#2
Valdai Discussion Club
http://valdaiclub.com
July 8, 2015
On the Chatham House Russia Report
By Mary Dejevsky
Mary Dejevsky is a columnist for The Independent newspaper and other UK publications. She is a member of Chatham House, but writes here in a strictly personal capacity.

Last month, the London think-tank, Chatham House, published "The Russian Challenge", a 58-page report looking at Russia in the light of events in Ukraine and making policy recommendations. The document was described as a "Chatham House report" - which put the institutional weight of Chatham House behind it. It was well trailed in advance and launched with some fanfare. It was a document that Chatham House clearly wanted to get noticed.

The report consists of an introduction and six chapters, each written by a specialist at Chatham House. The authors included two former British ambassadors to Moscow, Sir Roderic Lyne and Sir Andrew Wood, and the head of Chatham House's Russia and Eurasia programme, James Nixey. The thrust of the report is hawkish. The picture it paints is of a Russia acting from a position of strength and unafraid to break international rules; it is a Russia that needs to be kept at arm's length - with the help of sanctions and a beefed-up Nato - until it sees sense and changes its attitude. Some of the writers argue that this will not, and cannot happen, until Vladimir Putin has - one way or another - left office.

As a Russia specialist and a member - but not, I should stress, an employee or research associate - of Chatham House, I have made no secret of my dissent from what has seemed to me the increasingly hard line towards Russia taken by the think-tank, following the 2013 EU summit at Vilnius and everything that happened afterwards. "The Russian Challenge" seems designed to give that view analytical authority.

It is no exaggeration to say that developments in and around Ukraine, from the fall of Viktor Yanukovych, through the violent clashes in Kiev and Russia's annexation of Crimea, to the fighting in eastern Ukraine, the downing of MH17 and the uncertain fate of the Minsk II agreement - have polarized opinion almost everywhere outside Russia. And that polarization is as evident in the UK and among British Russia specialists, as it is elsewhere.

The differences lie less in what actually happened, as in why it happened and how the EU and the US have, or should have, responded.  One view - the one forcefully represented in the Chatham House report - owes much, I would argue, to Cold War thinking and assumes an unbridgeable gap, not just in priorities and perceptions, but in basic principles and their very nature, between Russia, as embodied in "the Kremlin" on the one hand, and "the West" on the other. To generalize (more than the sometimes contradictory report actually does), this boils down to the view that Putin wants to restore the power and territorial reach that Russia once had; that the Kremlin in its present mood understands only the language of strength, and that "the West" must unite to keep Russia in its box until it has learned to take its place as a civilized state.

The other view - the one I and others have argued consistently in print over the months - is that what we are looking at with Russia is "an end of empire" syndrome, not an attempt to re-establish the Soviet or Russian empire; that Russia is acting for the most part defensively, from a position of weakness - not aggressively from a position of strength - and that the harsher the line taken by "the West", in words and deeds, the greater the risk that Russia will respond in an equivalent, and destabilizing, way. This is not about rolling over in the face of Russian power, it is about understanding Russia's motives.

These are, in the most general terms, the lines of the debate as they currently run in the UK, and in many other countries.  I would say that the establishment consensus in the UK is more hawkish and more inclined to see Putin as the sole villain of the piece than it is in, say, Germany or France, but it does not have a monopoly. Public opinion is divided.

I have set out the context at such length, because this is how, I think, the Chatham House report needs to be seen - as a presentation of one argument, as a contribution to the continuing debate. It should not be seen as THE British view, though there is a risk that it will be understood like this.

There was a time, perhaps, when a document published by Chatham House - which is also the Royal Institute of International Affairs - could have been equated with THE British government view. That was when there were far fewer policy discussion forums in London. Chatham House now describes itself as a "think tank". As such, it is one - albeit a particularly influential one - among many that are competing for attention in the corridors of power. Yes, Chatham House has lobbying power, but not exclusive lobbying power. My impression is that, while the official rhetoric from London remains tough, the UK's Russia policy is in flux.

I would also observe that not one, but two documents on Russia policy, were published by Chatham House in recent weeks. "The Russian Challenge" was one, and it had the status of a "report". The other, by a single author, who is also a fellow of the think-tank, Andrew Monaghan, was described as a "research paper". Its title was: "A 'New Cold War'? Abusing History, Misunderstanding Russia." In it, Monaghan implicitly rejects many of the arguments and assumptions of "The Russian Challenge", calling for an end to what he calls "simplistic and repetitive polemic" which, he says, belongs back in the 20th century.

In conclusion, let me stress the Chatham House report proceeds from one view of Russia. Just because it comes from Chatham House does not mean that it is the official UK view. It is a contribution to a continuing debate. As Monaghan's paper shows, not even Chatham House researchers agree about Russia policy. The hawks may be more numerous, but are not alone in the skies over London.

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 #3
Levada.ru
July 7, 2015
Most Russian see no threat of mass protest, authorities unaccountable - poll

Most Russians think mass demonstrations against the authorities in their district are unlikely, despite seeing state officials as largely unaccountable, according to the results of a poll published on the Russian independent polling organization Levada Centre's website on 7 July.

In answer to the question, "Is it possible in your view that protests with political demands (demonstrations, meetings, strikes) will take place in your town or district?", 81 per cent of respondents said it was "unlikely", while 14 per cent answered "quite likely" and only 5 per cent said it was hard to say.

Similarly, when asked "If mass protests with political demands take place, will you personally take part or not?", 87 per cent said "probably not", while 8 per cent said they "probably would" and 5 per cent found it hard to say.

In response to the question, "Do you consider the authorities in Russia accountable to society?" 22 per cent said the authorities were more or less accountable, while 60 per cent said more or less unaccountable, and 18 per cent found it hard to say.

Asked why they thought the authorities in Russia were not accountable to society, 49 per cent said it was because "bureaucrats don't let citizens have access to important decisions, and couldn't care less about normal people", while 19 per cent agreed that "people are too passive to control the authorities". A further 14 per cent said "people are too busy and too concerned with daily affairs", while 10 per cent thought "the authorities conduct a consistent policy of restricting citizens' rights and freedoms". Five per cent said citizens shouldn't be involved in the authorities' business, while 3 per cent found it hard to say.

Most respondents seemed to think those in authority had less regard for society than in furthering their own interests. Asked, "What, in your opinion, is more important for those currently in power in Russia - the prosperity of the  state or maintaining or boosting their own power?", 58 per cent opted for boosting their power, while 30 per cent said the prosperity of the state and 12 per cent found it hard to say.

Respondents were invited to say how much they agreed with the statement, "If the state guarantees me a normal wage and decent pension, I don't mind not having freedom of speech and the right to go abroad". Forty-two per cent more or less agreed, while 49 per cent disagreed, and 11 per cent found it hard to say.

When asked "How would you define your relation to authority?" 69 per cent of respondents said they "Try not to have personal contact with the authorities", while 23 per cent opted for "I try to get what is owed to me", while 5 per cent found it hard to say.

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 #4
Moscow Times
July 8, 2015
How Much Have Sanctions Really Hurt Russia?
By Chris Weafer
Chris Weafer is a senior partner with Macro Advisory, a consultancy advising macro hedge funds and foreign companies looking at investment opportunities in Russia.

Next month marks one year since the beginning of the more serious phase of Western sanctions against the Russian economy and Moscow's retaliatory action to ban some imported foods. Recently the Western sanctions were extended, intact, until January so as to align them with the deadline for one of the key provisions of the Minsk II agreement, which is the return of control of all of Ukraine's borders to the Kiev government.

Moscow, in turn, has extended the food import ban for a full 12 months, albeit making it clear that this can be reviewed at any time depending on what happens to the Western sanctions.

As we approach the one-year anniversary, is it possible to say with any degree of accuracy exactly what the impact of the sanctions has been on Russia and the economy? There certainly has been a great deal of hype from both sides, with each side claiming a form of victory from the sanctions.

Cutting back the noise a bit, we can see that the only two sanctions that matter are the ban on Russian banks and some state companies from accessing new Western debt and credits, and, from the Russian side, the ban on some imported food.

The sanctions against individuals do not register at all, while the selective ban on supplying some services and equipment to the oil industry has not yet had any noticeable impact. Longer term it will, or may, but not over the short to medium term.

Despite predictions that the country's oil output would slide by up to 500,000 barrels per day (bpd) this year, the actual data for the first half of the year showed that output rose by 1.2 percent over the same period of last year and averaged 10.7 million bpd.

There is no doubt that the most damaging sanction was the ban on accessing new Western debt and credits because even though that action is directed against a handful of state banks and energy companies, the effect has been an almost total ban by all Western banks and trade organizations on any Russia risk. That has certainly hurt the economy and contributed to the current recession. But by how much? My view is that it is impossible to say.

The reason for that is because that particular sanction was applied almost exactly as the oil price rolled over and started a steep decline. Without the sanctions the economy would today be in recession because of the oil price collapse. If oil had not collapsed then the sanctions alone would not have caused the recession.

What we can also say, however, is that the sanctions accelerated the decline and made worse the problems resulting from the falling oil price. The lower oil price strained the availability of local liquidity which would normally be compensated by accessing foreign debt markets.

The fact that this was not an available option resulted in the more difficult and volatile backdrop we saw in December. The ruble would not have collapsed in mid-December if the oil price was above $100 bpd, regardless of sanctions, and it would not have been so volatile if access to international debt was still open.

What else can we see as a consequence or even a lasting legacy of sanctions? Russia has a new slogan, "import substitution," or perhaps a new buzzword, "localization." Domestic producers have gained from both the weaker ruble and the ban on some food imports since late last year. We can see that in the relatively good manufacturing and agriculture sector data for the past five months and the collapse in the value of imports, which are down by over 25 percent compared to this time last year.

That the Kremlin embraced import substitution as a recovery strategy so quickly is no surprise. President Vladimir Putin has been complaining about the high level of imported food, medicines and basic machinery ever since the disastrous harvest in 2010. Little has actually changed since then.

To that extent the opportunity to ban some food imports and make local manufacturing a national cause was very welcome. But here also the import ban was not solely as a result of sanctions. Recall, for example, that Russia placed an import ban on pork from some countries in January last year and has been regularly banning some food items for years. The stated reasons have usually been a veterinary or sanitation issue but, in fact, it was part of an effort to try and force investment into domestic production.

That progress has been so slow is also no surprise. Even if government support for import substitution stays strong, realistically it will be at least five years before import substitution starts to have a material impact on the availability of domestic food supply and on the economy.

More than two decades of neglect in such industries as agriculture and machine building will not be reversed with only 12 months of weak currency and sanctions. The evidence so far is very encouraging but it is only the start and needs to be sustained.

Another effect of the sanctions and, in particular, the political reset with the U.S. and EU is the so-called pivot East. There is plenty of evidence of the closer political and trade relationship with China and, as we can see at this week's BRICS summit in Ufa, with other major developing economies.

But if we cut back the geopolitical overlay, what we actually see is less of a shift East but more of a diversification strategy. Pre-sanctions Russia had become very integrated with Western economies and the EU in particular. Just as Brussels complained that 40 percent of the EU's gas imports came from Russia, Moscow woke up to the fact that 80 percent of its gas exports went to one region and over 50 percent of imported consumer goods came from the EU.

It is basic common sense that one should have economic and trade diversification. The longer the sanctions regime remains in place the greater will be the permanent diversification. The political shift away from the West is clearly very real, but the need to keep Western multinational companies engaged in the country and to be a big part of the import-substitution program has also now become much clearer.

That does not conflict with the fact that we will see more meat, fruit and vegetables with country of origin labels from Asia or Africa or South America on the shelves of Russian supermarkets. Hopefully they will be increasingly crowded out with domestically sourced produce in the years ahead.

What else can we say is the impact of sanctions and the political reset? There are plenty of positives to highlight, such as the fact that more Russians will spend their vacations inside the country and that should result in greater investment into the hotel and leisure sectors.

On the other hand, it is very regrettable that so many commentators, on both sides of the divide, have reverted to political and emotional bias, rather than basic facts, in their observations about the economy and the assessment of the future. That's to be expected.

What has come as a big surprise, however, is that Belarus is such a rich source of diverse foods such as salmon, lobsters and mozzarella cheese. Who knew?

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 #5
Levada.ru
One in six Russians opposed to all forms of censorship - poll

The proportion of Russians who believe that all censorship is unacceptable has fallen from 24 per cent in 2002 to 17 per cent in 2015, according to the findings of an opinion poll published by the Levada Centre on 7 July.

Members of the sample were asked which of a number of statements best reflected their point of view. Seventeen per cent agreed with the assertion that "any censorship is unacceptable" and "people should decide for themselves what they can read and watch". This figure compares with 18 per cent in June 2013, 20 per cent in July 2010, 18 per cent in April 2008, 19 per cent in April 2007 and 24 per cent in April 2002.

Some 35 per cent of the sample said they agreed that "books and films of dubious content should not be banned but their distribution should be limited, by being sold only in certain places, being shown at a later time etc". This figure compares with 26 per cent in June 2013, 32 per cent in July 2010, 34 per cent in April 2008, 35 per cent in April 2007 and 32 per cent in April 2002.

Some 44 per cent of the sample agreed that "the state should ban books and films that insult morality". This compares with 53 per cent in June 2013, 45 per cent in July 2010, 44 per cent in April 2008, 43 per cent in April 2007 and 43 per cent in April 2002.

Over the same period, the number of people who were not sure of their answer fluctuated between 2 and 5 per cent.

Levada carried out its polling during the period 19-22 June, based on conversations with 1,600 people aged 18 and over in 134 towns and villages in 46 of Russia's regions. The statistical margin of error was 3.4 per cent.

 
#6
Moscow Times
July 8, 2015
Poll: Nearly Half of Russians Favor Decent Wages Over Free Speech
By Daria Litvinova

More than 40 percent of Russians would be willing to forgo the right to free speech and the freedom to travel abroad if Russian authorities would guarantee "decent" salaries and pensions, a poll released Tuesday by independent pollster the Levada Center revealed.

Forty-two percent of Russians said they preferred "decent" wages and pension payments over the freedom of speech and the opportunity to travel abroad.

But it was a close race, with 49 percent of respondents voicing the opposite preference.

The poll produced similar results to one conducted in 2013, when 43 percent of Russians said they preferred financial stability over the opportunity to travel abroad and the right to freely express their views. At the time, 46 percent leaned in the opposite direction.

In 2008, as the world grappled with a large-scale economic crisis, 54 percent of Russians preferred freedom of speech and travel to salaries, and only 35 percent cared more about their income.

Meanwhile, 44 percent of respondents thought the government should play a more active role in cracking down on free speech, by banning books and films deemed "immoral." Thirty-five percent said the distribution of explicit materials should be restricted. A meager 17 percent expressed the view that any form of censorship is intolerable.

The poll also showed that the majority of Russians prefer to take a passive approach when it comes to fighting for their rights.

Sixty-nine percent of Russians, according to the poll, would prefer to avoid any and all dealings with the authorities. Only 23 percent said they were determined to fight for what the government has promised to do or provide.

This may owe to the fact that 60 percent of Russians don't believe the general population can hold the authorities accountable for their actions. Only 22 percent stated the opposite.

Nearly half of the respondents who lacked faith in government accountability attributed their opinion to the view that the authorities do not let ordinary people have a say in important issues.

Only 18 percent of Russians consider massive protests likely, and even fewer - 14 percent - would be willing to participate, should they occur, the pollster revealed.

The poll was carried out between June 19 and 22 among 1,600 residents of 46 Russian regions. The margin of error was no greater than 3.4 percent, according to the pollster.

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#7
Moscow Times
July 8, 2015
7 New Laws That Will Change the Face of Russia
By Ivan Nechepurenko

Russian lawmakers have kept themselves very busy this year. Over the course of its spring session, which ended Friday, Russia's State Duma passed a total of 278 new laws.

The majority of these were unremarkable - ratifications to international agreements, minor budgetary adjustments and a busload of measures aimed at integrating Crimea into the federal fold following Russia's 2014 annexation of the peninsula from Ukraine.

But a small handful of these new laws pack a powerful punch, standing to make a profound impact on Russia's political and economic future:

Undesirable Organizations

With tensions mounting between Russia and the West over the ongoing crisis in Ukraine, Moscow has been hyper-vigilant in monitoring for potential sources of foreign-sponsored unrest within its borders.

President Vladimir Putin has repeatedly sounded the alarm over what he sees as the role of Western NGOs in perpetuating "color revolutions," a term used to describe popular uprisings such as Georgia's 2003 Rose Revolution and Ukraine's 2004-05 Orange Revolution.

In a bid to avoid such a scenario on Russian soil, the Duma passed a law in May vesting the Prosecutor General's Office and the Foreign Ministry with the power to declare as "undesirable" foreign NGOs seen as posing a threat to Russian national security.

Members of Russian civil society and international NGOs have blasted the law, casting it not as a noble effort to protect national security, but as a crackdown on dissent - a move aimed at leveling Russia's political landscape.

Foreign Agents No More

A number of Russian organizations wound up on a similarly stigma-laden registry following the adoption of a 2010 law that relegated loosely termed "politically active" NGOs receiving funds from abroad to a list of "foreign agents," a term widely associated with espionage.

The law forced many NGOs either to shut their doors or to significantly reshuffle their operations. After the Dynasty Foundation, Russia's largest private donor supporting science, was declared a foreign agent in May, its founder Dmitry Zimin vowed to shut the foundation's doors. In late June, daily newspaper Kommersant reported that the organization was on the brink of closure.

Previously, there had been no set procedure for NGOs to exclude themselves from the registry. But under new legislation adopted by the State Duma in February, the foreign agents list is no longer the dead end it once appeared to be.

During their spring session, lawmakers introduced a way out for foreign agents that had severed ties with their international donors since having landed on the list.

So far, two NGOs have taken advantage of the exit procedure.

Not everyone has benefitted from the new legislation, however. Prominent Moscow-based NGO For Human Rights' application for exclusion under the new protocol has been denied, Kommersant reported on Monday.

Clamping Down on Extremism

The government's fear of internal dissent was further reflected in the State Duma's decision in April to increase fines for disseminating information with the potential to incite extremism or terrorism.

Critics have voiced concern that the law could be used to subdue media outlets critical of the Russian authorities. In comments made to The Moscow Times shortly after the amendment was signed into law, media law specialist Andrei Richter said a lack of clarity over the legal definition of "extremism" left the legislation "open to abuse and arbitrary application."

In October, liberal radio station Ekho Moskvy received an extremism warning over a broadcast about accounts of fighting in eastern Ukraine, and opposition newspaper Novaya Gazeta was cautioned over a piece the same month that compared policies of Russian lawmakers with those of Adolf Hitler.

Media organizations now face fines of up to 1 million rubles ($17,700), whereas the upper limit for such violations previously stood at 100,000 rubles.

Any media outlet that receives two written warnings within a year can likewise have its media license revoked.

Right to be Forgotten

Going out with a bang, Duma deputies adopted a law Friday during their final hearing of the season giving Russian Internet users the "right to be forgotten."

Russian netizens will now be able to request that search engines remove personal information that is either false or no longer relevant due to a change in circumstances, the TASS news agency reported.

Yandex, Russia's leading search engine, slammed the bill, saying it limited free access to open data.
 
Victory Day Amnesty

In April, the State Duma adopted a sweeping amnesty in honor of the 70th anniversary of the Allied victory against Nazi Germany. Victory Day is celebrated annually on May 9.

