Posts Tagged ‘Germany’

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Germany’s KfW and Oschadbank Ukraine look to SME financing in 2017

December 24, 2016

State owned KfW Bank of Germany together with State owned Oschadbank Ukraine will apparently target the ever under financed SME market in Ukraine following the signing of a memorandum to do just that via a vehicle called the “German-Ukrainian Fund”.

The “German-Ukraine Fund” is not exactly new.  It has been around since 1998 when it was created by Presidential Decree 574/98.  It’s creation was with the very same intent as the memorandum signed on 24th December 2016, and its structure 31.3% National Bank of Ukraine, Ministry of Finance Ukraine 31.3% and KfW 37.4% appears to be unchanged.

Needless to say that since its creation in 1998, judging by the woeful state of financing for the Ukrainian SME market, the results have been less than spectacular over the past 18 years.

Traditionally Oschadbank is not a bank that has ever had anything to do with the financing of SMEs.  It certainly has experience of financing large scale projects (all plundered naturally), but would not be on any list associated with the financing of SMEs.

Indeed it would be fair to state that Oschadbank has absolutely no experience of SME financing – a banking sector that undoubtedly has its own very specific competencies requiring sector expertise.

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KfW Bank, aside from being able to borrow cheaply due to being 100% owned by the German State, is split into 3 major banking subsidiaries.  Of most relevance to Ukraine is KfW Entwicklungsbank which lends to governments, commercial banks and public enterprises that engage in the microfinancing of SMEs.

It would appear that whatever the EBRD has done behind the scenes to the internal workings of Oschadbank, part of any result is to open up the banking horizons of Oschadbank and attempt to focus them upon what is an SME economic engine historically ignored.  If nothing else it would diversify the loan portfolio of Oschadbank if a significant number of loans actually take place.

(A reader may suspect that both the EBRD and KfW  will have to lend a good deal of experience regarding microfinancing to Oschadbank for the foreseeable future – though that too may be no bad thing in the short-medium term as the internal Oschadbank management develops.)

All in all, some reasonably positive news to (almost) close the year 2016 – particularly for Ukrainian SMEs or SMEs coming to Ukraine.  If 2016 has been a difficult year for Ukraine, 2017 unfortunately does not seem likely to get any better – that the environment Ukraine finds itself within will get worse is more probable.

So it is with this sliver of hope for Ukrainian SMEs and SMEs entering Ukraine in 2017, that the blog wishes all those who celebrate Christmas on 25th December a thoroughly enjoyable day.

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Pfeifer & Langen buy Mriya sugar mills – Ukraine

December 2, 2016

Less than 2 months ago an entry appeared regarding the exceptionally murky, decidedly criminal, and mysterious yet unknown top level protection being afforded by those with incredible clout to the investment disaster/horror story surrounding Mriya Agro Holdings in Ukraine.

An on-going and unresolved nightmare of which those at the very top have made no efforts to resolve – despite the situation going from bad to worse and the ugly image the situation projects.  Having re-read the above link, it really is an investment horror show.

Nevertheless, it appears that Germany’s Pfeifer & Langen have bought (or are imminently to do so)  the sugar mills of Mriya Agro from Prominvestbank that took control of these particular assets as collateral for past and defaulted loans.

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To be fair, Pfiefer & Langen are no strangers to Ukraine.  They have been active in the country for a decade via their subsidiary Radekhiv Sugar Ltd.  (Indeed they are active in sugar in half a dozen or more European nations.)

Clearly Pfeifer & Langen will have done their due diligence and therefore feel confident that they will be able to protect their asset – unlike the numerous well known international investors who now own Mriya and look on forlornly as the remains of that agricultural empire are slowly but surely stolen from under their noses piece by piece by previous owner structures with no resulting action by the Ukrainian political elite or law enforcement structures.

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Normandy Four – 19th October

October 12, 2016

Having not mentioned the “Minsk document” for some time, and on the last occasion being/remaining somewhat dismissive, the Normandy Four will meet in Berlin on 19th October.

That the meeting occurs when President Putin was originally due to be in Paris (opening a new Russian Orthodox Church among other things) boils down to the fact that France accused the Kremlin of war crimes in Syria and wanted the bilateral agenda to focus accordingly – an agenda which President Putin was not going to accept.  Thus the Paris trip was called off and the 19th October witnesses a gathering of the Normandy Four to discuss The Kremlin’s denied war in eastern Ukraine.

