Soros: EU, US must aid the 'new Ukraine' against Russia

I have not much to add to this op-ed by the alleged "evil" billionaire and "Colored Revolution"-maker George Soros, so I'm re-posting it in full, except to say: If there is some dumbbell in the Obama Admin. who is still not sure what to do about Ukraine, this is a good place to start.

The rest of my thoughts are highlighted below.

I will add this though: Americans who want a "strong" U.S. foreign policy had better realize that that requires more than tough words and finger-wagging by our government. In the case of Ukraine, it requires money -- billions, in fact, to lend to Ukraine's government as it tries to rebuild its army and simultaneously deal with economic recession and Russian economic-war tactics via trade sanctions and natural gas prices, not to mention economically crippling eastern Ukraine.

Anybody who says Obama isn't "tough enough" against Russia had better advocate billions of dollars in loan guarantees and aid for Ukraine -- a modern-day Marshall Plan -- or else they are political hacks who might as well be on the same side as Putin.  

Wake Up, Europe

By George Soros

October 23, 2014 | The New York Review of Books

Europe is facing a challenge from Russia to its very existence. Neither the European leaders nor their citizens are fully aware of this challenge or know how best to deal with it. I attribute this mainly to the fact that the European Union in general and the eurozone in particular lost their way after the financial crisis of 2008.

The fiscal rules that currently prevail in Europe have aroused a lot of popular resentment. Anti-Europe parties captured nearly 30 percent of the seats in the latest elections for the European Parliament but they had no realistic alternative to the EU to point to until recently. Now Russia is presenting an alternative that poses a fundamental challenge to the values and principles on which the European Union was originally founded. It is based on the use of force that manifests itself in repression at home and aggression abroad, as opposed to the rule of law. What is shocking is that Vladimir Putin’s Russia has proved to be in some ways superior to the European Union—more flexible and constantly springing surprises. That has given it a tactical advantage, at least in the near term.

Europe and the United States—each for its own reasons—are determined to avoid any direct military confrontation with Russia. Russia is taking advantage of their reluctance. Violating its treaty obligations, Russia has annexed Crimea and established separatist enclaves in eastern Ukraine. In August, when the recently installed government in Kiev threatened to win the low-level war in eastern Ukraine against separatist forces backed by Russia,President Putin invaded Ukraine with regular armed forces in violation of the Russian law that exempts conscripts from foreign service without their consent.

In seventy-two hours these forces destroyed several hundred of Ukraine’s armored vehicles, a substantial portion of its fighting force. According to General Wesley Clark, former NATO Supreme Allied Commander for Europe, the Russians used multiple launch rocket systems armed with cluster munitions and thermobaric warheads (an even more inhumane weapon that ought to be outlawed) with devastating effect.* The local militia from the Ukrainian city of Dnepropetrovsk suffered the brunt of the losses because they were communicating by cell phones and could thus easily be located and targeted by the Russians. President Putin has, so far, abided by a cease-fire agreement he concluded with Ukrainian President Petro Poroshenko on September 5, but Putin retains the choice to continue the cease-fire as long as he finds it advantageous or to resume a full-scale assault.

In September, President Poroshenko visited Washington where he received an enthusiastic welcome from a joint session of Congress. He asked for “both lethal and nonlethal” defensive weapons in his speech. However, President Obama refused his request for Javelin hand-held missiles that could be used against advancing tanks. Poroshenko was given radar, but what use is it without missiles? European countries are equally reluctant to provide military assistance to Ukraine, fearing Russian retaliation. The Washington visit gave President Poroshenko a façade of support with little substance behind it.

Equally disturbing has been the determination of official international leaders to withhold new financial commitments to Ukraine until after the October 26 election there (which will take place just after this issue goes to press). This has led to an avoidable pressure on Ukrainian currency reserves and raised the specter of a full-blown financial crisis in the country.

There is now pressure from donors, whether in Europe or the US, to “bail in” the bondholders of Ukrainian sovereign debt, i.e., for bondholders to take losses on their investments as a precondition for further official assistance to Ukraine that would put more taxpayers’ money at risk. That would be an egregious error. The Ukrainian government strenuously opposes the proposal because it would put Ukraine into a technical default that would make it practically impossible for the private sector to refinance its debt. Bailing in private creditors would save very little money and it would make Ukraine entirely dependent on the official donors.

To complicate matters, Russia is simultaneously dangling carrots and wielding sticks. It is offering—but failing to sign—a deal for gas supplies that would take care of Ukraine’s needs for the winter. At the same time Russia is trying to prevent the delivery of gas that Ukraine secured from the European market through Slovakia. Similarly, Russia is negotiating for the Organization for Security and Cooperation in Europe to monitor the borders while continuing to attack the Donetsk airport and the port city of Mariupol.

It is easy to foresee what lies ahead. Putin will await the results of the elections on October 26 and then offer Poroshenko the gas and other benefits he has been dangling on condition that he appoint a prime minister acceptable to Putin. That would exclude anybody associated with the victory of the forces that brought down the Viktor Yanukovych government by resisting it for months on the Maidan—Independence Square. I consider it highly unlikely that Poroshenko would accept such an offer. If he did, he would be disowned by the defenders of the Maidan; the resistance forces would then be revived.

Putin may then revert to the smaller victory that would still be within his reach: he could open by force a land route from Russia to Crimea and Transnistria before winter. Alternatively, he could simply sit back and await the economic and financial collapse of Ukraine. I suspect that he may be holding out the prospect of a grand bargain in which Russia would help the United States against ISIS—for instance by not supplying to Syria the S300 missiles it has promised, thus in effect preserving US air domination—and Russia would be allowed to have its way in the “near abroad,” as many of the nations adjoining Russia are called. What is worse, President Obama may accept such a deal.

