Putin: Battered, Bruised But Not Broken

Yves here. The triumphalism among Western commentators as the ruble plunged last week is more than a little cringe-making. We’re not yet in Two Minute Hate territory yet, but this feels like a warmup. Robert Parry provides an insanity check:

Official Washington’s “group think” on the Ukraine crisis now has a totalitarian feel to it as “everyone who matters” joins in the ritualistic stoning of Russian President Putin and takes joy in Russia’s economic pain, with liberal economist Paul Krugman the latest to hoist a rock…

Indeed, much of what Krugman finds so offensive about Putin’s Russia actually stemmed from the Yeltsin era following the collapse of the Soviet Union in 1991 when the so-called Harvard Boys flew to Moscow to apply free-market “shock therapy” which translated into a small number of well-connected thieves plundering Russia’s industry and resources, making themselves billionaires while leaving average Russians near starvation.

The piece goes on to debunk in considerable detail the caricature of Putin presented in America, the most important element being the charge that Putin was the aggressor in Ukraine and is therefore getting what he deserved. Mind you, Putin is still an authoritarian, but we don’t find that objectionable in many of our putative allies, starting with the Saudis.

By Colin Chilcoat,  a writer for OilPrice. Originally published at OilPrice

In what was perhaps the most anticipated edition of his annual press conference yet, Russian president Vladimir Putin certainly delivered. His increasingly colloquial speech brought several quotable moments as he tackled questions on Russia’s collapsing economy, Crimea, the West, and his love life in the annual yearend press conference. But how much can we extract from the three-hour event that may provide insight on global energy markets in 2015? Quite a lot in fact.

“What is happening with the economy is not the price paid for Crimea”

The weakened economy was brought up early and often and the ruble’s up and down volatility was evident throughout Wednesday’s conference – intraday swings peaked at plus 2 and minus 5 percent against the dollar. Delving very little into specifics Putin largely passed the buck, citing a lethargic central bank and ‘illegitimate and illegal’ Western sanctions as the root causes for the economic downturn. In a moment of frankness, he affirmed the woes are here to stay – two years by his estimation.

Putin still remains confident in his country’s energy industry as a vehicle for change. As such, his renewed pledge for economic diversification fell on tired ears. It’s clear his plan consists of little more than a waiting game and – though likely slip ups in Libya and Venezuela may grant it some validation – it will be a difficult wait. Putin dodged insinuations of corruption and instead commended his pal, and Rosneft head, Igor Sechin for his efficient management of the world’s largest oil company. For what it’s worth, ongoing projects are soldiering on and Russian oil output is projected to remain unchanged into 2015.

“The East is developing faster than the rest of the world.”

Russia will go down with the ship before ceding market share – especially in Asia, where Putin reaffirmed the pivot is real. Saudi Arabia and North America will have to keep pumping as Putin plans to uphold his end in this game of brinksmanship. The European Union will not have to worry about gas shortages, but Putin aims to ensure deliveries remain on his terms. US LNG hopes for a big piece of the pie also hang in the balance as Russian projects continue to move forward.

“China is our biggest economic and business partner – we will start the gasification of the Far East.”

With more to say on Asia, Putin answered questions on the blockbuster gas deal with China as well as the recent developments on South Stream. Beginning with Turkey, it appears Russia will forge ahead with its expansion of the Blue Stream pipeline. The new project aims to nearly quadruple current capacity and deliver 50 billion cubic meters (bcm) to the Turkish-Greek border, where the construction of a hub “depends entirely on the willingness of [Russia’s] European partners.”

Back to China, Putin defended the profitability of the new gas deals, which could see China source approximately 17 percent of its gas from Russia by 2020. According to the President, both sides proffered discounts in what was both an ideological and common sense transaction. Moreover, the Far East gasification will see Russia up its LNG volumes to the Asia-Pacific markets. Russia and Japan have been working closely to develop the Vladivostock LNG project, which seeks to deliver upwards of 7 bcm by 2018.

“The Bashneft case has nothing to do with a revision of privatization.”

Embattled oligarch and former Bashneft head Vladimir Yevtushenko can breathe a sigh of relief as it appears he hasn’t lost all favor with the President. Still, Putin’s comments did little to ease fears regarding the renationalization of privately held assets. Western majors are by and large locked out under the current sanctions, but they will tread carefully in future endeavors.

“It would be better without [the situation in Ukraine], but it happened.”

Despite his current situation, Putin’s 2014 presser was anything but somber and apologetic. His past suggests he doesn’t need to be if oil cooperates.

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  1. b

    Yves: “Mind you, Putin is still an authoritarian”

    What does that mean?
    Why is there a need to qualify him as such?

    Is there any doubt that Putin was fairly elected by a large majority of Russian voters?
    Is there any doubt that Putin has the support of a large majority of Russians?
    Is there any doubt that Putin has to respect the will of the parliament and the people?

    It is outright ridiculous to compare Russia and Saudi Arabia, a secular democratic republic to a tribal absolute monarchy based on fundamentalist religious interpretations.

    1. hunkerdown

      Not to put words in Yves’ mouth, but the term does seem to have a certain connotation of “insufficiently euphemistic about power for Westerners’ tender sensibilities”.

    2. Yves Smith Post author

      The US has behaved in an unjustifiable and reckless manner towards Russia. But one can be opposed to US warmongering without being a Putin fan. Putin is engaging in censorship and has had a nasty habit of putting people who are threats to him in prison, most notably Mikhail Khodorkovsky. However, regardless of what one might think of his domestic policies, it is none of our business. I am citing the Saudi example to say that we are in bed with some pretty ugly partners, and that does not imply equivalence. That is your straw man. We can hardly take pot-shots at Putin for what he does internally (as we did loudly during the Olympics in a remarkably tacky display) with the Saudis as a baseline.