Some 127,000 convicts had already been set free under the amnesty, state-run news agency RIA Novosti reported Monday. The vast majority of them - some 106,000 - were serving sentences that did not involve imprisonment.

The amnesty was expected to free up to 60,000 inmates serving sentences in Russian prisons, but only 16,702 have so far been able to walk free. An additional 3,844 people were released from pretrial detention centers, RIA Novosti reported.

The amnesty was expected to free up to 400,000 convicts within half a year, news site Gazeta.ru reported last week, but in some regions its progress has been stymied by bureaucratic hurdles.

Capital Amnesty

Lawmakers did not limit grants of amnesty to the human realm. In May, the Duma adopted capital amnesty legislation designed to limit the outflow of Russian money.

In accordance with the capital amnesty, Russian citizens and legal entities are entitled to declare their offshore assets without fear of being held to account for criminal, administrative or tax indiscretions that may have occurred in connection with the assets prior to the start of 2015.

Of the up to 100,000 Russian entities believed to have assets abroad, less than 4,000 have thus far come forward to take advantage of the amnesty, business newspaper Vedomosti reported Monday.

Early Elections

Ending the spring season in a blaze of glory, lawmakers won the Constitutional Court's approval to push the upcoming State Duma elections up three months.

In June, lawmakers gave tentative approval to move the December 2016 elections up three months to September. Russia's highest court ruled last week that doing so would not violate the Constitution, clearing the way for lawmakers to move forward with early elections.

During their final session of the season Friday, Duma deputies did precisely that.

Critics have speculated that the move was motivated by a desire to hold elections at a time of year when political activity tends to be at a lull - when many Russians would rather be vacationing or relaxing in their dachas far from the bustling city than waiting in line at a polling station.
 

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#8
Russia Direct
www.russia-direct.org
July 7, 2015
The case of an American vice-rector: A blow to Russian soft power
Russia seems to keep isolating itself from the West through misguided decisions. Case in point: the dismissal of a high-profile foreigner attempting to help build Russia's innovation economy.
By Alexey Dolinsky
Alexey Dolinskiy is a partner at Capstone Connections consultancy. He graduated with a Master's degree in law and diplomacy from the Fletcher School and has a Ph.D. in political science. He is also a winner of the Valdai Club Foundation Grant Program. He currently works in corporate diplomacy in the Asia Pacific region and Europe.

The recent removal of American entrepreneur and University of Nizhniy Novgorod vice-rector Kendrick White from his post in the aftermath of a critical report on a state-owned news channel presents a huge reputational problem for the university. It was White, after all, who was responsible for attracting global talent to the school and building the school's reputation for innovation.

While White will continue to head the school's efforts to commercialize new technologies, the surprising move is a clear indication of a nationwide governance crisis - something many government officials have been often talking about in private and in public for almost two years now. Often, decisions made at the highest levels seem to carry with them internal contradictions.

One of Russia's unique features - a feature that continues to create demand for Kremlinologists in the West - is the opaque dominance of unofficial institutions over official ones.

For example, the Presidential Administration is by far the most influential institution in Russia although it is barely mentioned in the country's constitution.

As a result, heads of large state-owned companies that technically have to report to government members may have more de facto political power than their de jure supervisors due to close personal relations with the President.

That creates a hard-to-navigate system of personal relationships, policy issues and development priorities that requires political intuition to understand current trends. The further one is from a decision-making center, the harder it is to guess a current trend and adjust one's course of action.

Instead of simply obeying laws and regulator's instructions, one always needs to think ahead and read presidential texts between the lines to make sure all decisions of national leaders are understood well and immediately carried out.

The problem is that a country of Russia's scale can hardly be run like that. According to one of the nation's most influential economic regulators, Russia has invented a new public management system - a system based on orders and assignments.

As a result, there tend to appear decisions that clearly contradict one another, not in the wording perhaps, but definitely in spirit. Regional governors need to both foster investment and economic development and increase social spending. Federal authorities aim at both improving the business climate and increasing control over entrepreneurs to prevent tax evasion. Making Russia part of the global innovation economy and boosting Russian universities into the ranks of the Global 100 coincided with rigorous attempts to prevent espionage and foreign influence, something that can be described as a sort of witch hunt, the search for fifth columns or foreign spies.

To make the situation even more complex, various agencies have different policy priorities, and their influence constantly changes depending on who was the last to have his or her ideas and projects approved by decision makers. That has happened before, too.

For example, there was the head of a global IT corporation visiting the Skolkovo Innovation Center to discuss establishing a large scale joint project who was detained for six hours just before law enforcers suspected Skolkovo of supporting the Russian opposition and conducted a search of the organization's headquarters in 2013. Clearly, the joint project was tabled as the global executive stormed back to the airport the moment police released him.

The only way any public official can navigate this system of competing and sometimes contradicting policy priorities is being able to adjust as quickly as possible. And, of course, overkill-an excessive effort- is a far safer strategy than any lack of compliance.

Was it indeed a decision by the president or some of his top advisers to prevent any American from taking a leadership position in the Russian education system? Of course not.

There was probably a 1 percent chance that the report of Russia's main propagandist Dmitry Kiselev criticizing Kendrick White was indeed an indication of a high-level political decision with a 99 percent probability that the news story was just yet another attempt to boost viewership.

However, who could blame the university president for firing his deputy after several prominent economists, including Sergei Aleksashenko, Sergei Guriev, Konstantin Sonin and outstanding scientist and philanthropist Dmitry Zimin came under pressure and left the country in the past few years?

The overall context made it seem entirely plausible that despite a strong need to attract international talent to foster innovation, Russia once again changed its priorities and seems to have turned its back on the West, obsessed with conspiracy theories and fears of espionage.

The consequences are, of course, far from glamorous. White will probably have to change his lifestyle, at least for some time. The Nizhniy Novgorod University he used to work for will have a hard time attracting other international professionals to work and teach there and, consequently, getting anywhere near the list of the Top 100 global universities it had been aiming at.

Russia's soft power has suffered yet another loss as nothing builds longer and crashes faster than reputation. The one and only potential positive outcome we can still hope to expect to follow from this story is that it created yet another reason to make changes in Russia's governance mechanism.
 

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 #9
The Kremlin Stooge
https://marknesop.wordpress.com'
July 6, 2015
Navalny Hearts Trouble
By Mark Chapman
[Links and extensive responses here https://marknesop.wordpress.com/2015/07/06/navalny-hearts-trouble/#more-3448]

Longtime readers will recall that Yalensis has sort of a thing about Alexei Navalny, and worked harder than any real journalist I know of to get to the bottom of the KirovLes timber scandal for which he was found guilty of embezzlement. Navalny surfaced from time to time in the news after that, but any political gravitas he may have accumulated was spent when he failed in his gambit to win Mayor of Moscow. Although he actually made a surprisingly credible showing - largely thanks to Sobyanin's not bothering to campaign - the government wisely gave him a suspended sentence for his financial crimes rather than jailing him, which I believe is what he hoped for. It would have allowed him to mount a political comeback by bleating that The Kremlin had locked him up to prevent his storming to victory in the election, while leaving him completely free to run gave him no excuse for failure except that the population of Moscow did not want him for mayor. He kind of hit the skids after that, largely disappearing from view except for cameo appearances to argue that sanctions are killing Russia, and basically adopting an opposite view to the official narrative, in an eerie imitation of the recently-assassinated Boris Nemtsov.

But he loves to be noticed, even if it's just so that he can pretend he is a private person who doesn't like being noticed. So we're going to help a little, or Yalensis is. What follows is (potentially) yet a little more dirt on Navalny, a possible link between him and Hermitage Capital Management bad-boy William Browder, and a murky plot to discredit Russian businessman Denis Katsyv. Kastsyv is on the USA's "Magnitsky List", and the region in question is the Khimki Forest beloved of western lapdog Evgenia Chirikova. The final element in this crazy circus tent of disparate interests - furniture giant IKEA. I should mention that the case is currently before Arbitrage in Moscow, and ongoing. But I don't imagine they will mind us kicking it around a little. Take it away, Yalensis!

IKEA, Browder, Navalny; A Tango For Three

Most of the material for this post comes from an interesting expose done by investigative journalist Oleg Lurie on his blog. The blogpost is entitled "IKEA, Browder, Navalny. A tango for three?"

Executive Summary: Lurie alleges that William Browder secretly requested Alexei Navalny to launch a specific media campaign against Denis Katsyv.

[yalensis: I checked Navalny's blog, but a word search on "Katsyv" didn't produce any results.]

Khimki

Once upon a time there was a wealthy kolkhoz in the woods near Moscow named "Path of Ilyich" («Путь Ильича»), which held more than 3000 hectares of land. By the beginning of the 1990's it was down to 1500 hectares, not all of them contiguous.

Later, this kolkhoz evolved into the "Collective Agricultural Enterprise" (КСХП) known as "Khimki Forest". By 2010 Khimki was fully inventoried and reorganized as a contiguous public area, after resolving many disputes with former kolkhozniks and owners of private plots.

At the same time, mysteriously, 2 office buildings suddenly sprang up in one of the previously empty plots, around 20 hectares in size. In 2012, it was discovered that this plot of land containing the office buildings, had been surveyed and registered on behalf of IKEA. Apparently this plot had been sold to IKEA, which now held the title to it. The land deal was all the more lucrative, since the office buildings were also thrown into the deal, along with the land.

The Khimki Collective then initiated a lawsuit against IKEA, demanding the return of the plot of land, which they claim was fraudulently obtained by the latter. Currently the lawsuit is in its second phase, at the 10th Arbitrage Court of Moscow.

Allegations against the Katsyv Family

Khimki is represented in court by Natalia Veselnitskaya, whose law firm also represents the Katsyv family. Natalia is the wife of Alexander Mitusov, who is Assistant Prosecutor for Moscow Oblast. One of the commenters to Lurie's piece, "Pakhomov" accuses Mitusov/Veselnitskaya and Katsyv families of being financially intertwined, although I am not sure any of this sounds actually illegal:

"Кстати, почему Вы не написали, что Наталья Владимировна Весельницкая - это жена Александра Митусова, первого зампрокурора Московской Области, а позже... первого заместителя Кацыва-старшего! А ещё Кацыв-старший будучи министром транспортам МО, а ранее - руководителем ГУП "Мострансавто", передал обязанность взыскания денег за транспортное обслуживание этой организации с районов... адвокатской фирме Весельницкой! За 6%. Так что Весельницкая не только Кацывов защищает, а ещё себя и своего мужа. Похоже на то, что они все там финансово повязаны."

"Why didn't you [Lurie] mention, that Natalia Vladimirovna Veselnitskaya is the wife of Alexander Mitusov, the Deputy Director of the Moscow Oblast Prosecutor's Office, as well as the Deputy of Katsyv the Elder! And also, Katysv the Elder while he was Minister of Transport for Moscow Oblast (...) hired the services of Veselnitskaya's firm, granting them 6% commission for finding new funding sources. In other words, Veselnitskaya defends not only the Katsyv family, but also herself and her husband. It seems like they are all financially intertwined."

The younger Katsyv, Denis, is notorious for being on the Magnitsky List. As Lurie points out, these past few months, as the Khimki lawsuit heats up, the liberal part of the Russian press has been flooded with a stream of articles "all with identical talking points", exposing the Katsyv family and their connections.

Here is a link to one of these typical exposes, from the "Moscow Post":

Here is a summary of the talking points made by the anti-Katsyv press:

Petr Katsyv is the (retired) ex-Minister of Transport for Moscow oblast. His son Denis is a prominent businessman. Both are suspected of massive corruption. Fearing prosecution, they have fled the country. Petr lives in Israel, allegedly frequenting gay nightclubs, along with his male secretary "Ilya"; while son Denis is hiding out in the U.S. One of their associates, a business partner of Denis and former top manager of Sberbank, Alexander Altunin, is suspected of being complicit in the bankruptcy of the Moscow bank Elektronika. The bankruptcy was investigated by Novaya Gazeta. The Moscow Post piece goes on to list other scandals associated with Denis Katsyv and his associates. A rogue's gallery, including Vasily Dupak and Alexei Kuznetsov, and others.

Meanwhile, in 2013, Denis Katsyv was put on the American Magnitsky List. The Americans claim that the company called "Prevezon Holdings Ltd", which is registered in Cyprus and lists Denis Katsyv as the sole stockholder, laundered $230 million. As alleged by the auditor Sergei Magnitsky, this money was allegedly stolen from the Russian state budget and laundered by Katsyv. Katsyv's "laundromat" allegedly consisted of freezing the liquid cash into New York City real estate. As a result of being put on the Magnitsky List, Katsyv had his American accounts confiscated. He initially contested the confiscations in American court, but later withdrew his suit.

IKEA

According to Lurie, the recent flood of anti-Katsyv exposes, and the regurgitating of all the Magnitsky List charges, is just part of a new propaganda war waged by IKEA supporters. One of the main talking points is that "foreign investors" such as IKEA are being persecuted in Russia. Trying to deprive Russian citizens of that wonderful Swedish furniture.

The pro-IKEA articles in the Russian press all say the same thing, and all attack the same people. Specifically, two people: (1) Denis Katsyv; and (2) Katsyv's attorney Natalia Veselnitskaya.

Oleg Lurie interviewed Veselnitskaya, which interview makes up the body of this interesting blogpost. According to Veselnitskaya, she has discovered the Holy Grail: namely, a direct connection between Alexei Navalny and William Browder.

Ashurkov

Before we get to the Veselnitskaya interview, let us take a trip down memory lane, to around 2010-2011.

See, for example, this link, which leads to a PDF file:

"The Great Combinator" Ashurkov figures prominently in Navalny's biography. Ashurkov has always been there, acting as Navalny's puppet-master and middleman. According to some, he actually created Navalny in a secret laboratory. Their email correspondence, laying out various money-making and political scheming, was brought to light by notorious hacker "Hell".

Recall that Hell hacked into Navalny's google-mail account, probably just by stealing or guessing Navalny's password. The archive of hacked emails later became the basis for Navalny's successful prosecution in the KirovLes case. But KirovLes constitutes only a fraction of Navalny's prolific opus.

Navalny's emails with Ashurkov show that Navalny did not know Browder personally. However, Navalny HAD met with Jamison Firestone. Also, Ashurkov acted as intermediary of Browder's interests, within the "Navalny Project", which was created by Ashurkov's "Alfa-Group". The peak of this project occurred in the years 2010-2011, AFTER Navalny had been forced to flee Kirov, finding sanctuary at Yale University. At the time, Browder was involved in various conflicts with Gazprom and Price-Waterhouse. Navalny's assignment, apparently, was to use his "anti-corruption" blog, Rospil, to attack companies on Ashurkov/Browder's hit list, and also to support the various projects of the Alfa Group.

More recently, Ashurkov himself was indicted, and fled to Great Britain, where he was granted asylum.

How was Ashurkov finally nailed? Not for any of his major schemes, involving big money. For just a minor scheme, involving only 1 million rubes! For creative methods of campaign financing.

Recall that Ashurkov, along with Navalny, when the latter was running for Mayor of Moscow, came up with a cute scheme, whereby Navalny's often passionate and dedicated supporters simply transferred (via Yandex) their small donations into HIS (Ashurkov's) bank account, thus bypassing the campaign-funding laws! Which state that a special bank account must be set up to receive campaign contributions.

In retrospect, it is a sure bet, that Navalny's run for Mayor was simply another money-making project for this duo of rogues. To their credit, they figured out the secret alchemy: how to turn thousands of small donations into a nice little stash of cash: 1 million rubles - not big money, but still money, and not bad for a pilot project. Thus, as Leonid Volkov noted, proving that money for political donations can be raised over the internet.

Imagine how Ashurkov/Navalny must have sweated, when it started to look like Navalny might actually receive enough votes to pass through to the second round! If Navalny had actually won the election and become Mayor of Moscow, that would have been a disaster for him, on the scale of Max Bialystock actually producing a successful Broadway show!

The Veselnitskaya Interview

With this historical background in mind, let us return to the Lurie material, and the interview with the attorney Veselnitskaya.

Veselnitskaya: "A month ago I received some information from our private investigators (who operate abroad); they reported on contacts between Browder and certain Russian citizens, who were called [in the correspondence] by the mysterious initials FBK. Of which one of the individuals involved was referred to by initials NAA. The aim of these contacts was to plant into Russian media negative exposes about Denis Katsyv and also his father, Petr Katsyv (....). And also negative exposes about myself, Katsyv's attorney. The communications even included instructions about which media outlets to use, and the talking points to employ."

"And then the penny dropped," Veselnitskaya continues, "that Browder's so-called FBK shares the same initials with Navalny's "Fund for Fighting Corruption" (Russian «Фонда борьбы с коррупцией»). And the initials NAA: Navalny Alexei Anatolievich! The media attacks against Denis and myself came from the usual 'independent' publications, such as Moscow Post, Novaya Gazeta, Vek, and others. Moreoever, the text and talking points are identical to those laid out in the 'theses' of William Browder."

Lurie: "So where does IKEA come into all this?"

Veselnitskaya: "As the attorney, I defend the interests of Khimki, which is suing in Arbitrage Court for the return of those 20 hectares, illegally taken by IKEA. Therefore, as far as IKEA is concerned, I am the enemy. They don't want to lose this golden plot of land! (....)

Lurie: " But why did Browder feel the need to launch this information war against you and Denis Katsyv at this moment in time?"

Veselnitskaya: "For the first time in all the years since he launched this Magnitsky campaign, Citizen Browder was actually questioned in a courtroom. An American courtroom. In connection with some companies belonging to Denis Katsyv, a case initiated by Browder himself on the basis of the so-called Magnitsky Act."

And any person who reads the record of his testimony will see, that Browder did not present one shred of evidence, that Katsyv's companies have even the faintest connection to criminal money. To every question posed to him [in the courtroom] Browder replied that 'he doesn't know, he doesn't remember, he doesn't understand...' This is the whole basis of his 'proof' against Katsyv, and moreoever, this is identical to Browder's 'proof' in the Magnitsky case too. A transcript of Browder's testimony is available, by the way. (....)"

Lurie concludes his blogpost by issuing a challenge to Alexei Navalny. Lurie claims he has read the the "technical instructions" issued by William Browder to his agent "NAA" at "FBK", and challenges Navalny to either confirm or deny, that he, Navalny was the recipient of Browder's instructions to launch a media campaign against Denis Katsyv.

It's me again; fascinating, Yalensis, and thanks for giving us a glimpse of a gripping legal yarn most English-speakers will never see. Considering it involves William Browder, alleged criminal and international fly-by-night, I dare to hope it might even lure our old and recently-wed friend, Alexander Mercouris, here for a visit. I miss him, and it would be good to hear from him again.

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 #10
www.rt.com
July 8, 2015
Upper House drafts first list of 12 undesirable foreign groups

Russia's Federation Council has released a list of foreign organizations it plans to declare 'undesirable'. The 12 entries in the document include the Soros Foundation and the US National Endowment for Democracy.

The upper house approved the list on its Wednesday session and forwarded the document to the Prosecutor General's Office, the Foreign Ministry and the Interior Ministry. Speaker Valentina Matviyenko told reporters that it had been created out of reports from regional authorities that are concerned about alleged subversive activities by certain organizations. She also noted that the proposed version of the document is subject to change.

Matviyenko emphasized that the inclusion of the anti-Russian groups on the blacklist would make their work transparent and clear for local authorities, political and non-government organizations.