That would be a tragic mistake, with far-reaching geopolitical consequences. Without underestimating the threat from ISIS, I would argue that preserving the independence of Ukraine should take precedence; without it, even the alliance against ISIS would fall apart. The collapse of Ukraine would be a tremendous loss for NATO, the European Union, and the United States. A victorious Russia would become much more influential within the EU and pose a potent threat to the Baltic states with their large ethnic Russian populations. Instead of supporting Ukraine, NATO would have to defend itself on its own soil. This would expose both the EU and the US to the danger they have been so eager to avoid: a direct military confrontation with Russia. The European Union would become even more divided and ungovernable. Why should the US and other NATO nations allow this to happen?

The argument that has prevailed in both Europe and the United States is that Putin is no Hitler; by giving him everything he can reasonably ask for, he can be prevented from resorting to further use of force. In the meantime, the sanctions against Russia—which include, for example, restrictions on business transactions, finance, and trade—will have their effect and in the long run Russia will have to retreat in order to earn some relief from them.

These are false hopes derived from a false argument with no factual evidence to support it. Putin has repeatedly resorted to force and he is liable to do so again unless he faces strong resistance. Even if it is possible that the hypothesis could turn out to be valid, it is extremely irresponsible not to prepare a Plan B.

There are two counterarguments that are less obvious but even more important. First, Western authorities have ignored the importance of what I call the “new Ukraine” that was born in the successful resistance on the Maidan. Many officials with a history of dealing with Ukraine have difficulty adjusting to the revolutionary change that has taken place there. The recently signed Association Agreement between the EU and Ukraine was originally negotiated with the Yanukovych government. This detailed road map now needs adjustment to a totally different situation. For instance, the road map calls for the gradual replacement and retraining of the judiciary over five years whereas the public is clamoring for immediate and radical renewal. As the new mayor of Kiev, Vitali Klitschko, put it, “If you put fresh cucumbers into a barrel of pickles, they will soon turn into pickles.”

Contrary to some widely circulated accounts, the resistance on the Maidan was led by the cream of civil society: young people, many of whom had studied abroad and refused to join either government or business on their return because they found both of them repugnant. (Nationalists and anti-Semitic extremists made up only a minority of the anti-Yanukovych protesters.) They are the leaders of the new Ukraine and they are adamantly opposed to a return of the “old Ukraine,” with its endemic corruption and ineffective government.

The new Ukraine has to contend with Russian aggression, bureaucratic resistance both at home and abroad, and confusion in the general population. Surprisingly, it has the support of many oligarchs, President Poroshenko foremost among them, and the population at large. There are of course profound differences in history, language, and outlook between the eastern and western parts of the country, but Ukraine is more united and more European-minded than ever before. That unity, however, is extremely fragile.

The new Ukraine has remained largely unrecognized because it took time before it could make its influence felt. It had practically no security forces at its disposal when it was born. The security forces of the old Ukraine were actively engaged in suppressing the Maidan rebellion and they were disoriented this summer when they had to take orders from a government formed by the supporters of the rebellion. No wonder that the new government was at first unable to put up an effective resistance to the establishment of the separatist enclaves in eastern Ukraine. It is all the more remarkable that President Poroshenko was able, within a few months of his election, to mount an attack that threatened to reclaim those enclaves.

To appreciate the merits of the new Ukraine you need to have had some personal experience with it. I can speak from personal experience although I must also confess to a bias in its favor. I established a foundation in Ukraine in 1990 even before the country became independent. Its board and staff are composed entirely of Ukrainians and it has deep roots in civil society. I visited the country often, especially in the early years, but not between 2004 and early 2014, when I returned to witness the birth of the new Ukraine.

I was immediately impressed by the tremendous improvement in maturity and expertise during that time both in my foundation and in civil society at large.Currently, civic and political engagement is probably higher than anywhere else in Europe. People have proven their willingness to sacrifice their lives for their country. These are the hidden strengths of the new Ukraine that have been overlooked by the West.

The other deficiency of the current European attitude toward Ukraine is that it fails to recognize that the Russian attack on Ukraine is indirectly an attack on the European Union and its principles of governance. It ought to be evident that it is inappropriate for a country, or association of countries, at war to pursue a policy of fiscal austerity as the European Union continues to do. All available resources ought to be put to work in the war effort even if that involves running up budget deficits. The fragility of the new Ukraine makes the ambivalence of the West all the more perilous. Not only the survival of the new Ukraine but the future of NATO and the European Union itself is at risk. In the absence of unified resistance it is unrealistic to expect that Putin will stop pushing beyond Ukraine when the division of Europe and its domination by Russia is in sight.

Having identified some of the shortcomings of the current approach, I will try to spell out the course that Europe ought to follow. Sanctions against Russia are necessary but they are a necessary evil. They have a depressive effect not only on Russia but also on the European economies, including Germany. This aggravates the recessionary and deflationary forces that are already at work. By contrast, assisting Ukraine in defending itself against Russian aggression would have a stimulative effect not only on Ukraine but also on Europe. That is the principle that ought to guide European assistance to Ukraine.

