of Russophenia is America's raving mad failed Presidential candidate John McCain. When he's not busy posing with IS fighters, the Arizona senator has a sideline in Russia bashing. Last year, McCain described Russia as a "gas station masquerading as a country." Remarkably, only a few days after his outburst, McCain had compared Putin to Hitler. McCain now occasionally pops up to warn of impending Russian invasions of neighboring lands.

Whenever I mention Russia to an average Dubliner, the usual response is either that Russia is economically devastated or sometimes I get a summary of Kremlin plans to take over Europe. Russophrenia sufferers might have problems with reality, but thanks to a heavily-biased Western media, their influence is both potent and troubling.

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#20
Euromaidan Press
http://euromaidanpress.com
June 29, 2015
Putin regime can't be reformed, only replaced, like its Soviet predecessor, Yakovenko says
By Paul Goble

For several decades before the demise of the Soviet Union, there was an intense debate among both Russian dissidents and Western experts concerning whether the communist system could be reformed, would collapse in the event of any attempt at reform, and would one way or another have to be replaced by something else.

Now that debate has been joined again about Vladimir Putin's regime, with Igor Yakovenko arguing that "regimes like the USSR and Putin's Russia can't be touched or they will fall apart," a parallel suggested by the fact that Putinist rhetoric increasingly resembles that of CPSU leaders at the end of Soviet times.

The Moscow commentator points to a curious conjunction of the events of the last few days - the Armenian protests, Yevgeny Primakov's death, and the campaign to return the statue of Felix Dzerzhinsky to Lubyanka Square [in front of the FSB / former KGB headquarters building. The statue was taken down after the breakup of the USSR and the action symbolized the end of the Soviet totalitarianism at the time.  - Ed.] - to those of the anniversaries of the 19th CPSU Party Conference and the 28th CPSU Party Congress.

Twenty-seven years ago which opened on June 28, 1988, the party conference "put in train the process of the self-liquidation of the CPSU and the disintegration of the USSR," coming as it did only a little more than a year after the January 1987 Central Committee Plenum which called for glasnost, moves toward privatization, and "'new thinking'" in foreign affairs.

That led to the publication of many things that had been banned and to the December 1988 revision of the Soviet constitution to allow competitive elections, something that had not been allowed since 1918 and was "in principle incompatible with the existence of the USSR and CPSU in the form in which these two dinosaurs then existed."

Mikhail Gorbachev thought all these changes were compatible with his continuing to serve as CPSU leader, but events soon proved him wrong: the violence in Alma-Ata and between Armenia and Azerbaijan, the killings in Tbilisi, and the way in which the three Baltic republics got ready "in a businesslike fashion" to reclaim their independence.

In response, Gorbachev and his team, "instead of trying to run this strange machine with the help of an accelerator and breaks, attempted to subordinate everything with the knout and thought up a new arrangement for the leader," combining the head of the party and the presidency in one man, "a completely suicidal decision."

The elections of peoples deputies in 1989 highlighted that reality, returning Boris Yeltsin to the center of politics and "bringing there Sakharov, Yury Afanasyev, Dmitry Likhachev, Yegor Yakovlev, Sobchak, Stankevich and another 250 people who later united into the Inter-Regional Group of Deputies.Their meetings electrified the country.

Those who remember those times or who read the statements of party officials cannot fail to be struck by how their responses to change were quite similar to the statements and responses of people around Putin, Yakovenko says, with those accustomed to having their orders obeyed coming up with the same ideas even though the situation had moved beyond them.

Had Gorbachev not been chosen party leader in 1985, Yakovenko says, and had Romanov or Grishin been chosen instead, "then today the country would live under the power of the latest secretary general of the party." To be sure, the Soviet economy would no longer be second in the world, and possibly "several countries of the Warsaw Pact would have left."

But "it is almost certain that in domestic politics, [that country] would have moved in the direction of North Korea but probably without the extreme features which are part of that remarkable country," Yakovenko says. Thus, the analogy with the Soviet Union of the 1980s and Putin's Russia now.

According to the Moscow commentator, "Putin had a 100 percent chance to die of old age in the office of president of a giant gasoline station." But his decision to set the wheels of empire moving by his talk of 'the Russian world' put in train the process of the self-liquidation of this system.

Having unleashed the imperial self-consciousness of the population, Yakovenko continues, "Putin not only does not want but cannot stop this insanity. He already lacks the powers to stop the war he began in Ukraine, even if he wanted to. He lacks the power to stop the hysteria of hatred in the media."

"Even the referendum on restoring the Dzerzhinsky monument is objectively not useful to the powers that be, because it will inevitably lead to a public discussion about the nature of the current powers and will have to be resolved," Yakovenko continues.

It would be "irresponsible to predict the length of the agony" of Putin's system, the commentator concludes, noting that "the USSR, after the steps incompatible with its existence were taken, suffered on three years. The steps incompatible with the life of Russia were made a year ago."
 

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 #21
Vox.com
June 29, 2015
How World War III became possible
A nuclear conflict with Russia is likelier than you think (excerpt)
by Max Fisher
[Full text of lengthy piece here http://www.vox.com/2015/6/29/8845913/russia-war]

It was in August 2014 that the real danger began, and that we heard the first warnings of war. That month, unmarked Russian troops covertly invaded eastern Ukraine, where the separatist conflict had grown out of its control. The Russian air force began harassing the neighboring Baltic states of Estonia, Latvia, and Lithuania, which are members of NATO. The US pledged that it would uphold its commitment to defend those countries as if they were American soil, and later staged military exercises a few hundred yards from Russia's border.

Both sides came to believe that the other had more drastic intentions. Moscow is convinced the West is bent on isolating, subjugating, or outright destroying Russia. One in three Russians now believe the US may invade. Western nations worry, with reason, that Russia could use the threat of war, or provoke an actual conflict, to fracture NATO and its commitment to defend Eastern Europe. This would break the status quo order that has peacefully unified Europe under Western leadership, and kept out Russian influence, for 25 years.

Fearing the worst of one another, the US and Russia have pledged to go to war, if necessary, to defend their interests in the Eastern European borderlands. They have positioned military forces and conducted chest-thumping exercises, hoping to scare one another down. Putin, warning repeatedly that he would use nuclear weapons in a conflict, began forward-deploying nuclear-capable missiles and bombers.

Europe today looks disturbingly similar to the Europe of just over 100 years ago, on the eve of World War I. It is a tangle of military commitments and defense pledges, some of them unclear and thus easier to trigger. Its leaders have given vague signals for what would and would not lead to war. Its political tensions have become military buildups. Its nations are teetering on an unstable balance of power, barely held together by a Cold War-era alliance that no longer quite applies.

If you take a walk around Washington or a Western European capital today, there is no feeling of looming catastrophe. The threats are too complex, with many moving pieces and overlapping layers of risk adding up to a larger danger that is less obvious. People can be forgiven for not seeing the cloud hanging over them, for feeling that all is well - even as in Eastern Europe they are digging in for war. But this complacency is itself part of the problem, making the threat more difficult to foresee, to manage, or, potentially, to avert.

There is a growing chorus of political analysts, arms control experts, and government officials who are sounding the alarm, trying to call the world's attention to its drift toward disaster. The prospect of a major war, even a nuclear war, in Europe has become thinkable, they warn, even plausible.

What they describe is a threat that combines many of the hair-trigger dangers and world-ending stakes of the Cold War with the volatility and false calm that preceded World War I - a comparison I heard with disturbing frequency.

They described a number of ways that an unwanted but nonetheless major war, like that of 1914, could break out in the Eastern European borderlands. The stakes, they say, could not be higher: the post-World War II peace in Europe, the lives of thousands or millions of Eastern Europeans, or even, in a worst-case scenario that is remote but real, the nuclear devastation of the planet.

I. The warnings: "War is not something that's impossible anymore"

Everyone in Moscow tells you that if you want to understand Russia's foreign policy and its view of its place the world, the person you need to talk to is Fyodor Lukyanov.

Sober and bespectacled, with an academic's short brown beard, Lukyanov speaks with the precision of a political scientist but the occasional guardedness of someone with far greater access than your average analyst.

Widely considered both an influential leader and an unofficial interpreter of Russia's foreign policy establishment, Lukyanov is chief of Russia's most important foreign policy think tank and its most important foreign policy journal, both of which reflect the state and its worldview. He is known to be close to Russian Foreign Minister Sergei Lavrov.

I met Lukyanov around the corner from the looming Foreign Ministry compound (his office is nearby), at a small, bohemian cafe in Moscow that serves French and Israeli food to a room packed with gray suits. He was candid and relaxed. When the discussion turned to the risks of war, he grew dire.

"The atmosphere is a feeling that war is not something that's impossible anymore," Lukyanov told me, describing a growing concern within Moscow's foreign policy elite.

"A question that was absolutely impossible a couple of years ago, whether there might be a war, a real war, is back," he said. "People ask it."

I asked how this had happened. He said that regular Russian people don't desire war, but rather feared it would become necessary to defend against the implacably hostile United States.

"The perception is that somebody would try to undermine Russia as a country that opposes the United States, and then we will need to defend ourselves by military means," he explained.

Such fears, vague but existential, are everywhere in Moscow. Even liberal opposition leaders I met with, pro-Western types who oppose Putin, expressed fears that the US posed an imminent threat to Russia's security.

I had booked my trip to Moscow in December, hoping to get the Russian perspective on what were, at the time, murmurings among a handful of political and arms control analysts that conflict could come to Europe. By the time I arrived in the city, in late April, concerns of an unintended and potentially catastrophic war had grown unsettlingly common.

Lukyanov, pointing to the US and Russian military buildups along Eastern Europe, also worried that an accident or provocation could be misconstrued as a deliberate attack and lead to war.

In the Cold War, he pointed out, both sides had understood this risk and installed political and physical infrastructure - think of the "emergency red phone" - to manage tensions and prevent them from spiraling out of control. That infrastructure is now gone.
 
"All those mechanisms were disrupted or eroded," he said. "That [infrastructure] has been degraded since the end of the Cold War because the common perception is that we don't need it anymore."

That the world does not see the risk of war hanging over it, in other words, makes that risk all the likelier. For most Americans, such predictions sound improbable, even silly. But the dangers are growing every week, as are the warnings.

"One can hear eerie echoes of the events a century ago that produced the catastrophe known as World War I," Harvard professor and longtime Pentagon adviser Graham Allison - one of the graybeards of American foreign policy - wrote in a May cover story for the National Interest, co-authored with Russia analyst Dimitri Simes. Their article, "Russia and America: Stumbling to War," warned that an unwanted, full-scale conflict between the US and Russia was increasingly plausible.

In Washington, the threat feels remote. It does not in Eastern Europe. Baltic nations, fearing war, have already begun preparing for it. So has Sweden: "We see Russian intelligence operations in Sweden - we can't interpret this in any other way - as preparation for military operations against Sweden," a Swedish security official announced in March.

In May, Finland's defense ministry sent letters to 900,000 citizens - one-sixth of the population - telling them to prepare for conscription in case of a "crisis situation." Lithuania has reinstituted military conscription. Poland, in June, appointed a general who would take over as military commander in case of war.

Though Western publics remain blissfully unaware, and Western leaders divided, many of the people tasked with securing Europe are treating conflict as more likely. In late April, NATO and other Western officials gathered in Estonia, a former Soviet republic and NATO member on Russia's border that Western analysts most worry could become ground zero for a major war with Russia.

At the conference, Deputy Secretary General Alexander Vershbow spoke so openly about NATO's efforts to prepare for the possibility of Russia launching a limited nuclear strike in Europe that, according to the journalist Ahmed Rashid, who was in attendance, he had to be repeatedly reminded he was speaking on the record.

One of the scenarios Vershbow said NATO was outlining, according to Rashid's paraphrase, was that Russia could "choose to use a tactical weapon with a small blast range on a European city or a Western tank division."

A few weeks later, the Guardian reported that NATO is considering plans to "upgrade" its nuclear posture in Europe in response to Russia's own nuclear saber-rattling. One proposal: for NATO's military exercises to include more nuclear weapons use, something Russia already does frequently.