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That said it seems unlikely that President Putin would head to Berlin and a Normandy Four meeting without something to talk about – and The Kremlin will only talk if it believes that its agenda upon its terms will be furthered.

The options for his attending may be one of PR for domestic (and certain foreign) audiences turning out to be nothing more than a photo op to belie the impression of isolation and/or complete belligerence but that seems less likely than there being something to talk about (on Kremlin terms).

It may also be that the Kremlin thinking is that it is overdue another round of “make it, break it, counter-accuse” negotiation made in bad faith.

Kremlin momentum is currently behind forcing Ukraine to adopt an election law for the occupied territories prior to Ukraine regaining control over its borders.  Both Germany and France whose diplomats have hardly gained any concessions from The Kremlin in more than 2 years of talks seem to have decided that when faced with a belligerent Kremlin it is far easier to press Ukraine to therefore meet Kremlin terms with regard to Minsk event scheduling.

A reader may perceive this (rightly) to be a reflection of the problem of handing policy to diplomats who instinctively want to talk (and prize contacts highly) whilst simultaneously displaying an unwavering and almost principled refusal to learn from experience when it comes to interaction with the current Kremlin.

The out-going US Administration with only 2 months left in office also seems to suffer the same western diplomatic stubbornness when it comes to refusing to accept that the only terms acceptable to The Kremlin are its own – particularly in what it still firmly believes to be its rightful and indisputable sphere of influence.

It is also a US Administration that would like to leave office with something of a foreign policy gain to hand on to those that will follow.

As such this twilight US Administration is going to be tempted to also quietly push Ukraine toward the Kremlin terms regarding the adoption of an election law for the occupied Donbas – even if the US political class more broadly is far more unlikely to agree with such maneuvering in accordance with Kremlin terms.  After all, officially the US is not involved in the “Minsk document” or associated negotiations, so the ability to blame Paris, Berlin, Moscow or Kyiv for any failures to solutions it may quietly push exists and may blunt wider US political unease at such a strategy.

Ukraine for its part has actually managed to defend its current diplomatic position for more than a year when it comes to a ceasefire actually commencing and in which the fire actually ceases, the verified removal of Kremlin personnel and weaponry, and the regaining of control over its borders occur before passing election laws and establishing the conditions of holding free and fair elections.

At no point during the past two years has The Kremlin actually bothered to progress “Minsk” issues over which it has control.  To be entirely blunt, the immediate future and beyond also provides little reason for the Kremlin to seriously pursue doing so either.

Further, The Kremlin’s “conversation” with the current US Administration is over – unless that conversation relates to unilateral US concessions, either directly (Syria) or by influence over third parties (Ukraine), to Kremlin interests.  Both existing and new levers will currently be being prepared for use upon the in-coming US Administration in the New Year.  Kremlin contempt for the current US Administration is crystal clear.

A reader may therefore ponder the content of any on-going Surkov-Nuland diplomacy with regard to Ukraine.  It seems unlikely that they would be unambiguously to the benefit of the Ukrainian State if any negotiating ground is to be given to The Kremlin that forces the order of “Minsk” implementation per a Kremlin list of priorities.

The 19th October therefore may be a severe test of the Ukrainian position if “progress at any cost” tops the German, French, Russian and behind the curtain US agenda – for “any cost” will be borne by President Poroshenko who is eyeing ever-poor popularity figures while already positioning for a run at a second term.

If the assumptions described above are even halfway accurate and Ukraine is forced to cede to a Kremlin led Minsk implementation timetable (which The Kremlin probably wouldn’t fulfill on its part), what wiggle room is available to the Ukrainians regarding any proposed law that would stand even the remotest chance of getting through a Verkhovna Rada vote?

(A reader will note that this is a statutory law requiring 226 majority rather than any Constitution changing vote that will simply not see the required 300+ votes no matter how much money or coercion was offered to vote “the right way” to amend the basic law of the land.)

Firstly the Ukrainian State and any “special” statutory electoral legislation has to try to avoid stating a definitive date around which circumstances can and will be manipulated.  Rather, it may be prudent to consider a definitive set of circumstances that automatically trigger the election date.