Germany, as the main advocate of fiscal austerity, needs to understand the internal contradiction involved. Chancellor Angela Merkel has behaved as a true European with regard to the threat posed by Russia. She has been the foremost advocate of sanctions on Russia, and she has been more willing to defy German public opinion and business interests on this than on any other issue. Only after the Malaysian civilian airliner was shot down in July did German public opinion catch up with her. Yet on fiscal austerity she has recently reaffirmed her allegiance to the orthodoxy of the Bundesbank—probably in response to the electoral inroads made by the Alternative for Germany, the anti-euro party. She does not seem to realize how inconsistent that is. She ought to be even more committed to helping Ukraine than to imposing sanctions on Russia.

The new Ukraine has the political will both to defend Europe against Russian aggression and to engage in radical structural reforms. To preserve and reinforce that will, Ukraine needs to receive adequate assistance from its supporters. Without it, the results will be disappointing and hope will turn into despair. Disenchantment already started to set in after Ukraine suffered a military defeat and did not receive the weapons it needs to defend itself.

It is high time for the members of the European Union to wake up and behave as countries indirectly at war. They are better off helping Ukraine to defend itself than having to fight for themselves. One way or another, the internal contradiction between being at war and remaining committed to fiscal austerity has to be eliminated. Where there is a will, there is a way.

Let me be specific. In its last progress report, issued in early September, the IMF estimated that in a worst-case scenario Ukraine would need additional support of $19 billion. Conditions have deteriorated further since then. After the Ukrainian elections the IMF will need to reassess its baseline forecast in consultation with the Ukrainian government. It should provide an immediate cash injection of at least $20 billion, with a promise of more when needed. Ukraine’s partners should provide additional financing conditional on implementation of the IMF-supported program, at their own risk, in line with standard practice.

The spending of borrowed funds is controlled by the agreement between the IMF and the Ukrainian government. Four billion dollars would go to make up the shortfall in Ukrainian payments to date; $2 billion would be assigned to repairing the coal mines in eastern Ukraine that remain under the control of the central government; and $2 billion would be earmarked for the purchase of additional gas for the winter. The rest would replenish the currency reserves of the central bank.

The new assistance package would include a debt exchange that would transform Ukraine’s hard currency Eurobond debt (which totals almost $18 billion) into long-term, less risky bonds. This would lighten Ukraine’s debt burden and bring down its risk premium. By participating in the exchange, bondholders would agree to accept a lower interest rate and wait longer to get their money back. The exchange would be voluntary and market-based so that it could not be mischaracterized as a default. Bondholders would participate willingly because the new long-term bonds would be guaranteed—but only partially—by the US or Europe, much as the US helped Latin America emerge from its debt crisis in the 1980s with so-called Brady bonds (named for US Treasury Secretary Nicholas Brady).

Such an exchange would have a few important benefits. One is that, over the next two or three critical years, the government could use considerably less of its scarce hard currency reserves to pay off bondholders. The money could be used for other urgent needs.

By trimming Ukraine debt payments in the next few years, the exchange would also reduce the chance of a sovereign default, discouraging capital flight and arresting the incipient run on the banks. This would make it easier to persuade owners of Ukraine’s banks (many of them foreign) to inject urgently needed new capital into them. The banks desperately need bigger capital cushions if Ukraine is to avoid a full-blown banking crisis, but shareholders know that a debt crisis could cause a banking crisis that wipes out their equity.

Finally, Ukraine would keep bondholders engaged rather than watch them cash out at 100 cents on the dollar as existing debt comes due in the next few years. This would make it easier for Ukraine to reenter the international bond markets once the crisis has passed. Under the current conditions it would be more practical and cost-efficient for the US and Europe not to use their own credit directly to guarantee part of Ukraine’s debt, but to employ intermediaries such as the European Bank for Reconstruction and Development or the World Bank and its subsidiaries.

The Ukrainian state-owned company Naftogaz is a black hole in the budget and a major source of corruption. Naftogaz currently sells gas to households for $47 per thousand cubic meters (TCM), for which it pays $380 per TCM. At present people cannot control the temperature in their apartments. A radical restructuring of Naftogaz’s entire system could reduce household consumption at least by half and totally eliminate Ukraine’s dependence on Russia for gas. That would involve charging households the market price for gas. The first step would be to install meters in apartments and the second to distribute a cash subsidy to needy households.

The will to make these reforms is strong both in the new management and in the incoming government but the task is extremely complicated (how do you define who is needy?) and the expertise is inadequate. The World Bank and its subsidiaries could sponsor a project development team that would bring together international and domestic experts to convert the existing political will into bankable projects. The initial cost would exceed $10 billion but it could be financed by project bonds issued by the European Investment Bank and it would produce very high returns.

It is also high time for the European Union to take a critical look at itself. There must be something wrong with the EU if Putin’s Russia can be so successful even in the short term. The bureaucracy of the EU no longer has a monopoly of power and it has little to be proud of. It should learn to be more united, flexible, and efficient. And Europeans themselves need to take a close look at the new Ukraine. That could help them recapture the original spirit that led to the creation of the European Union. The European Union would save itself by saving Ukraine.

The West should tell Russia: 'We don't need you'

There's a chilling, little-known factoid about Putin at the end.  This one's worth reading in full! 

Fortunately, the White House has said publicly that any Russian incursion into Ukraine, even for "humanitarian" or "peacekeeping" purposes, without the formal, express consent and authorization of the Ukraine government would be "unacceptable and a violation of international law."

Why Vladimir Putin isn't going to make peace

By Yuri Yarim-Agaev

August 7, 2014 | CNN

The killing of 298 innocent people on board Malaysia Airlines Flight 17 was a crime, a consequence of the war against Ukraine that Vladimir Putin started, and which he supplies, directs and controls. The Russian President bears full responsibility for this war, including the downing of the Malaysian airliner.

