Archive for February 11th, 2010


Selling Warships to Russia…..oh Tut- Tut!!

February 11, 2010

Associated Press BRUSSELS — Concerns by some allied nations about France’s sale of a modern assault ship to the Russian navy are understandable for historical and geographical reasons, NATO’s spokesman said Wednesday.

“Secretary-General (Anders Fogh Rasmussen) doesn’t consider Russia as a threat and he hopes Russia doesn’t think of NATO as a threat,” spokesman James Appathurai said.

“But the anxieties of some allies are of course real and are understandable for historical reasons and for geographical reasons,” he said.

The sale of the 23,700 ton (21,500 metric ton) Mistral class helicopter carrier has alarmed Estonia and Lithuania, which have expressed concerns about the deal.

France has agreed to sell Russia a single warship and is considering a request for three more vessels that may be built under license in Russian shipyards. Each ship costs between €400 million and €500 million (US$547 million and $684 million).

NATO members and Russia have had some small, country-to-country technology deals in the past, but this would be the first sale of a major piece of equipment by a NATO nation to Moscow.

Mistral-class vessels are the second-largest ships in the French fleet after the aircraft carrier Charles de Gaulle. The ships have not yet been sold outside France.

The Mistral can carry up to three dozen transport helicopters, along with a battalion of naval infantry with their armored vehicles.

Yeh, I know dear readers, this has nothing to do with Ukraine……unless of course, the Russian Black Sea Fleet lease is extended in Crimea and this Mistral ship is harboured there…….which is unlikely.  I mean the ship being harboured in Crimea……not the extention of the RBSF lease………well Ukraine is absolutely broke and couldn’t redevelop the RBSF base if it left…….leaving a major populus of Crimea without an alternative income to that which the RBSF provides.

Actually, the RBSF and Crimea is worthy of a post of it’s own……and there is plenty of time to discuss this subject in the months and years ahead…….well the Russians don’t have to be out of here until 2017 as it stands today.

Now many less informed or balanced people will automatically blame Russia for buying this vessel (and wanting 3 more) stating it will create an imbalance or major threat to the regional security/peace.

You have to ask how it does and what would have Russia done if France had not sold them the warship……after all one warship, or even 4…….does not significantly increase the threat of the Russian navy, even if it does give them an amphibious ability they didn’t have before. 

Quite simply a Russian naval upgrade has been openly talked about by Dmitry Medvedev since taking office……so if France had not sold them this ship then Russia would simply have built their own…….this just saved on the R&D costs and a bit of time…….and that is all.

Russia has as much rite to upgrade it’s military as the USA, UK, France, Ukraine or any other nation.

Why are Estonia and Lithuania concerned?  Are they not confident in NATO and it’s ability or will to enforce Article 5 of the Charter should “someone” act agressively towards them?

If they consider that Russia is a military threat to them, then equally so they must consider France, a NATO ally, a threat to their security for selling the warship to Russia in the first place……and possibly another 3.

So who is the “bad guy” here?  Russia who would have started the overhaul of its navy anyway……or France for selling the warship to them in the first place?

As I have said, the gains for Russia are simply in R&D costs and timelines…….but an upgrade was going to happen anyway.

The gains for France?  Well that is a good question.

The money is neither here nor there when all is said and done.  Both nations sit in the top 5 arms sellers in the world.  There is no such thing as a secret for long anyway and of course it is not unheard of these days for the Russian navy to carry out joint operations with NATO navies either. 

The latter point is worthy of a little expansion.  Naval exercises jointly between Russia and NATO are not unheard of.

What have both Russia and France held as a common thought over the past decade either overtly or covertly?

The answer is some form of European Army or collective defence force…….both of which could be seen as slightly undermining the concept of NATO…….as obviously a European Army or European collective security agreement is…….well……European, to the exclusion of non-Europeans…….you know who I mean!

When France officially re-engaged with NATO a few years ago it was not because NATO needed it to, but because France took up it’s rite to do so after many years of standing back……why was that?

Here is a clue…….

All you have to do is replace Sir Humfrey with a Frenchman and replace the subject with NATO.

Anyway, the precident has now been set for NATO members to sell arms to Russia……and this probably won’t be the last sale by a NATO member to Russia either.

With France engaging in military sales with Russia, Germany and Italy engaging in direct energy security with Russia……3 old men of Europe seem to be quite happy to hold Russia closer after many years at a distance…….albeit they will not hold them intimately ever.

I am waiting to read a statement from Baroness Ashton about this……as after all, she is the European High Representative for Foreign Affairs and Security Policy……and she has much to say, normally badly, over many things…….and this sale surely effects both foreign affairs and security policy for several EU members.