      Putin has behaved in a more statesmanlike manner than his counterparts in the West, and has played a very difficult situation well. His foreign policy moves have been very astute, regardless of what doubts one might have with his domestic policies. And with the US propaganda becoming more deranged and our policing and surveillance more aggressive, it would not take much for us to tip into much more authoritarian policies very rapidly. The apparatus is all in place. It just needs to be redeployed from the black population, which is prosecuted and imprisoned at rates way out of proportion to whites, to dissidents. The crackdown against Occupy Wall Street is a harbinger of what is likely to be in the offing.

      1. norm de plume

        ‘with the Saudis as a baseline’

        As your second paragraph implies, it may not be long before there is no need to go so far afield for that baseline. I think b would agree.

      2. EoinW

        But can you have your cake and eat it? What kind of politician, other than a Putin type, would actually stand up to the US? The idea of Putin being authoritarian is music to my ears as it means he’s not owned by the Amerikaner Reich. True I don’t have to live in Putin’s Russia, however most of the Russians who do are very supportive of him. I can’t help but think more countries need authoritative leaders. I wish Canada had such a leader. Instead we’ve got one who sneaks around doing deals to sell out the country in the dark. Yet he still is as authoritative as he can get away with.

        My point being: a less authoritative leader will just be a Quisling.

        1. susan the other

          Yes. Very wow. Putin has to live in a real world that is presently pretty unreal. He blusters against us to gain traction at home and he reconciles as much as he dares to keep the world turning. The Saudis do it. The Chinese do it. The Europeans do it. And, newsflash, we North Americans do it. Everybody does it. Oil is the pivot. The Pivot isn’t a geographical pivot from one quadrant to another. It is an oil world pivoting to a non-oil future. In forty years. The blink of an eye. So When Michael Hudson points out that the US started to trash Putin when he refused to let us build and manage the Russia-to-Northern Europe pipeline and take our big fat cut, we see part of the real action. And we should be more reasonable for the knowledge. When Jeffrey Sachs says Putin is a brutal aggressor in Ukraine but it is justified because of Russian national interests, we have to understand what is at stake; when Paul Craig Roberts tells us that Russia will never hand over its southern riches, that seems like a no brainer, and when we learn that Russia sent fighter jets to fly over the Carribbean, well, obviously he was saying that Venezuela could be challenged. And etc. But melt it down and everybody has a general direction here. Sustainability I’m thinkin’ – or as the 3 Stooges said, “I’m thinkin, I’m thinkin! …but it’s not workin”.

          1. optimader

            Hi Susan
            Nationalistic posturing is not why I said Wow, it has been around as long as sovereign countries have been.. The notion that a (euphemistically termed) Authoritarian leader is all that Russians can aspire to, no less is ideal I think is bullocks.

            ” It is an oil world pivoting to a non-oil future. In forty years.”
            I would like to see a link that supports that claim before wading too deep into it. What you might be referring to is the BP annual report estimating Proven Reserves most recently being 53.3 yr at current extraction rates?
            Proven reserves are a dynamic metric, the term is not intended to indicate a point in the future when oil runs out and we’re globally confronted w/a “nonoil future”. Proven Reserves are an investment not a geologic metric.

            Proven Reserves
            Quantity of energy sources estimated with reasonable certainty, from the analysis of geologic and engineering data, to be recoverable from well established or known reservoirs with the existing equipment and under the existing operating conditions. Also called measured reserves or proved energy reserves. See also proved developed reserves and proved undeveloped reserves
            Read more: http://www.businessdictionary.com/definition/proved-reserves.html#ixzz3MewHtGhO

            ” So When Michael Hudson points out that the US started to trash Putin when he refused to let us build and manage the Russia-to-Northern Europe pipeline and take our big fat cut, we see part of the real action.”

            IMO the “rent extraction” theme is over played, it is not the strategic point, how control of energy inputs to Europe is shared is.


            1. susan the other

              maybe I’m being too hopeful but I think we are actually planning our future as a civilization out as far as we can… maybe a millenium – with favorable winds.

              1. optimader

                I appreciate the noble sentiment.
                When I was a corporate cog I had this taped on the cover of my carry in the meeting folder.. in fortune cookie size font..
                “”In preparing for battle I have always found that plans are useless, but planning is indispensable.”
                ~Dwight D. Eisenhower
                Planning is a necessary discipline to make progress, a fundamental misunderstanding is not constantly reevaluating the plan. Also a fundamental pitfall of Political litmus testing as if changing an assessment based on new information is a character flaw.

      3. John Jones

        Not to take away from your point just thought it be interesting to put here.

        Khodorkovsky is also a philanthropist. In 2001, Khodorkovsky launched the Open Russia Foundation in Somerset House in London, owned by the Rothschild’s Family Trust, with Henry Kissinger as its trustee. The Foundation’s mission statement declared as follows: “The motivation for the establishment of the Open Russia Foundation is the wish to foster enhanced openness, understanding and integration between the people of Russia and the rest of the world.” The following year it had its United States launch in Washington, DC.[18][19] His efforts include the provision of internet-training centres for teachers, a forum for the discussion by journalists of reform and democracy, and the establishment of foundations which finance archaeological digs, cultural exchanges, summer camps for children and a boarding school for orphans.[20][21]

        Khodorkovsky is openly critical of what he refers to as “managed democracy” within Russia. Careful normally not to criticise the current leadership, he says the military and security services exercise too much authority. He told The Times:

        “It is the Singapore model, it is a term that people understand in Russia these days. It means that theoretically you have a free press, but in practice there is self-censorship. Theoretically you have courts; in practice the courts adopt decisions dictated from above. Theoretically there are civil rights enshrined in the constitution; in practice you are not able to exercise some of these rights.”[22]

        1. peteybee

          he became a nice person after he got rich, but he got rich by profiteering on a grand scale — personally taking ownership of what used to be Russia’s prized national asset, in shady deals that could only have happened in the chaos of the Yeltsin years. These haphazard and mega-corrupt transfers of ownership of public property into private hands were generally considered a mistake, one which was tolerated as long as the oligarchs who benefitted played along with the system. If they became too ambitious, the mistake was fixed, using a de-privatization process just as arbitrary as mistaken privatization process that happened in the first place. This does not make Putin an angel, but one must remember that neither was Khodorkovsky.