II. The gamble: Putin's plan to make Russia great again

Should the warnings prove right, and a major war break out in Europe between Russia and the West, then the story of that war, if anyone is still around to tell it, will begin with Russian President Vladimir Putin trying to solve a problem.

That problem is this: Putin's Russia is weak. It can no longer stand toe to toe with the US. It no longer has Europe divided in a stalemate; rather, it sees the continent as dominated by an ever-encroaching anti-Russian alliance. In the Russian view, the country's weakness leaves it at imminent risk, vulnerable to a hostile West bent on subjugating or outright destroying Russia as it did to Iraq and Libya.

This is made more urgent for Putin by his political problems at home. In 2012, during his reelection, popular protests and accusations of fraud weakened his sense of political legitimacy. The problem worsened with Russia's 2014 economic collapse; Putin's implicit bargain with the Russian people had been that he would deliver economic growth and they would let him erode basic rights. Without the economy, what did he have to offer them?

Putin's answer has been to assert Russian power beyond its actual strength - and, in the process, to recast himself as a national hero guarding against foreign enemies. Without a world-power-class military or economy at his disposal, he is instead wielding confusion and uncertainty - which Soviet leaders rightly avoided as existential dangers - as weapons against the West.

Unable to overtly control Eastern Europe, he has fomented risks and crises in there, sponsoring separatists in Ukraine and conducting dangerous military activity along NATO airspace and coastal borders, giving Russia more leverage there. Reasserting a Russian sphere of influence over Eastern Europe, he apparently believes, will finally give Russia security from the hostile West - and make Russia a great power once more.

Knowing his military is outmatched against the Americans, he is blurring the distinction between war and peace, deploying tactics that exist in, and thus widen, the gray between: militia violence, propaganda, cyberattacks, under a new rubric the Russian military sometimes calls "hybrid war."

Unable to cross America's red lines, Putin is doing his best to muddy them - and, to deter the Americans, muddying his own. Turning otherwise routine diplomatic and military incidents into games of high-stakes chicken favors Russia, he believes, as the West will ultimately yield to his superior will.

To solve the problem of Russia's conventional military weakness, he has dramatically lowered the threshold for when he would use nuclear weapons, hoping to terrify the West such that it will bend to avoid conflict. In public speeches, over and over, he references those weapons and his willingness to use them. He has enshrined, in Russia's official nuclear doctrine, a dangerous idea no Soviet leader ever adopted: that a nuclear war could be winnable.

Putin, having recast himself at home as a national hero standing up to foreign enemies, is more popular than ever. Russia has once more become a shadow hanging over Eastern Europe, feared and only rarely bowed to, but always taken seriously. Many Western Europeans, asked in a poll whether they would defend their own Eastern European allies from a Russian invasion, said no.

Russia's aggression, born of both a desire to reengineer a European order that it views as hostile and a sense of existential weakness that justifies drastic measures, makes it far more willing to accept the dangers of war.

As RAND's F. Stephen Larrabee wrote in one of the increasingly urgent warnings that some analysts are issuing, "The Russia that the United States faces today is more assertive and more unpredictable - and thus, in many ways, more dangerous - than the Russia that the United States confronted during the latter part of the Cold War."

Joseph Nye, the dean of Harvard University's school of government and one of America's most respected international relations scholars, pointed out that Russia's weakness-masking aggression was yet another disturbing parallel to the buildup to World War I.

"Russia seems doomed to continue its decline - an outcome that should be no cause for celebration in the West," Nye wrote in a recent column. "States in decline - think of the Austro-Hungarian Empire in 1914 - tend to become less risk-averse and thus much more dangerous."....

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 #22
Russian Ministry of Foreign Affairs
Senior Russian diplomat gives wide-ranging interview - ministry transcript (excerpt)
Text of report headlined "Interview with Russian Deputy Foreign Minister Sergey Ryabkov with Mezhdunarodnaya Zhizn editor-in-chief Armen Oganesyan, presenter of Sputnik radio's 'Vis-a-Vis With the World' programme, 11 June 2015", published on the Russian Ministry of Foreign Affairs website on 20 June; subheadings inserted editorially:

Question: Sergey Alekseyevich, in recent months the pace of international life has become extremely tense, and has, no doubt, accelerated. What would you single out from this host of events as most important?

Answer: Good day, Armen Garnikovich. I am glad that we meet again. The pace has accelerated - this is beyond question. I have no doubt of this. For us, the most important thing is the continuing consolidation, I insist on this, of Russia's positions in the international arena, despite all attempts to present the matter as if Russia were isolated, as if it were almost lonely - nothing of the sort. We are in demand everywhere, we are influential, and people reckon with us. To take a specific matter - the intense beginning of Russia's chairmanship of BRICS from April. In the two-and-a-half months since then, a number of major events have been held in Russia through the BRICS channel. Moreover, a highly important forum has been held in the sphere of the nonproliferation of nuclear weapons - the review conference in New York, which lasted for one month from the end of April till the end of May. This event occurs once every five years. Well, and, no doubt, the series of very important, packed, and productive contacts at the highest level and at other levels with the leaders of the Latin American states.

Relations with US

Question: Sergey Alekseyevich, seeing that you oversee the American direction in the Foreign Ministry, tell us, what is the reason for such an obvious cooling in Russian-American relations?

Answer: The reasons: The main one is the disapproval of the policies of contemporary Russia by Washington and by the American political elites scattered across the country as a whole - and no less an influence, if not a greater one, is exerted on the frame of mind of politicians in Washington from the West Coast than, I do not know, from New York or from Houston. So then, the disapproval of the US political elite and of that country's leadership of Russia's independent course, of our firm and consistent opposition to the attempts of other countries, led by the United States, to impose behavioural models and value systems. It is possible to cite a large number of examples, and there were also a quite a few in the "pre-Crimean period," let us call it that. I will name only three. First - there is what happened around the unacceptable practice of the American adoption of our children. This was, in many situations, tragic, which led to our reciprocal steps. That is to say, in a certain sense, the war of measures and counter-measures began precisely in this period. Second - the situation in which Edward Snowden, an American special services contractor, made the decision to ask for asylum in the Russian Federation. Of course, the decision to grant him the corresponding status provoked a storm of indignation in Washington, which began, as the saying goes, to "tighten the screws" in the Russian direction. There were many other situations, including regional situations, that added to the coldness in our relations. The culmination - and this is the third example - was the Crimea and Sevastopol. Afterward, relations slid under the ice-hill, but not through our fault. The sanction methods that the US Administration employs are not producing the effect that the latter needs; this, however, is not leading to a modification of the American course; which is why we are where we are. Indeed, the current moment in time is one of the most difficult periods in relations between our countries.

US "exceptionalism"

Question: The administration of President B. Obama, as I recall, was piqued by an article by President V.V. Putin, which was published in the American press, in which he called into question the topic of the exceptionalism of the American nation.

Answer: In this article, the Russian president, if you recall, spelled out an important matter; the truth that God created all men equal. The article ends with this. It proved difficult for the Americans to argue to the point, which is why their emotions got the better of them. It seems to me that Americans allow the conversation about where equality lies, and where the exceptionalism of countries and peoples lies, only among themselves. When people whom they do not think of as equal dare to call American exceptionalism into question, this is perceived as an insult, if not as an affront. The Americans have a system of unwritten taboos, of their own laws of political correctness: who is allowed, and who is not allowed, to express opinions on various topics. We, however, believe that the democratic character of international relations in whose behalf the Russian Federation speaks (I stress, this in no way contradicts concern for sovereignty, the need to ensure non-interference in internal affairs, or our consistent demands for respect to be shown to all the principles of international law) presupposes precisely the freedom to express opinions, including ones that are in some way disagreeable to the Americans. In democratically organized international relations, each person has the right to express his point of view, and should do so. If it hurts someone's feelings, one should not, in our view, lapse into mentoring, into a moralizing tone; it is better to attempt to get to the bottom of the situation.

Incidentally, addressing myself a little to another aspect of our current affairs with the United States, we recently published a commentary on the State Department's report on the fulfilment of international treaties. Some people, for whom the current atmosphere in our relations seems difficult and, perhaps, artificially packed with politicized tenets or enduring phobias, will say that this document, our commentary, is composed on the basis of the principle of "it takes one to know one" or "but in your country they lynch blacks." But this is a primitive simplification of what is happening. For a normal dialogue to develop, for countries to communicate with one another and to arrive at results, it is not necessary to agree with one another all the time. It is thesis and antithesis that produce synthesis. Natural discourse, or call it what you will, consists of a country defending its views, but at the same time, listening to what its opponents are saying. Russia is acting precisely in this way.

Unfortunately, an argument, or even simply a dialogue, about the deep, fundamental questions with regard to how far the United States is "exceptional" and where its "messianism" lies, where it sees its role, and why in the course of decades and centuries an image formed there of their country as a "city on a hill" that lights up everything around it, or as a "beacon of democracy" is difficult for Americans. Question: Does the United States have grounds to suggest that, in certain aspects, it is indeed ahead of other countries? The answer is yes. But this is not a reason to take the next step and to insist that it is better, or, as it is customary to say nowadays, "cooler" than everyone else. It is necessary simply to communicate normally and to look for compromises and common denominators with those who do not believe this. So far, the Americans are not managing to do this very well.

Trade with EU, US

Question: Information has appeared to the effect that after a year of sanctions Russia's trade turnover with the European Union has decreased, but its trade turnover with the United States has grown. How did this manage to come about?

Answer: Unfortunately, we do not have an agreed methodology with the United States for keeping customs statistics. Incidentally, this is one of the "imperfections" of the former period, that we do not even have certain basic framework documents in the economic sphere. The United States' statistics and our statistics differ on this plane. According to our statistics, there is indeed growth, but according to the American statistics, there is a certain decline; but at any rate, an approximate equilibrium, or on the whole, the same level, is apparent. This means two things. First - that American products, including machinery and equipment, are in demand in Russia. Second - that the sanctions introduced against us by the United States last year are organized in such a way as not to impede relatively normal trade development. I am not talking about the entire range of economic relations, only about bilateral trade. We are not against this, we do not want to "shoot ourselves in the foot", and have always said that sanctions are not our path, not our method, not our choice. Therefore if trade is developing despite sanctions and the overall pronounced cooling in bilateral relations, this can only be welcomed.

What is happening in relations with the European Union is a separate question. I think that the current sanctions scheme being used against Russia, which was organized on the initiative of the United States, contains approaches and mechanisms that are inflicting truly greater damage on the Europeans, on European economic operators, than on American operators....

US missiles in Europe

Question: There is talk to the effect that American medium-range missiles could be stationed in Great Britain and other European countries. What is this - as yet hypothetical stovepiping, or real intentions?

Answer: You mentioned Great Britain. I would like to say right away that we are tracking, analysing, and considering very closely everything that the official representatives of NATO countries are saying on this topic, not excluding Great Britain. I wish to remark that the way that the relevant signals of the U.K. foreign secretary were presented in the mass media is the worst example of misrepresentation and distortion, of taking words out of context, and so forth.

Having said this, let me stress right away that I am not thereby "taking under my protection" the policies of Great Britain, the United States, and the NATO countries in the nuclear sphere as a whole and specifically in interpretation of the "semi-threats," let us call them that, that have been addressed to us as regards a possible decision to station on European territory something that is prohibited by the treaty between the USSR and the United States on intermediate-range and shorter-range missiles [INF treaty].

There is the prehistory of this question of recent years. It boils down, to put it briefly, to the fact that the United States is accusing us of actions in breach of the treaty. We deny this and say that, in order to continue the discussion of the topic, we need more information, more data from the United States, with regard to the basis on which they are putting forward these claims. At the same time, for many years - not against the background of the Ukrainian crisis and not in the light of this American stovepiping - we have been saying for many years now, since the eighties, that we do not like, for example, the United States' use of so-called target missiles during test launches of their missile defence system. Target missiles have parameters that come under the treaty. During these launches of target missiles, elements of intermediate-range systems banned by the treaty are perfected. We also have other complaints. In order to continue dialogue, we need an additional "invoice" from the United States. We must hear something from the Americans apart from unfounded allegations. Instead of this, they are starting to say to us: "Ah, so you reject dialogue? Then we will be forced to use military-technical measures to contain Russia." And so, with every new occasion, this screw is tightened another half-turn. Right now, they have begun to hint more plainly at the possible deployment of something in Europe. This is the reflection of a policy that is doomed. It is impossible to reach agreement on such a basis. No one ever negotiates under pressure. We have not withdrawn from the INF treaty, we understand and acknowledge the significance of this treaty. The American claims are unacceptable for us, they are unsubstantiated.