"Today Russia faces its strongest attack in the past 25 years, targeting its national interests, values and institutes," reads the Federation Council's address to state agencies. "Its main goal is to influence the internal political situation in the country, undermine the patriotic unity of our people, undermine the integration processes within the CIS space and force our country into geopolitical isolation," the senators state in the document.

The first list created in accordance with the recently-introduced law 'On Undesirable Foreign Organizations' includes foreign and international groups "known for their anti-Russian bias."

They are: the Open Society Institute, also known as the Soros Foundation; the National Endowment for Democracy; the International Republican Institute; the National Democratic Institute; the MacArthur Foundation; Freedom House; the Charles Stewart Mott Foundation; the Education for Democracy Foundation; the East European Democratic Center; the Ukrainian World Congress; the Ukrainian World Coordinating Council; and the Crimean Field Mission on Human Rights.

The head of the Federation Council's International Affairs Committee, Konstantin Kosachev, told reporters that very often the groups who posed as NGOs were working on orders from government structures of foreign nations with the objective of countering Russia's interests.

The Law on Undesirable Foreign Organizations came into force in early June this year. It requires the Prosecutor General's Office and the Foreign Ministry to make an official list of undesirable foreign organizations and outlaw their activities. Once the group is recognized as undesirable, all its assets in Russia must be frozen, offices closed and distribution of any of its information materials must be banned.

If the ban is violated, both the personnel of the outlawed group and Russian citizens who cooperate with them face punishments of heavy fines, or even prison terms in case of repeated or aggravated offence.

Just days after the law came into force two senior Communist Party MPs asked the Prosecutor General to use it against George Soros's Open Society organization. The lawmakers blamed the group for "persistent anti-Russian activities both in Russia and in other countries," in particular for promoting hatred against Russians in Ukraine via the destruction of the Russian education system.

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 #11
Interfax
Russian Presidential Council for Human Rights slams law on "foreign agents"

Moscow, 7 July: The Russian Presidential Council for Human Rights insists on the immediate cancellation of the Justice Ministry decision to include Dynasty [Dinastiya] and Liberal Mission foundations in the list of NGOs that are foreign agents and review of the law on NGOs.

"Since the first days of the existence of this very approximate and therefore legally invalid law on the so-called 'foreign agents' our council has been fighting for it to be rectified," says the statement posted on the council's website on Tuesday [7 July].

However, in the view of rights activists, "changes are minimal and the register has exceeded 60 (listings - Interfax), including dozens of human rights, environmental and other socially orientated NGOs".

"The current example (the inclusion of Dynasty and Liberal Mission foundations in the list NGOs that are foreign agents - Interfax) of demonstratively absurd application of law is testing our patience. We insist on Russian Justice Minister Aleksandr Konovalov cancelling the ruling by his deputy (on including the foundations in the registry - Interfax)," the press release said.

"If this is not done, we think it necessary to achieve its cancellation through the courts. The infamous law should be either immediately amended or deemed to be null and void. There is no third option," the statement said.

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 #12
RFE/RL
July 6, 2015
IS Boosts Russian-Language Propaganda Efforts
by Joanna Paraszczuk

The militant group Islamic State (IS) has stepped up its Russian-language propaganda efforts, another sign that its Russian-speaking contingent is becoming more powerful.

Though Russian-speaking IS militants have put out their own propaganda for some time, in recent weeks a new Russian-language IS media wing -- Furat Media -- has emerged that appears to have taken on official, or at least semiofficial, status within IS's overall media operations.

IS currently produces official propaganda messages in Arabic, English, Kurdish, French, and Russian, according to Aaron Y. Zelin, an analyst with the Washington Institute for Near East Policy.

And though IS has not made any specific announcement declaring that Furat is an official IS media wing, Zelin says it is an "unofficial official account."
Furat has opened accounts on Twitter, Facebook, and the Russian social network VKontakte and maintains a website, Furat.info, through which it disseminates various forms of IS propaganda, including video messages by Russian-speaking militants and Arabic- and English-language videos dubbed into Russian.

Furat, whose name comes from the Arabic word for the Euphrates River, even has its own logo, a blue square with two white, wavy lines suggesting water.

Formalizing Operations

That Russian-speaking militants in Syria are disseminating propaganda is nothing new.

The various factions of militants -- including those fighting alongside IS as well as individual factions -- have had their own websites and social-media accounts almost since they first emerged in Syria in late 2012.

But as IS's Russian-speaking faction has grown in prominence -- and in numbers -- it has transformed its media operations from piecemeal efforts by what appeared to be a handful of militants into an increasingly slick and semiprofessional operation.

The main precursor to Furat began life around early 2013 as FiSyria, a website run by a group of Chechen militants led by Umar al-Shishani, an ethnic Kist from Georgia's Pankisi Gorge. At first, FiSyria was effectively Shishani's personal site, offering news about battles he and his fellow Chechen militants were involved in.

But when Shishani moved on to bigger things -- he is now IS's military commander in Syria -- FiSyria changed, too.

After Shishani swore an oath of allegiance to IS leader Abu Bakr al-Baghdadi and moved over to IS with a group of militants in late 2013, FiSyria went with him and became a Russian-language IS propaganda website.

Now, FiSyria redirects to Furat's website.

Furat also seems to have swallowed another IS media group, ShamToday, which was previously active on Russian social media and which was run by a group of North Caucasian militants.

Increased Output

Furat has significantly increased the volume of IS propaganda available to Russian-speakers, primarily by publishing existing IS videos with Russian subtitles.

But to do this, the group will have had to recruit additional "staff" who have a good enough understanding of spoken Arabic to allow them to translate the videos into Russian.

Clues of how IS's Russian-language media operations work can be found on social media, where Russian-speaking militants have posted photographs of IS media offices.

A Kazakh IS militant who goes by the name Artyom posted a photograph of what he said was an "IS Media Center" on July 1. The photograph shows Artyom and another militant sitting in an office with laptops and cellphones.

Not Just Chechens

The presence of Artyom, who is based with a Russian-speaking IS contingent in Mosul, in an IS "media center" is another sign that IS's Russian-language propaganda efforts are changing and growing.

In the past, Russian-speaking IS propaganda efforts appeared to be run primarily by and for North Caucasian militants.

Recently, however, Central Asians have also been photographed undertaking IS propaganda work.

Prominent Tajik militant Abu Daoud (real name Parviz Saidrakhmonov) has been photographed several times working in an IS "Media Center."

Saidrakhmonov, who is thought to have been killed, has been linked to several prominent Russian-speaking IS ideologues, including Daghestani preachers Akhmad Medinsky and Nadir Abu Khalid. Both Daghestanis are close to Abu Jihad, an ethnic Karachay who is Shishani's close confidante and who has been involved in IS propaganda efforts for many months -- and who is likely one of those behind Furat Media.

Recruitment And Retention

Furat's work has two main purposes.

First, it is dedicated to recruiting new Russian-speaking militants, both from the Russian Federation -- particularly the North Caucasus -- and from elsewhere in the former Soviet Union, especially from Central Asia.

Furat is also engaged in spreading IS messages to Russian-speaking militants who are already fighting alongside the group, both via social media and by creating and sending CDs containing Russian-subtitled IS propaganda videos to various Russian-speaking militant groups in IS-controlled territory.

A July 1 Facebook post included photographs of one batch of CDs with an explanation that these were for "brothers in the caliphate," the term used by IS for territory under its control.

By translating Arabic-language material into Russian, Furat is able to ensure that all Russian-speakers in IS-controlled territories have access to the same messages and ideology as their Arabic-speaking counterparts. So, too, can potential recruits back home in the Russian Federation or Central Asia.

Furat is also playing an important role in building ideological bridges between militants in Syria and Iraq, and those who are still in the North Caucasus.
It was Furat which announced that IS had declared the establishment of a "province" in the North Caucasus. The propaganda wing also issued a professionally produced video, Unity Of The Mujahideen (Jihad Fighters) Of The Caucasus, which included interviews with Russian-speaking militants in Iraq and Syria who praised the pledges of allegiance to IS by North Caucasians.

Resilience

Although there have been efforts by social-media websites like Facebook and Twitter to crack down on pro-IS accounts, Furat has so far been resilient.
Furat's Facebook account has already been banned, but the group opened a new one -- this time a closed group -- on July 1. By July 2, the group had 87 members.

And while several countries, including Russia, Kazakhstan, and Tajikistan, have banned pro-IS and other Islamist websites, they have been less successful in blocking social media.

A group of websites listed by the Tajik Interior Ministry on July 2 as being banned does not include Furat Media's site or its social-media accounts.

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 #13
www.rt.com
July 7, 2015
2,200 jihadists from Russia fight in Syria, Iraq - Russian Foreign Ministry

There about 2,200 Russian-born fighters among the ranks of the terrorist groups in Syria and Iraq, Russian deputy foreign minister has said, stressing that "the figures start getting really alarming."

"At the time being, around 2,200 people from Russia are engaged in the fighting in Syria and Iraq," Oleg Syromolotov, Deputy Foreign Minister for anti-terrorism, told TASS news agency on Tuesday.

"Among them, about 500 came from Europe, where they had earlier obtained citizenship, residence permit or refugee status," he stressed.

The need to suppress "any moves" of Islamic State and other militant groups towards Russian territory, citizens and institutions presents a challenge for the government, according to the deputy minister.

"We are thoroughly analyzing belligerent statements of IS leaders on transition of the "jihad" to Northern Caucasus and in Central Asia," said Syromolotov.

The threat comes from foreign terrorists who travel to Middle Eastern regions that are occupied by militant groups, and return to their homeland after training and indoctrination, according to the diplomat.

"It's clear that they bring along not only their terrorist potential itself, but also radical ideas, a source for negative ideological impact on the society, especially on its most vulnerable members - the youth, the faithful," added Syromolotov, who thinks that radicals are currently "winning the informational confrontation" due to the "dissociation" of states that should lead the struggle against terrorism.

As of January, over 20,000 foreign nationals from about 100 countries around the world were estimated to be fighting for various militant groups, including Islamic State, according to the International Centre for the Study of Radicalisation. Of that total nearly a fifth came from Western Europe, with the UK and Germany topping the list. Other countries, whose influx exceeds 1,000 people, include Jordan, Morocco, Saudi Arabia and Tunisia.

Islamic State, formerly known as ISIS/ISIL, has captured large areas both in Syria, where its combatants have been fighting since 2012, and in Iraq, which saw the advancement of militants in 2014.

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 #14
Putin says Russia can overcome difficulties in intl politics, economy by pooling efforts with China

UFA. July 8 (Interfax) - Russia is aware of the difficulties it has been encountering in international politics and the economy but is confident it can overcome them by pooling efforts with China, Russian President Vladimir Putin has said.

"We are perfectly aware of the difficulties we have to face in the economy and international politics but, by joint efforts, we will certainly overcome all the problems faced by us, will resolve all the problems and tasks we are facing," Putin said at a meeting with Chinese President Xi Jinping in Ufa on Wednesday.

The Russian president welcomed his Chinese colleague to "a most beautiful place in Russia." He thanked Xi Jinping for agreeing to visit one of the most beautiful cities of the Volga region to attend BRICS and SCO summits.

"Hopefully, you will like it here. I know that the administration of this republic and residents of these territories have done a lot to worthily prepare for this event," the Russian president said.

"I will not deny that we are especially pleased to see here our friends from China, bearing in mind the large volume of our humanitarian and political contacts and the growing volume of trade and economic contacts," the Russian leader said.

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 #15
Moscow Times
July 8, 2015
Russia Searches for Post-G8 Footing at BRICS Summit
By Peter HobsonJ

The leaders of the world's biggest emerging economies will meet in Russia on Thursday for a powwow that Moscow hopes will demonstrate the futility of Western efforts to isolate the country.

The summit of the BRICS nations - Brazil, Russia, India, China and South Africa - that opens Wednesday in the Russian city of Ufa, some 1,170 kilometers southeast of Moscow, is expected to continue efforts to give emerging economies a more powerful voice.

According to Russian President Vladimir Putin, the summit will launch a new development bank and emergency currency reserve pool, each to be armed with $100 billion, which will be equivalent to the World Bank and International Monetary Fund (IMF).

For Putin, the gathering is a chance to show that despite Western sanctions over the Ukraine crisis, Moscow is finding new, more powerful allies among the world's future economic kingpins.

But some analysts warned that China's dominance of the new BRICS risked turning the group's new projects into mirror images of U.S.-backed institutions like the IMF.

'Foiled U.S. Plans'

Many see the BRICS group has a fundamentally good idea, both for Russia and its fellow emerging economy partners.

"[The] BRICS have become a reliable buttress for Russia both politically and economically," said Vyacheslav Kholodkov, a department head at the Institute for Strategic Studies, a think tank that advises the Kremlin.

"They foiled U.S. plans to isolate Russia," he said at a round table discussion titled "BRICS as the Foundation of a Multi-Polar World" late last month.

The BRICS nations account for around 40 percent of the world's population and over 20 percent of global economic output. But their rising share of global wealth is not reflected in voting rights at the World Bank and IMF, where Western countries have outsize influence. A packet of reforms to the IMF that would give emerging nations a bigger voice has been blocked by the U.S. Congress since 2010.

"Emerging markets are regularly treated as almost second-class citizens by the dominant powers within the G7 [group of industrialized nations]," said Chris Weafer, senior partner at Macro Advisory, a Moscow-based consultancy. G7 members, which include the United States, Canada, Britain, France, Germany, Italy and Japan, play large roles within the operations of the World Bank and IMF.

The BRICS are "fighting for their rights," said Kholodkov.

Chinese Dominance

Yet some observers doubt the potency of the BRICS grouping.

Russia was forced over the past year to find new partners after it was cut off from its traditional markets and sources of capital by sanctions imposed by the U.S., EU and many of their allies on Moscow over its role in the Ukraine crisis.

Joining the BRICS sends a message to the West that sanctions aren't working to isolate the country, said Neil Shearing, chief emerging markets economist at Capital Economics.

But while the grouping neatly encapsulates Moscow's efforts to grow trade with developing countries, "the partnership doesn't really add up to much," he said. Trade between Russia and the other BRICS is still far below its annual turnover with the EU, historically its largest trade partner.

The growing dominance of China is also a potential hurdle. At its current growth rate of 7 percent, China will over the next 2 1/2 years expand its gross domestic product by an amount equivalent to Russia's entire $1.8 trillion economy. During that period, Russia, which is mired in a recession, will likely see its economic output fall.

"While Russia has been pushing for the creation of the BRICS as a counterbalance to the G7, the real danger is that they are encouraging the creation of a vessel to extend China's global power, just as the G7 facilitates this for the U.S," said Weafer.

The new BRICS reserve fund is balanced heavily in China's favor, with $41 billion of the bank's $100 billion capital coming from Beijing. Russia, India, and Brazil will each contribute $18 billion and South Africa $5 billion, Russia's Central Bank said Tuesday.

New Order

Yet Russia may have reason to prefer its odds in a BRICS-led world order. Moscow has three things in its favor, according to Weafer: China needs it as a supplier of materials such as oil, gas and metals; Russia's military is more technologically advanced than China's; and Russia from its years as a Soviet superpower has more experience handling diplomatic scuffles.

All of this boosts Moscow's starting position in the BRICS structure, and could clinch for the Kremlin a better position than the one it has within organizations like the World Bank, IMF and G7, the later of which ejected Russia last year.

Some Russian analysts doubted that Beijing could lord its power over Moscow in the new BRICS grouping.

Kholodkov, the Kremlin adviser, branded the idea of Chinese domination a myth peddled by Western analysts.

Kholodkov trumpeted the equal voting rights adopted by the BRICS bank.

"The BRICS are being created to build democratic structures of management into the global economy," he said.

"Let's not follow Western propaganda."

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 #16
Russia Insider
www.russia-insider.com
July 7, 2015
Ufa - The Summit That Is Re-Making the World
The coming summit underlines the gap that is emerging between East and West; whilst the West squabbles over Greece, in the Russian city of Ufa a new world is being made
By Alexander Mercouris

This week the Russian city of Ufa will witness what will be by far the most important summit of 2015.

This summit is in theory a joint summit of two different organisations - the Shanghai Cooperation Organisation and the BRICS.

It will also be an informal summit of a third organisation - the Eurasian Union.

The reason for these curious arrangements is that certain states whose leaders will be attending the summit are members of one of these organisations but not of others.

For example, Brazil and South Africa are members of the BRICS but are not members of the Shanghai Cooperation Organisation or of the Eurasian Union.

Uzbekistan is a member of the Shanghai Cooperation Organisation but is not a member of the Eurasian Union or the BRICS.

Russian spokesman have also made it clear that one other country that is not a member of any of these organisations - Iran - will shortly be invited to join them.

Only one country - Russia - is a member of all three organisations that are meeting in Ufa.  That makes Russia the hinge of the whole grouping, though the most powerful state represented in Ufa and the one that is busy forging the new economic linkages via the BRICS and the Silk Road initiatives that will underpin the whole emerging system is China.

What we are seeing in Ufa is the coalescing of the new power centre that is challenging the historic hegemony of the US and the European states.

At its core is the alliance (or "strategic partnership") of China and Russia, who are now busy forging a full spectrum relationship with each other covering all aspects of their relations: political, diplomatic, economic and military.

Coalescing around this core are the Eurasian states (including Belarus and Iran) who are being drawn into a Eurasian system that integrates them politically, militarily and economically with the core.  These together with the Russian-Chinese core will form the Eurasian heartland.

Beyond the heartland there is a group of other states linked to the heartland by a web of political, economic and security linkages.  Of these the giants are India, Pakistan and Brazil.

The key security organisation is the Shanghai Cooperation Organisation.  The key economic organisation is the BRICS, now being underpinned by the new financial institutions being forged by China.  The inner political grouping will be the Eurasian Union of which China - via its alliance with Russia - is a not so secret partner.  The economic and trade linkages tying together the Eurasian heartland are the Eurasian Union and the Silk Road.

Whilst the West seems incapable of resolving a crisis in little Greece, in Ufa a new world is being made.

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 #17
Carnegie Moscow Center
July 8, 2015
Why Do Brazil, Russia, India, and China need BRICS?
By ALEXANDER GABUEV, ANDREY MOVCHAN, PETR TOPYCHKANOV, SERGEI VASILIEV

The heads of BRICS states who gathered in Ufa for another summit have rather different ideas about why their countries are participating in this organization. The Carnegie Moscow Center asked a number of experts to comment on the motivation of BRICS' key players: Brazil, India, Russia, and China.

BRAZIL'S INTERESTS

Sergei Vasilyev, Vice Chairman at VEB Bank for Development, member of the Advisory Council at the Carnegie Moscow Center, Chairman of the Russian-Brazil Business Council

First of all, by participating in BRICS, Brazil derives several economic benefits.One of Brazil's largest trade partners is China, and Brazil is also Russia's largest trade partner in South America. Brazil also has very large economic interests in South Africa. In addition, India, South Africa, and Brazil have been partners within the IBSA framework since before BRICS was created.

On the other hand, its political benefits are even more critical to Brazil. Brazil has always had geopolitical ambitions but could never develop them because of its weak economy and disorganized internal politics. Domestic, political, and economic stability over the last 20 years, however, has allowed Brazil to dramatically elevate its international profile. Let's also recall the active role Brazil played in the WTO negotiations. The Brazilian elite has found BRICS' format quite suitable for attaining its long-term goals - particularly, in terms of moving out of America's shadow. At the same time, this format prevents direct confrontation with the U.S.