A definitive set of circumstances may include a consolidating and verifiable time period based upon an absolute and verified ceasefire.  For example 100 days (or whatever) from a complete and strictly observed ceasefire becomes election day.  Any breach of ceasefire resets that clock.

During the electioneering Ukrainian and international media has full and free access to the occupied Donbas.  Should that freedom be curtailed, the 100 day clock is reset.

International election observers have unconditional access during the electioneering period, on election day, and during vote counts – which in turn demands a security environment that facilitates such freedoms.  Any failure resets the election day clock.

Who can actually vote needs to be unambiguously stated.  Perhaps only those voters registered in the occupied territories on 1st January 2014 in order to avoid “constituency stuffing”.  IDPs wherever their location, if registered as a genuine resident upon any specified historical registered voter date will need to be afforded the maximum opportunity to vote – be they displaced within Ukraine or have left for other nations (including Russia).

In short it could be possible to write an election law that may possibly be forced, coerced and bought through the Verkhovna Rada and that possess enough “snap-back clauses” to prevent a volatile reaction among the more militant of Ukrainians, and which would also avoid the most serious of political damage within the majority of the Ukrainian constituency.

Naturally the Kremlin would not be keen on such a law, but it may be enough to appease the “friends of Ukraine” all of whom have domestic political reasons to push the Minsk timetable and proclaim “successes” no matter how small, and yet avoid being perceived to cave into the Kremlin.

(For the sake of sarcasm – Alternatively, following the experience of the Budapest Memorandum, perhaps Ukraine should agree to a Kremlin timetable only and exclusively under the explicit guarantee (not assurances or other woolly terminology) from Berlin, Paris and Washington that should the Kremlin fail to abide, a very specific set of actions would occur.  Naturally none would agree to providing such guarantees when there is no trust in the current Kremlin – so why should Ukraine be any more trusting?)

As 19th October is unlikely to be a PR exercise for President Putin, and neither is any pretense at being constructive likely to seriously influence western capitals regarding sanctions or increased top level interaction, there is probably something else that brings President Putin to the Normandy Four gathering.  Thus questions as to what degree of further concessions and/or appeasement does he expect, what if any will be given with regard to and/or by Ukraine, and what is the substance of any Surkov-Nuland deals behind the curtain?

Will there be another Normandy Four meeting before the year end?

If so will there be yet another official rolling over of “Minsk” as there was last year?  Will somebody within the EU see any wisdom in loosening the rhetoric that ties sanctions to “Minsk” if its rolling over is not to occur but it is instead finally pronounced dead?  Do such sanctions die if “Minsk” to which they are consistently rhetorically tied dies?

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Opening up the organised crime front

July 11, 2016

Over the past two months the Inbox of the blog has increasingly received emails regarding organised crime.  From Luke Harding of the Guardian, to EU bureaucrats, a Canadian former spook, and now a journalist from Belgium, this cluster of emails on the same subject in such a short period of time is unusual.

Assuredly with regard to Odessa, Messrs Angert, Zhokov, Galadilnik, Mayor Trukhanov et al continue to very well under the current Ukrainian leadership’s deliberately blind eye.

Indeed the appointment of Yuri Lutsenko as Prosecutor General is unlikely to see any will, let alone progress, in tackling organised crime – this despite Mr Angert being regularly named by Mr Lutsenko (to the point of appearing to be his nemesis) during an entirely uneventful and below par stint as Minister of Interior in the Tymoshenko government.

However, some of the emails seek views on organised crime far wider than the well known participants from Odessa – and quite rightly, for organised crime respects no borders.  Indeed cross border crime has its advantages when bureaucracies, laws and jurisdictions create legal holes and large cracks in the pavement of law enforcement.

Whether or not some (if not all) of these random and unconnected emailed inquiries relate to the clear increase in “Russian” organised crime within Ukraine and further west into EU nations – time and the related published articles will ultimately tell.

“Russian” organised crime, it appears has something of an elastic definition.  For some “Russian” means Russian, such as groups like Solncevskaya Grouperovka, or “Russian” meaning “Russian speaking” – which includes Belorussians,  Ukrainians, Moldavians, Georgians, some Bulgarians etc – be they actually connected to Russian organised criminals/entities – or not.

Of course organised crime does not really differentiate between nationalities when creating networks throughout the “Russian speaking” regions.  A “Ruski Mafiosi Mir” certainly exists in some form or another, albeit whilst some personalities remain constant, others drift in and out.  It can be somewhat fluid regarding involvement at certain levels and/or tasks to be accomplished.