The main problem with our reaction to Russian aggression is not even the mildness of our sanctions, but the lack of clarity of their purpose. Our message to Putin is very confused. Do we want him completely out of Ukraine, or do we want his help in dealing with that country? They are two very different requests.

Despite Putin's offenses, Western leaders apparently still want him to play an active role in securing peace and stability. According to the White House, on July 17, "President Obama called on President Putin to take concrete steps to de-escalate the situation, including pressing separatists to agree to a cease-fire."

After the Malaysian airliner was shot down, German Chancellor Angela Merkel urged Putin to use his influence with the rebels to ensure a cease-fire. In recent appearances on several TV shows, U.S. Secretary of State John Kerry asked Putin to take "immediate and clear action to reduce tensions in Ukraine," "to step up and make a difference," and "to use all his influence."

Despite their harsh words for Putin, leaders of the West still want his help. British Prime Minister David Cameron summed it up best when he said: "We sometimes behave as if we need Russia more than Russia needs us."

Putin is only too glad to put on sheep's clothing and assume the role of peacemaker that he has pretended to be throughout the war that he himself started. According to him, annexing Crimea, shooting down airplanes and supporting separatists has only one purpose: to protect the Ukrainian people from alleged right-wing extremists.

If you want Putin's help, beware of what you are asking. He would be glad to broker a "diplomatic solution" with the separatists, thus legitimizing his terrorists and entrenching them on Ukrainian territory.  If that option doesn't work, we can imagine the following completely different scenario: Russian tanks roll over Donetsk. Instead of supporting the separatists, Putin arrests leaders of the Donetsk republic and persecutes them for terrorizing the local population. Blaming the Ukrainian government for its inability to protect people from the terrorists, he establishes full control over the territory, and leaves Russian troops there to secure law, order and tranquility.

[Putin is just devilish enough to try this! - J]

How would the world react to such a "peacekeeping mission"? Would the Ukrainian army fight Russian troops? Would Western political leaders accept this as a plausible option? I do not know. But what is more important, Putin doesn't know either. We should make very clear that we would not accept Putin as a peacekeeper and we want him out of Ukraine.

Western governments should not implicitly accept the aggressive doctrine called the "Russian World," which was endorsed by Putin, and which gives him the right to intervene into the affairs of virtually any sovereign nation, as he did in Ukraine, using the pretext of protecting Russian-speaking citizens.

The major concern of Western leaders is that by taking a strong stand against Putin, we may lose him as a useful partner in the world arena. We shouldn't worry about that. History clearly demonstrates that in all major international trouble spots in which we accepted Putin as our partner, Russia has always taken the side of the West's enemy. Such has been the case with Iraq, North Korea, Syria and Iran.

It was only natural for Putin to use any invitation on our part as an opportunity to damage us. One should not expect anything different from a person with the background of a KGB officer, for whom America always has been enemy No. 1, and for whom anti-Americanism is a pillar of his power.

If America is Russia's enemy, Putin's Russia cannot be our ally. Whether we like it or not, such relations are reciprocal. And from an enemy we do not need help. We need only check its aggression. For that purpose we should take the following steps:

1. Publicly recognize that Putin is not our ally or partner, but rather our foe, and make this position clear to him and to the rest of the world.

2. Ensure that our demands to Russia be absolutely clear. Stop supporting separatists in Ukraine. We do not need Putin as a broker or peacemaker. Putin must completely get out of Ukrainian territory and Ukrainian politics.

3. Make clear that Putin's help is not needed in any other part of the world. Exclude Russia as our partner or as a mediator from any international arrangements and negotiations.

4. Reiterate our position of not accepting the annexation of Crimea. Demand that it be returned to Ukraine.

5. Stop propagating Putin's propaganda. Instead, counter it with all the power of America's media. Expand broadcasts by Radio Liberty and other radio stations.

6. Make it clear that we consider the "Russian World" policy a threat to world peace and stability. Insist that Russia officially renounce that doctrine and repeal supporting legislation as necessary conditions for Russia's readmission to the community of civilized nations.

7. To stop aggression against Ukraine and to prevent aggressions against other countries, make Russia pay a high price by introducing sector and other serious economic sanctions. Be ready to accept the cost of those sanctions.

8. Take immediate steps to reduce that cost and any dependence on Russia. Develop new energy sources and transportation systems in America and Europe.

9. Provide help, including military assistance, to those who are under immediate attack or potential aggression by Russia.

10. Revisit communism, an ideology that remains important in Russia as well as other countries. Educate new generations about its atrocities and bankrupt ideology.

Opponents of strong action against an aggressor wrongly equate political confrontation with war. They believe that admitting that the second largest nuclear power is our enemy would usher in another Cold War and make the situation much more dangerous.

History teaches us, however, that to ignore reality and appease our enemy is a more dangerous approach than to clearly articulate our principles and disagreements.

When in 1983 the Soviets shot down Korean Air Lines Flight 007, Ronald Reagan denounced them as enemies of the United States and the entire world. Reagan's strong stand against the Soviet communism that threatened us for decades with nuclear war helped stop its expansion and eventually led to its complete capitulation. If we could stand against the mighty Soviet Union, we can manage Putin's much weaker Russia.

In February 2000, only two months into his presidency, Vladimir Putin presented one of his first state awards to Air Force Gen. Anatoly Kornukov. In 1983, Kornukov was commander of Sokol Airbase in Sakhalin. His order to the fighter pilot was: "Destroy the target!"

