Archive for March 16th, 2014

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Fair warning(s)

March 16, 2014

According to the German Bild media outlet, thus far on a list of Russians to be sanctioned the following names appear:

Sergei Shoygu; Alexander Bortnikov; Sergei Ivanov; Dmitry Rogozin; Nikolay Patrushev; Sergey Glazyev; Vladislav Surkov; Alexey Pushkov; Alexei Miller; Igor Sechin; Dmitry Kiselyov; Alexander Vikto; and Vladimir Zhirinovsky.

The Europeans and USA have given fair warning.   The decision to actually sanction – and whom – to be taken on Monday after the Crimean referendum delivers an unquestioned result requesting to join the Russian Federation.

The Crimean request is to subsequently be considered by the Russian Duma on 21st March – coincidently (or not) the same date the EU and Ukraine are muted to sign the political Association Agreement.

The problem with fair warning when sanctioning such incredibly wealthy people who sit so closely within Mr Putin’s inner circle, is just what assets they still have within the jurisdiction of the sanctioning nations that they cannot move prior to their implementation.

A case in point, the Chairman of the Board of Directors of Gazprom, Viktor Zubkov, clearly knew in advance the Kremlin decision regarding Crimea – and dumped his entire shares portfolio in Gazprom prior to the invasion in anticipation of market reaction.

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Ergo, it is not unreasonable to suspect that any and all within the Kremlin inner circle will have moved all movable assets to a place of safety in anticipation of western reaction.  Leaving behind a few multi-million dollar castles and mansions in Europe will simply be seen as the cost of doing business for these billionaires.

It seems very apparent that the liberal voices within The Kremlin have been sidelined and that the siloviki are now firmly in control – A totalitarian Russia on the cusp of becoming a reality.

Fair warning works two ways – and as Mr Putin will rely on his inner circle for robust and disciplinarian political support, they will undoubtedly have had advanced warning over actions Crimea – and actions beyond if they are necessary, for Crimea is not an end in and of itself – but an assured consolation prize if plans don’t work out as envisaged. – The prevention of Ukraine leaving the Russian orbit is the goal, seemingly regardless of the economic, diplomatic and political cost.

Russian demands are quite simple.  Ukraine will never join NATO.  Ukraine will not join the EU.  Ukraine will not sign the agreements with the EU as they are currently written.

As a bonus, Russia would like to engineer federalism into any new constitution for Ukraine – it makes it far easier to have the persistent threat of secession and to break bits off, and thus by extension the ability to easily  influence Kyiv when Russian sensitivities are rudely ignored or expansionist appetite proves too great to resist.

A not entirely unreasonable position to take from a Russian perspective.

Naturally a completely unreasonable position with regard to Ukrainian sovereignty and the ability to chart its own course.

Notwithstanding any Ukrainian desired trajectory, this is naturally not a position that the Europeans, USA or NATO – regardless of their real intentions toward Ukraine – would allow Russia to unilaterally set in the European backyard.

Any form of negotiated settlement seems far from reach prior to any sanctions being placed, and there is no chance of the Crimean referendum being canceled tomorrow – What happens thereafter is the question that must be asked – with the multiple possible answers considered by policy makers and planners on all sides very carefully.

Will The Kremlin “go for it” with regard to Crimea, and possibly south and eastern Ukraine?  Is a new reality on the ground worth the costs for Russia (and thinking with a Russian mentality not a western one would help)?  What will the Europeans and USA do if Russia does “go for it” that Russia isn’t prepared for or expecting by way of economic, political and diplomatic pain?  Can the Europeans and USA regain the initiative vis a vis Russia?

All will become very clear over the next ten days – and those ten days will reverberate through the region and far into the future quite considerably.  Fair warning!

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