          1. John Jones

            To me its seems that this is the model the U.S and Europe seem to have which is why I found it funny.

            “It is the Singapore model, it is a term that people understand in Russia these days. It means that theoretically you have a free press, but in practice there is self-censorship. Theoretically you have courts; in practice the courts adopt decisions dictated from above. Theoretically there are civil rights enshrined in the constitution; in practice you are not able to exercise some of these rights.”[22]

        2. c1ue

          Khodorkovsky translation: now that I’ve stolen my money – I don’t want someone else using the same channels to do the same.
          More importantly, Khodorkovsky broke the explicit bargain offered by Putin: you oligarchs can keep your private jets, yachts, and supermodels so long as you stay out of politics.
          Yes, Putin is authoritarian. Sadly. the fact remains that in Russia, authoritarianism acts in the interest of the nation and the overall people far more than so-called democracy in America.

          1. John Jones

            Good points. I like and believe in Democracy the problem is how do you keep internal enemies like Khodorkovsky and external countries from manipulating your Democracy for their own ends.

        3. Henry

          Speaking of Russia – “theoretically you have a free press, but in practice there is self-censorship. Theoretically you have courts; in practice the courts adopt decisions dictated from above. Theoretically there are civil rights enshrined in the constitution; in practice you are not able to exercise some of these rights.”
          Ironic that this sounds more and more like a description of the United States!

      4. optimader

        don’t really need to take it further than “But one can be opposed to US warmongering without being a Putin fan…. it is none of our business.”
        It’s not a zero sum game.

      5. vidimi

        this is spot on. i admire putin’s statesmanship and his handling of the diverse crises sent his way, but let’s call a spade a spade. one can argue the merits of having an autocrat in charge when your sovereignty is under attack by a resourceful enemy (e.g. usa vs castro, now russia, and even chavez in the past), but it’s hard to argue that putin isn’t an autocrat.

      6. different clue

        About Khodorkovsky, wasn’t Khodorkovsky about to sell Yukos and all its Russian territorial oil to Exxon-Mobil? Isn’t that what Putin moved fast and hard to prevent?

    3. sleepy

      I agree with your observations on the language used, b.

      With some nations it is de rigeur to hedge one’s analysis by using terms such as authoritarian, regardless of whether the term had much relevance to the analysis. It’s analogous to a weather forecast: “it will be warm and cloudy tomorrow in authoritarian Putin’s Moscow.”

      Venezuela would be another example.

      It may be appropriate to use the term “authoritarian” in a discussion that focuses on a nation’s human rights record, but otherwise it frequently comes across as boilerplate.

      1. kapala

        precisely – this is a product of decades of western propaganda, whereby Russia is incapable of having a free press (everything out of russia is popaganda – classical projection!) or anything but autoritarian leaders.
        It is also a result of the newer anglo phenomenon of needing to “balance” every discussion with an “opposing” view regardless of context or merit. That is why that statement seems like boilerplate – because it is.

        And because it is boilerplate, yves makes a further mistake in equating Russia with Saudi Arabia. If Yves meant that Saudi is much worse than Russia (more authoritarian etc..) she could easliy have written so: “… allies like Saudi make Putin look like the Dalai Lama …”.

        1. Reductron

          It is also a result of the newer anglo phenomenon of needing to “balance” every discussion with an “opposing” view regardless of context or merit. That is why that statement seems like boilerplate – because it is.

          A lurker here. My first post.
          This phenomenon is a crippling infestation I see in almost every written, broadcasted and blogged discussion. And in individuals. I can count on one hand those who are not infected. I even experience it at the office. Everywhere.

          1. Tom in AZ

            In general, I would agree, but the outright, blatant propaganda demonizing Putin over Ukraine when it has been our government up to its neck in causing the misery in that country has been stunning to see. But when you get Obama acceding to the wishes of both the neo-liberals AND the neo-cons in one place they will cheer lead even if they hate him.

    4. Jackrabbit

      When applied to a person (vs. a regime) “authoritarian” has a wide scope. One might just as easily label Obama as “authoritarian” given his:

      a) willingness to ignore human rights and democratic limits (as in Libya and droning);
      b) restriction of civil liberties (NDAA) and unwillingness to defend Constitutional rights (NSA spying);
      c) cronyism (favortism to ‘bundlers’, appointments, etc.);
      d) proclivity for signing statements and executive orders;
      e) abuse of power (IRS, Benghazi);
      f) misleading of the public (“if you like your doctor…”) and non-transparent government;
      g) war on whistle-blowers and access journalism.

      And, Yves was contrasting, not comparing Russia and Saudi Arabia. We seem to have no problem with much worse countries as long as they work with us.


      You guys BOTH do great work.

      H O P

    5. Seamus Padraig

      Quite right, b. And never mind Saudi Arabia. Just look at the US today: torture, police impunity, warrentless wire-tapping, the NSA, peace-time executive fiats… exactly how many more lines does Washington have to cross before we begin to call it ‘authoritarian’ too?