RUSSIA'S INTERESTS

Andrey Movchan, director of the Carnegie Moscow Center's Economic Policy Program

The BRICS countries are trying to create an institution that will serve as a potential alternative to the IMF - WB (IBRD) system and that will not directly depend on the US (of course, indirect dependence will continue to persist). Despite Russia's active participation in this project, it's hard to imagine that Russia will emerge as one of themost  important sponsors of such a system; after all, Russia is far behind other member states in terms of the scale and dynamics of its own economy.

Nevertheless, it is possible that Russia might be able to use BRICS Bank and reserve currency pool in the future in order to alleviate its economic problems and even to possibly launch Perestroika-2 - this time without any political demands associated with financial assistance provided by IMF, IFC, or IBRD. Thus, while being mindful of the BRICS members' economic realities, Russia is effectively trying to create a system that will be controlled by China, the country that, unlike the scrupulous US, doesn't scrutinize its partners' domestics policies.

It's still too early to tell whether this system can become successful enough to induce serious World Bank sponsors to make a switch. Its success appears unlikely for a number of reasons. The US and US-controlled World Bank are familiar and rule-oriented partners, while China has so far presented itself as a more active and self-interested creditor.

At any event, Russia has nothing to lose.. The regime considers self-preservation as the country's priority and sees any possibility of external influence on its domestic policies as the main danger. In this light, plans to create BRICS financial institutions are quite reasonable despite their low chances for success.

INDIA'S INTERESTS

Petr Topychkanov, an India scholar and an associate in the Carnegie Moscow Center's Nonproliferation Program

What India appreciates  in BRICS is the association's informal character that allows the country to further its agenda on the international stage with little political and so far little economic costs. The political component of India's agenda has to do with New Delhi's effort to play a global role.  Indian politicians understand that the UN reform will take a long time. They also understand that India is unlikely to become a member of the UN Security Council any time soon, despite Moscow's and Washington's assurances of the contrary. It's also clear that the SCO is more of a regional organization than a global one. Moreover, India has yet to be granted  full-fledged membership to that organization.

India is also interested in BRICS because it would give Indians an opportunity to continue their maneuvering between alliances and associations, enabling them to further develop relations with states that are in conflict with one another.  While improving its relations with the US, India continues to develop ties with both Russia and China. It's easier for India to shield its joint initiatives with Russia and China from Western criticism if these initiatives were to be conducted under BRICS' umbrella.

India's participation in BRICS is also important for its domestic politics. This is due to the fact that anti-colonial and anti-Western sentiments are still strong in the country and are being exploited by all political parties. Were it not for BRICS, India's rapprochement with the US would encounter greater resistance inside the country. Yet as of now, the Indian authorities can always cite BRICS as proof of the country's balanced foreign-policy course.

On the economic front, India is in dire need of investments. The country will hardly be able to sustain its current industrial and agricultural growth. Without reforms in these areas, India will be unable to lay the economic foundation for the global role it wants to play in the 21st century. Indeed, in orderto conduct reforms, it requires investments that no single country can provide. In this case, Indians see BRICS and the Asian Infrastructure Investment Bank, which was created under its umbrella, as a source for new opportunities.

CHINA'S INTERESTS

Alexander Gabuev, the chair of the Russia in the Asia-Pacific Program at the Carnegie Moscow Center

Originally, China didn't start the process of turning BRIC into a semblance international organization (incidentally, the acronym was coined by then-chairman of Goldman Sachs Asset Management, Jim O'Neill, as a marketing move). It was actually Russia who came up with the idea first. Nevertheless, Beijing had and still has at least three reasons to sponsor BRICS' format.

First of all, it is quite appropriate for the largest developing countries to demand that the West revamp the global financial architecture. Indeed, the IMF vote structure no longer reflects modern realities. Furthermore, as theworld's second largest economy (first in terms of purchasing power parity), China is quite justified in its quest for greater privileges.

However, Beijing has hesitated to voice its demands until just recently and was always on the lookout for good company - preferably high-profile and authoritative partners. Thus, the format that emerged in 2009 as a result of the financial crisis allowed China to make a more assertive claim for its rights while speaking on behalf of developing countries and while avoiding a direct clash with the West.

Secondly, Beijing lacks its own original ideas on how to organize global financial architecture (apart from replacing the U.S. with China as its center). Therefore, intellectual cooperation with other large powers that think alike will help generate some creative ideas. Besides, by participating in BRICS Banks and the currency reserve pool, China will gain invaluable practical experience in the implementation of development projects - this time by playing a leadership rather than an auxiliary role.

Thirdly, the BRICS format gradually conditions the world to allow for the possibility of parallel centers in the global financial architecture. It also creates an infrastructure for promoting yuan as one of reserve currencies.

The emergence of the Asian Infrastructure Investment Bank is the first practical outcome of China's participation in BRICS. In addition to the US Congress' obstinacy and China's wide-open wallet, the project owes its current success to the feeling that it's quite normal and in fact good to have another institution in the ever-more-complicated global financial architecture. Furthermore, the ideas formulated and absorbed by Chinese diplomats and financiers in the course of their work on BRICS Bank have also contributed to the project's success.

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 #18
Russia Beyond the Headlines
www.rbth.ru
July 8, 2015
Russian weapons face West's economic wall
Despite being technologically ahead, Russian weapons face a virtual ban in the West. However, the picture is entirely different in Asia.
Rakesh Krishnan Simha, special to RBTH

Russian weapons are good enough for China and India - countries flush with cash and able to afford the best - but in the western world there seems to be an unwritten ban on them. With the notable exceptions of Greece and Cyprus, no western nation even looks at Russian defense systems.

There is a sort of economic apartheid at work against Russia. Long before the West officially slapped sanctions, Russian companies had been fighting an unwritten boycott of their manufactured products. Only a handful of gun enthusiasts in the U.S. imported Russian weapons such as Kalashnikov rifles, and these were clearly not bought in bulk.

The role that the West has assigned to Russia is that of a raw-material appendix to First World economies. According to Leonid F. Fitunin, Director of the Moscow-based Centre for Strategic and Global Studies, "The reason for this is not only the inability of Russian manufactured and high-tech goods to compete in western markets due to their allegedly inferior quality. Political, administrative and bureaucratic barriers in Europe and America make it difficult for Russian producers to support their local producers, the importation of technically superior Russian commodities) weaponry, helicopters, turbines, precision equipment etc) is usually viewed as a security threat. Even imports of Russian oil and gas, which caused no concern back in the day of the Cold War when Russia was a mighty superpower, are now presented as instruments of the alleged domination of and dependence on Russia."
 
Frequent shoppers

In contrast, both China and India are leading importers of Russia's manufactured goods, in particular military equipment and armaments. China, which has a three trillion dollar treasure chest, prefers Russian technology. The bosses in Beijing aren't fools; they are the rulers of a future superpower. Not only do they want to maintain China's legacy of using Russian defense equipment, they are also acquiring precisely those systems that excel their western analogues.

China's latest acquisitions include the 4++ generation Su-35 fighter-bomber and the $500 million S-400 Triumf air defense system. Beijing's appetite for Russian weapons is also fueled by its need to absorb leading-edge defense technology that it currently lacks.

For instance, China is currently dependent on Russian engines for its J-20 and J-31 stealth jets. Industry watchers can see the varying degrees of difficulties Chinese engineers are experiencing in incorporating US versus Russian technologies. China's stealth fighters are largely based on US stealth technology accessed by Chinese hackers, and Chinese designers produced their aircraft before the Americans could perfect their own F-35 stealth fighter.

On the other hand, Russian engines have proved to be hard to reverse engineer. The need to look at the Su-35's engine is one of the reasons China is spending billions on just 24 of these advanced Super Flankers.

You get the picture - Russian technology is on a much higher level than western commentators would care to admit. Fed on a steady diet of Pentagon press releases and sometimes working as embedded reporters in war zones, most western journalists are not able to make informed judgments. They suffer in another way - you don't bite the hand that feeds you. Employment in corporate America means you can't afford to write anything that will portray American defense equipment as anything less than exemplary. End result: objectivity is tossed out the window.

Such close-mindedness can be self-defeating because it prevents the public and commentators from taking an objective look at comparative strengths and weaknesses. Only if and when war breaks out will the public know the efficacy of western weapons against a well-trained and motivated enemy. Such an enemy won't be like Iraq that was pounded by over 40 countries and lacked a motivated military. If the US comes up against the likes of China, Vietnam or India then it will see real action. By then it could be too late to make changes in weapons design.

India is investing a neat $25 billion in Russia's PAK-FA stealth fighter project. Other big-ticket buys include the Sukhoi-30 Flanker, T-90 tank and stealth warships. India has allocated over $100 billion for military equipment during the current decade and a hefty chunk of that amount will go to buy Russian weapons. Despite western defense companies camping out in New Delhi, desperate to hawk their aircraft, submarines and missiles, India is sticking largely with Russia because its battlefield experience with Russian weapons has been positive.

The reality is that Russian weapons are meant to work - they are workhorses. Even during the dawn of the Cold War when Moscow was struggling to catch up with the West in armaments, the quality of Russian weapons was acknowledged albeit reluctantly in the West. It was a time when western corporate interests and journalism hadn't yet became bedfellows. In 1958 here's what TIME magazine wrote: "Russian weapons are generally simpler in design and more mobile. For too long the West believed that the Soviets made simple weapons because they were too unsophisticated to make complex ones. Now the West realises that the simplicity bespeaks a high state of engineering skill."
 
Bottom line matters

Geopolitical considerations play a key role in the choice of weapons providers. That won't change. But other unpredictable factors can play havoc with defense planning. Take the F-35 stealth fighter. It was meant to the surgical strike weapon - a one-size-fits-all solution the US had come up with for itself and its allies.

The F-35 was supposed to replace all existing war planes because it would perform all roles that are currently being done by a clutch of fighters such as the F-15, F-18, F-16 and the A-10 tank killer. Turns out, the F-35 is a truly useless fighter that has blown an Australia-size ($1 trillion) hole in America's defense budget.

Japan and Australia plan to acquire around 70 each of the F-35 to replace their F-15s and F-18s. Now forget the plane's shortcomings such as lack of thrust, paltry firepower and engine blowouts. The bigger worry for Japan and Australia is the F-35 will be prohibitively expensive to operate, which means fewer training flights for their pilots. Secondly, the aircraft will spend dozens of hours in maintenance for each hour of flight which means lower fleet availability. In war, it could be the difference between winning and crying off.

In this backdrop, Asian nations need to act smarter than Japan and Australia to ensure they are getting enough bang for their buck.

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 #19
New York Times
July 8, 2015
Russian Belts Tighten, Affecting Tastes for the Finer Things
By NEIL MacFARQUHAR

RUBLOVKA, Russia - FOR SALE: Nine-bedroom, 15-bathroom, 84,000-square-foot family home with singular amenities: a 16-car garage, indoor-outdoor swimming pool, movie theater, wine cellar, dining table that seats 22, private dental suite and ambient heat throughout the 3.5-acre property to vaporize snow.

ASKING PRICE: 100 million euros, or about $110 million, though a real estate agent says that if you catch the owner on the right day, he might let the one-story behemoth go for a mere 80 million euros, given the lackluster interest seen during its year on the market.

Billboard-size pictures of children scattered throughout are not included, by the way; life-size naked female torso forged from small bullet casings is negotiable.

Sounds steep, but you can't beat the location. With President Vladimir V. Putin and Prime Minister Dmitri A. Medvedev living a few miles down the forested road, the area is crawling with undercover F.S.B. agents and zero reported burglars. Kremlin security will most likely remove the dial telephone that is part of its closed network, however.

The area, Rublovka, has long housed Russia's elite: Soviet leaders like Leonid I. Brezhnev, celebrity writers, actors and filmmakers. On days when the police do not seal the leafy two-lane road to Moscow for hours so Mr. Putin can speed to the Kremlin unimpeded, it is only about a 40-minute drive to downtown.

A mixture of Greenwich, Conn., and Beverly Hills, Calif., Rublovka is a patchwork of gated communities combining vast wealth with often dubious taste - the roofs of faux French chateaus and Italian palazzos peek out amid high walls and even higher trees.

But Russia is slouching through a recession, and Barvikha Luxury Village - a neatly groomed shopping mall housing brands like Prada and Gucci as well as two car dealerships, Bentley and Ferrari/Maserati - is deserted most days. With the economy reeling from the oil-price crash and Western economic sanctions over Ukraine, the ruble has sunk precipitously, inflation is up sharply and real wages are shrinking for the first time in years, forcing Russians - even the wealthiest - to make do with less.

Mr. Putin and his Kremlin cohorts have tried their best to minimize the downturn, yet autonomous analysts present a darker picture, with only a halting recovery, if any, expected next year.

While Mr. Putin told Russians recently, "We have stabilized the situation, absorbed the negative short-term fluctuations and are now making our way forward confidently through this difficult patch," Rublovka's sluggish real estate market tells a different story. Experts, including economists and real estate agents, said sellers are either desperate for cash or fleeing abroad, taking their money with them, while buyers are shunning the Rococo-style castles that are something of an area trademark.

"People do not think that they will make the same type of money in the future, so they don't want to spend what they have now," said Leonid Krongauz, a founder of Kalinka Realty, which has been trying to sell the 100-million-euro villa. "The political and economic instability prevents everyone from buying real estate."

There are exceptions, he and others noted. Political and business barons from distant Russian regions still covet a prestigious Moscow address, as do Ukrainian tycoons seeking to escape the simmering war. (The deposed Ukrainian president, Viktor F. Yanukovych, is rumored to have taken up residence in town.)

Various real estate agents said no Rublovka clients wanted to speak publicly about emigrating lest they be labeled part of the "fifth column" supposedly undermining Russia's interests. Yet the uncertainty convinces many that their savings will be safer abroad.

"I know a lot of people, even middle-income people, who are trying to invest money abroad - in Bulgaria, the Baltics, Montenegro," said Evgeny Gontmakher, a prominent economist often critical of government policy. "In this situation it is safer to sell in Rublovka, to take the money abroad and to live somewhere else."

Of course, many people remain perfectly happy in Rublovka, support Mr. Putin and have no intention of leaving.

A brick turret marks the entrance to Tagankovo, the gated community where Alexander Kulikov, 53, has lived since 1994. He has founded a half-dozen businesses, including an optic lens manufacturer, a popular fashion website and a wholesale housewares company that distributes Ace Hardware here.

Last fall, after the ruble crashed and the sanctions raised the cost of capital, businessmen borrowed money at 40 percent, he said, accepting zero profit or worse just to survive. The rate has since dropped to about 25 percent, and he renegotiates his financing monthly, he said.

He said the tone of conversation on Tagankovo's tennis court has changed of late. "We used to talk only about how bad the situation was," said Mr. Kulikov, speaking in the secret den of an American neighbor that was hidden behind a concrete wall in his basement movie theater. "Lately, the volume of such discussions has gone down. We have started to talk about women again."

Another neighbor, Boris I. Chirkov, 77, led the team that once helped install the hotline linking the White House to the Kremlin. After the Soviet Union collapsed, he founded a telecommunications company and moved to Rublovka.

"This is what makes me uncomfortable," he said. "There used to be feta cheese from Greece. Now Belarus makes it, but it is not the same. Am I going to die from that? Of course not. I don't know anyone whom the sanctions are killing."

Mr. Putin has wrapped the need to endure economic hardship in fervent nationalism.

"Optimistic words are used to describe a sinking economy," said Konstantin V. Remchukov, editor of The Nezavisimaya, a daily newspaper in Russia. "All this propaganda and patriotism casts a huge shadow on the situation. Seven out of 10 Russians say that they are willing to live under hardship rather than to accede to American pressure."

All kinds of spending habits have changed.

Mr. Kulikov used to seek out imports like American meat, now banned under Russian sanctions, but he said he and his Rublovka neighbors buy Russian these days, even when it comes to wine. "It might not be the same as the French or Italian wine that we are used to," he conceded, "but the wines have a very patriotic nose."

The luxury end of the market has suffered, however. One Russian executive for an American company said the wealthy no longer accept paying three times the price for a Tiffany ring just for the convenience of buying it in Russia.

The manager of the local Ferrari dealer maintained bravely that the 43 percent nationwide drop in car sales in the last year has not affected luxury models, but that was belied by a showroom floor featuring 2014 models being sold at steep discounts, like a 458 Spider reduced to $317,000 from $410,000.

Ekaterina Rumyantseva, another founder of Kalinka Realty, said that in terms of high-end sales she could only recall one this spring, a $30 million house in Rublovka. "A house that was $50 million is now $25 million, or an $8 million house goes for $3 million," she said. "The market is overstocked."

In the boom years of 2010 and 2011, the company easily sold 100 houses a year, she said, but it is now down to somewhere between 30 and 50.

Mr. Kulikov and Mr. Chirkov speculated that anyone selling a huge home right now might be facing problems with the government, otherwise no one would try in such an anemic market. For many of those leaving, the official reason is moving closer to children studying abroad - in Switzerland, in the case of the 100-million-euro domicile..

A staff of 132 people still keep the place humming, with the workers filling out three round-the-clock shifts, said Mr. Krongauz, the real estate agent. He added helpfully, "You can do it with fewer."

The house, finished in 2012, is not officially listed, but a half-dozen potential buyers have inspected it in the past year, he said. Even with no prospective buyer in sight, members of the real estate team still ran through its sales pitch.

"This house is the best house in Russia," said one.

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 #20
Russia Beyond the Headlines
www.rbth.ru
July 7, 2015
How culture continues to bring Russians and Americans together
In an RBTH exclusive, Mary Ellen Koenig, Cultural Attaché to the U.S. Embassy in the Russian Federation, writes about the special unifying bond that culture can provide between Russia and the United States even in times when official relations between the two countries are tense.
Mary Ellen Koenig, special to RBTH

At the height of the Cold War, a 23-year-old Texan, Van Cliburn - who had studied piano in the Russian romantic tradition - won the Soviet Union's first International Tchaikovsky Piano Competition, earning him worldwide recognition and a special place in the hearts of both those Americans and Russians who appreciate great performers.

Culture has a way of transcending political differences, bringing together Russians and Americans who may differ on issues but who appreciate outstanding music, dance, drama, literature, film and visual arts.  As the U.S. Embassy's cultural attaché for the last two years, my goal has been to help show the depth and diversity of American culture. At the same time, I have developed a deep respect and admiration for the traditions of Russian culture and its impressive array of arts institutions.

Among the highlights of my two years here have been performances that involved collaboration between American and Russian artists. This year, for example, one of the great U.S. ballerinas of the 20th century, Suzanne Farrell, brought her troupe to Moscow to partner with Ballet Moskva to perform ballets choreographed by the great Russian-American, George Balanchine.

In February, Grammy Award-winning trumpeter Terrence Blanchard performed with famed Russian saxophonist Igor Butman. Young American and Russian opera singers from the Bolshoi Theater and the Metropolitan Opera in New York performed at the Bolshoi and at the U.S. Ambassador's residence, Spaso House.
Another high point was last summer's New Orleans/Moscow 2014 festival, which brought music, food, and photography from the American South to the Usadba Jazz Festival in Moscow. Last weekend, I went to the latest Usadba festival to enjoy the performance of the Jones Family Singers, a gospel singing group from Texas.

When our musical and dance groups travel throughout Russia, they always draw enthusiastic, knowledgeable and appreciative audiences. There is a genuine interest in American culture here in Russia and we are often pleased to partner with outstanding Russian institutions such as the Bolshoi, the Moscow Art Theater, the Moscow Conservatory, the Multimedia Museum and the Documentary Film Center.