Question: They refer to the placement of our Iskander-type missiles in Kaliningrad.

Answer: Iskander missiles do not come under the range prohibited by the INF treaty, and this has been discussed many times. Incidentally, the same goes for our fairly well-known R-500 missile, which is periodically discussed in specialized publications. The Americans have no pretensions on this subject, or on the other. They talk about some kind of other violations...

Question: ...Without specifically naming them.

Answer: ...They do not give any specifics so that this can be sorted out in a professional manner and a substantive expert dialogue can be held.

G20

Question: The G-20 was an influential format even before now. What is its role against the background of current events in the world?

Answer: I think that it will grow. The Turkish chairmanship of the G-20 in the current year, and especially the Chinese chairmanship - in view of the nature of our relations with the PRC - next year will create a pretty good basis for this. We have no illusions; generally speaking, we go along with the magnitude of any format in which we participate. We believe that a game in many registers and participation in various structures is indeed the X-factor for guaranteeing Russia's interests and influence on the decisions that are adopted. In the CSTO [Collective Security Treaty Organization] we concern ourselves mainly with one group of countries, in the G-20 with another group, at East Asia summits, with a third group, and in BRICS, with a fourth group. And all these are mutually complementary processes. The G-20 is a non-politicized format. It has retained the hallmarks of an informal association and the character of an anti-crisis instrument. It was engendered as a format for reacting to the difficult crisis of 2008-9 and partly remains as such. But I draw your attention to the fact that certain decisions being elaborated in the G-20 are being realized with difficulty. This refers, in particular, to the reform of the Bretton Wood institutions - the international institutions in the sphere of finances and financial regulation that have existed since the immediate post-war period. The IMF demands reforms, and BRICS has negotiated on this within its circle. The appropriate decisions have been adopted in the G-20. We will continue to work on this. I think that the infusion of the G-20 format with a political agenda as well will become inevitable - maybe not now, but in time. In the past, the G-8 become a purely political platform, because all the economics were essentially transferred to the G-20. Right now, the G-7, so I understand, is a mostly political format. I read the declaration of the G-7's summit in Elmau. It is interesting, it is curious. But there is no pepper, no salt. You can leaf through a few pages and go on your way....

Iran sanctions

Question: As is well known, Russia assisted from the diplomatic point of view the achievement of a preliminary accord between Iran and the Western countries on lifting sanctions in exchange for the absolute transparency of the Iranian nuclear programme. Your mediatory activity is also notable. Will the lifting of the sanctions on Iran not negatively affect the Russian economy, however?

Answer: There are two aspects here. The first - I proceed on the basis that it is better to participate in a process that affects us in a direct way than not to participate in it. Without our participation, I suspect, the deal being prepared with Iran would be worse from the point of view of Russia's interests than it is with our participation. Not by way of self-advertisement, but simply such is life.

Second - we already have the groundbreaking and historic accords, as US President B. Obama described this, of 2 April in Lausanne. These are indeed serious accords that have laid the basis for an agreement that, I hope, will be successfully elaborated by 30 June. But let us look at the quoted prices of oil. What, did they collapse after 2 April? Let us look at how much needs to be invested in Iran's infrastructure before the Iranians increase the volumes of deliveries to external markets to "pre-sanctions" levels.

In general, the world hydrocarbon market, as I understand it, has become extremely volatile and excessively dependent on psychological factors, on panic on the stock exchanges, on the expectation of something. In addition, this market depends to a far greater extent nowadays on non-traditional suppliers, once again, on the United States, which is single-mindedly increasing supplies of shale oil and beginning to move towards export deliveries of gas, of liquefied gas, to the world markets. It is necessary to look at the volumes: Who, how much, of what. If Iran, let us say, adds a million barrels a day, given the global consumption of 97-98 million barrels, how does this influence the quoted prices? I do not know, but at the same time, I am confident that the lifting, and to begin with, the easing, of the sanctions regime, including the removal of the arms embargo as a priority measure after the conclusion of the agreement, will exert a positive influence in a direct way on the opportunities of Russian suppliers in these spheres. So that everything is relative.

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#23
http://milakovsky.livejournal.com
June 29, 2015
Evgeny Shibalov: "They denounce those they cannot defend...just like 70 years ago"
By Brian Milakovsky
Brian Milakovsky, a volunteer with refugee aid organizations in Kiev, Kharkiv and the Donbas. Brian Milakovsky first traveled to Ukraine in 2009 with the Fulbright program, and for the past five years has worked in Russia as a forest ecologist. This year he returned to eastern Ukraine for three months to volunteer with refugee aid organizations and learn more about the humanitarian crisis there. He blogs about this experience at http://milakovsky.livejournal.com/ and is author of "Time for a Lousy Peace in Ukraine" published on the National Interest.

One of the best sources on the humanitarian and social crisis in the Donbas is Evgeny Shibalov, a Donetsk journalist and volunteer. He is one of the founders of "Otvetstvennie Grazhdane" (Responsible Citizens), which provides humanitarian assistance across separatist-controlled Donbas while openly holding a pro-unity position. He, like many of his colleagues in Responsible Citizens, remains in Donetsk.

Shibalov provides some of the best commentary on how many policies of the Ukrainian government are deepening the divide between the Donbas and the rest of the country. In particularly he highlights a strain of angry, pitiless patriotism that inclines some Ukrainians to harsh punitive policies towards the Donbas. As Shibalov points out in the text below, that attitude often has its roots in frustration and helplessness.

Several weeks ago Shibalov wrote a post on his Facebook page that has had significant resonance in Ukraine. After some delay I got around to translating it. Here's the original (in Ukrainian) [https://www.facebook.com/evgenii.shibalov/posts/765000143618789?comment_tracking=%7B%22tn%22%3A%22O%22%7D&pnref=story], and here's my translation:

    During the Second World War millions of Soviet citizens fell under German occupation.

    The Soviet government could not protect these people.

     And so the Soviet authorities «harshly and justly»... punished them.

     Everyone who remained on occupied territory was declared a traitor.

     Many of them later passed into filtration camps, concentration camps and work camps.

     These people remained deprived of their rights until the end of their lives. Especially for them a lower status was created in Soviet identity papers.

    «Engaged»Soviet citizens took every opportunity to denounce these «traitors»in the pages of Pravda and Izvestiya.

    Today the Ukrainian government is acting in the same way. It has deprived those people that it cannot defend of their rights. Of their rights to free movement, to welfare, to choice of their place of residence, against self-incrimination, etc.

    «Engaged» Ukrainian citizens, just like 70 years ago, passionately defend the «party and government line» on the pages of Facebook and on TV.

    A rhetorical question: does anyone really believe that «de-Communization» is when you re-name the streets?

--------------------------------

A few weeks later, on the first day of the blockade, Shibalov wrote the following text [https://www.facebook.com/evgenii.shibalov/posts/770560546396082?pnref=story]. When reading his direct, angry challenge to his fellow Ukrainians (in which he pointedly references Euromaidan), remember what he is doing today for  a united Ukraine. And keep in mind that he was one of the participants in the pro-unity demonstrations in Donetsk in May, 2014, when the DNR was already in control, for which he was beaten bloody (see below). In short, these are not the words of a Kremlin troll, but of an agonized patriot.

Here's my translation:

     There are already multiple confirmations: from today on no buses will be allowed through the line of contact.

     People will have to cover the distance between the line of contact and the "zero km" roadblock on foot, if some kind soul in a car doesn't pick them up. There they can board a bus.

    To orient you, here are the actual distances [line of contact to zero km roadblock]:

    Volnovakha-Novotroitskoe - 19.8 km
    Artemovsk-Mayorsk - 30 km.

    The temperature outside is 27 C. For the past few days it was 32 C.

   I can't stop asking myself the question: how did a country which purportedly had a Revolution of DIGNITY sink to such debasement of its own citizens?

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 #24
Catholic Relief Services
www.crs.org
June 29, 2015
Ukraine's Unseen Crisis: Mass Civilian Displacement
By Rebekah Kates Lemke and Nikki Gamer

1,325,200: the number of internally displaced people in Ukraine.

This is not a story about numbers, though, or even conflict. It's a story about people. And about people who need your help.

"We're not doing enough. This has been viewed primarily as a political conflict in the news," says Erik Heinonen, CRS Ukraine program manager. "The humanitarian catastrophe has not really been talked about or covered: 1.3 million people have left their homes behind and everything they had."

The stories of these families are similar: they fled their homes with few belongings. And they're now competing for the same resources and jobs in an economy that was depressed even before the conflict.

"People are having to lower their expectations to simply meet basic needs, if they can manage that. And that's hard for people to do," Heinonen says. "They have the disadvantage of arriving in cities and not knowing the place or the people. In Ukraine, connections are very important."

Caritas Ukraine has provided humanitarian assistance to more than 50,000 conflict-affected people, and will support another 30,000 during the remainder of 2015. In the past month, Catholic Relief Services and Caritas Ukraine have opened six child-friendly spaces to support trauma counseling for up to 500 children.

"These are kids who hid in bomb shelters, who have seen and heard gunfire," says Heinonen. "What we're doing is much closer to creating preschools, kindergartens and after-school programs. One goal is to help kids integrate into new communities, to create normalcy and stability in their lives."

But while the need is there, the resources are not. Only midway through the project, CRS and Caritas have already provided cash grants to the targeted number of families. Another 1,000 beneficiary families have been identified, and CRS is trying to close the gap.

"Much more could be done for [people] in Ukraine if we had more resources. Because of the very limited funding available, we and other relief agencies have had to target only the most vulnerable families," says Kevin Hartigan, regional director for Europe, the Middle East and Central Asia. "The Ukrainians have been extremely generous in hosting and helping their compatriots, but the country is in a deep financial crisis and we cannot rely on local solidarity to help this many people."

With the escalation in fighting and the expectation that the situation will deteriorate further during the summer months, CRS is relying on you.

With your help, we can continue providing emergency food, water, living and shelter supplies to families-and help them get back to work so they can support their families. "We're hearing the things we're hoping to hear," Heinonen says. "Children are happy, and parents have a little bit of space and flexibility in their lives." Space and flexibility that will help them rebuild their families' livelihoods-and lives.

Find out more about our work in Ukraine and how you can help.

Rebekah Kates Lemke is CRS' Web producer. Nikki Gamer is CRS' communications officer for Europe, the Middle East and Central Asia. They are based in Baltimore, Maryland.

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 #25
United Nations Office for the Coordination of Humanitarian Affairs
www.unocha.org
June 29, 2015
Five things you need to know about the crisis in Ukraine

"We can make a difference ... but we do need to get the funds," said UN Resident Coordinator Neal Walker on Friday at a New York Headquarters Briefing on the Humanitarian Situation in the country, co-chaired by Ambassador Yuriy Sergeyev, Permanent Representative of Ukraine to the United Nations.

Access remains a major challenge in certain non-government controlled areas, which compromised and impedes the delivery of humanitarian aid.

With no political solution in sight, and the number of people fleeing their homes continuing to rise, the situation is dire.

Here are the 5 things you need to know about the crisis in eastern Ukraine right now:

1. Human cost:
Violence in the Ukraine has killed 6,500 people in the past year, wounded 16,000 and left 5 million people in need of humanitarian aid.

2. Water:
Access to water remains a critical issue for many civilians, with up to 500,000 people with poor or no access to water. This increases the risk of water-borne disease outbreaks, especially as temperatures are rising.

3. Displaced people:
With more than 1.3 million registered IDPs, Ukraine has now the ninth largest number of internally displaced in the world, according to the Internal Displacement Monitoring Centre.

4. Peace and reconciliation are the only solutions to this crisis:
Aid agencies in Ukraine are committed to helping all those in need, but there must be a peaceful political solution to this crisis before it becomes even worse.