      ‘Oh!’ you might say. ‘But they have elections in America.’ But hey, they have them in Russia, too. For that matter, they even have elections at the Vatican! Big deal…

  2. timbers

    “Mind you, Obama still routinely bombs children and pregnant woman and entire villages”…and we don’t find that objectionable and nobody else does it that I know of.

  3. Chauncey Gardiner

    An aspect of Russia’s current situation that has not received a lot of U.S. media coverage is the reported $5.7 trillion U.S. dollar-denominated debt owed by borrowers in “emerging markets”. Although Russia’s sovereign US dollar debt is reportedly very low, Russian private sector borrowers, such as Rosneft mentioned here, have in the aggregate taken out US dollar loans and issued bonds in US dollars that reportedly total 70 percent of Russia’s GDP. With the decline in the ruble and oil prices, and the rising US dollar together the Fed making noises about beginning to raise interest rates, these large private sector $USD debts could present problems for Putin and Russia, as well as for other “emerging markets”. It will also be interesting to see if China provides support on this matter.

    Ambrose Evans-Pritchard issue discussed this issue in an article last week in the Telegraph:

    1. Gerard Pierce

      In one of Mike Whitney’s more recent articles he points out that one of Putin’s options is to block repayment of these dollar-denominated debts. That would be a little hard on Russians, but a polite “sorry about that” would be likely to get the attention of the US.

      1. optimader

        Conceptually similar to when Venezuela nationalized Exxonmobil’s assets. Didn’t play out quite the way Chavez planned..

    2. vidimi

      if a company like rosneft has assets it sells in dollars then any loans it takes out to finance its operations will also be denominated in dollars. that’s just best practice and, without knowing russian law, probably legally mandated. the issue here for them is then the drop in oil price more than the drop in the ruble.

  4. Lexington

    No one said sanctions were going to work miracles overnight. Putin has already admitted Russia will experience recession next year; for an authoritarian leader with a strong demagogic streak who is intent on stoking Russian nationalism to legitimize his rule this is a lot like the Pope admitting there is no God. Putin’s popularity has been inflated by lots of flag waving, a sycophantic domestic media, and one cheap victory in the Ukraine with the promise of more to come. We’ll see how it stands up when sanctions start materially affecting the quality of life of ordinary Russians (please spare me your ill informed analogies to World War II. First, this isn’t World War II, second, anyone who would entertain such an analogy and isn’t a Russian nationalist obviously knows very little about both Russia and World War II, and third the Ukrainian crisis has already had its fill of amateur hour historical prognostication).

    The real problem here is that the West’s sanctions regime is a monumental failure at the level of grand strategy. It would have been perfectly appropriate for the West to impose sanctions in order to restrain Russian aggression against the Ukraine, since the destabilizing effects of that aggression ultimately has profound implications for the security of Europe and Asia. If that were the real intention of the sanctions however the West would be working toward some sort of political compromise in which sanctions are eased in return for Russia curtailing support for Ukrainian secessionists (the fact Russia has already annexed Ukrainian territory greatly complicates the matter, but to the extent the West is ready to sacrifice Ukrainian interests for the greater good -and when the chips are down it will be very ready to do exactly that- it needn’t be a deal breaker in itself). Properly understood, sanctions are a tool that should be used alongside other tools to achieve the desired foreign policy end.

    The problem however is that the West has no clear idea what it is trying to accomplish through sanctions. It has no coherent strategy for diplomatic engagement with Russia to move things in the desired direction. As with Iran sanctions have become an end in itself. In practical terms, the US is using sanctions to punish Russia for challenging what it regards as its geostrategic prerogatives. The sanctions regime is really a testament to the hubris, folly and conceit of the American foreign policy establishment. Perhaps it is symptomatic of America’s decline as a great power that its elite feels the need to resort to ever grander gestures to “prove” its relevance.

    Be that as it may, it is also very dangerous. An isolated and discontented Russia is a major security problem in its own right. Humiliating Russia to gratify American leaders’ sense of their own importance is probably going to end badly for all concerned.

    1. Yves Smith Post author

      Russia was not the aggressor in Ukraine. The US destabilized the government. It is not a stretch to call it a coup, since a democratically elected leader was ousted when elections were months away. The new government had neo-Nazis in key posts, including a minister of defense who announced a program of what amounted to ethnic cleansing in the southeast, calling for the forced resettlement of ethnic Russians and saying that members of the army could confiscate property. This comes after the US repudiated its promise not to move NATO into former Warsaw Pact countries after the USSR dissolved. The US has been the aggressor here, not Putin. The “aggressive” actions that Putin appears to be punished for are supporting Iran and Syria and harboring Snowden.

      If the Chinese destabilized Quebec and an anti-American government were installed and a key official announced that Americans would be forcibly resettled and have their property taken, pray tell how the US would react?

        1. Yves Smith Post author

          I gather you missed that the new government in Kiev repudiated the current constitution and that there was a referendum in Crimea as to whether the citizens wanted to have greater autonomy in Ukraine or join Russia. The US and EU declared the referendum to be illegal but that view depends on what you make of the legitimacy of the government in Kiev, which seized power in violation of existing democratic processes, when elections were months away. Putin integrated Crimea after the Russian vote. He did not invade or subjugate it.

          1. Praedor

            Putin RE-integrated Crimea after the vote, very strongly, in favor of (re)uniting with Russia. Kruschev simply handed Crimea to Ukraine back when without consulting the desires of the Crimeans. He just handed it over. It’s not like Crimea is historically or ethnically Ukrainian. It was Russia and now is Russia again.