Last fall, the Stanislavsky and Nemirovich-Danchenko Music Theater hosted several nights of contemporary American dance. The Lumière Brothers Center for Photography displayed a well-attended exhibit of images of the young Elvis Presley and the long-lost photos of Vivian Maier. And our annual AmFest film festival always attracts big, movie-loving crowds at Moscow's Gorizont Theater.

It is always a pleasure for me to attend events featuring American artists at Russian cultural institutions, whether or not the Embassy is involved. The Pushkin State Museum of Fine Arts and the Calder Foundation in New York recently collaborated on the first-ever retrospective in Russia featuring the works of the great American artist Alexander Calder. And Moscow's exciting new Garage Museum of Contemporary Art opened with a fascinating exhibit about the American National Exhibition [held in Moscow's Sokolniki Park in 1959 - RBTH].

Over the years, culture has played a remarkable role in our nation's overall diplomacy with Russia - in particular, when the political dialogue is difficult. In the Cold War era, some of the most memorable moments of U.S.-Soviet communications occurred at cultural events. Van Cliburn's stunning performance at the Tchaikovsky Competition made headlines worldwide in 1958.

The following year, Vice President Richard Nixon and Soviet premier Nikita Khrushchev held impromptu "kitchen debates" at the American National Exhibition. And Russian music lovers packed the Moscow Conservatory in 1986 to witness the return of the great Russian-born pianist, Vladimir Horowitz. This month, young American pianists have performed well in the latest Tchaikovsky Piano Competition - 57 years after Van Cliburn's triumph.

The United States and Russia share a long history, having maintained an official relationship for more than 200 years. That relationship has at times been turbulent - as it has been in the past year - but Americans and Russians set aside such debates when they have the opportunity to enjoy the best in one another's culture.

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#21
Moscow Times
July 7, 2015
Angelina Jolie Buys Rights to Film About Catherine the Great and Her Lover
By Ilaria Parogni

Hollywood actress, film director and producer Angelina Jolie has purchased the film rights to Simon Sebag Montefiore's book about the love affair between Catherine the Great of Russia and Prince Grigory Potemkin, the British author's literary agency said Monday.

Jolie's production company, Jolie Pas, has bought the option to adapt the book for film or a television drama, the agency, Georgina Capel Associates, said in an online statement.

"Catherine the Great and Potemkin: The Imperial Love Affair," was published in 2000 under the original title "Prince of Princes: The Life of Potemkin" and focuses on the intense and extravagant relationship between the self-possessed Russian monarch and her militant lover. Montefiore's first history book, it draws on the fascinating and passionate correspondence between the two lovers.

"Catherine and Potemkin had history's greatest love affair. They were both brilliant people who were totally equal and totally balanced," Montefiore was quoted as saying by British newspaper the Daily Mail.

Montefiore welcomed news of the prospective film.

"Catherine is the ultimate feminist hero. I feel very safe with Angelina in charge of it," he was cited as saying by the Daily Mail.

"The characters are dear to my heart and I can't imagine my book could be in better, more sensitive hands. This is a dream team to bring Catherine and Potemkin, these exceptional and flamboyant characters, to the screen," he wrote in a statement published on the Georgina Capel Associates website.

Catherine the Great, a Prussian princess who married into the Russian royal family, deposed her husband and ruled the empire from 1762 to 1796 during what is often referred to as the Golden Age. Her love affair with Potemkin lasted for years and many believe the couple were secretly married.

Details regarding Jolie's role in the production are yet to be revealed, the Daily Mail reported. The actress, whose name was previously linked to the role of Catherine in another adaptation of a novel about the empress that was ultimately never made, has been experimenting with off-the-stage roles. After making her directorial debut in 2011 with "In the Land of Blood and Honey," Jolie returned behind the camera for "Unbroken" (2014). She was also a producer on both films.
 

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 #22
Russia Can No Longer Afford to Be the Militarist and Expansionist Power It has Always Been, Shevtsova Says
Paul Goble

Staunton, July 8 - After a brief attempt to escape from its past in the 1990s, Russia under Vladimir Putin is "again returning to militarism ... the model of existence in which Russia had existed for centuries" in order to prepare for war. No other such civilization exists in the world now, but Russia "cannot militarize as it did because it lacks the means," Lilya Shevtsova says.

In an interview to Apostrophe.com.ua, portions of which have been published today, the Russian analyst points out that the Russian budget of 430 billion US dollars simply isn't large enough to maintain the former kind of militarism (apostrophe.com.ua/news/world/2015-07-08/rossiya-vsegda-jila-podgotovkoy-k-voyne---uchenyiy/28972).

And that gap between aspiration and possibility explains why Putin is behaving as he is: "Militarism requires the consolidation of society on the basis of one idea: the enemy and a besieged fortress. But now there are very few people in Russia who are prepared to support militarization."

As a result, Shevtsova continues, "we find ourselves in a very complicated pause, when on the one hand, the system has not departed from militarism and the authorities want to return to militaristic patriotism and, on the other - and this is certainly the last gasp and agony of militarism -- the country no longer can militarize itself or conduct a continuing struggle with the entire world."

What that means, she says, is that "the Kremlin is capable of fake militarism, the imitation of war, and 'an undeclared war.' That is the kind of war Russia is conducting with Ukraine." Most members of the Russian elite understand what is going on, she says; it is critically important that people in neighboring countries and the West do as well.

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#23
DPR, LPR militiamen no terrorists - Russian Foreign Ministry

MOSCOW, July 7. /TASS/. There are no terrorists among militiamen of the self-proclaimed Donetsk and Luhansk People's Republics (DPR and LPR) fighting in south-eastern Ukraine, Russian Deputy Foreign Minister in charge of antiterrorism efforts Oleg Syromolotov told TASS commenting on accusations that Russia provides military support to the militias.
Syromolotov underscored that Russia is ready to defend its foreign policy interests "by all available legal means, in line with international practice and on the basis of international law."

He said that if media now join this work, this should not be perceived for example as an element of information counteraction, all the more so war.

"It more looks like truth that information war, and at times a rather cynical one, has been conducted for decades against Russia," the deputy Russian foreign minister said. "Only this allowed the global public opinion to refuse to see evident elements of the situation in a number of states, agree with the clearly wrong policy of their own governments, for example, in Iraq, Libya, Syria. And now in Ukraine."

He said that if the term "hybrid war" means accusations against Russia of military support for "separatists", then it "first of all, surely has nothing to do with reality, terrorism or counterterrorism."

"Among those fighting in the southeast of Ukraine, in the ranks of the DPR and LPR militiamen, there are no and can be no terrorists. Because they have not committed and are not committing any terrorist acts, they are fighting for their freedom, defending their families and rights."

"On the contrary, the actions of forces standing against them, first of all, combat units of radical organizations, in our view, quite fall under the definitions of extremist and terrorist crimes, or even military crimes, crimes against humanity," Syromolotov said.

"And such crimes will not go unpunished," he said. "The Russian side is conducting relevant work and will keep conducting it until punishment is inevitable for all those guilty."

Situation in Ukraine

After a coup occurred in Ukraine in February 2014, mass protests soon erupted in Ukraine's south-east, where local residents, mostly Russian speakers, did not recognize the coup-imposed authorities, formed militias and started fighting for their rights.

In response, Kiev in April 2014 announced the start of "an antiterrorism operation" in east Ukraine, which involved the Armed Forces, the Interior Ministry's National Guard and volunteer battalions made up of Euromaidan activists, many of whom hold far-right and neo-Nazi views.

Ukrainian troops have been engaged in fierce fighting with local militias during Kiev's punitive operation, underway since mid-April 2014, against the breakaway territories - the Donetsk and Luhansk People's Republics constituting parts of the Donetsk and Lugansk regions of Ukraine.

Massive shelling of residential neighborhoods, including with the use of aviation, has killed thousands and led to a humanitarian disaster in the area.

Kiev has regularly violated the ceasefire regime imposed as part of the Package of Measures on implementation of the September 2014 Minsk agreements.

The Package (Minsk-2) was signed on February 12, 2015 in the Belarusian capital Minsk by participants of the Contact Group on settlement in Donbas. In line with the document, cannon artillery with calibers of 100 millimeters and more was to be withdrawn from the disengagement line to a distance of 50 kilometers.

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 #24
AFP
July 7, 2015
Russia cuts off power supplies to Ukraine rebels: Kiev
 
Kiev said Tuesday that Russia had cut off electricity to Ukraine's rebel-run regions in what appears to be another sign that Moscow is losing interest in plans to splinter its neighbour.

Russian President Vladimir Putin has gone through an extended spell without peppering his speeches with mentions of Novorossiya, the "New Russia" made up of Ukrainian lands that were once under tsarist control.

The veteran Kremlin leader had promoted the project repeatedly while the separatists were gaining ground along Ukraine's eastern industrial heartland toward the end of last year.
But Ukrainian insurgents who claimed to be in charge of re-creating a part of the old Russian empire had in recent weeks complained of a sudden lack of interest from the Kremlin and a dire shortage of funds.

Ukraine's Energy Minister Volodymyr Demchyshyn said Tuesday that energy-rich Russia had recently also stopped supplying electricity to the militia-run regions of Lugansk and Donetsk.

"We held fairly productive negotiations with the Russians," Interfax-Ukraine quoted Demchyshyn as telling an energy ministry meeting.

"We have been able to switch off four supply lines that ran from Russia to territories outside our control."

The energy minister said the thick cables supplied an allowance of $15 million (14 million euros) of power a month.

"That money was not being paid," Demchyshyn said.

There was no immediate response to his comments from Moscow.

Russia had earlier also promised to deliver free natural gas to Ukraine's rebel regions by building extensions and branches to existing pipelines.

It remains unclear where those plans stand today. Kiev officials believe the fighters may be smuggling in small supplies of gas through hastily-erected -- and considerably smaller -- pipes that cross parts of the Ukrainian-Russian border under their control

Demchyshyn's comments came ahead of a new round of negotiations Tuesday in the Belarussian capital Minsk aimed at ending a 15-month conflict that has claimed more than 6,500 lives.

The EU-mediated meeting will see Ukrainian President Petro Poroshenko's personal envoy speak to the Moscow-appointed negotiator in the presence of separatist representatives who are not formally part of the talks.

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 #25
DPA
July 7, 2015
OSCE hopes for new accord on withdrawing weapons in Ukraine conflict
 
Moscow (dpa) - The special representative of the Organization for Security and Cooperation in Europe (OCSE) hopes a new accord on withdrawing weapons from Ukraine's conflict zone can be agreed soon.

Following Tuesday's round of talks of the trilateral contact group, the OSCE's Martin Sajdik said another meeting would be needed to finalize a deal on withdrawing from the front lines weapons with a calibre smaller than 100 millimetres.

The contact group comprises representatives of Ukraine, Russia and the OSCE, which is monitoring the conflict. Tuesday's meeting in Minsk took place behold closed doors and followed a flare-up in fighting last week.

While in Minsk, the officials were expected to have discussed elections slated for October and November in the self-proclaimed separatist republics of Donetsk and Luhansk.

The Russian side, for its part, was expected to have pressed for Ukraine to turn back on tap water supplies to areas controlled by the separatist groups. The water has been shut off for more than a month.

Earlier on Tuesday, Kremlin spokesman Dmitry Peskov told state media that Russia does not see any stabilization in the conflict, since the ceasefire deal signed in February is regularly violated.

Moscow has said it is using its influence on the pro-Russian separatist groups to pressure them into complying with the ceasefire. Complete fulfillment of the ceasefire is paramount for Western sanctions against Russia to be lifted.

The OSCE has side that both the Ukrainian military and the rebel groups have violated the ceasefire on various occasions.

About 6,500 people have died in the conflict since April last year, according to estimates by the United Nations.

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 #26
Russia Insider
www.russia-insider.com
July 7, 2015
Additional Evidence Kiev Sniper Massacre Was a False Flag Keeps Coming Out
The official investigation isn't going anywhere, but more new evidence keeps coming out in the media that contradicts the accepted narrative
By Ivan Katchanovski

From the author's Facebook (via New Cold War.org)
Introduction by New Cold War.org

Ivan Katchanovski is a researcher and lecturer at the University of Ottawa who continues to follow and document the story of the 'Snipers' Massacre' on Maidan Square in Kyiv on Feb. 20, 2014.

Below is latest information from him about the lagging-to-non-existent formal investigation of the sniper fire that killed dozens of people that day and served as a pretext for a violent coup against the Ukraine government in the days that followed. And here is further reading on the subject by the same author:

YouTube screenshot of shots being fired on police and protesters from Hotel Ukraina on Feb 20, 2015

*  New report on Feb. 20, 2014 Maidan sniper massacres shows official investigation falsified, by Ivan Katchanovski, May 21, 2015

*  The Snipers' Massacre on the Maidan in Ukraine (revised and updated version), document by Ivan Katchanovski, Feb. 20, 2015

From the Facebook of Ivan Katchanovski, July 6, 2015:

1. Recently discovered sources corroborate my analysis of the "snipers' massacre" on the Maidan and show how leading Western media, such as BBC, CNN, and Paris Match, misrepresented this massacre.

This is easy to determine and it requires no technical expertise or ballistic tests, which continue to be withheld by the government investigation.

CNN filmed from the Hotel Ukraina a Maidan medic being shot in his right leg at 10:17am [on Feb 20, 2014] but did not report that this direction pointed to a shooter in one of the Maidan-controlled buildings, such as a roof window on Horodestkoho street or a roof of Bank Arkada.

Maidan eyewitnesses, radio intercepts by SBU snipers, videos, and bullet impact signs all pointed to concealed shooters in these locations, which were at that time in the Maidan-controlled area.
(Referencing CNN report of Feb. 20, 2014)

2. In his Radio Svoboda [Radio Liberty] interview one year after the massacre, Roman Kotliarevsky, this wounded Maidan medic, said that his position at the moment of his shooting and a steep wound in the side back area of his right thigh indicate that he was shot from the Bank Arkada or a roof of one of the buildings there, i.e. the ones on Horodetskoho Street.

He also stated that the investigation into his shooting was dragged out and that no specific suspects were identified.

This is consistent with my study findings that the official investigation is falsified, since it continues to deny that any "snipers" were at these locations in spite of various evidence to the contrary.

[Kotliarevsky tells Radio Svoboda, "The investigation is very slow, and I do not see much desire to find the truth. Often I have to call the investigators and ask them, "Well, so what? Maybe something else will do? Send maybe for examination ..." Everything is very slow, for the year has changed the order of five investigators. How long it will last and whether a result, I do not know."]
(Referencing Radio Svoboda report, July 15, 2015)

3. My study found that an exit bullet hole in the left side of his blue helmet and his position when he was shot in this video (39:48) indicated that Ustym Holodniuk was killed at 9:54:36 am from the direction of the Hotel Ukraina. The hotel, from which this video was filmed, was on the opposite side from the Berkut and Omega-manned barricade.

The CNN video shows that the Maidan medic was wounded when he tried along with other Maidan medics to evacuate Holodniuk to the Hotel Ukraina.
(Referencing You Tube posting from Feb. 20, 2014)

4. A lawyer representing Ustym Holodniuk basically corroborated this finding in his interview which I just located. He said that Holodniuk was not among 39 protesters whose killings were attributed by the official investigation to Berkut. The lawyer also admitted that the investigation had evidence that protesters were shot from the Hotel Ukraina and Arkada buillding, but the investigation denied this at the time. The government investigation also did not disclose this information, specifically concerning Holodniuk. (Referencing Vesti News report, October 2014)

His killing was publicized in Ukrainian and Polish documentaries and various media reports and attributed to government snipers or the Berkut. In a BBC interview earlier this year and in many other interviews, his father, a former policeman who was on the Maidan during the massacre and conducted his own investigation of his son's killing, also misattributed Ustym Holodniuk's killing to the government forces. With the exception of this crucial information buried in the interview of the lawyer, no other media reported that even official investigation did not include Holodniuk among the 39 protesters whose killings it attributed to the Berkut police.
(Referencing BBC News report, Feb. 25, 2015)

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#27
Consortiumnews.com
July 7, 2015
Ukraine Merges Nazis and Islamists
By Robert Parry
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s.

Exclusive: Ukraine's post-coup regime is now melding neo-Nazi storm troopers with Islamic militants - called "brothers" of the hyper-violent Islamic State - stirring up a hellish "death squad" brew to kill ethnic Russians in eastern Ukraine, on Russia's border, reports Robert Parry.

In a curiously upbeat account, The New York Times reports that Islamic militants have joined with Ukraine's far-right and neo-Nazi battalions to fight ethnic Russian rebels in eastern Ukraine. It appears that no combination of violent extremists is too wretched to celebrate as long as they're killing Russ-kies.

The article by Andrew E. Kramer reports that there are now three Islamic battalions "deployed to the hottest zones," such as around the port city of Mariupol. One of the battalions is headed by a former Chechen warlord who goes by the name "Muslim," Kramer wrote, adding:

"The Chechen commands the Sheikh Mansur group, named for an 18th-century Chechen resistance figure. It is subordinate to the nationalist Right Sector, a Ukrainian militia. ... Right Sector ... formed during last year's street protests in Kiev from a half-dozen fringe Ukrainian nationalist groups like White Hammer and the Trident of Stepan Bandera.

"Another, the Azov group, is openly neo-Nazi, using the 'Wolf's Hook' symbol associated with the [Nazi] SS. Without addressing the issue of the Nazi symbol, the Chechen said he got along well with the nationalists because, like him, they loved their homeland and hated the Russians."

As casually as Kramer acknowledges the key front-line role of neo-Nazis and white supremacists fighting for the U.S.-backed Kiev regime, his article does mark an aberration for the Times and the rest of the mainstream U.S. news media, which usually dismiss any mention of this Nazi taint as "Russian propaganda."

During the February 2014 coup that ousted elected President Viktor Yanukovych, the late fascist Stepan Bandera was one of the Ukrainian icons celebrated by the Maidan protesters. During World War II, Bandera headed the Organization of Ukrainian Nationalists-B, a radical paramilitary movement that sought to transform Ukraine into a racially pure state. At times coordinating with Adolf Hitler's SS, OUN-B took part in the expulsion and extermination of tens of thousands of Jews and Poles.

Though most of the Maidan protesters in 2013-14 appeared motivated by anger over political corruption and by a desire to join the European Union, neo-Nazis made up a significant number and spearheaded much of the violence against the police. Storm troopers from the Right Sektor and Svoboda party seized government buildings and decked them out with Nazi insignias and a Confederate battle flag, the universal symbol of white supremacy.

Then, as the protests turned bloodier from Feb. 20-22, the neo-Nazis surged to the forefront. Their well-trained militias, organized in 100-man brigades called "sotins" or "the hundreds," led the final assaults against police and forced Yanukovych and many of his officials to flee for their lives.

In the days after the coup, as the neo-Nazi militias effectively controlled the government, European and U.S. diplomats scrambled to help the shaken parliament put together the semblance of a respectable regime, although four ministries, including national security, were awarded to the right-wing extremists in recognition of their crucial role in ousting Yanukovych.

At that point, virtually the entire U.S. news media put on blinders about the neo-Nazi role, all the better to sell the coup to the American public as an inspirational story of reform-minded "freedom fighters" standing up to "Russian aggression." The U.S. media delicately stepped around the neo-Nazi reality by keeping out relevant context, such as the background of national security chief Andriy Parubiy, who founded the Social-National Party of Ukraine in 1991, blending radical Ukrainian nationalism with neo-Nazi symbols. Parubiy was commandant of the Maidan's "self-defense forces."