5. Health:
Life in the embattled provinces of eastern Ukraine is also precarious from a healthcare standpoint as services are increasingly curtailed due to lack of medicine and medical equipment. Yet the UN and its partners have still been able to provide basic health services, including health kits for 2.6 million people and vaccinations for 30,000 people.

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 #26
Ukraine Today
June 28, 2015
UT Exclusive: Ukraine's snipers - the deadliest men in the country's hybrid war with Russia
[Video here http://uatoday.tv/politics/ukrainian-snipers-who-are-the-country-rsquo-s-deadliest-soldiers-447001.html]

Ukraine Today goes undercover to tell their story

Ukraine Today goes undercover to meet the snipers training to become Ukraine's deadliest men. They hope that their contribution can be decisive, as the Ukrainian military continues to fight Russian-backed militants in the east of the country.

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 #27
Luhansk reports Ukrainian army's use of forbidden weapons

LUHANSK. June 30 (Interfax) - The Ukrainian army has shelled the territory of the self-proclaimed Luhansk People's Republic (LPR) twelve times in the past four days, using armaments and hardware prohibited by the Minsk agreements, deputy chief of staff of the LPR militia corps Col. Igor Yashchenko has said.

"Violations of the Minsk agreements by the Ukrainian Armed Forces are ongoing. In the past four days, populated localities of the republic have come under twelve attacks of the Ukrainian army. Moreover, the Ukrainian army is using means of war and armaments directly prohibited by the Minsk agreements," Yashchenko said at a press briefing in Luhansk.

"In the aforementioned period, over 25 rounds were fired from 120mm mortars. There was also fire from anti-tank grenade launchers, 25 shots in all, and over 30 shots fired from automatic grenade launchers. Combat infantry vehicles fired 35 shells on a dacha area near the Prince Igor Monument in the vicinity of Stanitsa Luhanska. Over 40 rounds were fired from an 82mm mortar," the deputy chief of staff said.

In his words, Pervomaisk, dacha areas near Stanitsa Luhanska and the towns of Zhelobok, Holubivske, Zhovte, Vesela Hora and Rayevka were most frequent targets of the attacks.

An LPR militiaman was wounded in overnight shelling in Pervomaisk.

The Luhansk information center earlier reported an overnight artillery attack of Ukrainian servicemen on Pervomaisk, as a result of which the entire town had a blackout.

"Army bombardments damaged gas pipeline facilities in Pervomaisk and, unfortunately, wounded one serviceman of the people's militia," Yashchenko said at a press briefing in Luhansk.

In his words, the degree of damage done by the shelling was being verified.

Yashchenko said that militia units were not responding to provocations of the Ukrainian army and abstained from taking active measures. "But we are warning that we are prepared to defend our independence if necessary," he said.

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 #28
Ukraine will need seven years plus referendum to join NATO - Poroshenko

ROME, June 30. /TASS/. Ukraine's accession to NATO is not the issue of the day yet, because it will take 6-7 years to meet all the mandatory requirements, its president, Petro Poroshenko, said in an interview published by the daily Corriere della Sera.

"We have been working on a fundamental reform of the country in economic, social and administrative terms. It will take at least 6-7 years of hard work (to meet NATO membership criteria). When we are ready, a referendum will be declared to ask the people of Ukraine whether we should join the North Atlantic Alliance," Poroshenko said, adding that in his opinion "there is no other system in the world but NATO that is capable of ensuring security."

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 #29
LPR leader says Kiev has over 75,000 servicemen in conflict zone in Donbas

MOSCOW, June 29. /TASS/. Kiev has a grouping of 75,000 servicemen in the conflict zone in Donbas, head of the self-proclaimed Luhansk People's Republic (LPR) Igor Plotnitsky told a briefing at LuhanskInformCenter on Monday.

"Judging by what [Ukrainian President] Petro Alexeyevich [Poroshenko] was proudly saying not long ago, the grouping now has more than 60,000 servicemen. However he shyly withheld information about those 'private battalions' that are deployed here," he said. "So, the Ukrainian grouping here is likely to exceed 75,000."

On Friday, June 26, Ukrainian President Petro Poroshenko said Kiev troops in Donbas amounted to 60,000.

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 #30
Business New Europe
www.bne.eu
June 30, 2015
Ukraine's default ducks are all in a row
Ben Aris in Moscow

Ukraine has lined up all the ducks it needs to successfully default on its privately held bonds. Ukrainian Finance Minister Natalie Jaresko indicated she wanted to meet with both the IMF and the ad hoc committee of private creditors in Washington before or on June 30. But alas, a statement issued by her ministry admits that no talks with the committee had ever actually been started. Jaresko herself then appeared to put the icing on the default-cake scenario, signalling that no decisive meeting was likely: "I have repeatedly stated my desire to meet with the Creditors Committee & enter into direct negotiations," she tweeted.

And so it come down to the wire of a self-imposed June 30 deadline Kyiv set itself to cut a deal to reduce the size of the outstanding principle, and absolutely nothing has happened. A default now looks inevitable after the creditors said they see no need for the 40% 'haircut' on the bonds Kyiv has been pushing, with the IMF behind it.

Most of the "negotiations" between the two sides so far have been conducted through reports in the press and a flurry of letters, periodic recriminations, and no indication that either camp will back down.

Hedging big bets

Five international hedge funds on the committee hold about $10bn of Ukraine's debt from a total of $17.3bn in sovereign Eurobonds and $31.4bn in domestic debt. US fund Franklin Templeton owns the largest single chunk of about $6.5bn and chairs the committee.

A key part of the IMF demand for a haircut is for Ukraine to reduce its debt to GDP ratio to 71% in 2020 - considered to be a sustainable level that would allow the economy to recover. In absolute terms, that means paring the country's debt to $56.1bn from about $74.9bn as of the end of March, of which some $5bn needs to be cut off the debt coming due this year. "Since it's impossible to extract $18.8bn from the servicing of these two types of debt (the average coupon income is 7.1%), principal reductions are a must," Concorde Capital said in a note earlier this month.

The bondholders are obviously unhappy with this. Franklin Templeton has countered that a maturity extension and a deferral of interest payments would be a better option. It has also suggested that Ukraine use part of its IMF loans to pay off part of the debt. The committee maintains that the proposed haircut demanded by Kyiv would result in the country losing access to international capital markets for years and rule out a quick return to financial health, which could well be true.

Time has almost run out and the sides seem as far apart as at the start of the process. "In addition, and despite previous statements to the contrary, the proposals by the ad hoc Creditors Committee do not meet the three criteria agreed with the IMF," the Finacne Ministry statement said. "That proposal includes utilizing $8bn from the international reserves of the National Bank of Ukraine for no consideration. This measure has been strongly rejected by the IMF in their statement of 12 June 2015."

Can't pay, won't pay

As things stand, Ukraine in on course to become a failed state. Without the haircut (or a default) there is no way that Jaresko can finance budget spending or reduce the debt to GDP ratio to 71%.

"Ukraine is unable to service debts generated over past three years. The total amount required to service the external debt, in fact, is equal to our military spending which makes up 5% of the country's GDP," Ukrainian Prime Minister Arseny Yatsenyuk said on June 25.

Ukraine went into the Euromaidan protests at the start of 2014 with a very healthy debt to GDP ratio on the order of a bit more than 30%. However, the level of debt has soared in the subsequent 18 months. Ukraine state debt inched again by 0.5% in May to hit 87.9% of GDP and is on course to hit over 90% by the end of this year.

The Maastricht criteria for joining the EU limits debt to GDP levels to 60%, which is considered a comfortable level. In the meantime, most EU countries have seen their debt balloon to at least 90%, which is considered to already in the flashing red light zone on the edge of sustainable, and several are well beyond even this level.

Already up to its neck in hock, Ukraine plans to borrow even more, as with only two months of import cover of hard currency in reserves it simply doesn't have enough money to function and start the process of recovery.

"We anticipate [Ukraine will borrow another] $5bn from the IMF, €1.2bn from the EU and UAH1.8bn from the World Bank by the end of 2015," Alexander Paraschiy, head of research at Concorde Capital said in a note on June 28. "At the same time, we will have to pay back $0.8bn to the IMF and nearly $4.3bn on Eurobonds (which are subject to maturity extension). All in all, assuming no debt restructuring in 2015, we expect the state debt to approach the UAH1.7 trillion level, which is 91.7% of GDP, by the year end."

If it looks like a duck...

The clock has been running down for months and given that Jaresko has had no talks with the creditors at all it must have been increasingly clear that default was coming. Both Kyiv and IMF have been actively preparing - just in case.

In June, the Ukrainian parliament, the Verkhovna Rada, passed a set of laws that would allow the Finance Ministry to halt interest payments on bonds, unilaterally giving itself the ability to impose a "technical default" - ie Kyiv would take the same route as Russia did on its Eurobonds and ruble-denominated GKO bonds in 1998, where the government doesn't refuse to pay back the money, just suspends payments for several years.

Another piece in the puzzle was the IMF's admission that the $3bn bond owed to Russia's sovereign wealth fund was an "official" debt rather than a "private" debt on June 23. The distinction is important as under the IMF's own rules it can lend to countries that default on private debt but can't to a country that defaults on official debt, or money lent to them by International Financial Institutions (IFIs) or other governments.

There has been a lot of discussion over the status of the Russian debt, as clearly Kyiv didn't want to pay it off. It has even been suggested that this bond, issued by the former Ukrainian President Viktor Yanukovych's government in December 2014, is "odious debt," ie a debt imposed specifically to cause harm to a borrower or exert control over the debtor, which under international law doesn't have to be repaid - something that still could happen. However, Kyiv dodged the bullet for the meantime by paying off a $75mn coupon on the Russian bond earlier in June as scheduled. It seems that the IMF was afraid of a nasty legal battle with the Kremlin if it repudiated the official status of the Russian-held bond - a fight it was unlikely to win.

Finally, the IMF bought some extra insurance by saying earlier this month that even if Ukraine does default and even if legal battles are started, the fund can continue to lend to Ukraine under its "lending into arrears" policy that was first adopted in 1989.

Lending into arrears was introduced precisely so debt holders couldn't use the IMF's ability to provide assistance as leverage against debtor countries. So Ukrainian bondholders, especially the funds managed by Templeton's Michael Hasenstab, should be more malleable if the IMF keeps pumping money into that country, even if it makes good on its threat to declare a moratorium on private debt payments. There would be no deadline for a debt deal and Ukraine has an official sanction to default at will.

Everything now seems to depend on the meetings or absence of meetings in Washington around June 30, Ukraine's emerging 'D-Day', which may yet decipher either as deliverance or default day for the country's finances. Jaresko is reportedly being represented at some consultations with both creditors and IMF by the Ukrainian government's Commissioner for Public Debt Management Vitaliy Lisovenko.

A last-minute deal is not out of the question after so much prolonged brinkmanship. The June 30 date was Kyiv's own, after all, and some are saying that if the creditors suddenly want to thrash out a solution in person, Jaresko can still hop on a plane to Washington. But given the "we tried" statements and tweets fanning out across the spectrum, the bets are increasingly on Kyiv putting the 'D' in default.

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 #31
Russia softens Ukraine gas price stance ahead of talks
By Katya Golubkova

MOSCOW, June 29 (Reuters) - Russia proposes keeping the gas price for Ukraine unchanged in the third quarter, Prime Minister Dmitry Medvedev said on Monday, a day before Russia's energy minister goes to Vienna for gas talks.

"Despite all the difficulties in our current relations with Ukraine, we should within reason make concessions," Medvedev told Energy Minister Alexander Novak and Gazprom Chief Executive Alexei Miller.

Gazprom had said Ukraine would be charged $287 per 1,000 cubic metres with no discount in the third quarter. That compares to the $247 charged in the second quarter, including a discount of $100 per 1,000 cubic metres.

Russia, Ukraine and the European Commission are meeting on June 30 to discuss gas supplies, the day a winter price deal expires.

Europe gets around a third of its gas needs from Russia and around a half of that comes via Ukraine. Moscow is under Western sanctions for its role in the crisis there, although the Kremlin denies Western accusations it has supporting the rebels with weapons and troops.