Yanukovych’s Priorities

February 11, 2010

The winner of Ukraine’s presidential election, Victor Yanukovych, said the first thing his Cabinet would do was to submit a bill on the state budget for 2010 to parliament and to provide citizens with more social support.

“The new cabinet will have to audit Ukraine’s economic and financial situation urgently, to assess the scope of problems inherited from the outgoing government, to form a mechanism that will guarantee the government’s transparency for our partners and society, to submit a bill on the state budget for 2010 and to implement social support measures,” Yanukovych said in a statement posted online on Feb. 10.

Ukraine must ask its creditors, neighbors and also industrialized states to provide direct aid to be used for overcoming the economic crisis, he said.

Ukrainian citizens and foreign partners’ trust in government institutions must be restored also, Yanukovych said.

“The new cabinet must launch a real fight against corruption. If it does not, Ukraine will drop out of the community of civilized nations,” the statement said.

A broad discussion must be set off in society and efforts started to reorganize the foundations of the state system, Yanukovych said in the statement.

“We must guarantee the implementation of my election program – Ukraine for the People,” he said.  Interfax-Ukraine.

Now, spookily dear readers, if you are an avid reader of my written garbled thoughts, not many posts ago, (a week or two…..maybe three), I was harping on about systemic change to the Ukrainian “civil service” and indeed Mr Yanukovych does seem to touch on this in his statement…….no not the bit about corruption……..the bit about reorganising the foundations of the State.

Of course, some may say that the corruption statement is now the fox running the henhouse to some degree, yet Mr Yushenko and Ms Tymoshenko…… well as many others…….did very, very, VERY well financially from their time in power…….much better than those in “opposition” could hope to do.

Let us not forget that even though it looks like Tymoshenko will contest the results…….despite everyone pretty much agreeing it was for the most part free and fair around the planet……except her, because she lost,…….she is still the Prime Minister of Ukraine and therefore still in a powerful position.

In fact, unless she resigns, it could take months, quite literally, to remove her from the office of Prime Minister according to the rules of the Ukrainian Constitution.

I expect appeals for direct aid to many international institutions and entities located on every point of the compass once the true scale of the ecomony, debts and items which have dropped from the books have found, identitfied, collated and corroborated……which of course will not be easy to do whilst ever Ms Tymoshenko remains as Prime Minster.

In the meantime I expect appeals for debt restructuring to happen immediately whilst a good idea of what there is, or is not…….by way of liability…….is discovered.

The issue is who the much more lenient creditors to Ukraine will be and who will give more if they will give at all?

As Party of Regions is commonly thought of as the party of big business and the oligarchy……despite the fact it does not have the monopoly on oligarchy in its politcal ranks……how would a business look at Ukraine?

A worthy asset……certainly with outstanding agricultural, metal, coal, chemical industries, but all need massive investment. 

On going talks with the EU about a Free Trade Agreement, which will no doubt eventually get signed off…….but given the potential of Turkey, 6 hours away by boat, 90 minutes by plane and a major strategic ally potentially in business for steel, coal, chemicals, agriculture…….and energy.

In fact, Ukaine should forget Nabucco and get directly involved with Turkish projects as Russian ovatures to Turkey obviously show Turkey is of strategic importance to them too.  (Let’s be honest Nabucco will never happen). 

Ukraine has already ballsed up so much Nord and Southstream lines will happen without their involvement but an intitiative with Turkey would be a very good possibility.

It is not enough for Ukraine to look only East and West……it can look South as well, where a swift reciprocal deal of Visa free travel will open the doors to potentially a major trading partner backed by immense goodwill from Turkey, as it is they who are pushing for it…….and yes I have mentioned it to a few PoR deputies…… we will see what happens…….although of course I will not be “mentioned in dispatches” if all of a sudden Turkey becomes a point of intense activity in Ukrainian diplomatic circles.

So Ukraine is a “troubled asset” in business terms but certainly one which if you wanted a tax right-off for some years or had a long term plan and strategy for, is well worth taking the financial hit on intially……..if and only if the foundations of the civil service, where 90% of the corruption occurs, is sorted out.

The top 10% of corruption is the same in every nation of earth and will never be removed…….but it is about perception of the public and the majority of business activity here. 

Those in power, ultimate power, just as in the USA, UK, France etc etc will always get their “thanks” for allowing things to happen……or not happen……from those with a vested interest in the result.  It is really quite irrelevant if it comes in the form of nominal directorships which are paid very well for doing nothing, investment in “pet projects” or simply large manilla envelops stuffed with cash for “consultancy fees”……that sort of corruption is a matter of ” financial accounting” in the West after all, labelled any way except “pay-off/corruption/bribe”.

Still, we have to wait for Mr Yanukovych to be sworn in yet…….and that may take some time!

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