            The illegally overthrown government (by the US coup) was elected with ~70% of the vote. That is a MUCH stronger vote in favor than ANY US politician or President has had since…Washington? As soon as Yanukovich decided to tighten up ties with Russia rather than the kleptocratic austerians in the USA/EU, the coup was whipped up. What was THE first thing to come after the coup? A US gas deal to frack the hell out of Ukraine, including the eastern part with a majority ethnic Russian population that didn’t WANT to be part of the Austerity Union (EU). NATO and the US were also getting stiffies over the idea that they would be able to shut down the major Russian naval base Sevastopol. Oops. The Russians and the Crimeans quickly ended THAT wet dream.

            No, everything that has happened in Ukraine, from the sniper attack on peaceful pro-EU protesters to the coup to ethnic cleansing movements and to the civil war, is ALL the doing of the US/NATO aggressor, NOT the Russians.

          2. wrobel

            Yves, you like using parallels such as this:
            “If the Chinese destabilized Quebec and an anti-American government were installed and a key official announced that Americans would be forcibly resettled and have their property taken, pray tell how the US would react?”

            So let me try something similar: if Russian forces invaded Hawaii with their army and announced a referendum on whether Hawaii wants to join Russia (taking place, whilst Russian troops are still present on the ground), pray tell what would be the outcome of the referendum?
            (obviously, to make it work, we would have to assume that US army compared with Russian would be as weak as Ukrainian army during the Crimea vote)

              1. tunfold

                No, it’s good that you brought up Hawaii.

                From Wikipedia:

                The overthrow of the Kingdom of Hawaii refers to a coup d’état on January 17, 1893, in which anti-monarchical insurgents within the Kingdom of Hawaii, composed largely of United States citizens, engineered the overthrow of its native monarch, Queen Lili’uokalani. Hawaii was initially reconstituted as an independent republic, but the ultimate goal of the revolutionaries was the annexation of the islands to the United States, which was finally accomplished in 1898.

              2. optimader

                I’ve posed both scenarios in the past as open questions, Alaska being the closer analogy as it was part of the Russian Empire that was sold off at a pittance in a time of turmoil in the Empire.

                On the point of the Ukraninian Constitution being “repudiated” from what I’ve read elsewhere that’s not quite an accurate characterization perse (if meant to imply the Ukraine did not have a Constitution at eh time of the referendum). What did happen was a rollback to the 2004 Constitution.
                In any case, I don’t think it is generally recognized internationally for a State or Region of a Sovereign country to stage it’s own referendum and secede. Correct me if I’m wrong on that point.

                “… Let me share my opinion as Ukrainian citizen, from Kharkiv, eastern Ukraine.

                On February 21, 2014 Yanukovych and the opposition signed an agreement on resolving the crisis in Ukraine, one of the conditions was the immediate (within 2 days) rollback to the Constitution of 2004, constitutional reform and early presidential elections no later than December 2014.

                The same day, right after signing the agreement, Yanukovych left Kyiv even without driving home.

                The next day in the interview Yanukovych said that he would not resign and is not going to sign the decision of the Verkhovna Rada, which it considers illegal, and what is happening in the country qualified as “vandalism and gangsterism”.

                Form this moment it was clear that he run away, made everybody fool, and was not going to do what he signed on February 21.

                Actually, Yanukovych in unconstitutional manner withdrew from the exercise of constitutional authority and did not fulfill his obligations.

                On February 23 Acting President Rights were assigned to Oleksandr Turchynov.

                It was absolutely unclear where Yanukovych has gone.

                The east of the country was under separatists attack. Yanukovich seemed to be somewhere there. Assigning rights to new temporary president was the only correct way to save the country…”

                1. wrobel

                  What’s most disappointing is a total lack of a diversified perspective found on this blog.

                  Now, I can understand seeing Ukraine in the context of US warmongering but this is merely one lense through which the conflict can be viewed (and, in my view, hardly the most important one).

                  However, what is absolutely terrifying is how this perspective skews the reality on the ground. All of a sudden, 200k Maidan protesters becomes “US destabilising government”; all of a sudden Yanukovych, a marionette in Putin’s hand who was supposed to become president thanks to the rigged election in 2004 (how quickly people forget?) becomes a “democratically elected leader”; there will be mention of US repudiating “its promise not to move NATO into former Warsaw Pact countries after the USSR dissolved”, but there will be no mention of The Budapest Memorandums. Voting under duress of the foreign army (with no legal oversight over the actual proceedings) is now a legitimate “referendum” (and anyway, Crimea used to be Russian, so what’s the big deal right?). War with an independent country becomes a rebellion of ethnic minority (and by the way, “protecting Russians abroad” is the oldschool tactic. Ask Georgia. Beware Moldova). So on and so forth.

                  Yves, you are doing a great job on this blog on economic and financial matters. But you need a bigger perspective on this. This is not simply a case of US establishing its international diktat and staging yet another coup. This is Putin re-establishing the idea of the Russkiy Mir. This is an attempt of making Aleksandr’s Dugin “Foundations of Politics” a reality.

                  1. optimader

                    this was met w/ crickets but it was posted..

                    November 20, 2014 at 4:34 pm

                    I think if you read on Eurasianism / Aleksandr Dugin you’ll have a clearer idea




                    BTW, I find when I look back for things in the Search box, rarely do I find it.
                    For example Search: Dugin
                    “Nothing Found
                    Sorry, but nothing matched your search criteria. Please try again with some different keywords.”

          3. optimader


            “International Law
            Of course, when it comes to international law, none of Russia’s purported justifications for the invasion are legally relevant. Article 2(4) of the UN Charter proscribes the use or threat of force. The only two exceptions are actions pursuant to a UN Security Council resolution or self-defense on the basis on Article 51 of the Charter. Neither of these applies in the case of Russia’s invasion.