“Russian” organsied crime is intertwined, almost symbiotic, with the political class of the former Soviet states – and beyond within the former Communist States.

Many older, well placed politicians that came from, and survived, the “wild, wild east” of the 1990’s are unable to convincingly put clear daylight between themselves and organised crime.  In many cases those that once were active in the underworld, now sit prominently amid and atop the political world.  Others relied upon assistance up the greasy business and/or political pole from organised crime.

Past deeds and past relationships do not disappear.

The 1990’s also saw something of a cross-pollination between law enforcement and organised crime too – notwithstanding an unambiguous “understanding” being reached between the State security services and criminal groups.

Of course time stands still for no man, nor organisations be they (nominally) on the side of angels – or otherwise.  Relationships have developed or died – along with numerous criminals and politicians along the way.

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The upshot of the past 25 years is that everybody surviving has “kompromat” on everybody else.  Organised crime on the politicians and some within the Security Services, the Security Services upon organised crime and the politicians, the politicians over organised crime and the security services – an entirely cancerous, but profitable (if still dangerous) web.

Every now and again, all three entities within this unholy trinity can be personalised in a single individual.

This political, criminal, and (compromised or otherwise) security service web spreads far and wide.  “Russian” and Russian organised crime has long established itself far beyond the borders of the Russian Federation.

Organised crime is hardly a patriotic endeavor.  It has a high tolerance for large sums being spent as a “cost of doing business” if those costs facilitate the least resistance.  Wars amongst themselves, with political enablers, or Security Services are few and far between.  After all, as with all wars, the costs of waging them in blood and treasure often outweigh the rewards.  Loyalty is to the $ and not a nation.

However, criminal loyalty to the nation can be bought – or at least hired – to further the national cause.

Simply being told that for relatively uninterrupted business to continue, it is expected by the State that organised crime deliver a robust message, or bribe, or coerce a certain party, or engage in a concerted action of “x” criminality in city, region or even country “y”.  A rather grubby variation upon Track 2 diplomacy perhaps.

By way of example, both Ukraine and Germany have both recently publicly raised concerns about Russian organised crime, tasked by Russian Security Services, deliberately creating crime sprees that fall outside the usual organised crime remit within their nations – Crimes which clearly have societal and therefore political implications before their respective constituencies for the political classes.

That the Ukrainian parliament twice recently refused to pass a draft law regarding “Thieves in law” may cause certain readers to wonder why – though it is perhaps a rhetorical question when considering the prose above and symbiotic relationships.

Nevertheless, the long anticipated “hiring” and mobilisation of organsied crime (next it will be religion that is selected from the tool box) by the Kremlin has seemingly visibly and tangibly begun to be felt – but perhaps unexpectedly within areas of criminality not normally associated with serious organised crime.

T’will be interesting to see how effectively the domestic national agencies deal with this – and the level of interaction between them.  It appears Russian organised crime, upon Kremlin instruction, is now prepared to engage in crime with a degree of organisation – at least for now.

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Nadiya Savchenko and Minsk

March 30, 2016

In recent days the spokesperson of the Russian Foreign Ministry, Maria Zakharova commented upon demands for the prompt release of Nadiya Savchenko following the end of her show trial, under the provisions of Minsk (I and II).

She stated thus “Russia is not a party to the Minsk Agreements. These agreements only concern two sides that are part of the conflict.

We have the responsibility to influence the parties of the conflict exactly the same way as France or Germany should influence Kiev. That’s all, we owe nothing more.”

For the sake of clarity, the tripartite liaison group charged with resolving technicalities, on 12th February 2015 negotiated the following – “Provide release and exchange of all hostages and illegally held persons, based on the principle of “all for all”. This process has to end – at the latest – on the fifth day after the pullout of weapons.”

More than a year later whilst there have been occasional prisoner swaps, the pullout of weapons is yet to occur, so whether or not Nadiya Savchenko would have been included in the Minsk process, the basic conditions for an “all for all” swap are still far from being realised.  That notwithstanding any swap involving Ms Savchenko will probably be for high profile prisoners in exchange, not necessarily from within Ukraine.  Moscow still prides itself on getting its most (in)famous prisoners home after all – wherever they may be incarcerated.