Medvedev said that Russia would offer Ukraine a discount of $40 per 1,000 cubic metres of gas in the third quarter and that Russian gas supplies to Europe depend on Ukraine as a transit country.

Gazprom stopped pumping gas to Ukraine during price disputes in the winters of 2005-2006 and 2008-2009, leading to reduced supplies in European countries that receive Russian gas via pipelines that cross Ukraine.

"We cherish (our) reputation as a reliable gas supplier... This (gas discount) is a serious measure to support the Ukrainian economy," Medvedev said.

Gazprom had announced plans to try to bypass Ukraine as a transit country and has said it would redirect flows to the yet-to-be-built Turkish Stream pipeline after its current transit agreement with Kiev expires in 2019.

Gazprom has offered to build pipeline extensions to Europe from a new gas hub on the Turkish-Greek border on their own. Europe supports an alternative gas supply route from Azerbaijan.

But last week, Miller said that Gazprom was rethinking plans to stop transporting gas to Europe via Ukraine after 2019.

"The idea of stopping gas flows via Ukraine after 2019 does not correspond with reality either in terms of costs for new pipelines or in investments needed to upgrade Ukraine's gas pipeline system," a European diplomatic source told Reuters.

"It will be a huge blow to Gazprom's reputation worldwide and with the EU in particular if it terminates supplies via Ukraine."

The diplomatic source said there could be discussions on Ukrainian gas transit - which contributes to the country's budget - in Vienna but that it was not high on the agenda.

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 #32
Kyiv Post
June 30, 2015
Partisans' arrest divides opinion on role of unofficial fighters
By Veronika Melkozerova

The May arrests of pro-Ukrainian partisans on charges of possessing illegal firearms and committing armed robbery has stirred serious debate. Many see such units as lawless and dangerous, and should be brought under control. Others, including many politicians, believe that their service to the country during a time when the military has been chronically weak is critical to success in Russia's war against Ukraine.

On May 8, police arrested three members of the Ravlyk brigade in the village of Yevhenivka in Donetsk Oblast.

Vyacheslav Abroskin, the local Interior Ministry head, wrote on his Facebook page that the suspects were caught on Ukrainian-controlled territory with eight Kalashnikov rifles, five rocket-propelled grenades, two pistols and about 2,000 rounds of ammunition and five kilograms of explosives. The charges could lead to a sentence of 12 years behind bars, although the men have since been released on bail. The next court date has not been set yet.

Their supporters quickly rallied to their defense.

A Free Ravlyk movement was formed which included 10 members of Parliament. They said that the arrested Ravlyk members - Bohdan Chaban, Oleksandr Kriukov and Borys Ovcharov - have been betrayed, despite having fought for Ukraine against Russian-backed separatist forces.

Lawmaker Semen Semenchenko, affiliated with the volunteer Donbas Battalion, is among the 10 members of Parliament who signed a petition to release the pro-Ukrainian fighters. Semenchenko commented on his personal experience of fighting alongside Bohdan Chaban before adding that he"is tired of all the mud, which is constantly pouring on the heads of volunteer soldiers."

Hipster on the battlefield

Before the Russia-instigated war, Chaban was the owner of the Izba-Chitalnya café in Donetsk. Viktoria Fedotova, also part of the "Free Ravlyk" movement, said the partisans were previously volunteer soldiers.

Chaban joined the Shahktarsk Battalion in September.

"After the battle of Ilovaisk, in order for his presence at the front to be officially recognized, he moved to the Ivano-Frankivsk Battalion of the Interior Ministry" said Fedotova, referring to the August massacre at Ilovaisk, one of the most decisive defeats for Ukrainian military.

However,the battalion was left to operate in the peaceful western Ukrainian region, and Chaban went to the front by himself seeking active service.

Under the microscope

Ilya Kiva, the deputy chief of the Interior Ministry of Mariupol, stood up for the squad, arguing that their detention happened after they informed him that they had discovered an armory on the territory of a farm. Kiva advised the group to record photo evidence of the find and call the official authorities.

"In 40 minutes they called me again. All the calls are in my phone, it is easy to check," Kiva added.

His superior, Abroskin, maintains a less favorable assessment, saying,"the streets are not the law and the war doesn't hide all crimes."

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 #33
The Daily Telegraph (UK)
June 30, 2015
Ukraine's 'history laws' purge it of communist symbols but divide the population
Lionising nationalists and removing Soviet monuments helps protect Ukraine from Russian aggression, supporters say - but others see praise for Nazi collaborators and an assault on the past
By Tom Parfitt, Lviv, Kiev and Zaporizhia

Almost blind and 82 years old, Yury Shukhevych leans heavily on a stick topped with an ornamental axe-head. "It's a Hutsul axe from the Carpathians," he says, with an impish smile. "You could cleave a head in two with this."

His stooped body and eyes squeezed almost shut do not suggest much of a warrior, but Mr Shukheyvch has pedigree. His father, Roman, was the head of the Ukrainian Insurgent Army (UPA), a nationalist group that fought both the Germans and the Soviets during the Second World War, collaborating for a time with the Nazis.

For some in Ukraine, members of the UPA were heroic freedom fighters who resisted all intruders in an attempt to preserve a national homeland. But for others in this deeply divided country of 45 million people, they were traitorous fascists, bent on mass murder and ethnic cleansing.

Now the argument is being stirred anew after Petro Poroshenko, Ukraine's president, approved a series of controversial new "history laws" last month. Under one law, Ukraine is to be purged of communist symbols, including hundreds of statues of Vladimir Lenin. Under another, UPA veterans - and other 20th century "fighters for Ukrainian independence" - acquire a special status, making it illegal to express "public contempt" towards them or deny the legitimacy of their struggle.

The contentious laws feed into a wider battle for identity and survival as government troops fight pro-Russian separatists in the eastern Donbas region, where a ceasefire is disintegrating.

'Let the Russians not tell us who are our heroes'
 
Mr Shukhevych, an MP with the nationalist Radical Party since October, drafted the law on freedom fighters. He says his father and comrades resisted Moscow's dominance and as a result were subjected to a Soviet - and now Russian - smear campaign.

"Let the Russians not tell us who are our heroes," he says. Fighting together with the Germans against Soviet forces during the war was a temporary and pragmatic move for Ukrainian nationalists, Mr Shukhevych adds, and they did not sympathise with Nazi ideas.

"This is all Russian propaganda," he says. "The Ukrainian people were denied their right to independence. How can this be? This is the legal right of every nation. We know of many nations that have fought for their independence, including in Europe. Lithuania, Latvia, Estonia, Finland. Serbia against Bulgaria; Poland fought in the 19th century. Byron fought for the independence of Greece. So to deny the legitimacy of Ukraine's struggle is illegal."

Introducing the new legislation protecting the UPA drew a predictably frothing response from Russia, where Ukraine's government is derided as a "fascist junta". But it has also provoked disquiet in the West.

Ethnic cleansing

A group of 70 scholars on Ukraine appealed to Mr Poroshenko to call off the "history laws", saying they would stifle debate and make it "a crime to question the legitimacy of an organisation (UPA) that slaughtered tens of thousands of Poles in one of the most heinous acts of ethnic cleansing in the history of Ukraine".

The UPA was established as a guerrilla group in 1942. The previous year, Roman Shukhevych and other Ukrainian nationalists had formed the Nachtigall and Roland battalions under German command to support the Nazi invasion of the Soviet Union.

Members of the Organisation of Ukrainian Nationalists (OUN) and UPA, its military wing, massacred between 60,000 and 100,000 Poles in Volhynia and Galicia, and also helped kill Jews, according to historians.

While the Communists were its main enemy, the UPA later turned on the Nazis too after Adolf Hitler failed to support the establishment of a Ukrainian state. The partisans continued to fight Soviet rule for several years after the war had ended.

A place of pilgrimage

Mr Shukhevych met the Telegraph in the former safe-house where his fugitive father hid and was finally assassinated in 1950 by agents of the MGB, predecessor of the KGB.

The house, on the edge of Lviv in western Ukraine, a nationalist stronghold, is now a museum and a place of pilgrimage. It was set up after the Soviet collapse in 1991 and funded by the descendants of UPA members who had fled to the US after the war.

Visitors come to see Roman Shukhevych's wartime uniforms and a mock-up of a partisans' forest bunker. In one wall of the house is a bullet-hole; left, it is said, when the UPA leader fired a final shot from his revolver as he was struck down by an MGB machine-gun volley. The shot was to warn his assistant to swallow a cyanide capsule.

"We get a lot of men from the army and the volunteer battalions visiting before they go off to fight in Donbas," says Volodymyr Karanda, the museum's director, referring to the war against Moscow-backed rebels in eastern Ukraine, which has claimed more than 6,400 lives since April last year. "For them it's an example of how to fight for one's motherland even against uneven odds, an inspiration."

Mr Karanda does not deny that the UPA murdered civilians in the 1940s, but he questions the scale of the killings and says they took place at the time of a ruthless, internecine conflict.

Mr Shukhevych, sitting at a table a few steps from where his father was shot, adds: "I don't justify everything that was done. But we can also talk of tragedies." The Poles killed many Ukrainians and destroyed churches, he said, while the Soviets slaughtered, deported and imprisoned millions.

'Lenin is a man with blood on his hands'

Besides giving status to the UPA, Mr Poroshenko's new "history laws" make it a crime to deny the "criminal nature" of both the Nazi regime and the "communist totalitarian regime of 1917-1991 in Ukraine". Using their symbols is also banned - meaning that over the next year communist monuments will be pulled down, street names changed and souvenirs prohibited.

The aim is to "tear up the link with our Soviet past" says Mr Shukhevych, who spent more than 30 years in Soviet prisons and penal colonies because of his father. "We must understand that Lenin is a man with blood on his hands, a symbol of an anti-human system. He can be left in a museum but not on our streets."

In Kiev, Ukraine's capital, many see the new laws as part of an existential struggle in the face of Russian aggression.

Oleg Sinyakevich serves in the OUN Battalion, a volunteer unit which adopted its name from the wartime nationalist group. Last year he fought against Moscow-backed separatists around Donetsk airport.

UPA veterans are unfairly maligned as Hitler supporters, he says. During the Second World War, they "did not go to fight in Poland, or in Russia, or in Belarus. We did not go anywhere, we were in our own land. The fascists invaded, then the communists, then the fascists again. We fought the aggressor.

"It's just the same now. Russia attacked us. Russia kills people, burns them alive, tells horror tales about us and then calls us fascists. Where's the logic?"

Some say the laws make hero-worship compulsory

The "de-communisation law" was drafted by Ukraine's Institute of National Memory, headed by Volodymyr Vyatrovych. He believes the uprising in Kiev last year which led to the ousting of Viktor Yanukovych, the president, was an "anti-Soviet" one.

"It is extremely important for Ukraine to have given a legal evaluation to the crimes of the communist period and to move away from that totalitarian past."

Other former states of the USSR or Soviet bloc - like Poland or the Baltics - went through that process long ago and are now on an "irreversible" democratic path, says Mr Vyatrovych. "By contrast, in Belarus, especially in Russia and until recently in Ukraine, the failure to condemn the past has resulted in its gradual rehabilitation."

The result, he says, was the hardline governments of Vladimir Putin and Mr Yanukovych, bringing censorship, political repression, and a fondness for calling Joseph Stalin "an effective manager" rather than a tyrant.

Yet some feel the history laws themselves veer towards intolerance.

Mikhail Pogrebinsky, a political analyst, says they are the initiative of a "party of victors" around Mr Poroshenko, who are unwilling to counter other points of view inside Ukraine, especially in the Russophone east.

"Glorifying UPA might be understandable if the country was only 'Little Ukraine' in the west and Kiev. But only about a third of the population supports the Russophobic, nationalistic viewpoint, and when they impose their will on the rest then I see a mass of problems ahead."

The de-communisation law is an unnecessary "stupidity" that will only drive Donbas further away, Mr Pogrebinsky added, even as Kiev tries to claw it back from the separatists and Russia's embrace.