            Nor is an “invitation” to use armed force, from the ex-president of Ukraine in this case, a legal ground for the deployment of the Russian military, as Professor Marc Weller of the University of Cambridge has noted. Thus, Russia’s declared commitment to observe international law should not offer much reassurance to the new Ukrainian government. To the contrary, recent developments have shown Putin’s understanding of his country’s international obligations to be highly opportunistic.

            But legalities aside, the Russian-speaking population of Ukraine doesn’t need foreign protection. Nor are recent events in Ukraine a project of a particular ethnic or linguistic group. Instead, the revolution has been an attempt to purge the government of organized crime and corruption. While citizens of eastern Ukraine and Crimea may sympathize with Russia more than Ukraine, one can hardly speak of any acute conflict between Russian-speaking and Ukrainian-speaking citizens of the country. Russian assertions to the contrary should be treated as the cynical machinations of a government that “pacifies” its neighbors through war.”

            1. Tom in AZ

              Russia was already in Crimea. And if you don’t think using neo-nazis as your attacking force against the population you have publicly called sub-human isn’t an acute conflict, I don’t know what is…

          4. Tom in AZ

            You’re doing great work here, Yves. Those arguing, know better if they are following this at all. Willfully ignorant or trolling.

      1. amanasleep

        Citation needed please. I hear plenty of talk about how Maidan was due to US intrigue, but no credible evidence beyond “key neocons liked Maidan so of course they caused it”. The most troubling part of all this for the left is the implicit denial of agency to anybody in Ukraine.

        1. kapala

          search “nuland pyatt call” – that seems to be the most popular search on google. Try and do some reading away from western MSM to gain a more balanced perspective.

          Good point about not giving agency to Ukranians. It is easy to fall into a superficial narrative of “the US did it all”. The euromaidan protests – while certainly seeded with western “aid” for “democracy initiatives” – did in the first few months reflect genuine popular frustration.

          Western Ukrainians (ukrainian speakers, catholics/uniates, fought with Germany in WWII) have (largely) always looked west, eastern ukrainians (russian speakers, orthodox, fought against Germany in WWII) have (largely) always looked east. Euromaidan was essentially western ukrainians protesting an eastern ukrainian president choosing economic ties to Russia over economic ties to the EU.

          So what you had (and have had ever since the fall of the USSR and the declaraion of the state of Ukraine) is an internal schism putatively over poltics and economic orientation, with a heavy heavy undercurrent of historical, cultural and religious differences.

          It is in this environment that hardcore / radical elements (svoboda party, right sector, lyashko etc..), with great assistance from Yanukovich bumbling handling of the protests, drove euromaidan into violent confrontation.

          Make no mistake, Ukrainians have all the agency in this crisis – they are doing the killing, the dying, the hating.

          1. amanasleep

            I am well aware of the Nuland call, but it doesn’t prove anything more than that the US was actively trying to stage manage the aftermath of Yanuk’s departure. That’s dirty pool I suppose but hardly a coup.

            The idea that the US created the Maidan protests, or somehow forced Yanukovich from power, is not substantiated by this phone call.

            The other part of this is of course that this phone call was intercepted and leaked by Russia. I would assume that if they had stronger evidence of US involvement in the Ukrainian transfer of power they would have leaked that as well.

            1. optimader

              That’s exactly right. I like to lay on my back and connect the dots when stargazing as much as the next guy, but it doesn’t mean the constellations I create actually exist.

              The call does prove that Nuland is a nasty, vitriolic Neoconservative windbag w/o a doubt, but that’s about it.

        1. kapala

          I don’t think that was quite the citation that was requested here. I think we can answer that request for citation by citing another of your comments:


          and my (and others) response to it:


          The Nuland “f*ck the EU” call is only one of many examples of how the US financed and orchestrated the coup.

          Destabilization projects are inherently “unstable”, there are many actors, many competing and contradictory actions and actors. The US did not “plan” euromaidan down to the smallest details because that would simply be impossible.
          Given the FACT of all the money spent, and all the high-level contacts both over the last 2 decades and specifically during euromaidan, and the FACT that thiis is exactly how the US has pursued regime change in dozens of countries throughout this century and the last, we have means. motive and evidence – and we conclude – beyond a resonable doubt – that this was yet another US regime-change op, and the burden of proof lies with those that would argue otherwise.

          1. Martin Finnucane

            We see the child at the table with wildly gesticulating arms. We notice on the table an overturned glass with remnants of what looks like milk, and a large, expanding puddle of milk expanding from the area where the glass is overturned. We also just heard the sound of an impact like that of a hand or arm hitting a glass, and we heard the child immediately prior to that exclaim “F*ck milk!”

            So: who are we to presume that the child spilled the milk? The most troubling part of all this for the left is the implicit denial of agency to anybody involved in the milk puddle on the table.

            Or maybe I’m just having a stroke. Something like that.

          2. Vatch

            No, this is not how the U.S. has overthrown governments. It is quite different. Guatemala and Iran in the 1950s, Brazil in the 1960s, Chile in the 1970s, were all different from the Ukrainian uprising in 2013. Guatemala, Iran, Brazil, and Chile were all military operations. The Euromaidan demonstrations were spontaneous uprisings by the Ukrainian people. The U.S. did not remove Yanukovych from power. After he was gone, the U.S. played a huge role in choosing the interim government, and the U.S. still is deeply involved.