Ever since the Minsk text was formulated, this blog has frequently lamented the fact it is was fatally flawed from the very outset by allowing Russia to sit at the table with the same standing as France and Germany – as negotiator and/or mediator – but unrecognised as a party to the conflict that it undoubtedly is.

A reader perhaps would question why such a negotiator and/or mediator would be subject to international sanctions for its part in the Donbas war, but apparently such considerations have no impact upon the status given The Kremlin in the Minsk document or negotiation formats.

Thus, it is simply policy necrophilia to continue try and force Ukraine to follow the Minsk text in the unlikely event of it managing to fully implement its part, to then be left with the hope that The Kremlin will then do the same.  Whatever political embellishments President Poroshenko may be telling his western peers, the fact is that he is a long way short of the 300 parliamentary votes required within the Verkhovna Rada to change the constitution allowing Ukraine to fully meet its obligations outlined in the Minsk document.  Indeed his political party currently does not even manage to lead a coalition that can gather the 226 votes necessary to pass basic statute.

This clearly being the case, this blog has stated that the focus of “The West” should be on pressuring Ukraine to reform and not pressuring Ukraine to adhere to the text of Minsk.

“Indeed only the foolish (or perhaps The Kremlin) would expect Ukraine to fully implement its Minsk obligations in the current circumstances within the occupied Donbas.  “The West” would be far better off publicly stating that it understands that is the situation and thus publicly lean less on Ukraine to fulfill such obligations while the circumstances remain significantly unchanged, and lean far harder on Ukraine to reform instead.

Perhaps such a shift in “Western” messaging would change the Kremlin calculus somewhat.  The entirety of “western” political and diplomatic energy pushing a reformed Ukraine, with less pressure regarding Minsk would at the very least raise eyebrows in Moscow.  Unless the situation changes dramatically regarding ceasefires and the ability to hold elections that in current circumstances would forever sully the reputation of the OSCE, it is policy folly.  Such a messaging shift would inevitably mean Kyiv actually moving “westward” slightly faster than it is doing.  As The Kremlin cares far more about the Ukrainian shift “westward”, and cares nothing about the occupied Donbas should it fail be to an effective lever over Kyiv, it is possible such a change in messaging could have an effect – or not.”

The above quote most recent example of many written here urging the need for western refocus in an attempt to force recalculation elsewhere.

However, Ukraine, like Russia and the “Republics”, have no legal obligation to adhere to the Minsk Agreement (I or II) – which is something that probably requires highlighting once more, lest we forget.

Far too often the Minsk Agreement is touted with the inference that it is somehow a binding legal document that cannot be broken.  It is not.  There are numerous legal international instruments, treaties and laws that have been broken in respect of Ukraine, all by Russia, but Minsk is not one of them – even if Russia were a fully recognised party to the conflict within the document.

Disregarding the Minsk document may be morally wrong (or not), but it is not unlawful to do so.

Neither Minsk I or II have any legal standing whatsoever.  It legally binds nobody to anything.  It is not even a signed and certified document enforceable by law comparable to the most basic of legal contracts.  It carries no signatures of the conflicting parties (recognised or unrecognised).  It has been ratified by no parliament.  It is therefore not a document that has been deposited with any international body or has any domestic power.  It is text.  It is a document listing bullet points along a possible path to the return (prima facie) to international laws and treaties – despite the perilous repercussions that its implementation would have internally for Ukrainian sovereignty as the text stands, if and when territorial integrity is returned.  It is a framework document, not a legal framework.

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The word “Agreement” is something of a misnomer to begin with.  It would be better identified as the Minsk Document or the Minsk Text.  “Agreement” masks the fact that Ukraine was coerced through both hard and soft Kremlin power, to concede its legitimate and lawful sovereign rights.  “Agreement” tends to soften the perceptions through the passage of time of what was, and remains, a serious violation Ukraine.  Minsk is a text forced upon Ukraine under duress.

In two years the Minsk document/text has not managed to secure even a ceasefire.  The closest it came to doing so was when Chancellor Merkel and President Hollande made it clear following a meeting in Paris that they were prepared to declare Minsk dead, prompting The Kremlin to turn down the heat for a while at the time when it had few other avenues to sit at the international table.  It’s actions in Syria have now changed that somewhat, thus allowing for Kremlin disregard of the Minsk text once again.