The target was Korean Air Lines Flight 007.

Meyerson: Why the EU's far-right is rising

Not that many Americans care about the recent elections to the EU parliament, but...

... Anyway, here's a message for my pro-Russian friends who are concerned about "Sudden Fascist Syndrome" in Ukraine:

Europe’s new far right is, at one and the same time, the continent’s analogue to our own tea party and the leading cheerleader for Russian President Vladimir Putin. With the divisions of the Cold War now safely confined to museums, a new transnational right is emerging, defined by a belief in a national volk and its traditions and a disdain for, if not loathing of, any neighbors — Muslims, Jews, social democrats — who either aren’t part of that volk or don’t believe in the politics of intolerance. Hence the spectacle of Nigel Farage, the leader of Britain’s U.K. Independence Party, and our own Pat Buchanan, expressing their admiration for Putin’s war on the moral flabbiness that comes with elevating democracy over traditional values — rotten though those values may be.

Looking deeper at the EU's existential crisis, Meyerson blames, first and foremost, as many others such as Paul Krugman have, the unworkable nature of the EU constitution's deficit spending and currency rules.  Essentially, the EU is too much like the Confederate States of America and not enough like the United States of America.

The EU must evolve to be more like the U.S. -- a fiscal and foreign policy union as well as a currency and trade union -- or else lose its weakest members... or worse, as many Europeans fear, collapse into the dustbin of history, just like the American Confederacy.

What fueled the rise of the Euro-right

By Harold Meyerson

May 29, 2014 | Washington Post

URL: http://wapo.st/1wv5nrc

Russian politics is about preserving Putin's power and life

I translated this op-ed (HT: AK) about Russian President Vladimir Putin because this Russian insight is not something my Western friends will often see in the media.  

Piontkovsky does not agree with some analysts that we are entering a second Cold War with Russia. In fact he believes we are entering a phase much more dangerous for Russia's near neighbors and global security.

Read on!

UPDATE (16.04.2014): For my Russian-speaking readers, here is a long conversation with Piontkovsky on Radio Liberty, where he repeats many of these themes and touches on other points. Bottom line: he doesn't believe Putin can stop with annexing Crimea; then Putin would be "caught in a mousetrap" of gaining Crimea only to lose Ukraine to the EU. Furthermore, he argues that Russia's foreign minister Sergei Lavrov always out maneuvers SecState John Kerry, and the upcoming negotiations with the US, EU, Russia and Ukraine won't bring any results. Finally, Piontkovsky still believes the West is not willing to use force to stop Russia's interference in Ukraine, only economic sanctions.

Piontkovsky's last words: "In the case of very tough economic sanctions the only opportunity to stop this catastrophic development is the discontent of the upper layer [of Russia] and the establishment of the dictator's [Putin's] inner circle."

Must Putin re-unify the old Russian Empire to survive as the anointed Leader?

The Last Russian Myth

By Andrey Piontkovsky

April 15, 2014 | Echo Moskvy

"The mind cannot understand Russia; it cannot be measured by a common yardstick." -- has been the standard excuse of Russian and Western experts for a century and a half. But today it is not necessary to understand it. The problem is greatly simplified. For practical purposes in the medium term it is enough to understand the motives of one person. All citizens of Russia from the last bum to leaders of Forbes' global list with delight and awe gave him their fealty. And this man's actions are determined by only one criterion -- preserving his lifetime in power.

And it is not pathological lust for power, as it is sometimes criticized, but rather a quite natural concern for his personal security. He understands the laws how the system, built with his participation, function. At the end of this tunnel is the same place from which people with crowbars pulled the condemned Gaddafi.

Consider in this context Putin's policy towards Ukraine. It has been fairly consistent and logical at all its stages. Even the timid attempt of his fellow Ukrainian oligarchs to launder their criminal past, having turned into civilized European entrepreneurs, elicited his fierce rejection. In the Association Agreement with the EU, he rightly saw some chance for Ukraine to fall out of the chain of post-communist thieving regimes, and go to the European model of economic and political competition.

Such a development could in the future be contagious and an attractive example for his subjects and therefore must be nipped in the bud. Having by way of threats and bribery won Yanukovych's refusal to sign the Agreement with the EU, he found his tactical mission accomplished and did not think about Crimea . Why would he need Crimea when he controlled the whole Ukraine.

Maidan was a surprise to him as it was for so many. The victory of the February Ukrainian anti-criminal Revolution turned a theoretical threat to his lifelong rule into a real political problem today.

The top priority for Putin's judo-ism as a necessary condition for its survival became the defeat of the Ukrainian revolution, its maximum discrediting in the eyes of Russian public opinion and either the establishment in Kyiv of an obedient Kremlin power, or the dismemberment of the Ukrainian state while retaining control over most of it.

Here became useful plans that were already drawn up for the annexation of Crimea by the Special Security Forces. They were swiftly carried out as a natural first step in an ambitious, but quite ad hoc, and not long-term program of restraining Ukraine.

His Crimean speech on March 18th  was conceived as a propagandistic presentation  urbi et orbi of the annexation of Crimea in the most favorable light for the Kremlin. Unexpectedly, it seems to me, it became something much larger, even for the orator himself. The speech decided for him a personal problem that was much more important than even the strangulation of the Ukrainian revolution.

Let me remind you what I see as the nerve of the dictator's existential problem, which I have repeatedly said in recent years. Even the most brutal dictatorship cannot rely solely on violence. The genetic matrix of every authoritarian regime is a kind of systemic myth that deceives for a time a significant part of society.