            1. vidimi

              no, the u.s doesn’t need to use military intervention to change a government it doesn’t like. check out the article on panama also posted today: of the 41 instances of u.s.-backed coups the harvard prof documented, only 17 involved military intervention (somehow he didn’t include aristide’s first ouster as a u.s.-backed coup, though).

              the u.s. was absolutely pivotal in ousting yanukovich. they did most of the organising. yes, there was genuine, popular opposition to yanukovich, but these people were not representative of the ukrainian people. this is because there is no such thing as a unified ukrainian people, but west ukrainians in the west and novorussians in the east. it was the novorussians who propelled yanukovich into power and it was kievan westerners who pushed him out, but in doing so, they were manipulated/led by the yanks.

              divide and rule is the staple of nearly every imperial colonial manoeuvre. be it shia/sunni, ukrainian/novorussian, if there are differences that can be exploited, they will be. and that is what happened in ukraine.

              1. Vatch

                I missed the spot where he said that only 17 out of 41 coups involved military intervention; maybe I skimmed the article too quickly. Could you please provide a quote? Please note that the relevant military intervention does not need to be by the U.S. military. Examples could be the Brazilian or Chilean military. The overthrow of Noriega was clearly a military event, and in that case, the U.S. military was involved.

                But the Ukrainian military didn’t become involved until after the Russians seized Crimea and the eastern provinces declared autonomy.

                1. kapala

                  let me see – no direct (overt) military involvement, no coup…

                  give it up. your twisting and spinning is making me dizzy…

            2. Tom in AZ

              Naw, we’ve moved on to the ‘color’ style meddling. State, CIA, USAID, murky NGOs. But we’re up to our regime changing necks in this mess. And as long as ‘our’ guy does what we want, it doesn’t matter what that person does…

      2. susan the other

        Oh. I think I get it. Sorry so slow. Cuba is tit for tat. Crimea and a smidge of eastern Ukraine in exchange for Cuba. And Cuba will probably prosper somewhat. They (Cuba) have been an amazing little country, with the help of Russia and China. This is evidence of the world coming together to break up the oil market. Half goes to Russia/China and the BRICS and half goes to the USA and the Americas. Maybe.

      3. Olaf Lukk

        “This comes after the US repudiated its promise not to move NATO into former Warsaw Pact countries after the USSR dissolved”. Promise to whom? By whom? Under what authority do the US and Russia have the right to negotiate the alliances of nations with the misfortune to be Russia’s neighbors? Did someone dig up Molotov and Ribbentrop?

        NATO was formed as a reaction to Russia’s refusal to withdraw from Eastern Europe after WW2. After the USSR “dissolved” in 1991, those nations which had been part of the Soviet “sphere of influence” for half a century- Hungary, Czechoslavakia, Poland, Bulgaria, Romania, Albania, Slovenia, Slovakia- if not annexed outright- Estonia, Latvia, and Lithuania- could not leave the Soviet orbit fast enough. Fully aware of where any future “aggression” would most likely come from, these countries were quick to drop their forced membership in the Soviet counterpart- the Warsaw Pact- to join NATO. This was not coerced by the US; it was done out of pragmatic self-preservation.

        To now justify Putin’s aggression in Ukraine- a nation which was subjected by Russian Bolsheviks to mass starvation in the 1930’s (Holomodor), and bloody battles in WW2- as a justifiable response to over-reaching American neocons (with the apparent magical power to manipulate millions of naive Ukrainians incapable of knowing their own history with Russia) would be considered the height of naivete by most Eastern Europeans.

        “Naked Capitalism” does a first class job- the best on the web- of calling out “useful idiots” in the economic sphere. It should not fall into the trap of fitting the original definition of that term.

    2. norm de plume

      You can take the Lexington out of America, but you obviously can’t take the America out of Lexington.

      ‘Putin’s popularity has been inflated by lots of flag waving, a sycophantic domestic media, and one cheap victory in the Ukraine with the promise of more to come’

      Sub Obama for Putin, same diff.

      ‘sanctions are a tool that should be used alongside other tools to achieve the desired foreign policy end’

      Tools like these perhaps?

      ‘In the last 10 months, the United States has executed a near-perfect takedown of the Russian economy. Following a sloppy State Department-backed coup in Kiev, Washington has consolidated its power in the Capital, removed dissident elements in the government, deployed the CIA to oversee operations, launched a number of attacks on rebel forces in the east, transferred ownership of Ukraine’s vital pipeline system to US puppets and foreign corporations, created a tollbooth separating Moscow from the lucrative EU market, foiled a Russian plan to build an alternate pipeline to southern Europe (South Stream), built up its military assets in the Balkans and Black Sea and, finally–the cherry on the cake–initiated a daring sneak attack on Russia’s currency by employing its Saudi-proxy to flood the market with oil, push prices off a cliff, and trigger a run on the ruble which slashed its value by more than half forcing retail currency platforms to stop trading the battered ruble until prices stabilised.’

      That is from the Mike Whitney piece Gerard Pierce referenced. I would add ‘sow suspicion of Russia for the downed civilian plane when the balance of evidence points elsewhere’ and not to forget ‘renege on solemn post Cold War promises not to surround Russia with suborned new NATO satellites and ICBMs’ – the first of the blunt instruments to be employed.


      ‘The problem however is that the West has no clear idea what it is trying to accomplish’

      Of course it does.

      ‘Washington doesn’t care about peoples’ dreams or aspirations. What they care about is ruling the world with an iron fist, which is precisely what they intend to do for the next century or so unless someone stops them… This is how the US plays the game, by keeping its “eyes on the prize” at all times, and by rolling roughshod over anyone or anything that gets in its way. That is why the US is the world’s only superpower, because the voracious oligarchs who run the country will stop at nothing to get what they want’

      That (again from Whitney) is your answer, if you’re pondering on rationale for strategy – good, bad or indifferent. Not very noble, but top dog power expansion never is. It makes a bit more sense than ‘sanctions have become an end in itself’ or trying to prevent ‘destabilisation’ of Europe or Asia or some such piffle. Unipolarity is the goal, whether with scalpel or bludgeon.