Further underscoring the absence of any binding legality of the Minsk text was The Kremlin’s clear desire to disregard and circumvent the Normandy Four (and lesser negotiation committees) and seek parlance directly with the USA via the ill-fated Nuland-Surkov channel initiated at the Kaliningrad meeting of January 2016..  No sooner was that channel opened than it was closed, with Berlin making robust representations to Washington and President Obama pulling that plug (no doubt to the ire of Ms Nuland).

A reader may ponder whether in pulling that plug the White House had already decided that no solution would be reached during the final months of an Obama presidency (ergo 2016) and therefore it saw no reason to become directly involved when reality suggests it would probably become an unfinished foreign policy legacy for any new president, or whether it was done to save face for Frank-Walter Steinmeier whose fumbling of the issues has thus far led the western response.  Any Nuland-Surlov solution would hardly be a fitting final chapter for his memoirs as he nears the end of his career.

All of the above said, and in full recognition that the Minsk document has no legal standing, and was necessarily born of entirely illegal Kremlin actions within Ukraine, a reader may now ponder that in the absence of binding legalities upon any parties within or without the Minsk text, how best western diplomacy be employed.

Is “western diplomacy” best employed in keeping Ukraine adhering to entirely arbitrary Minsk timelines during 2016 (and beyond), or it is better employed in finding reasons why Ukraine should not be held to such arbitrary timelines, unilaterally expected to fulfill the text of such an onerous document?

Should western diplomacy pursue the first option then the European neighbourhood is likely to become more rather than less stable.

If it be the latter, which would be the widely perceived path of integrity, then there is a need for either a Plan B to resolve the matter (which seems unlikely – and in fact given the outcomes thus far possibly yet more unhelpful for Ukraine in the long run), or a recognition that a war of exhaustion that will last many years, perhaps decades, presents itself for which it will have to be prepared to fully engage in – purely transactional necessities aside.

Whatever the case, every now and again it will serve us well to remember that the Minsk text in and of itself places no lawful obligations on anybody whatsoever, and is indeed not even a document of any legal standing.  Expectations of it relating to the release of Nadiya Savchenko necessarily have to be tempered accordingly – similarly to those long since discarded (and always misplaced) expectations of a ceasefire or weapons withdrawal.

That Ms Savchenko will not serve the 22 years passed down at the conclusion of her show trial there is little doubt.  Sooner or later she will become a bargaining chip and released long before.  When that occurs however, it will have little to do with the Minsk document.

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Germany soon to ratify the EU AA/DCFTA Agreement with Ukraine?

February 17, 2015

A few days ago, this entry was published relating to the Minsk II Agreement, interpreting it as a declaration of war by other means, rather than a ceasefire or peace agreement.

At the end of the entry appeared this paragraph relating to the AA/DCFTA; “The Kremlin will now be swift to try and unpick these economy transforming and European integrating agreements prior to it coming into force on 1st January 2016.  European political defeat lies in allowing an external 3rd party veto or amendment to a ratified bilateral agreement.  Any such precedent would be a disaster for the EU.”

What was not really touched upon was how easy or difficult that would be – despite it clearly being the Kremlin intent “They also support the trilateral negotiations between the European Union, Ukraine and Russia in order to develop practical solutions to issues of concern to Russia in connection with the implementation of the Agreement on deep and comprehensive free trade zone between Ukraine and the European Union.”

Thus far, the ratified parties to the AA/DCFTA are Ukraine, the EU, Bulgaria, Estonia, Latvia, Lithuania, Malta, Romania, Slovakia and Sweden.  Poland is all but there, although the ratified document has not been deposited to the knowledge of the author at the time of writing – but perhaps it has been.

Noticeable by their absence are the larger EU nations.  Germany, France, the UK etc – as well as others that always appear to be sticklers for rule of law, such as The Netherlands, that seemingly almost always attempt to meet their international obligations with integrity.

With the UK now entering an election cycle, quite when parliamentary time will be found for any ratification remains to be seen, but without some EU heavyweight nations behind it, preferably those recognised for taking seriously their international obligations, The Kremlin may feel it is still capable of unpicking the AA/DCFTA.

It appears however, that Germany is set to ratify the agreement on 27th March.  It may thus make it far more difficult for The Kremlin to undo what has already been ratified amongst those States it may feel it can pressurize into accepting changes.  It would seem somewhat unlikely that Germany would ratify to then immediately accept changes proposed by The Kremlin, instead of accommodating Kremlin changes prior to ratification.