Andrew Wilson, author of Ukraine Crisis, says one problem with the legislation is that it is "so prescriptive" and makes hero-worship compulsory. "The most controversial is OUN-UPA. Some people say they were heroes, some people say they were Nazis. The reality is that most of them were were locals just defending their local territories. But they did bad things, they did good things. You can't say they were all heroes."

Soviet lives

For many in Ukraine, Mr Wilson says, the anti-communist law jars because Lenin is less a political symbol than a reminder of lived experience, and "they don't want that entire Soviet part of their lives dismissed".

Inevitably, opposition to the history laws is strongest in Donbas, where the Moscow-backed rebels cherish their links to the communist past, recalling the relative prosperity of this coal-mining region. In the rebels' eyes, members of the Kiev government are "Banderovites" - a reference to Stepan Bandera, another Ukrainian nationalist who dallied with the Nazis. With a distinctly Soviet ring, the rebels call their separatist territories "People's Republics".

By contrast, in Ukrainian government-controlled territory demonstrators have already torn down scores of Lenin statues, Yet hundreds more remain across the country and in many places there is deep ambivalence over the Bolshevik leader's future. There, his likeness lives on - for now.

One such spot is the city of Zaporizhia on a bottleneck in the Dnieper River in southern Ukraine. Zaporizhia is known for its Lenin Hydroelectric Power Plant, its Lenin Avenue - one of the longest avenues in Europe - and its 66ft tall Lenin monument, erected in 1964.

At least twice since last year activists have gathered by the imposing statue to discuss his toppling. Other residents quickly surrounded Lenin to protect him. As a compromise, a crane was used to put a traditional embroidered Ukrainian shirt over his torso. It was later removed.

Oleksandr Sin, the city's mayor, says that more than 70 per cent of townsfolk are against removing Lenin. Reluctantly, he has decided to comply with the law, and hopes to rebrand the city by replacing him with a statue of a 17th century Cossack leader. Soviet street names will also get Cossack replacements.

Denis Bushtets, 36, a Zaporozhiya resident, says he is against the plan. A former advertising manager, he now volunteers to deliver pork fat and other food supplies to Ukrainian troops at the front. "I'm a patriot but I don't want Lenin to go," he tells the Telegraph. "People think we'll take him down and - 'bang' - we're all Europeans and all the holes in the roads get filled. It doesn't work like that. It's the mentality you need to change."

Goodbye Lenin, hello Superman

The Zaporozhia Lenin statue stands at the end of Lenin Avenue, his arm raised towards the huge sweep of the dam which he conceived and which was built not long after his death in 1924.

"I want him to stay, he's part of our landscape, our history," says Valentina, a hotel receptionist who works nearby. "My grandmother came here in the 1930s to help build the hydro-electric plant. I visited Lenin on trips as a Pioneer and my girlfriends all had their wedding pictures taken next to him.

"Taking him down and changing all the communist street names will cost a lot of money. The country is at war and the economy is falling apart. Let's feed people first."

Yury Barannik does not agree. An artist, he is curator of the ironically named Lenin modern art gallery on a street corner by the statue.

"Lenin was a criminal, he wrote orders for executions," he says. "If there was debate and people of the communist generation repented and admitted they were wrong then perhaps we could do without a law to remove all this. But they won't."

To ease the process of getting rid of Lenin Mr Barannik has been holding workshops where students sketch alternatives for his vacated square: a swimming pool, a concert hall, a Superman statue and a marble toilet.

At the hydro-electric plant, Viktor Kucher, its general director, is tight lipped. Inside the turbine hall, a large socialist-realist painting shows senior Bolsheviks opening the dam in 1932.

As a state enterprise, the plant would comply with the new laws and remove its Lenin nameplate and hammer and sickle emblems from the doors if ordered to do so, he says.

Leading the Telegraph on a two-hour excursion of the dam, Mr Kucher preferred to talk about the squirrels and pheasants in its 43-hectare grounds rather than the politics of the past.

"Any change means upset," he says.

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 #34
World Affairs
www.worldaffairsjournal.org
June 29, 2015
Ukraine's Bumpy Road to Normalcy
By Alexander Motyl
ALEXANDER J. MOTYL is professor of political science at Rutgers University-Newark, as well as a writer and painter.

The most striking thing about Lviv, Kyiv, and a number of small towns and villages I've recently visited is their normalcy. Walk down the streets or dirt roads and you'd never think Ukraine's economy is depressed and that the country is at war. A village church I visit is full of people dressed in their Sunday best. Lviv's cafes are packed. Kyiv's main drag, the Khreshchatyk, is as fashionable as before Russia's onslaught.

But that's just the outward appearance. Talk to people and their current or impending economic travails-inflation, stagnant wages, corruption, and the growing cost of gas and electricity-quickly come to the fore. Talk a little longer and the war in the east soon becomes a topic of conversation.

The appearance of normalcy is both a façade and a coping mechanism. People know full well that times are hard and that soldiers are dying-usually one or two a day, sometimes up to four or five a day. They know that Vladimir Putin and his proxies are threatening to unleash a devastating war against Ukraine and kill thousands more.

Ukrainians seek to live as normally as possible, as if all were well. In their memoirs, Soviet gulag inmates claimed to do the same, trying to recreate some semblance of everyday familiarity in their otherwise dreadful lives. A friend tells me he only reads the good news. Another focuses all her attention on her grandchildren. A villager worries about the tomatoes she's planted.

"The war has forced our ambivalent elite to consider genuine reform," says a political analyst in Kyiv. "If it hadn't been for Putin's invasion of Crimea and the Donbas, the Maidan would probably have ended with a return to the status quo ante."

"Putin as the promoter of Ukraine's reforms?" I say. "Putin as Ukraine's nation builder?"

"Exactly," my interlocutor smiles. "But we still have a long way to go. True, Russian speakers have now been integrated into the nation, but the language question still remains. It's just been bracketed for the time being. The problem is that Russian speakers still don't get that Ukrainian speakers also have rights. They assume everyone should naturally prefer Russian."

I witnessed an example of this mind-set the day before. A friend and I went to a popular Kyiv coffee shop. She asked the young boy serving us to speak Ukrainian. When asked politely, wait staff invariably switch to Ukrainian. This one refused. "Why?" she asked. "Can't you speak Ukrainian?" "I can," he responded, "but I won't."

His behavior strikes me as incomprehensible. If addressed in English, he'd probably respond in broken English. Address him in an "inferior" tongue, however, and he'll refuse to use it, even though he knows how. I know the comparison is overdrawn, but I can't help think of what blacks must have experienced when they were refused service in the Jim Crow South.

What mystifies me, however, is why some kid should make such a big deal of language use. "In America," I explain to him afterwards, "waiters try to adapt to clients' cultural and linguistic preferences because they know that'll get them a bigger tip." "Sorry," he says-in Russian.

Almost everyone in Ukraine believes that absolutely nothing has changed in the last year. The "absence of reform" has become a mantra. The pervasiveness of the view is understandable. People's lives have gotten worse, and may get even worse before they start to improve. The press has become freer and reports constantly on official malfeasance, creating the impression that corruption is on the rise. The war in the Donbas looks like it's going to be permanent. And the government has poorly communicated its intentions-thereby underscoring Ukrainians' innate mistrust of the authorities.

A journalist points to Mikheil Saakashvili's "brilliant" image-building in Odessa Province, which, as its newly appointed governor, he's promised to clean up. Georgia's former president has even taken to using public transport to commute to work. Why doesn't Ukraine's president, Petro Poroshenko, occasionally visit some popular eatery and have a plate of potato pierogis with the common folk? I ask. "Good question," she says.

A businessman in Lviv tells me things are changing. "They're not demanding bribes as brazenly as before," he says. "The fear of getting caught or exposed in the media seems to be having some effect." Local budgets are also being increased, and the result is much-needed repairs to Ukraine's awful roads. A resident of a dreadfully depressed Western Ukrainian town notes that one of its pockmarked roads is finally being fixed.

People's patience is wearing thin, or so they say. Reforms have taken place-in education, in law enforcement, in the army, and in the economy-but their immediate effect on people's lives has been either insignificant or negative. A radical decentralization of authority and budgets is in the works, but it won't be fully complete for another two years.

A university administrator in Lviv tells me that "Poroshenko could be ousted by the end of the year, especially as winter approaches and people find they have no money to pay their bills." In contrast, the Kyiv-based analyst doesn't expect a third Maidan. "There'll be localized demonstrations, but there's none of the deep moral outrage that led to the Orange and Euro revolutions."

"For all its faults, the current government is nothing like the Yanukovych regime," an American journalist tells me, speaking of the previous government. "We could easily trace the lines of theft and corruption under [Viktor] Yanukovych. There's no evidence of anything like that at present."

An article in the Ukrainian-language weekly Tyzhden notes that, when it comes to the economy, people believe either that "all is lost" or that "we've won." In fact, the author argues, both claims are true. Macroeconomically, Ukraine is on the way to recovery. Microeconomically-which is where the average citizen lives-life has gotten harder.

That dialectic is evident in all aspects of Ukrainian life.

Ukraine is changing, rapidly and significantly-partly as a result of the Maidan revolution, partly as a result of Putin's mad war, partly as a result of pressure from Ukrainian civil society, partly as a result of pressure from the West, and partly as a result of the efforts of Ukraine's "ambivalent" elites.

But change is always disruptive, even, or especially, if its ultimate effect is positive. And change is always viewed as either insufficient or excessive.

The griping in Ukraine will continue. The elites will continue to move the country in the right direction-too slowly for some, too quickly for others. In about a year or two, I'm betting Ukraine won't just look normal. It'll actually be normal.

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 #35
US-Russia.org
June 27, 2015
Ukraine: Who Invaded Who?
By William Dunkerley
William Dunkerley is author of Ukraine in the Crosshairs. He is a media business analyst, principal of William Dunkerley Publishing Consultants, and a Senior Fellow at the American University in Moscow.

Why did Kyiv invade the Donbass region? To that question you might respond quizzically: who did WHAT? Everyone knows it was Russia that invaded Ukraine, right?

Not only that, but Russia isn't going to stop in Crimea and Eastern Ukraine. We all know of Putin's aggressive territorial ambitions. He wants to recreate the Soviet Union, right?

If you have no personal knowledge of these facts, you can take it from President Barack Obama. Recently he issued a warning at the June 7 summit of the G7. He admonished the world to "stay vigilant and stay focused on the importance of upholding the principles of territorial integrity" regarding Ukraine.

Obama explained that Putin is "in pursuit of a wrong-headed desire to recreate the glories of the Soviet empire."

However, the president failed to disclose how he knows that Putin has territorial conquest on the agenda. Putin denies it. How do we know who's right?

The rhetoric of Obama about Ukraine reminds me of the commonly-accepted version of the 2008 war between Russia and Georgia. Reportage then was replete with unsubstantiated allegations, too. Typical headlines exclaimed "Russia Invades Georgia." Territorial expansion was in the news. President Mikheil Saakashvili was out in front bemoaning the tragedy that was inflicted upon his country.

That's what set me comparing the ongoing Ukrainian crisis with what happened in Georgia. Despite the assertive headlines, Georgia was another case where reliable facts were hard to find. There were a lot of confident allegations, but few hard facts on the Georgian side of the story.

It came down to a question of who shot first. The Russian counter-version of the story claimed the Georgians started the conflict and that Russia was merely being reactive. The Russian argument was greeted with quite a lot of disbelief.

Later, however, a multinational EU fact-finding mission issued a report that blamed Georgia for the war. A Spiegel Online headline proclaimed, "EU Investigators Debunk Saakashvili's Lies." The Russia-Invades-Georgia story was a highly successful fabrication.

Now in Ukraine the question is not who shot first. It's who invaded who. If we take Obama's word for it, the headline would be "Russia Invades Eastern Ukraine."

But I think there's another side to the story. What is it? It is that maybe Kyiv invaded Donbass, the area in which thousands of Ukrainians have died in horrific battles.

You see, if you think about it, there are two Ukraines. To justify that statement let me paraphrase a Clintonism: it depends on what the meaning of the word Ukraine is. There is a "former Ukraine." That's the country that existed before the Maidan uprisings. It was territorially whole, constitutional, and not beset by bloody internal war.