The life cycle of the regime is the same as the life expectancy of this myth that takes shape in a period of storm and stress, reaches its acme, and finally fades away, taking with it the regime that it generated.

Similarly the Soviet communist system, generated by the myth of the Tsardom of justice and freedom, reached its tragic peak in the Soviet victory in World War II and died out in the late '80s , when not even members of the Politburo any longer believed the communist myth.

His little TV myth about a young vigorous intelligence officer sending Russian troops deep into the Caucasus, carrying terror and death blasting us in our own homes to terrorists and all enemies of Russia rising from their knees, created cynical Kremlin spin doctors in the bloody autumn of 1999. A key theme was the famous "toilet" phrase. [Putin famously declared that he would root out and destroy all Chechen-Islamist separatists, even in their toilets. -- J].   "He is ours," sighed contentedly Russia's feminine soul.

The entire political structure of the state has since then hung since then on a thin thread of the Putin myth. Consciously conceived as a simulacrum of a more ideological style, Putinism has, in its short biography, run through all the classic stages of Soviet history, becoming a vulgar parody of each of them. In 2008 it passed its pathetic acme (the victorious war with Georgia), and since then the growing nausea of the elite testifies to the death of the Putin myth.

He then moved to his zombie stage whose time has long exceeded the normal range. By all the laws of evolution of authoritarian regimes, Putin's judo-ism should have fallen already as a result of two interacting factors: mass protests by an active minority, and an elite schism.

This Russian anomaly -- the unusually long duration of the zombie stage -- is due to the unique nature of our elite/nouveau riche that rose up not by their creating something new, but by their banal digestion of the former superpower's remains.

Elites' aversion to the dictator, and their awareness of how disastrous for the country and for themselves the continuation of his reign must be, lives together with their fear of being left without him, left one on one with a sullen people who are infinitely alien and wild to them.

The flood of mass protests in 2011-12 that was not backed by the "elite" that proclaimed "we must influence the government, not blame it," convincingly demonstrated this.

However, to continue their zombie existence in the absence of a positive mobilizing myth, weakly defending in political discourse the meme, "Putin is a thief," is becoming increasingly uncomfortable and dangerous, especially given the irreversible collapse of the thieving economy.

And here became apparent the genius of Putin's speechwriter. He intuitively grasped that in the course of 15 years of TV's defilement, the people were ready for debauchery, and had become ripe, finally, for the idea of ​​reunification of the Russian World / The Fifth Empire.

The Leader's risky appeal to Germany's experience of a disunited people in his Crimea speech at the Federal Assembly was related on the surface to the early '90s, but more deeply, it was about creating myths related to the 1930s.  

Taking place before our eyes is the successful reloading of the rotten "toilet" myth of 1999. A new, radiant, uplifting myth is being born of Vladimir Tauride, Uniter of Russian Lands.  [Tavria is an older name for southern Ukrainian lands including Crimea - J.]  It is the last Russian myth, senseless and merciless.

Until March 18, Kyiv was the goal; the annexation of Crimea was a means to get it.

After March 18, the unification of Russian lands and the criminalization of the entire post-Soviet space or even the Russian Empire has become the plan of Kremlin myth-makers and bandits; it has become their mystical super-goal and higher meaning of existence, having finally risen from their knees and gained a worthy ethnic Russian national idea.

And at the same time it has given legitimacy to the lifelong rule of the anointed one.

And Kyiv? It is a milestone, one of the necessary stages of a long journey. Seventy-five percent of those surveyed in the Russian Federation support a military solution to the Ukrainian question. This is the final diagnosis of a society subjected to the most brutal radiation by television porn-propaganda.

The reloading of a system-creating myth, and the anointing of Putin's rule for life in the robes of Russia's Messiah, will lead to fundamental changes in domestic policy and relations with the outside world, especially regarding the Russian Federation's military and nuclear strategy. Each of these areas deserves more consideration that I will give in the near future. In the meantime, I'll stick to general comments.

Some experts have expressed fears that this will lead to the start of a new Cold War. I strongly disagree.  It will lead to a state of Russia's relations with the West that is much worse and more dangerous than the Cold War.  During the Cold War, U.S. presidents and general secretaries of the Central Committee of the Communist Party after the dramatic experience of the Cuban missile crisis considered nuclear weapons only as way to prevent military conflict between them, as a tool to maintain strategic stability. They did not wave the nuclear club in front of each other.

The politician who has taken it upon himself to recreate the Russian World by redrawing state borders, who has a huge nuclear arsenal and relatively weak regular army is bound to proclaim (which was formally done ​​in 2008 ) a free hand in the former Soviet space, blackmailing his ​​"partners" in the erstwhile G-8 who disagree with this idea with the threat of nuclear weapons, i.e. the threat of mutual suicide.

Actually the nuclear bluff works today in the war with Ukraine. The famous remark about "radioactive ash" [recently by the Russian TV newscaster Dmitry Kiselyov, aimed at the USA --J] was undoubtedly approved at the highest level.

Characteristically, the first words of Obama and Rasmussen over Ukraine were assurances that U.S.-NATO military intervention was out of the question because Ukraine was not a member of NATO.

Well, what if the inhabitants of Narva [a city in Estonia, bordering Russia, with a large ethnic Russian population - J] tomorrow hold a referendum on accession to Russia? Will tens of millions of people in the U.S. and Europe be willing to risk war with a super-nuclear power and die for Narva?  Putin is convinced that they will not be ready. And I agree with him.