      Whitney suggests a few tools for Putin that made me want to take an aspirin and have a good lie down, and I don’t reside in Europe or Asia, or Russia or America. Perhaps he is being a bit hysterical, but ‘ill-informed’ and ‘amateur hour’ he ain’t.

      1. vidimi

        yup. furthermore, putin’s popularity has some grounding in economic reality: the recent ruble swan dive notwithstanding, the prosperity of the average russian has improved significantly since putin took over. furthermore, inequality has actually decreased. contrast that to obama’s legacy, or bush’s before him.

        in soviet russia, the poor get richer and oligarchs go to jail.

    3. Jackrabbit

      “the West’s sanctions regime is a monumental failure . . . [and] the West has no clear idea what it is trying to accomplish through sanctions”

      They want ‘regime change’ – to replace Putin with a leader that is more accommodating to the US/West. This is clear to most by now. And sanctions are not applied in a vacuum. Sanctions plus the dramatic fall in the price of oil will severely stress the economy (how deep will the recession be?). Then there is also the possibility for destabilization via democracy movements and militancy in different regions. All of this will give Putin’s political enemies a boost.

      I think Putin will need explicit support from other BRICS (especially China) to get through this. Will they be willing to defy Washington?

      H O P

        1. Andrew Watts

          Yeah, Russia isn’t alone in this. China could also start buying ruble on the markets. They swap dollars for rubles and they deliberately try to squeeze the short sellers over time while liquidating some of their USD holdings to foster bilateral trade.

          The only thing Washington accomplished in Ukraine was pushing Russia into the open arms of China. Besides helping to wreck an eastern European country with a good record on civil rights. As far as I know it was always the intention of George Kennan to forge a Russo-American alliance. From the beginning of the Cold War he was quick to stress that countries are never eternal enemies. What this would’ve meant for both countries would’ve been in their best interests and something along the lines of Veri1138 said it would be in a reply,

          What Haass is to Kennan is also what Krugman is to Galbraith. They’re both intellectual midgets standing in the shadow of greatness.

          1. susan the other

            Kennan was a giant. And his wisdom prevails. Don’t be fooled. The best “partner” (as Vlad calls us) is a strong one who adheres to approximately the same rules and can pick up the slack when we overly-optimistic Americans can no longer lift a glass. That would be now.

    4. Seamus Padraig

      The problem however is that the West has no clear idea what it is trying to accomplish through sanctions.

      Maybe the “West” has no idea, but I think I know what Washington’s game is here: the drive a wedge between Europe and Russia by starting up a new cold war. Crimea was the only really valuable part of Ukraine anyway, so now that it’s gone, they’re prepared to sacrifice the rest of Ukraine if they have to. If they can ever finish the job in Syria and overthrow the government there, they may even be able to build that Saudi/Qatari pipeline up into Turkey and Europe.

      1. Jackrabbit

        The rebel-held Dunbas is/was also a very valuable part of Ukraine. It the most urban and I’ve read that it accounted for 20% of Ukraine GDP. And it has untapped gas deposits.

      2. susan the other

        The possible but unmentioned pipelines are the ones that interest me. Like pipelines from the best producing corner of the Caspian. Or from the offshore riches of Gaza. You know – the stuff nobody wants to admit to because in one way or another just admitting to these resources makes world “markets” aka sewers, backflow in a gush of speculation insanity. And just yesterday someone quoted a factoid that Cuba, just offshore (whatever that means) has a bigger oil/gas field than the Saudis. How long have we known that?

  5. drexciya

    I have grown more and more frustrated on the reporting concerning Russia. In the Netherlands the MSM are simply parroting that Putin is evil and that it’s good that Russia is suffering. Well they’re complete idiots. Our exports (agricultural mostly) to Russia have dropped because of the counter sanctions put in place by Putin, which makes us suffer as well.

    And all for what? A conflict which we, deliberately (EU and the US) created and have mismanaged so badly that there’s way more needless suffering in the Ukraine than if had kept ourselves out of it, or, maybe, we could have talked with the parties involved, like grownups.

    That’s the thing that frustrates me the most; there’s no acknowledgement at all of all the suffering in the Ukraine, thanks to our awesome politicians. How many people have died already? How many have been displaced? What’s left of the economy in the Ukraine?

  6. M. Rains

    This conflict has turned very personal for Obama. Reported on CNN in an interview, Obama says:
    “There was a spate of stories about how he is the chess master and outmaneuvering the West and outmaneuvering Mr. Obama and this and that and the other. And right now, he’s presiding over the collapse of his currency, a major financial crisis and a huge economic contraction. That doesn’t sound like somebody who has rolled me or the United States of America.”

    I cannot believe my eyes/ears that an American president would make such a statement public. How petty is this?

    Also, I saw on French TV news a report by a very respectable/knowledgeable individual that Putin had commissioned a quick study to use force majure (sp?) on western debt in Russia. That would be interesting.

  7. JMarco

    Re: “In a moment of frankness, he(Putin) affirmed the woes are here to stay – two years by his estimation.”
    Yea, unitl Obama leaves office. Maybe, he is counting on Republican president in next US election who would be more interested in financial dealings with Russia for the benefit of his Wall Street supporters.

    All this talk about sanctions and more sanctions. How long did it take the public to find out about all the violations of Iran sanctions committed by global financial institutions? Are these financial guys going to pass up a profit for Obama? I think not.

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