Now there is the new Ukraine, the Ukraine created by the Maidanists. Many observers, like Obama, automatically equate the borders of the new Ukraine with those of the former Ukraine. But that equivalence does not seem to be rooted in reality.

The notion that the new Ukraine is entitled to all the territory of the former Ukraine is quite tenuous. There was no constitutional transfer from the former to the new. Instead, an armed junta took over in Kyiv by force. It chased the democratically-elected president Yanukovych out of the country under threats of death. And it nullified the democratically-instituted constitution.

A so-called interim government was put in place by the junta. It ruled from February 27, 2014 until June 7, 2014 when President Petro Poroshenko assumed office following a democratic election. In the meantime, however, two areas of former Ukraine, Donbass and Crimea, declined to become parts of the new Ukraine. The new Ukraine never had controlled those territories, and the majority of the inhabitants wanted no part of the new Ukraine.

I find it is hard for many people to wrap their minds around the foregoing explanation. The media drumbeat has constantly sounded out the Kyiv-centric version of things. Most casual observers have accepted it as gospel. Passions run high among those immersed in the news reports.

So it might be helpful to strip away the polarized positions that many have taken regarding Ukraine. To sidestep those entrenched views, let's explore the relevant issues with a hypothetical parallel:

Just say that in Spain there is a revolution whereby people who feel antagonistically toward Catalonians take over by force in Madrid. They throw out the Spanish constitution. There is no legal continuity of government. The junta immediately advances threats that diminish the cultural and linguistic heritage and practices of Catalonians.

In response the Catalonians take charge of their own territory. That region was never under control of the junta. What in the world would broadly legitimize a junta's claim of a right to control Catalonia?

And what just person would not condemn the junta if it invaded Catalonia, causing thousands of deaths and much economic destruction?

Of course the situation in Ukraine is much more complicated due to the Soviet background, differing World War II related sentiments and legends, and a long-running and well-crafted demonization of Putin in the press. But the principle seems the same to me. The hypothetical Catalonian scenario is the reality of Ukraine today. All of it. Donbass is the real Catalonia.

What this adds up to is that Kyiv indeed invaded Donbass.

All the flap about Russia sending troops and weapons into Eastern Ukraine has things backwards. What's being called Eastern Ukraine in the press is in reality Donbass. Russia actively denies that it has supported Donbass with military personnel and equipment. I don't know whether it has or not.

But isn't whatever Russia might be doing really a moot point? The real issue is that Kyiv invaded Donbass. That's the source of all the death and destruction. Once again, Russia didn't shoot first. It was just made the villain by a skillful campaign based on fabrications.

Unfortunately, world attention has been diverted from Kyiv's transgressions and the horror they have wreaked. It's been redirected to the reported Russian aggression. I've documented in my book Ukraine in the Crosshairs (www.UkraineInTheCrosshairs.com) how those allegations are not fact based.

I think it is very important to question why the press, the US, NATO, and the EU have so contorted their depiction of the Ukrainian crisis. Their actions have worked to the detriment of the Ukrainian people.

Ostensibly, the Maidanists claimed from the start to be seeking greater democracy and closer ties to Europe. The junta argued that a proposed EU association agreement was the key. Not everyone agreed. And that divisive issue spawned the internal conflict that precipitated the great Ukrainian crisis.

Look at what's happened in the junta's wake:

--Before the escalation of the Maidan protests, there was no threat of a Russian invasion, there were no fighting "separatists," there was no war in Donbass. Ukraine was whole.

--Sanctions were not causing ruinous economic damage to many countries. Relations between the US and Russia were not in dangerous disarray.

--There were no war-torn Donbass cities, towns, and villages. Thousands of now deceased Ukrainians were still alive.

--And the opportunity for replacing the unpopular leader Yanukovych through a democratic election was on the immediate horizon. Change was in the offing without any need for war.

Take a good look at what's transpired and tell me what tangible benefit has accrued to the Ukrainian people. The Maidanists set out to improve the population's lot. But things have gotten worse. Much worse.

It is difficult to imagine why anyone would believe that association with the EU will undo all the damage that conflict has caused. Claims it will help seem illusory. In the end, the horrors inflicted upon Ukrainians by the junta were totally unnecessary, ineffectual, and counterproductive.

What on earth are the motives of the people and governments that promoted and supported all this needless death and destruction?

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 #36
The Vineyard of the Saker
http://thesaker.is
June 26, 2015
Solving the Ukrainian Crisis
By Oleg Maslov

A magnificent project to unite the Eurasian continent in a web of pipelines, high speed rail, fiber optic cables, highways, and trade agreements from Lisbon to Singapore is already under construction and, should this project succeed, it will change the lives of everyone living in between and have profound implications on global geopolitics. Mostly initiated and driven forward by the economic might of China, the New Silk Road promises to bring cheap goods, cheap energy, new businesses and potentially hundreds of millions of jobs - essentially promising to deliver peace through prosperity for the largest landmass and the largest collection of people, cultures and natural resources on earth.

The ancient trade routes of Marco Polo which brought the silk and spices of Asia to Europe eventually fell out of favor with merchants largely due to the increased speed and security offered by the sea route, driven by rapid advances in maritime science and industry. Those who controlled the seas, a role played by Europe in the last 500 years and by the USA especially in the last 70, controlled global trade and made the world play by their rules, preventing other nations from using sea routes with their superior naval technology, thus effectively controlling income and development of the victim nation to their own benefit, making the victim nation bow to their demands. However, technology improvement in overland travel and current geopolitical security realities have rekindled hopes in the economic viability of the overland route, called the New Silk Road, as a competitor to the sea routes controlled by the US Navy.

The ancient overland route traveled from the Chinese Pacific coast to the Mediterranean and on to Europe, running underneath the Caspian Sea and through Iran and the Middle East, but another, more northerly route exists. The Northern Route moves through Kazakhstan and Russia and goes to Northern Europe through Belarus and to Central Europe and the Balkans through Ukraine. Serious geopolitical challenges such as the Islamic State, Central Asian radical movements, and the Taliban along with the jostle between Turkey, Iran, and the Gulf States for domination of the region bring huge transit risks to overland operations, and will do so for the foreseeable future, which means the stability of the Northern Route holds more promise in the near term. Major railway and pipeline projects between Russia and China have already started the process of developing the Northern Route and China has already begun to sign transit agreements with European countries such as Hungary.

Russian President Vladimir Putin has laid out Russia's future strategy numerous times. In echoes of proposals from former French President Chirac and former German Chancellor Schroeder, Putin has reiterated the desire to see a common economic space from London to Vladivostock. China's regional integration plans would expand this economic zone all the way to Singapore, uniting the entire Eurasian landmass in a series of agreements. Russia has already made significant process in bridging the differences with China, but efforts to further integrate Russia and Europe with trade arrangements have failed so far. Although Russia has significantly higher GDP, standards of living, lower debt, and better finances than many other countries admitted into the European Union, great resistance exists to Russia joining the EU, perhaps because of the fear that Russia, based on its military might, natural resources, and population, will dominate the bloc. All sorts of efforts, including the Third Energy Package, have been implemented to slow the inevitable linking of Russia with Europe. I say inevitable because the alternative is unthinkable - war on the European continent once again. Future relationships between Europe and Russia can take one of two forms, either negotiated partnership as equals or domination by force or subterfuge, and, by now, everyone knows that Russia will not bow.

This brings us to the current topic of Ukraine, a land right in the middle of one of the most important trade routes on Earth that has suddenly been swept up in national conflict. At the core of this conflict is what is presented as a civilizational choice - either to side with Europe through the Association Agreement or to side with Russia and the Eurasian Union project. People in Ukraine have clearly become tired of rampant systemic corruption regardless of which party comes to power and many have a close feeling of "Europeanness" and the craving of the European standard of living, therefore openly rejecting economic relations with Russia, while business, family, and cultural links tie other people in Ukraine closer to Russia. Ukraine is becoming the new meeting point between the European and the Russian world, a role served by the Berlin Wall in earlier times. However, instead of a wall, the best interests of Ukraine are to serve as a bridge between the two, and the best way for this to happen is to give Ukraine membership in both organizations - the choice of either/or is inherently a false dichotomy.

Ukraine has the unique opportunity to serve as a key bridge between Europe and Russia and as a key hub on the New Silk Road, and this opportunity could bring untold wealth to Ukraine while solving the internal conflict at the same time. Those in Ukraine arguing for a European future would have EU membership, EU visas, EU regulations, and EU oversight to tackle the corruption while Ukrainians with close ties to Russia would be able to keep their traditional business links and have the opportunity to build new business around a liberalization of trade flowing to both ends of Eurasia - both the financial and civilizational problems of Ukraine would be addressed. Negotiations between the EU and the EEU centered on the role of Ukraine could serve as a model for other countries to follow, such as Belarus and Moldova, and would open the entire 'World Island' for business and peace through prosperity and trade security.

I was born in Kursk, the site of the world's largest tank battle between the Soviet Union and Germany, a clash between Europe and the Russian world. My family moved to the United States when I was just five years old and I attended American public school and university and learned the American version of World War II, or the Great Patriotic War as it's known in Russia. Not until I was older did I investigate the role of my ancestors in this conflict. I discovered that Soviet people bore the brunt of the Nazi war machine and that my own great grandfather marched in Berlin and participated in taking the Reichstag. Then, I moved to Berlin and worked right near the heart of the division between East and West, the Berlin Wall. One of the most frequent questions that my Berlin connections ask is whether I feel Russian or American. For a long time, this question was very difficult for me to answer, I felt parts of both inside of me and always attempted to find a compromise answer that would encapsulate my ideas, referring to myself as a 'hybrid' or 'cosmopolitan'.

The Ukrainian political movement to build closer ties with Europe gained steam over the past decade, but the voices advocating this position have always claimed, counter to Ukraine's history, that this movement is mutually exclusive with Russian ties. Although building a bridge between Russia and Europe will certainly require thorough negotiation, it is far from impossible and could bring untold benefits to Ukraine. Choosing one side with the exclusion of the other is not only a loss of revenue and business, it creates an existential threat to the unified existence of Ukraine as a nation. Choosing one direction over another is blatantly against the national interests of Ukraine, while the idea of acting as a bridge to connect these two civilizations and to connect with Asia can be a national ideology of peace and prosperity that can unite the Ukrainian people and bring the planet on a course to a multi-polar world of respect for other cultures and peaceful coexistence on the Eurasian continent.

Although much blood has been spilt and hatred runs deep on either side, the opportunity still exists for the creation of a Ukrainian political movement centered on the idea of Ukraine as a bridge between Europe and Russia, with respect for the will of the people on both sides of the divide. The opportunity exists for Ukrainians to seize the prosperity they deserve and to play a key role in one of the most important projects in the future of humanity, the New Silk Road. Many problems and barriers exist to the implementation of this divide, especially the idea of the superiority of one nation, people, or genetic makeup over another. National Socialism in Germany was driven in large part by the idea of the superiority of the Aryan race, forgetting that civilizations in Egypt, the Middle East, and India were thousands of years old while Europe was populated with 'barbarians'. While many have tried to justify the results of the Great Patriotic war with different arguments, the baffling triumph of backward eastern 'Untermenschen' against the Nazi war machine of the 'advanced' Aryans proved the falsehood of these ideas and that the future must be built on new ideas of mutual respect.

One more important barricade to the successful completion of the New Silk Road is that any sizable shift to overland routes in trade between Europe and Asia necessarily means a decline in the role and power of those who guarantee the security of trade over the seas. Most certainly, these powers have much to lose and will do all in their power to prevent this change from happening, using all tools at their disposal, including military means, to prevent this integration. The objections of these powers must also be met with negotiations and mutually beneficial agreements.

The current moment, the current conflict is a key fork in the road in the history of planet earth. The people should have the ultimate right to decide their political and economic future for the best interest of all citizens. A historic opportunity exists to connect Eurasia from Lisbon to Singapore in a web of infrastructure and treaties that will bring peace and prosperity and link different cultures together with mutually beneficial trade agreements. The process begins with a conversation. Will membership in both organizations satisfy Ukrainians on both sides of the argument? Are the EU and the Eurasian Union able to find enough common ground in Ukraine to make the ends meet? I urge a start to negotiations and public dialogue because the stakes could not be higher. If we miss this chance, if we fail to build bridges and choose to build walls instead, the future will certainly take a much different and much darker course, for the only real alternative to peace is war.