Barbarians at the Gate

At times, the mainstream media's black-out of the brown shirts was almost comical. Last February, almost a year after the coup, a New York Times article about the government's defenders of Mariupol hailed the crucial  role played by the Azov battalion but managed to avoid noting its well-documented Nazi connections.

That article by Rick Lyman presented the situation in Mariupol as if the advance by ethnic Russian rebels amounted to the barbarians at the gate while the inhabitants were being bravely defended by the forces of civilization, the Azov battalion. In such an inspirational context, it presumably wasn't considered appropriate to mention the Swastikas and SS markings.

Now, the Kiev regime has added to those "forces of civilization" - resisting the Russ-kie barbarians - Islamic militants with ties to terrorism. Last September, Marcin Mamon, a reporter for the Intercept, reached a vanguard group of these Islamic fighters in Ukraine through the help of his "contact in Turkey with the Islamic State [who] had told me his 'brothers' were in Ukraine, and I could trust them."

The new Times article avoids delving into the terrorist connections of these Islamist fighters. But Kramer does bluntly acknowledge the Nazi truth about the Azov fighters. He also notes that American military advisers in Ukraine "are specifically prohibited from giving instruction to members of the Azov group."

While the U.S. advisers are under orders to keep their distance from the neo-Nazis, the Kiev regime is quite open about its approval of the central military role played by these extremists - whether neo-Nazis, white supremacists or Islamic militants. These extremists are considered very aggressive and effective in killing ethnic Russians.

The regime has shown little concern about widespread reports of "death squad" operations targeting suspected pro-Russian sympathizers in government-controlled towns. But such human rights violations should come as no surprise given the Nazi heritage of these units and the connection of the Islamic militants to hyper-violent terrorist movements in the Middle East.

But the Times treats this lethal mixture of neo-Nazis and Islamic extremists as a good thing. After all, they are targeting opponents of the "white-hatted" Kiev regime, while the ethnic Russian rebels and the Russian government wear the "black hats."

As an example of that tone, Kramer wrote: "Even for Ukrainians hardened by more than a year of war here against Russian-backed separatists, the appearance of Islamic combatants, mostly Chechens, in towns near the front lines comes as something of a surprise - and for many of the Ukrainians, a welcome one. ... Anticipating an attack in the coming months, the Ukrainians are happy for all the help they can get."

So, the underlying message seems to be that it's time for the American people and the European public to step up their financial and military support for a Ukrainian regime that has unleashed on ethnic Russians a combined force of Nazis, white supremacists and Islamic militants (considered "brothers" of the Islamic State).

[For more on the Azov battalion, see Consortiumnews.com's "US House Admits Nazi Role in Ukraine."]
 

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 #28
Russia Direct
www.russia-direct.org
July 8, 2015
The US, Russia might replace confrontation with cooperation
Recent efforts at dialogue between top Russian and U.S. diplomats offer real hope that Russia and the U.S. could finally be seeking an end to their confrontation over Ukraine.
By John Pedler
John Pedler is a former British diplomat and now a diplomatic consultant based in France. He was partly educated in the United States during World War II and then at the London School of Economics, where he took a subsidiary course in Comparative Religion. He joined the British Diplomatic Service in 1951 offering Russian as a foreign language. He served in Vienna, Paris and the three countries that comprised French Indochina: Vietnam, Laos and Cambodia. During a year's leave of absence he went to Vietnam in 1968 as a war correspondent for the Sunday Telegraph. He is the author of "A Valedictory Despatch," which deals at some length with the imperative need, in today's world, for close EU-Russia relations.

On July 9, Deputy Russian Foreign Minister Grigory Karasin, Foreign Minister Sergey Lavrov's right hand man, is said to be meeting Victoria Nuland, Assistant Secretary of State for European and Eurasian Affairs. This could be a further indication that Moscow and Washington are moving towards détente on Ukraine.

This follows Secretary of State John Kerry's and Russian Foreign Minister Sergey Lavrov's meeting in Geneva on June 30 for their fourth tête-à-tête this year. Both the State Department and the Russian Foreign Secretary have given little information about this - or, indeed, their other three meetings. The Russian Foreign Ministry only revealed that the two "decided to continue our contacts on the Ukrainian crisis on a more practical plane."

So Kerry's tweet on May 12 after his visit to Sochi - "Had frank discussions with President Putin & FM Lavrov over key issues including Iran talks, Syria, Ukraine" - could prove truly historic as presaging a new "reset" in U.S.-Russia relations, after an earlier "reset" stalled during Obama's presidency.

Indeed, the Geneva meeting appears to confirm U.S. President Barack Obama's determination to use the last 17 months of his presidency to do what he can to usher in a period of cooperation in world affairs, ending the neo-conservatives' push for a unipolar world dominated by the U.S. The U.S. "reset" with Cuba is further evidence of this.

If - and it's a big if - these efforts are followed through, despite Republican opposition, the U.S. and Russia could convert Ukraine from a bone of contention into a benign hyphen joining the "EU west" and the "Russian east" in Europe.

Reassessing blame for the Ukraine crisis

Part of the Anglo-American media are presenting Kerry's May visit to Putin's dacha in Sochi as a defeat for Obama. Indeed, the all-prevailing mantra of the Western media is that the Ukraine crisis is "all Putin's fault" and little gets published contradicting this, despite what many Western experts have long been saying.

There are, for example, two recent publications that deserve the attention they have not had. The first is the February 10 report of the UK House of Lords Committee on Foreign Affairs chaired by Lord Tugendhat. It declares that, "Foreign Office [and the EU's] shortcomings led to a catastrophic misreading of the mood in the run-up to the Ukraine crisis."

The second is a recent monumental work, "Frontline Ukraine," by University of Kent Professor Richard Sakwa, which evenhandedly distributes blame on the EU, on President Putin, and on the U.S.

Indeed, in the last few months, noted historians John J. Mearsheimer, Margaret Macmillan, and Tarik Cyril Amar have faulted U.S. and EU policies for ignoring Russia's vital interests. As early as September 8 last year, three former U.S. Ambassadors to Russia/USSR (Jack F. Matlock, Thomas Pickering and James F. Collins) signed a New York Times op-ed headlined "Give Diplomacy with Russia a Chance."

Jean-Pierre Chevèrnement, a former French Minister of Defense, has just challenged the prevailing self-censorship around Russia with a piece in June's Le Monde Diplomatique (translated as "No Need For This Cold War"). He stresses the need for the EU to distance itself from the U.S. and assert a policy of its own towards Ukraine and Russia.

The true national interests of Russia and the West coincide

Russia, of course, has a vital interest in Ukraine. The EU has a very important interest. The U.S. has no political interest, provided Ukraine is that "benign hyphen" joining the EU west and the Russian east of Europe.

It is not only President Obama who is under pressure to end the present standoff with Russia. President Putin, too, is under pressure. The assassination on February 27 of Russian opposition leader Boris Nemtsov, who had openly deplored the policies that brought civil war to Ukraine, momentarily revealed the depth of Russian middle-class concern about President Putin's alienation of the West.

Putin is popular in Russia for standing up for Russia's vital interests, not for a Ukrainian civil war that's in the interest of no one - particularly the hapless Ukrainians. So if Putin is made an offer that Russia "cannot refuse," he is likely to take it.

Prospects for agreement on the status of the Ukraine

Last year the stage was at last set for serious negotiations about the shape of a Ukrainian settlement. The European Union (in the form of German Chancellor Angela Merkel and French President Francois Hollande) had begun direct talks about Ukraine with the Kremlin without the U.S. being directly involved, yet with the involvement of all the Ukrainian parties.

These ongoing discussions could now have far greater potential to result in negotiations to end the civil war and determine the future status of Ukraine. But EU foreign affairs decisions, where they involve defense, can be vetoed by any one of the 28 members. So the EU - which generally follows the U.S. when it cannot agree on policy - may now be overtaken by the U.S. in seeking détente with Russia.                                             

In favor of détente is the growing awareness that neither the West nor Russia can afford to make more enemies than they already have. They both need partners on such pressing challenges as climate change, Iran, Syria, the Israel-Palestine conflict, and the Islamic State of Iraq and Greater Syria (ISIS).
And good relations between the EU, the U.S. and Russia will largely determine whether a much-needed era of cooperation replaces these times of confrontation. President Obama was right when he famously remarked that, in today's world, you can't get much done without Russia.

But both the U.S. and Russia are big ships - and big ships are hard to turn around - particularly when there are those on the bridge who are out to seize the wheel, such as neo-conservatives in the U.S. and security officers in Russia.

So it could be hard for Kerry and Lavrov to keep the ear of their bosses. If the media, Western and Russian, were now to become even-handed in reporting on Ukraine, that would do a great deal to help them.

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 #29
Médecins Sans Frontières
www.msf.org
July 8, 2015
Ukraine: "If you scratch the surface a little bit, people are traumatised."
By Dr Andrew Dimitri, former MSF Medical Activities Manager in Ukraine.

Dr Andrew Dimitri from Sydney worked as Médecins Sans Frontières (MSF) Medical Activities Manager in Gorlovka region, eastern Ukraine, until May this year. More than 2 million Ukrainians have been displaced by the conflict and thousands have been killed.

"The city of Gorlovka has been badly affected by the conflict, and is still only 5-10kms from the frontline. There was shelling every night that I was there, and sometimes during the day, but civilians weren't being actively targeted. Things have vastly improved since the beginning of the ceasefire in February and it was easy to feel like the war was over, that everything was fine. The weather was getting warmer, bars and cafes were open, the streets were being cleaned. But if you scratch the surface a little bit, people are traumatised. People had spent weeks in bunkers in the bitter cold of winter. They'd had family members killed or be seriously injured.

MSF was providing mental health services such as one-on-one sessions and group sessions, including working with children at local schools. I remember one day visiting our local psychologist who was doing a session in a school in a small town. There were about ten kids in the room, who were writing down or drawing some of the terrible things that had happened to them, and then throwing away the pieces of paper. So I walked in on this kind of chaotic, playful paper fight.

I was talking to one of the teachers when we suddenly became aware that there was a kid up the front who was crying. She had been drawing something frantically while everyone else was running around. We had a look, and she'd drawn the typical type of cross they have on funerals and she'd written on it, 'goodbye to my brothers'. I think she'd lost two brothers in the conflict. It's easy to forget that these things have happened so recently, that 6,500 people have been killed. It was very sobering to see that drawing.

There are still huge challenges with access to healthcare. The first problem is a supply problem. The government has cut off financial support to the health system in the rebel-held areas, so drugs aren't being delivered to the hospitals. The second problem is more about access. Some villages have been very badly bombed, and the only doctor has left town. Transport systems have been disrupted by the conflict, so people often have difficulty reaching the nearest doctor. There is also a more complex socio-economic problem, because pensions have been cut off, so sometimes people can't afford to pay for drugs or public transport to see a doctor.

MSF was setting up mobile clinics on both sides of the frontline, in towns where people couldn't access a doctor. Our clinics focused mostly on primary care, mostly for chronic diseases such as hypertension, diabetes and cardiovascular disease. People weren't getting their blood pressure checked, or their diabetes monitored, and a lot of them had missed out on medications for many months. We employed local doctors in our clinics, and provided training for them and the local psychologists, mostly in chronic disease management and mental health in post-conflict situations. But they already had a very good level of knowledge, we were just supplementing what they knew.

The other major activity we were doing was supply. My role involved assessing all the hospitals in Gorlovka, and the local village clinics, to see what their needs were and organise donations. I drove around the countryside meeting all the local doctors to see what they needed to provide better care to patients. We supplied a lot of medicines to treat general medical diseases such as heart attacks, strokes and pneumonia. We also supplied a lot of surgical equipment to hospitals including hospital #2 in Gorlovka, which was treating a lot of war wounded. We had supplied the hospital during the peak of the shelling in January and February, and we continued supplying them in the months that followed. We also made some really specific donations. For example we donated eight tonnes of dialysis fluid to one of the major hospitals in Gorlovka, which basically kept 33 people alive for two and a half months. That was quite a significant donation, it was pretty impressive.

MSF's work has had a massive impact in bridging the gap in healthcare since the beginning of the war, especially because there are very few other NGOs with a strong presence on the ground. There just aren't any other organisations supplying drugs in large quantities to these facilities. I think the reason MSF could work in these areas is because we had a great relationship with the people in the local authorities. They'd seen the good work that we're doing, and had developed a lot of trust and that's how we could guarantee our security."

On 3 June, fighting erupted close to one of the main supply lines. Since then, MSF has been the only humanitarian organisation granted permission to cross with medical supplies and has brought six trucks across the frontline.

Since the beginning of the conflict MSF has provided enough supplies and medicines to treat more than 20,750 wounded patients and more than 34,500 patients with chronic diseases. Our supplies have helped doctors conduct 61,200 basic healthcare consultations, and supported safe delivery for 3,400 pregnant women. More than 2,400 individual counselling sessions have been held. MSF also continues to provide drug-resistant TB treatment in prisons in eastern Ukraine - a program that has run since 2011.

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 #30
http://newcoldwar.org
July 7, 2015
Residents of village in Lugansk, without electricity for nine months, demand that Ukraine cease shelling

Report on Truth About Situation in Ukraine Facebook, July 7, 2015

'We're living like in the Stone Age.'

Residents of the village of Prishib in Slavyanoserbsky district of Luganks region have demanded that the Ukrainian forces stop shellings. Because of Ukraine's attacks, people haven't been able to restore electricity in the village since last October.

The villagers held placards reading "Abide by the Minsk Agreements! Do not fire at electricians! No to the blockade! We need electricity! Ukrainian authorities, stop this outrage!"

"We have gathered here to discuss the main problems of our residents suffering not only from hostilities, but also from its consequences," said Andrey Zagorodnyuk, head of Slavyanoserbsky district, at a meeting with the residents of Prishib.

Residents of village of Prishib, Lugansk region of Ukraine demand Ukraine army cease shelling, let them resume a lifeAn engineer of Slavyanoserbsk electricity distribution company, Vladimir Sumskoy, said they have difficulties restoring electric power lines because of shellings. "We electricians have all the materials to restore electric power lines. We are ready to start the restoration at any time, but there is no possibility to do it because of Ukrainian army's shellings."

Residents of the village believe that they won't have electricity in the near future because the restoration can't start until the Ukrainian servicemen stop shelling.

"We are tired of the war. We're living like in the Stone Age, there are no any conditions for a life in the village. Most of all, we want peace," said one of the women villagers.

The residents of Prishib said that most of the villagers refuse to leave their houses despite the fact that the village is regularly shelled by the Ukrainian forces. At present, people live without electricity and water supply.

They are unable to grow vegetables in their gardens to somehow feed their families. But they are more worried about the coming winter, as it will be much more difficult to survive when the weather turns cold.

Original news report in Russian here. Video news report here.

* * *

Here is a typical daily report of the monitors of the Organisation for Security and Cooperation in Europe, for July 6, 2015:

In Shchastia (government-controlled, 20km north of Luhansk) local inhabitants told the SMM that they heard shelling on the night of 6 July between 24:00 and 04:00hrs noting that night-time shelling had increased over the last three days. The SMM observed that the bridge in Shchastia was closed for traffic. Following negotiations with the Ukrainian Armed Forces and the "Lugansk People's Republic" ("LPR"), the Ukrainian Armed Forces temporarily removed the anti-tank mines they had previously placed at the southern end of the bridge, and the SMM was able to cross the bridge for the first time since 16 May 2015.

At a bridge in Stanytsia Luhanska (government-controlled, 16km north-east of Luhansk) the SMM observed that 12 civilians, mostly women and children, attempted to cross into government-controlled areas and were denied access at the Ukrainian Armed Forces checkpoint. Some of these interlocutors stated that they had been coming to the checkpoint on a daily basis for more than a week. The SMM also monitored the impacts of machine gun fire, mortar and artillery in and around the Ukrainian Armed Forces and "LPR" checkpoints.  The "LPR" and the Ukrainian Armed Forces present at the checkpoints separately told the SMM that fighting starts every evening at around 20:00hrs and ends at 02:00hrs.

* * *

Shelling of Donetsk republic on July 7, 2015

Here is a typical, daily situation report from the neighbouring Donetsk People's Republic, on DAN News.info, July 7, 2015

Donetsk People's Republic, Novorossiya-Ukrainian forces have violated the ceasefire regime 18 times in the last 24 hours, the Deputy Commander of Corps of the DPR Defense Ministry, Eduard Basurin, said today.

"We have recorded 18 ceasefire violations by the Ukrainian forces over the past 24 hours. Overall, 70 artillery shells, 11 tank shells, 119 mortars of 82-mm and 120-mm caliber were fired on the DPR territory.

"The Ukrainian side also used grenade launchers and small arms. Ukrainian forces shelled Nikolayevka, Belaya Kamenka, Spartak, Petrovskoye, Dokuchayevsk, Sakhanka, Donetsk (Petrovsky district, Donetsk airport). The village of Svobodnoye in Telmanovsky district came under the most intense fire," Basurin said.

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 #31
Sputnik
July 8, 2015
Poroshenko Makes Donbass Increasingly Hate Ukraine - German Media

The Ukrainian army no longer dares to openly attack the territory of Donbass. But Kiev is further conducting a policy of isolation towards the eastern regions along with continued shelling and blockades, Südwest-Presse wrote.

Over the past six months, both sides of the Ukrainian conflict have violated the Minsk Agreement, Südwest-Presse wrote. Instead of prisoner exchanges and constitutional reform, the parties continue shelling and hindering negotiations.

A required restoration of normal social economic relations with the breakaway Donbass did not take place and Kiev is continuing its overall blockade: the central government prohibits the transport of all goods and supplies to the 'rebellious' republics and is not paying pensions and salaries.

Ukrainians who want to travel to eastern parts of the country wait for months for special authorization. But even after that they have to stand hours for at the checkpoints and undergo humiliating check-ups. Thus, Kiev is disregarding the freedom of movement of its own citizens and making them hate their own state, Südwest-Presse wrote.

Donbass is increasingly becoming Russian. People use rubles instead of hryvnia, buy Russian vodka instead Ukrainian gorilka and import medicines from Russia, even if they are twice as expensive as Ukrainian ones.

Thus, the Ukrainian government has given up the idea of open offensives and become passive-aggressive. It treats its own countrymen as enemies, seeking to harm the Donbass people by any means necessary, the newspaper wrote.

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 #32
www.rt.com
July 8 , 2015
Ukraine: self-proclaimed Donbass republics call for UN war crimes probe

The heads of the self-proclaimed Donetsk and Lugansk Republics in eastern Ukraine have asked the United Nations Security Council to establish an international tribunal to investigate and prosecute those responsible for waging civil war in Donbass.

"Donetsk People's Republic [DNR] and Lugansk [LNR] People's Republic are addressing the UN Security Council with a plea to establish an international tribunal for legal prosecution of those responsible for violation of the International Humanitarian Law and crimes against humanity in Ukraine," the DNR head, Aleksandr Zakharchenko, and LNR head Igor Plotnitsky said at a joint press conference.

Those found responsible should be brought to trial, they stressed.

The heads of the unrecognized republics are calling for the leaders of Russia, the US, China, Great Britain and France to consider this proposal at the next UNSC session.

"Expecting your soonest reply to the proposal," Plotnitsky said.