Kim Jong-un with just one bucket of nuclear slop as blackmail makes the whole world dance around him and equip the army with food. And by the way the Kim family safely ruled for 70 years and the youngest is also planning to die in his bed in his old age .

Imagine what opportunities await Putin if he finally breaks his bonds, overturns the chessboard and also plays "against the rules." That's why he was kept so long in the G-8, even when he started to frankly ***** in their eyes.

And his behavior is not madness. It really is another reality beyond the comprehension of respectable Frau Merkel and Chicago's union rouser Obama.

International relations are entering the most unstable and volatile place they have been in the past 60 years.

If we seek an analogy in Soviet-Russian history, I would compare the current Putin reboot to the last months of Stalin's life (October 1952 - March 1953). That leader, like all in his rare profession, was also concerned, and not without reason, with the problem of preserving his own power and life. And so he thought up a three-pronged reboot: the forced preparation for a Third World War, the elimination of the party leadership, and the radical solution to the Jewish question.

At that time, the Russian God intervened at the last moment in a fatal course of events for Russia...

Germany is key in Ukraine crisis

Notably, this is the first global crisis where Germany, not Great Britain or France, plays the key role in partnership with the U.S.  So says the editor of Germany's Die Zeit:

So everybody is looking at Mrs. Merkel, Europe's uncrowned empress in the euro realm since the Crash of 2008. Which leads to the second surprise. In the confrontation with the Soviet Union, and then with Putin's Russia, Germany could always be counted among the most reticent. It was Bismarck all over again, who famously prescribed: "Never cut the link to St. Petersburg." Since the Ostpolitik of the Seventies, Bonn/Berlin has either stroked the Russian bear or refused to rile him. Indeed, the Schröder government harnessed an informal alliance with Paris and Moscow in 2002 to stop George W. Bush's march into the Iraq war.

Yet now, the shift, though hesitant and far from complete, is palpable, at least in terms of rhetoric. Earlier this year, a trio of German leaders changed the traditional tune of abstentionism, played most egregiously during the Libyan campaign when Berlin coldly refused to fly along with NATO's air forces. Suddenly, the kettle drums can be heard among the violins. President Joachim Gauck, Foreign Minister Frank-Walter Steinmeier and his colleague in the defense ministry, Ursula von der Leyen, have all touted Germany's responsibility for world order and promised a more active role.

"Reticence," Gauck proclaimed "must not degenerate into self-serving privilege." Nor must Germany "hold back in the face of genocide, war crimes, ethnic cleansing or crimes against humanity." Add to these three Chancellor Merkel who was raised in communist East Germany and holds to a more jaundiced view of Russia than the peace-and-understanding camp that runs from left to right in Germany.

Let's hope that Germany will continue look beyond its own short-term economic interests to defend the integrity of Europe!

Ukraine Crisis Has Pushed Germany to Center Stage

By Josef Joffe 

March 14, 2014 | Huffington Post

URL: http://huff.to/1gq6dhq

Stiglitz: For nations, economic inequality is a choice

It's not too late to post this stirring essay on global inequality by my main bearded liberal economist Joe Stiglitz!

Inequality Is a Choice

By Joseph E. Stiglitz

October 13, 2013 | New York Times

It’s well known by now that income and wealth inequality in most rich countries, especially the United States, have soared in recent decades and, tragically, worsened even more since the Great Recession. But what about the rest of the world? Is the gap between countries narrowing, as rising economic powers like China and India have lifted hundreds of millions of people from poverty? And within poor and middle-income countries, is inequality getting worse or better? Are we moving toward a more fair world, or a more unjust one?

These are complex questions, and new research by a World Bank economist named Branko Milanovic, along with other scholars, points the way to some answers.

Starting in the 18th century, the industrial revolution produced giant wealth for Europe and North America. Of course, inequality within these countries was appalling — think of the textile mills of Liverpool and Manchester, England, in the 1820s, and the tenements of the Lower East Side of Manhattan and the South Side of Chicago in the 1890s — but the gap between the rich and the rest, as a global phenomenon, widened even more, right up through about World War II. To this day, inequality between countries is far greater than inequality within countries.

But starting around the fall of Communism in the late 1980s, economic globalization accelerated and the gap between nations began to shrink. The period from 1988 to 2008 “might have witnessed the first decline in global inequality between world citizens since the Industrial Revolution,” Mr. Milanovic, who was born in the former Yugoslavia and is the author of “The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality,” wrote in a paper published last November. While the gap between some regions has markedly narrowed — namely, between Asia and the advanced economies of the West — huge gaps remain. Average global incomes, by country, have moved closer together over the last several decades, particularly on the strength of the growth of China and India. But overall equality across humanity, considered as individuals, has improved very little. (The Gini coefficient, a measurement of inequality, improved by just 1.4 points from 2002 to 2008.)

So while nations in Asia, the Middle East and Latin America, as a whole, might be catching up with the West, the poor everywhere are left behind, even in places like China where they’ve benefited somewhat from rising living standards.

From 1988 to 2008, Mr. Milanovic found, people in the world’s top 1 percent saw their incomes increase by 60 percent, while those in the bottom 5 percent had no change in their income. And while median incomes have greatly improved in recent decades, there are still enormous imbalances: 8 percent of humanity takes home 50 percent of global income; the top 1 percent alone takes home 15 percent. Income gains have been greatest among the global elite — financial and corporate executives in rich countries — and the great “emerging middle classes” of China, India, Indonesia and Brazil. Who lost out? Africans, some Latin Americans, and people in post-Communist Eastern Europe and the former Soviet Union, Mr. Milanovic found.