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 #37
New Eastern Europe
http://www.neweasterneurope.eu
June 30, 2015
Speaking Tough on Russia is not Enough
An interview with Ivan Krastev, Chair of the Centre for Liberal Strategies, in Sofia. Interviewer: Matthew Luxmoore
Ivan Krastev is Chair of the Centre for Liberal Strategies, in Sofia, and Permanent Fellow at the Institute for Human Sciences, in Vienna. Matthew Luxmoore is a freelance journalist who has written for The New Republic, Evening Standard and Kyiv Post.
 
MATTHEW LUXMOORE: During your appearance at the ECS Forum in Gdansk you said that we discuss such topics as the Ukraine crisis from a very Eurocentric perspective, that we do not understand how Russians view the situation. Do you think this is a major issue?
 
IVAN KRASTEV: It is an important issue. In my view there are several things that have puzzled us. One was Vladimir Putin's decision to annex Crimea, and even more the response from the Russian public opinion. The situation is even more complicated because statistics show that support was highest in urban centres, which just a few years before had been protesting against Putin's return to the presidency. In this context I believe that the Ukraine crisis is not only a nation-building exercise for Ukraine, but also for Russia. In fact, it is an existential crisis. What Putin managed to do, which is important in the long-term, is to decouple his own legitimacy and the legitimacy of his regime from Russia's economic performance.
 
How could those who had been asking for a Russia without Putin so easily switch support for the annexation of Crimea? It seems that they were looking for some kind of meaning in Russian politics. The contract between Putin and society was: "I am going to deliver economic welfare and you are not going to meddle with politics." People were not ready for that. They went onto the streets and said: "We want meaning." And then Putin said: "You are going to have meaning. Your meaning is Greater Russia."
 
Q: So you think it was a populist tactic?
 
Yes, his decision was much more driven by domestic politics than simply by geopolitical concerns. But then we start talking to the Indians and Chinese, and as you know the Chinese are particularly conservative when it comes to border changes. We say that Europe is worried that China has shown little concern about what is happening in Ukraine. And the answer we get from China sounds like: "We have just watched the final phase of the Soviet Union's disintegration. It is now a post-colonial space, so we are not treating these borders in the way we treat the borders of established states."
 
In my view that is the major difference. For us (Europeans), everything that is happening is post-Cold War. For the rest of the world it is very much post-colonialism. Turkey and Russia, for example - they were empires, but because they were peripheral empires they have imperialism and at the same time a feeling that they themselves have been colonised by the West. As a result we have a different idea of what is going on in Ukraine. We see the Ukrainians' struggle for independence. They got formal independence in 1991, but it was simply the decision of the Soviet elite who moved to gain control over the assets for themselves. People who voted were not sure what they wanted and who they were. And now they want to be truly independent and sovereign.
 
Today we are facing a conceptual problem in Ukraine. It is not only about money, it is not only about Russia's destabilising tactics - which are obvious and should be taken for granted. It is about a kind of state-building. Two forms of state-building emerged after the Cold War and both of them are probably not going to work in Ukraine. One is the Baltic model based on treating the Soviet period as an occupation and coupled with the marginalisation of Russian speakers. This will not work in Ukraine because Ukraine simply cannot afford it. Also the cultural differences between the Baltics and Russia were totally different than the ones you have between Ukrainians and Russians.
 
The second model is the Balkan approach, centred on federalisation and minority-centred state-building. If we are going turn Ukraine into a big Bosnia with a similar type of constitutional reform I do not believe it would work either. Even in Bosnia it does not work.
 
From this point of view the strategy for state-building in Ukraine - how it will be done, who will control what, what is to be the relationship between the economic elite, the Maidan supporters and others - is an important question that we are trying to reduce to European integration. The chances of Ukraine joining the European Union anytime soon are not high. So how can you have a legitimate state-building process that is not based on false expectations? Russia made two major mistakes in reading the situation in Ukraine. Firstly, it incorrectly viewed its Russian speakers as a Russian minority. Many Russian speakers have a strong Ukrainian identity, and are key to the current process. Secondly, it misread Germany, believing Germany's traditional relationship with Russia is going to be more important. What it did not understand is that for Germany the Ukrainian crisis is not about Ukraine but about the unity of the EU. Germany basically decided that it is crucial to keep Poles, Balts and others reassured. So they took a position that was totally unexpected from Russia's perspective. The only reason we have a common sanctions policy in the EU is the position of the German government.
 
In Europe we also have a consensus on Putin. I do not believe there is much sympathy towards him, particularly on the level of the European elite. One thing that has isolated him particularly from the European elite has been his support for extreme parties on the left and the right in Europe.
 
Q: It seems Putin is indeed targeting what he sees as weaknesses within the EU. Do you see these weaknesses as real? Are we seeing a real turn to nationalist parties? And does Russia have genuine fears about losing its own national identity?
 
Putin's view of the EU is very much rooted in his experience of the Soviet Union's collapse. He tries to make simple analogies between the Soviet Union and the EU. Many probably believe that the future belongs to extreme parties on the left and the right. But on the other hand the Russian government has far more tacticians these days who believe demonstrating capacity means showing capacity to destabilise. They look at these parties in the EU in the same way a liberal pro-westerner looks at NGOs in Russia - as a source for creating trouble. They are not interested in these parties' values but they believe they can instrumentalise them in order to get a better deal from the European Union.
 
There are serious risks to all this. Firstly, the European elite - correctly, in my view - perceive this as subversion, so even when they are sharing somebody's concerns they are not going to tolerate any meddling in their domestic politics. As a result I do not think Putin is gaining much from this game. The second risk relates to your question about Russia's fears. I could be wrong, but I am reading what Putin is doing these days not so much as classical expansionism but as aggressive isolationism - he does not so much want to change the borders of Russia as to change the very nature of those borders. He wants to have a border that is protectionist in its nature.
 
Q: In your recent article in Foreign Affairs, co-authored with Mark Leonard,you suggest we accept Russia's Eurasian Union as a viable project. Is not making overtures to Russia tacit approval of its recent actions? How do we strike a balance?
 
Our idea is rather more complex. First of all I believe we should try to consolidate the European space, which is why we advocate Russia's expulsion from the Council of Europe. We should not pretend that we share values when clearly that is no longer the case. Secondly, I believe we should be more realistic about our capacity to transform Russia. This is closely related to our Ukraine policy. The more we press Russia, the more incentive Russia will have to destabilise Ukraine. The only field in which Russia is still competitive is the military and that is not one are with which we want to compete.
 
Many people who go with the classic isolationist line do not understand that unfortunately we are not the only players anymore. The close relationship we have seen between Russia and China in the past year is very much a result of our attempts to isolate Russia and I do not think this is something we should be encouraging. We need to be careful as Russia is a declining power (at least in my view, which Mark Leonard shares) and China is a rising power. When you have a declining and rising power and both are authoritarian, are we sure we want to be supporting the rising one? We can use China to put pressure on Russia, but this is going to have a price. Such a China policy is going to affect our relations with the United States which has its own China policy.
 
Russia believes that the political trends that started with the Maidan in Ukraine are reversible. They want to convince the Ukrainians that the EU and the US are neither going to pay nor fight for them and the only viable option is to rearrange relations with Russia. That is why Russia has not taken the loss of Ukraine for granted. Pretending it is enough to speak tough and isolate Russia is a risky game. It is risky because the unity within the EU is crumbling. What we discovered in the crisis with Russia is that while economic inter-dependence is a major source of security with respect to Russia, interdependence can also be a source of insecurity. We need a long-term strategy, a strategy for ten to 15 years. Sanctions are not a policy but an instrument within a policy.
 
We also need a policy for state-building in Ukraine. I do not believe that Ukraine is going to become another Poland in the next ten years. But having a functioning state and consolidating Ukraine's nation-building is very important. It is important also for Russians, as creating a black hole in Europe is going to destabilise not only Europe but also Russia itself.

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 #38
Putin's Peace Offensive on Ukraine Means Situation is 'Really Dangerous,' Piontkovsky Says
Paul Goble

Staunton, June 29 - Vladimir Putin's "peace offensive," marked by his call to US President Barack Obama, means that the situation is becoming "really dangerous," Andrey Piontkovsky says, because the Kremlin leader has not changed his goal of destroying Ukraine as a state but only the means he is prepared to use to get there.

And those means, including his oft-repeated commitment to maintaining the territorial integrity of Ukraine "minus Crimea of course," include the insertion of a cancerous tumor within the boundaries of that country and the election of pro-Russian candidates to the Verkhovna Rada, may be even more dangerous than a direct military attack.
           
That is because, the Russian analyst says, many in Ukraine and even more in the West are tired of the conflict and will be likely to drop their guard against such tactics, believing that they constitute a Ukrainian victory and a Russian defeat rather than simply another change in how Putin is seeking to get what he wants (kasparov.ru/material.php?id=5591360521CE8).

"A year ago," Piontkovsky says, "Putin seriously considered the 'Novorossiya' project: the annexation of 10 or 12 Ukrainian regions. But the project failed" because it wasn't supported by Russian-speakers in Ukraine. Despite Putin's expectations, they "turned out to be patriots of the Ukrainian state."

Now that the West has made it clear that it will react to any massive use of force, "for the overwhelming majority of the Russian establishment, military excalation is excluded because they understand that the price, including for them personally would be very large," and they do not want to pay it.

As far as Putin himself is concerned, he "is forced to take this attitude into consideration but it is impossible to exclude insane actions on his part" because as Chancellor Merkel said, "he lives in another reality."  But for the timing being, the Kremlin has changed its strategy but not its goal.

Putin's strategy now consists of supporting nominally the territorial integrity of Ukraine but using "his own interpretation of the Minsk agreements," an interpretation in which he will never withdraw Russian forces even as he continues to deny that they are within the borders of Ukraine.

According to Piontkovsky, the Kremlin leader is seeking to impose his interpretation of the Minsk accords on Ukraine by means of a diplomatic offensive. He has managed to get some in Germany and France to go along, but Ukraine has rejected the pressure they have put on Kyiv to agree. And so too has the United States.

But Putin hasn't given up on Barack Obama and is trying to win him over with the old refrain that "without Moscow, it is iimpossible to resolve any world problems like nuclear proliferation, Syria, ISIS." Translated into real language, Putin is saying "allow us to quietly rape Ukraine and we will take a constructive position" on other issues. So far he has failed in Washington.

Putin is also cleverly using the latest round of terrorist attacks, Piontkovsky observes.  "These terrorist acts always work to the benefit of Kremlin propaganda ... after each major one, all the Putin agentura in the West begins to spread the word: 'Forget about this Ukraine. For us, the struggle with Islamic terrorism is much more important, and without Moscow's support we will not be able to do anything.'"

The timing of this peace offensive corresponds to the seizure of Russian assets in the West and the Dutch tribunal on the shooting down of the Malaysian aircraft, Piontkovsky continues. These things worry many in the Russian elite; "they want to somehow stop the wave of sanctions" and so the Kremlin has launched a peace offensive.

And the leaking of the faked Russian military plans for an attack on Ukraine are "part of 'the peace offensive' of the Kremlin," its way of reminding everyone that unless the West and Ukraine cave, there are those in Russia who favor a more muscular set of actions and consequently those offering peace should be supported.

"A rat driven into a corner is capable of an act of desperation," and so too is Putin, the Russian analyst says. On the one hand, those around him are worried about their self-preservation and ever less attracted to Putin's vision. But on the other, Putin may act despite what others think.

This situation can't last for long: any attack would have to begin soon to take advantage of the weather; and consequently, Piontkovsky argues, Putin will have to make "a certain political and existential choice" about what they are going to do very soon, certainly in the course of this summer.

While Putin and the war party could come out on top, Piontkovsky concludes, the chances of that are no more than ten to fifteen percent. And that is yet another reason for Ukraine and the West to take a tough line and to make clear to Putin how much he and Russia have to lose by making the wrong choices.

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