Indeed, the question may be asked, as all leaders like to head to summits, or leave them, having accomplished “something”, just how many nations will ratify the AA/DCFTA prior to the May Riga Summit, swiftly falling in behind Germany in a second wave of agreement ratification.

The more that will ratify, the more difficult the Kremlin task of unpicking the AA/DCFTA beyond the realms of what is considered worthy of the political and diplomatic energy to try.  That said, perhaps in these times of a “hot peace” rather than a “Cold War” with much of the “west”, The Kremlin will consider no effort will be deemed to great?

None of this in any way makes the AA/DCFTA anymore of a panacea, or Utopian easy-fix, for Ukraine – but for a genuinely integrated European economy, there are no easy fixes.  Perhaps Germany ratifying the agreement in the near future will remove any vague – or hopeful – thoughts of the goal posts moving to something “easier” however.

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Too many cooks – Ukraine

February 9, 2015

There is an expression that states “Too many cooks spoil the broth”.  And it has merit.

The same can be said of the negotiations and interactions between the actors to end the war in eastern Ukraine.

In the UK media there has been criticism of the UK lead in these negotiations.  Some have made comment within the social media that the UK is silent.

However, it can be said that too many interlocutors spoil the negotiations with as much merit as that regarding cooks and broth.

UK Foreign Minister, Mr Hammond is quite right when he stated today “The participation of too many parties in the negotiations with the Kremlin is useless.”  

Is not The Kremlin, Ukraine, Germany and France enough?  Is there a need for an EU representative – or a representative of each of the EU Member States?  The USA?  The UK in particular?  Where do you draw the line?

If there is a consensus amongst the EU and its members that Germany and France take the lead, as long as their negotiations are within parameters acceptable to all EU members and EU institutions, why do others need to be present?

Does the EU as an entity , with its internal frictions between Member States, want to take part in any negotiations, or is it better that they allow two Member States under their own flags to engage – allowing for the embracing or distancing of any outcomes, thus mitigating to some degree, further internal disagreement amongst members that may follow?

Why would the USA want to tie itself to any negotiations by others whatsoever, when the winds of arming Ukraine despite German objects are blowing throughout The Beltway?  No matter how chilly the atmosphere between Washington and Moscow, direct and back channels will remain open, as they will with the EU and its Member States.  There is an advantage to being an actor that can choose to act in unison or individually of the Europeans – ask the Kremlin.

With numerous interlocutors, how much more difficult would it be logistically to gather together all relevant negotiating parties at the same place at the same time?  Urgent EU gatherings can be announced on Sunday and yet not occur until the following Thursday.  The fewer the interlocutors, the more nimble and timely any urgent gatherings are to accomplish.

There is of course, also the psychological issue of how many people are physically sat one side of the table vis a vis another.  Further, there is the issue of interlocutors that are deemed acceptable to all parties to consider – and those that are deemed unacceptable, preventing negotiation at all.

It may very well be that nobody is entirely happy with the composition of the negotiating format, nor their own nation’s position or visibility in the process – but that nobody is entirely unhappy is much more to the point.

Lastly, there is the question of whether becoming an interlocutor is something a nation or entity is keen to do – or begrudgingly accepts because it has little other choice.  It can be a thankless task – especially if or when outcomes are not those that are desired, or not even thought to be achievable in the first place.

Why mire yourself in something you consider futile and that will carry with it significant and adverse blow-back when it all fails – as you knew it would from the outset?

Would the FCO want a prominent interlocutor role, or is it quietly content to remain in the shadows in this particular instance, using existing channels quietly, as it normally does?  Is it better to be criticised for quiet diplomacy, or unnecessarily self-inflicted evisceration over what it may very well consider are going to be headline grabbing failures?

Germany and France have taken the European lead – whether they wanted to, felt obliged to, or were more or less forced to in the absence of any other willing, acceptable, European interlocutors, is a discussion for another day.  Whether their efforts will be rewarded on Wednesday, with at the very least a ceasefire worthy of the name, or whether they will fail as is widely expected, remains to be seen – but somebody had to try, or at the very least be seen to have tried in a last ditch effort, prior to what seems likely to be a very noticeable escalation.

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