The United States provides a particularly grim example for the world. And because, in so many ways, America often “leads the world,” if others follow America’s example, it does not portend well for the future.

On the one hand, widening income and wealth inequality in America is part of a trend seen across the Western world. A 2011 study by the Organization for Economic Cooperation and Development found that income inequality first started to rise in the late ’70s and early ’80s in America and Britain (and also in Israel). The trend became more widespread starting in the late ’80s. Within the last decade, income inequality grew even in traditionally egalitarian countries like Germany, Sweden and Denmark. With a few exceptions — France, Japan, Spain — the top 10 percent of earners in most advanced economies raced ahead, while the bottom 10 percent fell further behind.

But the trend was not universal, or inevitable. Over these same years, countries like Chile, Mexico, Greece, Turkey and Hungary managed to reduce (in some cases very high) income inequality significantly, suggesting that inequality is a product of political and not merely macroeconomic forces. It is not true that inequality is an inevitable byproduct of globalization, the free movement of labor, capital, goods and services, and technological change that favors better-skilled and better-educated employees.

Of the advanced economies, America has some of the worst disparities in incomes and opportunities, with devastating macroeconomic consequences. The gross domestic product of the United States has more than quadrupled in the last 40 years and nearly doubled in the last 25, but as is now well known, the benefits have gone to the top — and increasingly to the very, very top.

Last year, the top 1 percent of Americans took home 22 percent of the nation’s income; the top 0.1 percent, 11 percent. Ninety-five percent of all income gains since 2009 have gone to the top 1 percent. Recently released census figures show that median income in America hasn’t budged in almost a quarter-century. The typical American man makes less than he did 45 years ago (after adjusting for inflation); men who graduated from high school but don’t have four-year college degrees make almost 40 percent less than they did four decades ago.

American inequality began its upswing 30 years ago, along with tax decreases for the rich and the easing of regulations on the financial sector. That’s no coincidence. It has worsened as we have under-invested in our infrastructure, education and health care systems, and social safety nets. Rising inequality reinforces itself by corroding our political system and our democratic governance.

And Europe seems all too eager to follow America’s bad example. The embrace of austerity, from Britain to Germany, is leading to high unemployment, falling wages and increasing inequality. Officials like Angela Merkel, the newly re-elected German chancellor, and Mario Draghi, president of the European Central Bank, argue that Europe’s problems are a result of a bloated welfare spending. But that line of thinking has only taken Europe into recession (and even depression). That things may have bottomed out — that the recession may be “officially” over — is little comfort to the 27 million out of a job in the E.U. On both sides of the Atlantic, the austerity fanatics say, march on: these are the bitter pills that we need to take to achieve prosperity.  But prosperity for whom?

Excessive financialization — which helps explain Britain’s dubious status as the second-most-unequal country, after the United States, among the world’s most advanced economies — also helps explain the soaring inequality. In many countries, weak corporate governance and eroding social cohesion have led to increasing gaps between the pay of chief executives and that of ordinary workers — not yet approaching the 500-to-1 level for America’s biggest companies (as estimated by the International Labor Organization) but still greater than pre-recession levels. (Japan, which has curbed executive pay, is a notable exception.) American innovations in rent-seeking — enriching oneself not by making the size of the economic pie bigger but by manipulating the system to seize a larger slice — have gone global.

Asymmetric globalization has also exerted its toll around the globe. Mobile capital has demanded that workers make wage concessions and governments make tax concessions. The result is a race to the bottom. Wages and working conditions are being threatened. Pioneering firms like Apple, whose work relies on enormous advances in science and technology, many of them financed by government, have also shown great dexterity in avoiding taxes. They are willing to take, but not to give back.

Inequality and poverty among children are a special moral disgrace. They flout right-wing suggestions that poverty is a result of laziness and poor choices; children can’t choose their parents. In America, nearly one in four children lives in poverty; in Spain and Greece, about one in six; in Australia, Britain and Canada, more than one in 10. None of this is inevitable. Some countries have made the choice to create more equitable economies: South Korea, where a half-century ago just one in 10 people attained a college degree, today has one of the world’s highest university completion rates.

For these reasons, I see us entering a world divided not just between the haves and have-nots, but also between those countries that do nothing about it, and those that do. Some countries will be successful in creating shared prosperity — the only kind of prosperity that I believe is truly sustainable. Others will let inequality run amok. In these divided societies, the rich will hunker in gated communities, almost completely separated from the poor, whose lives will be almost unfathomable to them, and vice versa. I’ve visited societies that seem to have chosen this path. They are not places in which most of us would want to live, whether in their cloistered enclaves or their desperate shantytowns.

German linguists can't do without 's**tstorm'

You're welcome, Germany.

But German speakers are not alone; even we English speakers sometimes find that "shitstorm" is the only word that will do.

I humbly submit this slight variant to the lexicon: "shitastrophe."

UPDATE (07.09.2013): Here's the latest on shitty German lexicography: "The German Dictionary Has A New Fun Word, Thanks To The Internet And The Eurozone Crisis."  Apparently shitstorm (Scheißesturm?) is one of Merkel's favorite words.

'S**tstorm' Chosen By German Linguists As Top New Addition To Language

By David Moye

February 14, 2012 | Huffington Post

URL: http://www.huffingtonpost.com/2012/02/14/shitstorm-top-new-german-word_n_1274503.html