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Putin Orders Troops Back to Base; East-West Détente

by Oui Tue Mar 4th, 2014 at 09:29:00 AM EST

The media airwaves are filled with unbelievable rhetoric from two strange, unrealistic worlds. Watching and listening today to CNNi, BBC, Sky News, Al Jazeera and Russia Today, come to one conclusion: pure propaganda. I found one quite level headed response ...

The Limits of East-West Fusion in Ukraine  by Patrick Smith

For a few days after protesters of varied political stripes and legislators of different motives deposed President Viktor Yanukovych, you could call Ukraine a story of new possibilities. In a weekend, it turned into a story of limits and futility.

 « click for info author

It was daunting enough when the provisional government faced an urgent fiscal and economic crisis as its No. 1 task without quite knowing who would extend a hand. Now it stares full front at questions it wanted to brush aside:

  • Is the new administration legal according to Ukraine's constitution?
  • Who, exactly, does it represent?
  • How is it going to re-assert its authority in Crimea, which is decisively given to its historical bonds with Russia, and how will it respond to Vladimir Putin's new signals that he has no intention of standing by as Kiev attempts to pull the nation westward with one swift yank?

You cannot answer any of these questions without addressing all of them. The legitimacy of the interim regime is shaky and in all likelihood non-existent, as even its supporters agree. In any case, it speaks for part of Ukraine's 46 million citizens, and many of its members are veteran losers in past elections. Street mayhem, in part instigated by right-wing extremists, has done for the new regime what they could not get done in polling booths.

Fooling around in Russia's backyard by manipulating ambitious, self-interested oppositionists, as Washington was doing at least since anti-Yanukovych demonstrations began last November, was a drastic miscalculation. It is difficult to understand how the nation that lived by the Monroe Doctrine for two centuries could imagine that Putin, vigorously a man of "Great Russia," would stand by as Washington (and the European Union more subtly) played on sectional discontent to shake Ukraine loose.

Ukraine is now unhinged all right. A high school history student could have anticipated the consequences. Putin has quietly built to full boil these past days. Late Saturday he declared he had the right to intervene in Ukraine on the pretext of protecting Russian interests.

The Two Ukraines Portend a Disastrous Possibility

h/t seabe Oligarchs Triumphant: Ukraine, Omidyar and the Neo-Liberal Agenda

Continued below the fold ...

Oligarchs Triumphant: Ukraine, Omidyar and the Neo-Liberal Agenda

The Western intervention in Ukraine has now led the region to the brink of war. Political opposition to government of President Viktor Yanukovych -- a corrupt and thuggish regime, but as with so many corrupt and thuggish regimes one sees these days, a democratically elected one -- was funded in substantial part by organizations of or affiliated with the U.S. government, such as the National Endowment for Democracy (a longtime vehicle for Washington-friendly coups), and USAID. It also received substantial financial backing from Western oligarchs, such as billionaire Pierre Omidyar, founder of eBay and sole bankroller of the new venue for "adversarial" journalism, First Look, as Pando Daily reports.

Yanukovych sparked massive protests late last year when he turned down a financial deal from the European Union and chose a $15 billion aid package from Russia instead. The EU deal would have put cash-strapped Ukraine in a financial straitjacket, much like Greece, without actually promising any path for eventually joining the EU. There was one other stipulation in the EU's proffered agreement that was almost never reported: it would have also forbidden Ukraine to "accept further assistance from the Russians," as Patrick Smith notes in an important piece in Salon.com.  It was a ruthless take-it-or-leave-it deal, and would have left Ukraine without any leverage, unable to parlay its unique position between East and West to its own advantage in the future, or conduct its foreign and economic policies as it saw fit. Yanukovych took the Russian deal, which would have given Ukraine cash in hand immediately and did not come with the same draconian restrictions.

By all accounts, Viktor Yanukovych was an unsavoury character running an unsavoury government, backed by unsavoury oligarchs exploiting the country for their own benefit, and leaving it unnecessarily impoverished and chaotic. In this, he was not so different from his predecessors, or from many of those who have supplanted him, who also have oligarchic backing and dubious connections (see addendum below).  But in any case, the idea of supporting an unconstitutional overthrow of a freely elected Ukrainian government in an uprising based squarely on the volatile linguistic and cultural fault-lines that divide the country seems an obvious recipe for chaos and strife. It was also certain to provoke a severe response from Russia. It was, in other words, a monumentally stupid line of policy (as Mike Whitney outlines here).  Smith adds:

    [U.S.] foreign policy cliques remain wholly committed to the spread of the neo-liberal order on a global scale, admitting of no exceptions. This is American policy in the 21st century. No one can entertain any illusion (as this columnist confesses to have done) that America's conduct abroad stands any chance of changing of its own in response to an intelligent reading of the emerging post-Cold War order. Imposing "democracy," the American kind, was the American story from the start, of course, and has been the mission since Wilson codified it even before he entered the White House. When the Cold War ended we began a decade of triumphalist bullying -- economic warfare waged as "the Washington Consensus" -- which came to the same thing.