Aleksandr Zakharchenko said Kiev's operation in Donbass is "a direct violation of the Geneva convention."

"Not one death will be forgotten. Those responsible for the deaths of our women and children, for every human loss that took place, they will be called to account," said Zakharchenko.

"Dear Ukrainian soldiers! Please do not think that coming to Donbass means coming to Wonderland. According to your deeds will be it done to you. If you kill, torture and rape here, an equal calamity will come to your home. We're going to find you at the world's end," Zakharchenko added.

The military operation in eastern Ukraine began in spring last year after residents in the Donetsk and Lugansk Regions refused to recognize the coup-imposed government in Kiev.

On February 12, in Minsk, peace negotiations between the two sides resulted in a second ceasefire agreement. The first was signed in summer 2014 and was violated practically immediately. The current ceasefire is also being violated on a frequent basis. Shelling in the self-proclaimed Donetsk and Lugansk People's Republics happens every other day, with each side pointing the finger at the other.

Zakharchenko said the prosecutors' offices of both republics have collected copious evidence of war crimes committed by Kiev troops.

"There is a considerable volume of evidence of the Ukrainian National Guards' involvement in torture and killing of civilians. Dozens of mass graves have been found on territory that was occupied by Ukrainian troops," Zakharchenko said.

The DNR and LNR also have evidence of Ukrainian troops using weapons prohibited by the international arms conventions, including cluster and phosphorous bombs.

Since the beginning of 2015 an estimated 1,212 civilians, including 25 children, have died in shelling incidents.

According to DNR and LNR statistics, since the start of the conflict, 3,684 civilians have been killed in both republics, including 522 women and 65 children.

UN data states there were 6,417 deaths in the Ukrainian conflict from mid-April 2014 to May 30, 2015, with an estimated 15,962 people wounded. The war has affected around 5 million, of which about 1.2 million became refugees.

Ukrainian President Petro Poroshenko estimates the conflict's death toll to be nearly 9,000: about 1,800 servicemen and 7,000 civilians.

Over the 15 months of the conflict 4,868 buildings and private households have been destroyed, among them 63 hospitals, 150 schools and 135 kindergartens.

In addition, 1,616 infrastructure installations have been damaged or leveled completely, including factories, mines, power stations and waterways.

There are tens of thousands of buildings in the Donbass region that suffered minor damage.

Over 6,200 people were invalided. More than 2,000 people in Donetsk People's Republic are missing.

The UN watchdog notes that these statistics are conservative and real losses could be much higher.

The situation in Donbass has long since entered a state of humanitarian catastrophe, a situation exacerbated by the economic blockade established by Kiev against the rebellious republics.

Russia's Emergency Ministry has been sending humanitarian convoys to Donbass on a regular basis - 31 convoys so far. They have delivered over 39,000 tons of food supplies, medicine and equipment needed to restore normal life in the war-torn region.

The 32nd humanitarian convoy to Donbass will hit the road on July 16.

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#33
Financial Times
July 8, 2015
Former Georgia president shakes up Odessa
By Roman Olearchyk in Odessa region

The treacherous six-hour drive from Odessa to Bolgrad, the rural town where Petro Poroshenko was born, helps explain why in May the Ukrainian president entrusted the job of regional governor to Mikheil Saakashvili, the maverick reformer and former president of nearbyGeorgia .

In these agricultural heartlands, impoverished locals struggle to get produce to markets. With deep potholes and dirt tracks, roads are more torn up than in Ukraine's war-torn breakaway east.

After years of neglect, the 244km ride from the cosmopolitan regional capital and Black Sea port hub of Odessa to this southwest corner of Ukraine is like navigating a minefield.

"We feel abandoned, cut off and left for despair...Leaders from Kiev, including Poroshenko, aren't welcome any more," said Viktor, a resident in the largely ethnic Bulgarian town. "But we like Saakashvili so far," he added.

Last year's clashes in Odessa city between pro-Russian and pro-Ukraine forces fed fears that the Moscow-backed separatism fomented in the Donbas region could spread to Odessa, which has a high proportion of Russian speakers and is an ethnic melting pot. Some feared the arrival of Mr Saakashvili, a foreigner and pro-western politician who in 2008 clashed with Russia over control over two Georgian separatist enclaves, could stoke fresh geopolitical tension. Kiev's hope was that he would repeat his success in Georgia, where he helped turn the economy around, and thus neuter support in Odessa for Russia.

So far, the arrival of the straight-speaking Mr Saakashvili, who studied in Kiev and speaks Russian, Ukrainian and English, has injected fresh energy and hope into a region that faces some of the same challenges Georgia did when he took over more than a decade ago. He is now exiled from his country by criminal charges that he says are politically motivated.

In Odessa, road reconstruction has accelerated and Mr Saakashvili has sacked corrupt regional officials and promised investment and new jobs, swiftly winning over desperate locals.

Hopping into a crowded and sweaty Odessa minibus last week, with no notice and without bodyguards, Mr Saakashvili made one of his regular trips around the region to get a glimpse into what works and what doesn't.

At first his presence stunned his fellow passengers, tourists and residents alike. But the locals quickly made their feelings clear, pleading for reforms. Mr Saakashvili told them his top priorities are fixing infrastructure and boosting business and tourism, tasks that will be financed by a crackdown on corruption. "The old system is collapsing," he said, as the minibus bounced erratically over potholes. "Revolutionary reforms are the answer and we need to act fast."

"We know Putin is plotting to foment separatism here," he added. "Without Odessa, there will be no Ukraine. It will be cut off from the Black Sea...its exports will be choked."

As the bus rolled into the resort town of Serhiyivka, residents launched into accusations against a once-feared mayor who has controlled the city for more than a decade. They took Mr Saakashvili on a tour of dilapidated infrastructure, pointing out the luxurious estates built by local officials.

Sergei Lutenko, a 26-year-old who hopes to challenge the mayor in forthcoming elections, said Mr Saakashvili's presence had "broken fear and offered hope".

Hours later, in the governor's office, Mr Saakashvili called in the heads of anti-corruption departments for a televised cabinet meeting. He swiftly fired them and their staff after one admitted he had brought no officials to justice for corruption since the beginning of the year. "Have you not seen the roads?" said Mr Saakashvili. "Where did the money go? I'm firing you for doing nothing."

The ruthless accountability demanded by Mr Saakashvili has regional officials in a panic: many have started repaving roads at their own expense. "They know I will come to their town next, and they are trying to hold on to their jobs by covering up their wrongdoings," Mr Saakashvili said. Broader plans include streamlining local government from about 8,000 to 3,000 staff and clamping down on the rampant evasion of customs duty at regional ports. This, he says, will free resources to improve governance by replacing fat-cat bureaucrats with more motivated - and often western educated - young people.

His flamboyant style strikes a chord in a region known for its sense of humour. "We need to move fast...It will be messy; mistakes will be made," he said. His combative approach may yet anger entrenched mafia interests and even put him in danger. "First they will try character assassination, to discredit me. After that they will come after me with other methods," he said.

Echoing the views of residents across the region, Viktor, from Bolgrad, said: "It was strange at first to have a former president from another country as our new governor, but in one month we see him doing more than anyone did for us in years."

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 #34
Interfax-Ukraine
July 8, 2015
Ukrainian Navy can be headquartered in Trade Unions House "according to wartime laws" - Saakasvhili
 
The head of Odesa Regional State Administration, Mikheil Saakashvili, has called for Odesa's House of Trade Unions, where a tragedy took place a year ago, to be handed over to the Ukrainian Armed Forces Navy.

"The trade unions building in central Odesa must be handed over to the Ukrainian Navy headquarters," he wrote on his Facebook page on Sunday.

At the same time, the head of the administration noted that the trade unions leader "has been bazaar-bargaining," asking for significant amounts of state property in return. Currently, the House of Trade Unions, where many people were killed in May 2014, is rented out by trade union leaders "for all kinds of entertainment events," Saakashvili said.

"We will not allow a potential fifth column to continue filling its pockets, the building must be seized according to the wartime laws and handed over to the armed forces which defend Ukraine," he said.

Forty-eight people were killed and over 200 injured during mass riots in Odesa on May 2, 2014. Most of the tragedy victims died at the House of Trade Unions. The inquiry found that the Odesa mass riots had been organized and planned deliberately.

A few days later law enforcement officers arrested chief suspects from extremist organizations, as well as several police officers. In addition, Odesa regional police chief Dmytro Fuchedzhi was put on the wanted list. He managed to abscond, having left the country.

On September 25, Ukraine's President Petro Poroshenko announced that three people had already been held to account in the case over the May 2 events in Odesa and that Fuchedzhi was still on the run. The head of state asked Russia to assist in bringing Fuchedzhi back to Ukraine so he can face trial.

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 #35
Trade unions protest against Saakashvili's move to hand Odessa building to Ukraine's Navy

KIEV, July 8. /TASS/. The statement of Mikhail Saakashvili, the new governor of Odessa region, that the building of the House of Trade Unions in the southern port city can be handed over to the Navy violates Ukraine's legislation, the federation of trade unions said on Wednesday.

"In the whole world, and Ukraine is not an exception, the property of trade unions like any property is private property protected by the law. No state official can unilaterally manage it instead of the owner," the trade unions said in a statement.

"The decision on its dispossession can be taken only by the elected body of the trade unions in line with its powers defined by the Charter," the statement also reads.

On May 2, on the anniversary of last year's Odessa massacre, Saakashvili said Ukraine's Navy may be headquartered in the building of the House of Trade Unions after the restoration works are completed there.

On May 2, 2014 the radicals from the Right Sector extremist organization, which is banned in Russia, and the so-called Maidan self-defense set ablaze a tent camp on Kulikovo field in Odessa where local citizens were collecting the signatures for holding a referendum on Ukraine's federalization and granting the Russian language a state status.

The federalization supporters hid in the House of Trade Unions but the attackers encircled the building setting it on fire. At least 48 people died and over 200 people were injured.

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 #36
Wall Street Journal
July 8, 2015
Eastern Ukraine Refugees Worry They Came Home Too Soon
Some who came back to after cease-fire now live in fear of renewed fighting
By LAURA MILLS

POPASNA, Ukraine-When the cease-fire between Ukraine and Russia-backed militants in the country's east appeared to be holding this spring, Oksana Mandrichenko returned with her husband and son to their apartment near the front lines.

Soon after, the shelling started again. Last week, one shell landed in a first-floor apartment in their building, though nobody was hurt. Their courtyard, where the playground stands empty, has three new craters made by Grad missiles.

"The cease-fire was sort of working, so we came back," said Mrs. Mandrichenko, standing in her apartment 50 yards from a Ukrainian army checkpoint. "Then everything started all over again. There is shelling every night from 2 a.m. to 5 a.m., like it is on a schedule."

Almost 1,000 people-combatants and civilians-have been killed since the cease-fire was agreed to in mid-February, about half in the days of heavy fighting immediately afterward. That has brought the death toll to more than 6,400 since the conflict began in April 2014, according to United Nations figures.

Political steps to reintegrate the rebel-held areas into Ukraine have stalled, leaving the conflict simmering.

The rebels, backed by the Kremlin, are demanding that Ukraine give them broad autonomy and a veto over attempts to join Western security and economic blocs. The government in Kiev, under public pressure not to cave, says it can't take political steps, such as organizing elections, until the fighting stops.

Last week, President Petro Poroshenko introduced a bill that would give more power to local governments, but rebels have rejected the proposals as not going far enough.

"If somebody is going to use fantastical suggestions for the constitution of Ukraine in order to destroy Ukraine...then of course these unconstructive suggestions will not be accepted by Ukrainian society," parliament speaker Volodymyr Grosyman said in an interview.

International efforts to resolve the crisis have also stalled. The West has prolonged sanctions against Russia, but Moscow has shown no sign of backing away from its support for the rebels. Officials from the U.S. and the North Atlantic Treaty Organization say Russia is bolstering supply lines to the rebels and massing troops. Russia denies sending soldiers to Ukraine.

The accord brokered by the leaders of Ukraine, Russia, Germany and France in Minsk, Belarus, in February "is not good enough. At best what it does is it creates more time and a less urgent or pressured atmosphere" in which to negotiate further, said one Western diplomat in Kiev.

Western officials had worried that Russian President Vladimir Putin could strike for a land corridor from Russia to the Crimean peninsula, which it seized from Ukraine and annexed early last year. But in recent months some believe the Kremlin may be trying to snap up smaller pieces of territory to maintain constant pressure on Ukraine.

International observers have reported more shelling in recent weeks all across the front line and regular use of heavy artillery, with major battles in the town of Maryinka last month leaving at least five soldiers and 15 rebel fighters dead in one day. In many cases, even Russian military commanders based in the region as part of an effort to monitor the cease-fire have attributed more violations to the rebels than to the Ukrainian army.

That has left those in towns like Popasna, which was seized by rebels last summer and later retaken by the Ukrainian army, reeling.

The prewar population of 22,000 had fallen to about 10,000, but recently climbed back to about 11,000, Mayor Yuriy Onishchenko estimated. But people are hesitating again, he said, noting that recent bout of shelling had left the city without water for four days.

"People just returned and now they are sheltering in basements or have run away to their relatives," he said. "The situation in the city isn't stable."

The Mandrichenkos spent much of the past year shuttling back and forth to a relative's house in Kiev. After the latest cease-fire, they waited three months before daring to return home in late April, but the fighting soon picked up again.

The Mandrichenkos and their neighbors said that they have asked local authorities to move the army checkpoint farther away, but were told that wasn't possible. The family is considering leaving again if the fighting continues, but Mrs. Mandrichenko's husband, Nikolai, a train conductor with a steady job in Popasna, said he will stay because he was unable to find work in Kiev.

"We're just sitting here like targets," Mrs. Mandrichenko said. "Which apartment or who will be next is just a matter of time."

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 #37
Komsomolskaya Pravda
July 3, 2015
Viktor Baranets, Ukraine 'Discovers' Five Russian Generals in Novorossiya; Ukrainian Security Service Concocts Latest 'Canard' for United States

Kiev has passed to Washington reports of Russian generals who are allegedly "playing a key role in organizing and commanding the separatists' troops in the republic's southeast". The document names them.

We have found out the posts which this impressive team of Russian military chiefs actually hold. Oleg Tsekov is commander of a brigade in Pechenga (Murmansk Region); Valeriy Solodchuk is deputy commander of the fifth combined arms army (Ussuriysk); Sergey Kuzovlev is deputy commander of the 58th army (Vladikavkaz); Aleksey Zavizon is deputy commander of the 41st army (Novosibirsk); and Roman Shadrin is already in reserve, and in February-August 2013 he was chief of the Interregional Directorate of the Federal Service for the Defence Order in the Urals and then became a Yekaterinburg City Duma deputy, and remains so to this day. The same list mentions the name of Col Anatoliy Barankevich, who after leaving the Armed Forces (in 2004) engaged in politics and now has nothing to do with the Russian Army.

But now - pay attention! All the above generals were present on 9 May of this year at Victory Day parades in their own Russian garrisons and they were shown on television and their portraits and interviews were published in local and even foreign media. Some even met with the press last week. But that is just one aspect of the matter exposing the lies of Ukrainian intelligence which is crudely feeding "pap" to the United States.

This primitive lie production technology has been known for a long time: The Kiev information "cooks" simply pull the titles and names of real Russian generals from the Internet and put them in their reports to their American bosses, whom they clearly take for dummies.

Although perhaps that is really the case? After all, American officials have already confirmed they have received the document, adding that the information contained in it "largely corresponds to US intelligence information."

And now let's ask ourselves a simple and pragmatic question: Is it rational for Russia and the Russian Federation Defence Ministry leadership to risk the reputation of the country and the army in this way by sending an entire detachment of high-ranking (career) military men to the Southeast of the former Ukraine, where they could instantly be exposed and have their names broadcast throughout the world? This is not even a pragmatic question, it is a stupid one, some will say, and they will be absolutely right.

Incidentally, according to the Ukrainian intelligence services themselves, there are 8,690 Russian soldiers in Novorossiya [name given to the self-proclaimed Donetsk and Luhansk people's republics]. So that's what, 1.5 generals for every 1,000 soldiers? But in our country we have colonels commanding regiments and even some brigades (with 3,000-4,000 servicemen)!

Incidentally, about the figures. Kiev changes the number of Russian servicemen allegedly fighting in Novorossiya changes almost daily. In the morning Ukrainian Armed Forces Chief of General Staff Viktor Muzhenko cites a figure of 5,000 men. In the evening the Ukrainian Security Service increases the figure to nearly 9,000. Ukrainian President Petro Poroshenko then repeats that figure yet a week later raises it to as much as 200,000 (in an interview with the Italian newspaper Corriere della Sera). Then, during his visit to Germany (May 2015) Poroshenko spoke of "11,000 Russian servicemen on Ukrainian territory." So in a month or two the "Russian troops grouping in Ukraine" has grown by a factor of about 20! Is that conceivable? Either there is something wrong with Mr President's arithmetic or else there is something wrong with his health. Incidentally, that was precisely how one Russian General Staff officer commented on this "canard" from Kiev in an off the record conversation.

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#38
Counterpunch.org
July 3, 2015
Orator Poroshenko and the Dead Souls
By HALYNA MOKRUSHYNA
Halyna Mokrushyna is currently enrolled in the PhD program in Sociology at the University of Ottawa and a part-time professor. She holds a doctorate in linguistics and MA degree in communication. Her academic interests include: transitional justice; collective memory; ethnic studies; dissent movement in Ukraine; history of Ukraine; sociological thought.  Her doctoral project deals with the memory of Stalinist purges in Ukraine. In the summer of 2013 she travelled to Lviv, Kyiv, Kharkiv and Donetsk to conduct her field research. She is currently working on completing her thesis. She can be reached at halouwins@gmail.com.

On June 4, President Poroshenko delivered an hour and a half long speech "On the Internal and External Situation of Ukraine in 2015" before the Verkhovna Rada. By now, the speech is yesterday's news. However, I cannot help but write about it since it struck me in several aspects, first of all, by its figurative eloquence.

Poroshenko must have a whole team of speech writers who create impressive figures of speech, unheard of any previous leader of Ukraine. Inspired, probably, by the famous poetic Ukrainian soul, the writers do not shy away from vivid colors and emotionally charged epithets. They present a heart-breaking, soul-wrenching image of poor Ukraine, driven by the "kleptocratic regime" of Viktor Yanukovych to disastrous conditions. The cruel dictator "tried to put an end to Ukrainian history planned beyond Ukraine".

"One shivers", says Poroshenko, recalling the national disaster to which Yanukovych was deliberately driving a poor, naïve Ukraine. According to the speechwriters, money wasn't entrusted to anyone except an enigmatic "neighboring country", which, like Koschei the Deathless [1], appropriated this money for its "complete disposal". The "reckless policy of absurd pacifism" of Yanukovych and the "fifth column" of the "neighboring country" had completely destroyed the Ukrainian army, disarming it and leaving it naked and barefooted. Poor bureaucrats in the State Treasury "even forgot the smell of money there" because the Treasury was emptied by the cruel plutocrat who wormed his way into the confidence of naïve European creditors and "borrowed more money in 2010-14 than in all the other years of independence".

