|The Game Continues As More Innocent People Die|
As winter gets ever closer a cold reality is settling in as the Euro-zone furiously scrambles to find alternative sources of energy should Gazprom pull the plug on natural gas exports to Germany and Europe. The surge in Ukraine gas prices is probably the best indication of what Europe faces. A cutoff by Russia would severely disrupt supplies. The EU, Turkey, Norway, Switzerland, and the Balkan Countries received 30% of the natural gas they burned last year from Russia according to the U.S. Energy Department "We have to be very careful not to hurt ourselves more than we hurt the other side," the Polish Foreign Minister has said. This comes after Russia announced what many have called the "Holy Grail" energy deal with China that has geopolitical implications for the whole world as it binds the two nations in a commodity-backed axis.
A recently signed deal for gas supplies to Ukraine only highlights the fact the devil of any agreement is in the details. It was quickly pointed out the EU didn’t give any guarantees to Russia for Ukrainian gas payments by a spokeswoman for the European Commission in Brussels. The Russian Energy Minister Alexander Novak said any resumed supplies could be halted again on Jan. 1 if Ukraine doesn’t pay $3.1 billion in debt prepay for future deliveries. It appears this deal is tenuous and the guarantees of it being fulfilled are weak. In the end the money will come from an IMF loan to Ukraine which means that many of the same countries that are claiming to oppose Putin and not giving any guarantees for payment will be filling Putin's coffers with cash.
The Russian President has kept tensions high and some people think he may be telegraphing his intentions with his fighter jets. This forced the North Atlantic Treaty Organization to scramble its own warplanes several times this week. Russian military planes were tracked over the Baltics,North Sea, and Atlantic yesterday. “The airspace interceptions around Europe in the past few days show that Russia is willing to challenge NATO and has no interest in de-escalation,” Stefan Meister, an analyst at the German Council of Foreign Relations in Berlin, said by phone. “I don’t see this gas deal as a step forward.”
On the ground in Eastern Ukraine the daily clashes have intensified between rebels and government forces. The Russians have been sending more supplies to the region, according to the Ukrainian army while the Kremlin has denied any "military involvement" in its neighbor’s crisis. The EU on October 30th rebuked Russian Foreign Minister Segei Lavrov, who said that his country would recognize the separatist elections. Reports are Russia continues to supply the militants and conduct surveillance from its side of the border. Russia’s Emergency Ministry said it’s organizing another convoy that will include meat, sugar, construction materials, fuel and medicine.
As parts of an EU-Ukraine Association Agreement will go into effect today, covering such areas as the rule of law as well as the fight against crime and corruption. Nothing has really changed within Ukraine and the next flashpoint may be in the self-proclaimed republics of Donetsk and Luhansk. The separatists are pushing ahead even as daily fighting and violent clashes test a truce signed September 5th. “The separatist elections planned on November 2nd matter a lot more in terms of the big picture than the gas deal,” Arkady Moshes, the head of the EU’s Eastern Neighborhood and Russia research program at the Finnish Institute of International Affairs, recently said by phone. “The overall conflict is in a state where too many parties simply don’t want to have any solution.”
As this unfolds a self-righteousness President Obama continues to scold Russia for intervening in the affairs of Ukraine and Secretary of State, John Kerry is on record declaring it unacceptable to invade another country on a "completely trumped-up pretext," or just because you don't like its current leadership. The glaring hypocrisy exhibited by the White House and what appears to be a total lack of self-awareness by U.S. officials has shocked the world. While Obama continues to charge his Russian counterpart, Vladimir Putin, with violating Ukraine's sovereignty and territorial integrity in breach of international law, it is difficult to forget the infamous "Fuck the EU" comment by Assistant Secretary of State, Victoria Nuland in the run-up to Ukraine's revolution. The comment revealed the extent to which Washington was recklessly maneuvering to undermine Ukraine's elected pro-Russian president by backing the Kiev street protesters' demands.
Reality on the ground remains that America has few military options in Russia's backyard unless it has the backing of a full and enthusiastic NATO and that is very unlikely. The political reality is that few Americans support such action and the number is dropping each day. Europe has reason to be unexcited about a possible long and expensive conflict. While still trying to recover from a recession, Europe would face fuel shortages and a massive spike in the price of natural gas. Currently, Russia supplies much of the gas used in Europe, this gives Putin a great deal of leverage. If an actual ground attack were to occur few see the Russians as likely to rollover as other armies have when America approaches.
Many in the West point to a weakening ruble as proof they are winning this "cold war." Russia’s currency has been plunging as Russians pull capital out of the country amid the standoff with the U.S. and its allies over Ukraine. Sanctions imposed by the U.S. and the EU have shut Russian companies out of foreign capital markets and threaten to push Russia into recession. It must be noted the euro is also falling as Euro-zone economies falter and this is pushing Russia into forging stronger bonds with China. This will haunt the Euro-zone in the long-run. Don't hold your breath for Putin to back-off or back-down, he has put down his marker and is now playing both Obama and Kerry for fools in a contest that may cost Russia little. If Putin doesn't get his way next week he will next month or next year at the latest. This conflict won't be over until Putin says its over.
Footnote; Your comments are welcome and encouraged. If you have time please check out the archives for other post that may be of interest. Below is another of several post I have written concerning Ukraine.