American policy is based upon -- dependent upon -- a raging, willful, arrogant ignorance of other peoples, other cultures, history in general, and even the recent history of U.S. policy itself. The historical and cultural relationships between Ukraine and Russia are highly complex. Russia takes its national identity from the culture that grew up around what is now Kyiv; indeed, in many respects, Kyiv is where "Russia" was born.  Yet one of the first acts of the Western-backed revolutionaries was to pass a law declaring Ukrainian as the sole state language, although most of the country speaks Russian or Surzhyk, "a motley mix of Ukrainian and Russian (sometimes with bits of Hungarian, Romanian and Polish)," as the LRB's Peter Pomerantsev details in an excellent piece on Ukraine's rich cultural and linguistic complexity.  This is not to say that Ukrainians are not justified in being wary of Russia's embrace.  Millions of Ukrainians died in the 1930s from the famine caused by inhuman policies imposed by a Moscow government (although that government was itself headed by a Georgian, in the name of a trans-national ideology). The complexity and volatility is always there. Today, as Smith puts it, "many Ukrainians see room for closer relations with the West; the more sensible seem to favor a variant of "third way" thinking, no either/or frame. Many fewer desire a decisive break with Russia."

Yet at every turn, the new Western-backed government in Kyiv has stomped hard on these volatile fault-lines, pushing stringent anti-Russian policies, with Western governments pretending that this would have no consequences, no reverberations in Moscow. What's more, the neo-fascist factions that played a leading role in the uprising are now calling for Ukraine to become a nuclear power again ...

My recent diaries about the Ukrainian issue ...

Miscalculation May Lead to A New Crimean War
Who Were Snipers In Kiev Massacre - A CIA-Svoboda False Flag Op?
US Security Adviser Rice Threatens Russia's Putin
Regime Change In Ukraine - Who Bugged Nuland, an Embarrassment

Poor naïve Ukranians, so easily manipulated by the Yankee dollar! Who knew so little money could go so far?

There are many ways of losing democratic legitimacy. One of them is to throw your defeated opponent into prison. Another is to revoke constitutional changes that don't suit you, through pressure on the judiciary. When it's clear that a democratically-elected leader has no intention of relinquishing power, then taking to the street is the only effective means of political expression; and overthrowing the regime through popular pressure becomes legitimate.

Oh but I forgot : the revolutionaries were all bought and paid for by Uncle Sam and some tech billionaire.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Tue Mar 4th, 2014 at 10:19:02 AM EST
There are many ways of losing democratic legitimacy. One of them is to throw your defeated opponent into prison. Another is to revoke constitutional changes that don't suit you, through pressure on the judiciary.

Well, in that light, the new unelected provisional government's majority undercut its legitimacy with the abrogation of the language law (vetoed by the interim President when it was already too late).

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Tue Mar 4th, 2014 at 10:46:21 AM EST
[ Parent ]
I agree with you there. It remains to be seen how they imagine they are going to get themselves some legitimacy.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II
by eurogreen on Tue Mar 4th, 2014 at 12:21:04 PM EST
[ Parent ]
Can we all at least agree that the attempt of the new government to limit the use of the Russian language was incredibly stupid?

I can only hope that this is dead, dead. Not laying in wait for use as an escalation by the new Ukrainian government.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Thu Mar 6th, 2014 at 01:17:52 PM EST
[ Parent ]
I was surprised by the harsh criticism from Mikhail Gorbachev directed at "bulldozers full advisers" pouring into Kiev to influence internal Ukrainian affairs.

Milhail Gorbachev: Ukrainians must get rid of all mentors and advisers from the U.S. and the EU

KIEV (UNN) February 23 - Last thing - it's to give advice to people, we should not interfere, not incite. This way the first Soviet President Mikhail Gorbachev commented on developments in Ukraine, UNN reported citing Russian media.

 « click for interview Boston Globe

"Let sit at the negotiating table: there is a need to talk - let them talk a month, they want to negotiate six months - let them negotiate," - Gorbachev said.

According to him, Ukrainians must get rid of all the "mentors and advisers" in the United States and the European Union. "Let the people decide." - said Gorbachev.

[Source Ukrainian News: UNN: "Михайло Горбачов"]

Ukraine ranks as one of the most corrupt nations, even outpacing Russia, at 144 out of 177 nations. Corruption has been endemic in the Ukraine from the moment of its independence and is spread across all parties and related oligarchs ...

1989. The Collapse of Communism in Eastern Europe

The Polish revolution soon affected the Baltic States and Soviet Ukraine. A 5-man Solidarity delegation visited Kiev for the founding congress of the Ukrainian opposition "Rukh" movement on Sept. 8-10, 1989. The Poles were received enthusiastically with a Polish flag emblazoned on the Solidarity logo. Gorbachev was worried; he did not want to see Ukraine separating from the USSR, so when President G.W. Bush visited Kiev he appealed to the Ukrainians not to rock the Soviet boat. He didn't want Moscow hardliners to overthrow Gorbachev.