Oops! That seems improbable, even to my eyes of a lay citizen. Let us take a short break from the exciting reading of Mr. Poroshenko's artistic speech and check facts by looking at Ukraine's external debt. According to the National Bank of Ukraine, the external debt of Ukraine as of January 1, 2011 was 117 billion USD. As of January 2014, when the Euromaidan Revolution was unfolding, the number was 142 billion USD (Balance of Payments and External Debt of Ukraine in 2014 by the National Bank of Ukraine, p. 91). A simple subtraction operation gives us 25 billion. According to laws of arithmetic, 25 billion is less than 117 billion already accumulated, correct? So, Mr. Poroshenko, you should take some time to view the real figures behind the intricately woven fabric of loaded metaphors of your speech writers.

And how about a "national disaster" in economics? The nominal GDP of Ukraine in 2013 was 182 billion USD. It dropped drastically to 131 billion in 2014, showing a dramatic decrease of 28%. In one of his recent posts, the Ukrainian Prime-Minister under Yanukovych, Mykola Azarov, stated that his government had been projecting an 8% growth of GDP in 2014. Well, of course, what growth can you expect in a country whose government is waging a war against its own people, in parallel destroying its own industry and infrastructure?

After having tried and failed to dismantle Ukraine through its "fifth column", the "neighbouring country" (Russia), in despair, passed to direct military action, annexing Crimea, invading Donbas and, indirectly through "separatists", instigating "pro-Russian" manifestations in Kharkiv, Odessa, Mykolaiv, Kherson and many other cities. I cannot help but provide a direct quote from the president to pay tribute to his oratory skills: "The Kremlin expected that bacilli spread by Russian special forces would provoke the epidemic of separatism in all Eastern and Southern regions." However, the Kremlin's hopes were crushed. Bacilli did not spread, so the Russians had to replace it with bayonets to sustain the pro-Russian disposition of what the leaders of Ukraine call the "temporarily occupied territories" of Lugansk and Donetsk.

But a heroic Ukrainian army, now 250,000 strong, stopped the aggressor. It was a true miracle because, in Poroshenko's words, in March of 2014, little more than 5,000 soldiers were ready to perform the required tasks. They had to forage for fuel in order to get to the "Eastern front". Today, over 50,000 "Ukrainian heroes are defending the country in the ATO [Anti-Terrorist Operation] area". So President Poroshenko is really proud of his military exploits. Over the course of one year, the number of "heroes" increased ten times. How is it, then, that in the info graphics accompanying President's speech before the Parliament and aimed at demonstrating the spectacular improvements in Ukraine under his leadership, the personnel of the Armed Forces of Ukraine is said to have counted 162,000 in 2013? Was it that difficult to find five thousand soldiers in March 2014 among those 162,000, an ordinary citizen might ask?

Mr. Poroshenko dismisses these doubts with an obvious answer: Russia and its "fifth column" were covertly engaged in the liquidation of the Ukrainian army and special forces. In addition, a Russian citizen was in charge of Naftogaz' dealings to receive Russian gas via reversing the supply from Europe. Can you believe this? A traitor in the heart of the pillar of Ukrainian energy! Right after the Revolution, the traitor fled to Moscow "together with the entire gang", escaping the righteous anger of the revolutionary crowds.

As a result of the shameful escape of the traitors in February of 2014, the whole of Ukraine was a total wreck - law enforcers, demoralized by Maidan, had scattered throughout the country and soon hostile, armed persons started acting in the cities. "Under the guise of the sacred names of Maidan activists and volunteers", they engaged in lawless activities, including robbery and racketeering. "Regionals" (leaders of the former governing Party of Regions) and communists were sabotaging the work of Parliament. "Every day, they've been trying to raise their heads", like the hydra of the counterrevolution in the civil war in the post-revolutionary Russia of 1918-1920. Chaos, horror and desolation everywhere. How can one not shiver at such a scene?

But to return to the real world of Ukraine today, how should a caring person react to the images of dead civilians in the east of the country, buried under the ruins of their houses destroyed by the shelling of the Ukrainian army? Would a person not "shiver" at listening to reports of the sadistic torture practices of the so-called volunteer battalions, such as 'Tornado', against their prisoners?[2] How about arrests and interrogations of citizens with a dissenting opinion who do not approve the official nationalist ideology? How about political killings staged as suicides? How about the growing street protests of ordinary Ukrainians, unsatisfied with multiple increases of electricity and gas tariffs, rising food prices, triple devaluation of the national currency, huge arrears in payments of wages, and an average salary equivalent to 190 USD per month? (Wage data from April 2015). In December of 2013, under the "bloody dictator" Yanukovych, the average salary was equivalent to 410 USD.

Protests are being dispersed and dismissed as the so-called agitation by Putin's agents. Pro-Russian Ukrainians are being killed in broad daylight, such as journalist, poet and historian Oles Buzyna and politician and former Rada deputy Oleg Kalashnikov. Laws have been pushed through Parliament in breach of procedures, without due study of the issues involved and without debate and taking into consideration expert opinions, as required by law. A banal re-division of property holdings among the oligarchs is taking place, disguised as a fight against corruption. Irony of irony, Poroshenko calls the re-division of properties a "de-oligarchization"!

The "Euromaidan Revolution" replaced one dominant oligarch clan with another. Moreover, the new clan is much more versed in the art of hypocrisy, double talk, and dishonesty. Does anyone still remember Poroshenko's promise to sell his profitable "Roshen" confectionaries enterprise once elected? Well, of course, the master of deception will tell you that he cannot find a buyer - the war in Eastern Ukraine (which he himself launched) has scared away potential buyers, notwithstanding the spectacular increase of Roshen profits, by nine times in 2014.

The master of deception says in his speech that he is not an oligarch, he has been accumulating all his profits in order to personally finance his presidential campaign. "I am fully independent. I have obligations only to the Ukrainian people. It is nice to be independent when making decisions". Others (meaning fractions in the parliament and political parties) cannot enjoy the same such "independence" because they are not financed from the state budget, as is the president and his office. So, to set things straight, to render the Verkhovna Rada "fully independent" from big money, a new anti-corruption piece of legislation has been introduced in which the financing of political parties and fractions will be done exclusively from the budget. It seems to me a chimerical, unrealistic project in the Ukrainian context, where the common practice is that parties are funded by oligarchs to represent their interests in the Parliament. It remains to be seen whether and when this law is passed, what exact form it will take and whether it will be enforced.

According to Poroshenko, oligarchs are fighting back against his courageous initiatives. They are "clanking weapons of private armies, camouflaged as miners", provoking rolling electricity blackouts, closing factories and firing away at Poroshenko with "Grad" information rockets via the nationwide television channels they own. Moreover, almost all of them have pet political projects that will "create calm prospects for themselves and a terrible future for Ukraine", says the President.

How about the 5 Channel, a national television station, owned by the President himself? How about his own vertical of power which he is building by placing his own people at key positions in the state apparatus and suppressing political dissent?

Poroshenko is an apt disciple of the "bloody dictator" Yanukovych. He has spent so many years in Ukrainian politics that he learned how to survive in its murky and dangerous waters. He switched allegiances when it suited his personal interests. In 1998, he was a member of the United Social Democratic Party of Ukraine, loyal to President Leonid Kuchma. In early 2001, Poroshenko was one of the key politicians who created the Party of Regions, the party of Viktor Yanukovych. In late 2001, he crossed the floor to join the opposition faction of Viktor Yushchenko's 'Our Ukraine' bloc. Poroshenko was among the wealthiest businessman who supported Yushchenko in his presidential campaign of 2004. He was rewarded after Yushchenko's victory when he was appointed Secretary of the National Security and Defense Council. What a disappointment that was for a politician who wanted to become prime minister! But that posting was promised and given to Yulia Tymoshenko.

As a result of the subsequent political dispute between Poroshenko and Tymoshenko, the Orange Revolution team of Yushchenko became bogged down in endless scandals and mutual accusations of corruption. Near the end of Yushchenko's presidency, Poroshenko worked as his minister of foreign affairs, from October 2009 to March 2010.

Under Yanukovych's presidency, Poroshenko switched camps again and was appointed the minister of trade and economic development, from March to December 2012. He defended his posting by claiming that he wanted to help bring Ukraine closer to the Euroepean Union and get Tymoshenko released from prison where she was languishing facing corruption charges.

Poroshenko was a minister under Yanukovych's presidency for nine months. After becoming president himself, and responding to popular demands for a purging from the state apparatus of the "former people" of the Yanukovych "regime", Poroshenko pushed for a "lustration" law. In early October 2014, he ratified the law "On the Government Cleansing" which had been adopted by the Rada on September 16.

According to this law, one of the groups to be subject to lustration review is government officials who occupied positions under the Yanukovych presidency (February 25, 2010 to February 22, 2014) for no less than one year cumulative. In their Final Opinion on the Government Cleansing (Lustration Law of Ukraine), issued June 19, 2015, experts from the European Commission for Democracy Through Law (also known as the Venice Commission) puzzled in section 51 "why a minimum period of holding such posts is needed and why this minimum period has been set to one year". They suggested that some justification be provided for this requirement. No such justification is provided in the text of the law, and, most likely, Ukrainian deputies did not convey any additional explanation to the experts of the Venice commission. After all, deputies of the Verkhovna Rada are not obliged to disclose all of the motives, or are they?

I found an explanation for this requirement in an interview with Egor Sobolev. He is a Ukrainian investigative journalist, activist of Euromaidan and a founding member of the political party "Volia". In February of 2014, he became the head of a social organization called the Lustration Committee. It was created by a decision of the All-Ukrainian Union "Maidan", an informal association of Euromaidan activists. In an interview to the Ukrainian web-portal Ukrmedia, Sobolev suggests that this time frame was established at the personal request of President Poroshenko between the first and the second reading of the lustration law. Poroshenko wanted a safeguard that he would not be subject to lustration, as any other state functionary was to be. According to Sobolev, the time limit is "not that unjust" because it limits the number of people to be purged to those who really worked for Yanukovych for a long time and planned and built his regime. But I wonder, how does one define a "long time"? How is it that nine months, the period which Poroshenko worked as a minister under Yanukovych, is "not a long time", while one year, especially cumulatively, is a "long time"?

Right now, Poroshenko is free from this obligation as President of Ukraine. The office of the president is an elected one. According to the lustration law, people holding elective offices are not subject to verification, the reasoning behind this being that voters already "cleansed" the corrupted officials by not electing them. However, after Poroshenko steps down from the president's position, and if he decides to continue his political career, he will have to subject himself to the verification, since the law on lustration does not have any expiry date.

But let us go back to the ornate eloquence of Mr. Poroshenko's speech. It is full of strong epithets, unexpected metaphors and innovative comparisons: opaque gas fumes which light up Forbes magazine's stars of Ukrainian coal and steel barons; "conservative, cumbersome and clumsy governance system ossified since the days of Voroshilov and Budyonny" (prominent military leaders and politicians in Stalin's Soviet Union); an "unequivocal and irreversible course towards EU membership and a profound Europeanization of Ukraine"; "vain efforts and impotent malice of our former 'strategic partner'." True to his confectionary beginnings in business, Poroshenko even brings in a culinary metaphor, inviting his listeners to imagine him as a chef who has already placed many political "dishes" in the cooking oven and is collecting, together with his revolutionary team, ingredients for future dishes whose recipes they did not know earlier, such as the "current status of reforms". And while chef Poroshenko is busy in the political kitchen, his Georgian brothers and sisters in-arms, pure and determined, such as Ekaterina Zguladze, Deputy Minister of Interior of Ukraine, are showing unheard of courage, as they did in Georgia, in the fight against "legendary bribes" by the road police, corruption and implementing successful reforms.

The President had time in his colorful, passionate speech to touch on the eternal subject of war and peace and how his heart is covered in "a thousand scars" of pain for the more than 6,400 civilians and 1,700 soldiers killed in the war that he himself launched against Donetsk and Lugansk. "Sometimes it seems as if every soul on the path to heaven flew through my office, and I talked to each", the president confided. How enchanting that he found time in his super busy schedule to say goodbye and wish a good journey to heaven to each and every soul who died under the shelling of the Ukrainian army. Such hypocrisy!

Hypocrisy and lies. Lies about a promised visa-free regime to Europe that has "acquired a fixed place in the calendar for the first time", Poroshenko says in his speech, in spite of public statements of European officials saying that they cannot name a date of the introduction of visa-free entry to Europe for Ukrainians. Lies about plans to hold a referendum on Ukraine's joining NATO, which "we would have easily won", but will not held because "this issue will shake the country" and its unity. So is Ukraine united in this issue or no, Mr. President? How about your promise to bring peace to the Ukrainian land? When will you pass from speechifying to concrete actions? When will you engage in real dialogue with Donetsk and Lugansk? When will you carry out a meaningful decentralization instead of solidifying your presidential powers?

It is easy to impress with flowery speeches, but a tree is recognized by its fruit, said Jesus. What fruits does your presidency bring to Ukraine, Mr. Poroshenko?

The original of President Poroshenko's speech before the Verkhovna Rada is accessible here. The English version can be found on the same page by clicking on the button 'Eng' in the right upper corner of the page. [http://www.president.gov.ua/news/shorichne-poslannya-prezidenta-ukrayini-do-verhovnoyi-radi-u-35412]

Notes:

[1] Koschei the Deathless, in Eastern Slavic mythology, is an immortal sorcerer and evil Tsar, often abducting the bride of the hero. He is depicted as a tall, boney old man or live skeleton, and often as a stingy, mean character.

[2] On June 17, the leader of the 'Tornado Battalion, Ruslan Onishchenko, and seven of his accomplices were arrested by Ukrainian police at the request of Gennedy Moskal, the appointed 'governor' of the Ukraine-controlled territory of Lugansk region. They are accused of robbery, extortion and torture. The Ukrainian television program Podrobnosti (TV-channel Inter) aired a story on June 19 containing recorded conversations of Onishchenko with his cohorts in which the bandit leader says, 'Without tortures, life would not be a life'.

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 #39
Financial Times
July 8, 2015
Ukraine's citizens have defeated Putin's "New Russia" - now Poroshenko must defeat Ukraine's oligarchs
By Taras Kuzio, University of Alberta    
Taras Kuzio is a research associate at the Centre for Political and Regional Studies, Canadian Institute for Ukrainian Studies, University of Alberta and non-resident fellow at the Center for Transatlantic Relations, School of Advanced International Relations, Johns Hopkins University.

The good news is that Russian and Donbas separatist leaders have called an end to the "New Russia" project, which had targeted eight Russian-speaking regions of eastern and southern Ukraine for separatist agitation and union with Russia. The bad news is that while it always was a mistake to assume Ukraine's Russian-speakers were fans of president Vladimir Putin, Ukraine's political vacuum and its selective "de-oligarchisation" are allowing diehards from the former ruling Party of Regions grouped in the Opposition Bloc and funded by Ukraine's powerful gas lobby to retain influence in eastern and southern Ukraine.

The eight regions of "New Russia" were artificially lumped together. In reality they consist of three groups.

First are the two regions of the Donbas, which are similar to the Crimea in their shared Soviet cultural identity and their regional focus, with low levels of support for Ukrainian independence and 30-40 per cent aggressive support for separatism. Crimea and Donbas were the only regions where a majority of the security forces defected to the separatists.

Yet the separatists did not have mass support even in Donbas, and without Russia's military intervention in August 2014 they would have been defeated by the then ramshackle Ukrainian army and volunteer units. Today, with separatist forces the same size as Portugal's 40,000 strong army, they are larger than the armies of 15 out of 28 Nato members. Added to this is a large modern arsenal of military equipment illegally supplied by Russia during the Minsk 1 and 2 ceasefires.

Second, Kharkiv and Odessa are swing regions where pro-Ukrainian and pro-Russian groups battled it out during the 2014 "Russian spring", with the former prevailing. Third, separatism is non-existent in Dnipropetrovsk, Zaporizhzhya, Kherson and Mykolayiv.

Three further factors buried Putin's "New Russia".

His decision not to invade and annex the region in spring-summer 2014 reduced euphoria among working class Russian speakers and pensioners who, like their Crimean counterparts, believed that their standards of living and their pensions would be higher in an expanded Russia. Putin prefers that the Donbas remain inside Ukraine, with Kiev paying for war damage and the region holding a veto over Ukraine's domestic and foreign policies.

After the triumph of pro-Ukrainian forces, Russian nationalist extremists and separatists from Kharkiv and Odessa fled to the Donbas. Some of these have received Russian training and have been targeting areas of "New Russia" outside the Donbas with terrorist attacks.

The shock effect of massive destruction of buildings, the deaths of 7,000 civilians and the creation of 1.5m internally displaced persons and refugees also reduced local euphoria.

Today, there are two Russian-speaking Ukraines.

The first is a civil society extension of the Euromaidan, which has produced volunteer patriots fighting on the front line and other volunteer groups providing support to them and to the displaced people.

The second consists of traditional supporters of the Party of Regions and the Communist Party, both of which have imploded, who prioritise standards of living and "stability" over democratisation and Europe. They represent the low efficacy voter base of the Opposition Bloc, which may win first place in the two regions in upcoming local elections in October.

Typical of this duality is the factory town of Mariupol, which I visited in April. The most polluted city in Europe has many mile-long factories where workers can be cajoled into voting for oligarch-controlled counter-revolutionary forces threatened by reform and Europeanisation. The same city boasts the garrison of the Azov nationalist National Guard battalion, two thirds of whom are Rusian-speakers, and active civil society NGOs such as "New Mariupol" run by Professor Mariya Podybaylo, and "Soldiers Mail" headed by journalist Olena Mokrynchuk in the nearby frontline town of Volnovakha.

Externally, through the use of military, economic and trade pressures, Russia seeks the failure of Ukraine's European integration. Gas negotiations collapsed last week, threatening Europe with disruption of supplies, as in 2006 and 2009.

Ukraine's path to Europe remains tortuous, and not only because of Russia. Unlike the EU's policies towards post-communist central Europe, Brussels demands that Ukraine must undertake deep structural reforms without a membership "carrot" and with far less financial support.

In central Europe, populist backlash against reforms led to the election of leftist governments that nevertheless remained pro-EU and pro-Nato. Populist backlash in Ukraine would be different and come from anti-European, counter-revolutionary forces in the east and south.

President Petro Poroshenko must see the train crash coming but he seems unwilling to halt it. His "de-oligarchisation" campaign will remain feeble and fail if it does not destroy the power of Ukraine's pro-Russian gas lobby, whose member lead the Opposition Bloc and sit in Vienna. Dmytro Firtash, who a Vienna court refused to extradite to the US, had the largest bail in Austrian history - $155m - paid by Vasily Anisimov, "a billionaire who heads the Russian Judo Federation, the governing body in Russia of Putin's beloved sport".

The recent freeze by the interior ministry on the assets of Firtash's Ostchem, Ukraine's biggest chemicals, energy and gas utility, should not be misunderstood. It is not the action of Peroshenko but of the government under prime minister Arseny Yatsenyuk, backed by a rival oligarch. Poroshenko can either continue to honour the agreement he and Kiev mayor Vitaliy Klitschko reached with Firtash in Vienna in March 2014 - in which Firtash brokered Klitschkov's withdrawal from the presidential election - or he can include the gas lobby in his "de-oligarchisation" campaign. In so doing he would destroy the most powerful pro-Russian camp and assist the US, Ukraine's most important strategic partner, in its appeal against the Vienna court decision.

Putin was surprised by the toughness and patriotism of Ukraine's solders and volunteers who defeated his "New Russia" project. It is incumbent upon Poroshenko to show the same determination the Ukrainian citizens have shown in the Euromaidan and on the front line by defeating the counter-revolutionary internal threat posed by pro-Russian oligarchs.

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