Soviet leaders feared Ukrainian nationalism, imposing far more severe repression [pdf]

President Leonid Kuchma and his alleged role in the disappearance/murder of opposition journalist Georgy Gongadze

... On 24 March 2011 Ukrainian prosecutors charged former president Kuchma with involvement in the murder. The decision prompted mixed reaction among the public. Former Prime-Minister and the leader of the main opposition party Yulia Tymoshenko argued that Kuchma's arrest was no more than a PR stunt designed to distract people from their economic woes and prop up President Viktor Yanukovych's sagging popularity ...

'Sapere aude'
by Oui (Oui) on Tue Mar 4th, 2014 at 03:27:37 PM EST
The latter Ukraine Soviet history is interesting. Shcherbytsky was an old Brezhnev protege, active with purging dissidents. And his performance after Chernobyl was just appalling. Glastnost and Perestroika were lagging behind under Shcherbytsky, and even the popular Rukh was slow to emerge. That Ukraine should be an archetypical example of collapsing Soviet economy and citizen discontent. Shcherbytsky survived until 1989 in the Poltiburo - while Gorbachov showed insensitivity to prides of Ukraine and Kazachstan.
by das monde on Tue Mar 4th, 2014 at 05:17:31 PM EST
[ Parent ]
Chart MICEX index - Chart USD-RUB -  Chart EUR-USD [Euro at 12-month high]

China plans to reduce its holdings of the US dollar

(NSNBC) Dec. 3, 2013 - China and Russia are quitting US dollar or at least significantly cutting the dollar share in their forex reserves.  Politically correct American analysts call this process "rapid forex reserves diversification".

In fact, some economists see this trend as a threshold in the unfolding world crisis because the whole pyramid of global finance is based on one simple fact - financial regulators around the world, buy the US debt (dollar & treasuries) no matter what.

"It's no longer in China's favor to accumulate foreign-exchange reserves," Yi Gang, a deputy governor of the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will "basically" end normal intervention in the currency market and broaden the yuan's daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining the reforms outlined last week following a Communist Party meeting.

Neither Yi nor Zhou gave a timeframe for any changes. It is well-known that Chinese authorities as a rule tend to avoid sharp changes in political economy. Such policies are implemented in such a discreet manner that people do not even realize the ongoing transformation.

What's interesting, the Central Banks do not announce such things so loudly. For example, over the period from the end of January 2013 to the end of July, the Bank of Russia reduced its stockpile of US Treasury securities from USD 164.4 billion to USD 131.6 billion, which means that over the course of six months, it reduced its portfolio of US Treasury obligations by USD 32.8 billion, or by 20 percent. Closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.  

Dollar cap: China limits world's highest foreign currency reserves

(RT) - China's central bank has said it no longer sees any benefit in increasing its $3.66 trillion foreign currency reserves- already the world's largest. China will cap its purchases of US dollars in an effort to limit the depreciation of the yuan.

"It's no longer in China's favor to accumulate foreign-exchange reserves," Bloomberg quoted Yi Gang, a deputy governor at the central bank as saying Tuesday.

Decreasing the influence of the dollar and other currencies is a step closer to reaching China's 2015 goal to "float" its currency and according to the People's Bank of China will help the everyday Chinese citizen.

Cross-posted from Booman's fp story - Money More Important Than Tanks . - [MICEX tanks a market warning to Putin?]

'Sapere aude'

by Oui (Oui) on Tue Mar 4th, 2014 at 07:38:04 PM EST
Russia Sinks Own Warship?

The Russian Navy Ochakov Kara-class cruiser was sunk on Thursday to blockade the Ukrainian Navy ships deployed in Novoozerne.

The Ukrainian military of the South Naval Base were observing the operation, and can confirm it.

The Russian ships blocking the Ukrainian ships in Donuszlav Lake left the zone at 23:30 p.m. (March 5).

Then, the Russian military towed the Ochakov and put it in the navigating channel. They filled her with water, and some sort of explosion followed.

by das monde on Thu Mar 6th, 2014 at 11:00:56 AM EST
Why headline Russia sinks own warship? when you can write Russia scuttles own warship!

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Thu Mar 6th, 2014 at 11:07:56 AM EST
[ Parent ]
Misleading headlines are more balanced...
by das monde on Thu Mar 6th, 2014 at 11:14:46 AM EST
[ Parent ]
"Scuttle" failed the reading difficulty optimiser.
by Colman (colman at eurotrib.com) on Thu Mar 6th, 2014 at 11:18:53 AM EST
[ Parent ]
I know...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Thu Mar 6th, 2014 at 11:48:59 AM EST
[ Parent ]
Vladivostok - Mistral Class LHD Bound for Russia Begins Sea Trials in the Atlantic
A French-built helicopter carrier Vladivostok has set sail from the French Atlantic port of Saint-Nazaire on its first sea trial. The warship is part of a 1.2-billion-euro deal ($1.6-billion) that marked the biggest-ever sale of NATO weaponry to Moscow.
I saw already headlines that this ship (still to be delivered, to the Pacific navy eventually) is heading to the Black sea...
by das monde on Thu Mar 6th, 2014 at 11:06:35 AM EST

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