Russian Daily Brief for May 19, 2015


May 19, 2015

Russian Daily Brief for May 19, 2015

By J.Hawk

This is the 43rd edition of the Daily Brief. To view earlier editions, click on the Daily Brief tab above the title.


Lavrov: “It is very difficult to solve global problems without Russia’s participation”

 Lavrov’s statement suggested issues discussed in Sochi included not only Ukraine, but also Syria, Yemen, and several others. Lavrov noted that the negotiations in Sochi and Moscow will most likely lead to renewed US-Russian cooperation on a range of issues.

Peskov: Nuland did not meet with representatives of the Kremlin

Such a meeting was not warranted or expected, in accordance with proper protocol, as Nuland is entirely too junior-ranking to deserve that level of attention. Instead she and her colleague David Rubinstein met with two Russian deputy foreign ministers. The meetings did not appear to lead to any breakthroughs, the two sides characterized the exchange of views as “direct.” The most positive outcome of the talks appears to be Nuland’s new-found desire to engage in more frequent discussions with the Russian government, which represents a departure from the policy of isolation.

Great Britain increases Russian gas imports by 70%

 That’s the implication of the new three-year contract signed between British firm Centrica 13 and Gazprom. Financial Times notes the incongruence of UK’s growing more dependent on Russian energy supplies and its official pro-sanctions stance.

Hein: Russian gas deliveries to Germany may increase after a climate treaty

Joachim Hein, who directs the energy section of the Union of German Industrialists, writes that if a climate treaty is signed in Paris in December 2015, it would almost certainly lead to greater demand for Russian gas, since the treaty would curtail the use of coal. Hein also writes that the Ukraine crisis is no reason to consider Russia an unreliable partner.

 Ulyukayev statement on the trilateral Russia-EU-Ukraine meeting

Ulyukayev’s statement suggests there’s movement on this front as well. The meeting dealt with the issues of trilateral trade, and the range of issues discussed indicates the three parties are attempting to work out an arrangement under which Ukraine’s suicide association with the EU would not be economically harmful to the Russian Federation, which no longer insists that the association agreement’s planned January 2016 entry into force be postponed once again. Ulyukayev also made references to expert group meetings, which are supposed to complete their work by the end of July.

Russian banks suffer a 17 billion ruble loss in 1Q 2015

Russia’s financial sector remains the most heavily affected part of the country’s economy, due to the limits on access to foreign capital markets, the Russian Central Bank lending rate increase in late 2014, and the ruble devaluation.

Russia and Iran may engage in barter trade

Russia would supply Iran with wheat, receiving in return fish, cheese, and meat, according to Rosselkhoznadzor which referenced the ongoing negotiations in Teheran. In addition, Iran may become the next member of the Shanghai Cooperation Organization.

Russia may supply grain to China

Something similar is in the works between Russia and China. The striking aspect of the deals is that they are aimed at minimizing the use of international currencies (especially dollars) in bilateral trade. These measures are likely being introduced in anticipation of the almost-inevitable US Federal Reserve interest rate increase, which will have the effect of reducing the global dollar supply, and with it global trade in general unless alternative approaches are found. 

We’ll never be brothers

Maksim Sokolov argues that Russia and Ukraine will never be brothers because, unlike brothers, they are really one and the same creature, just as Dr. Jekyll and Mr. Hyde are one and the same individual. Which means this is not a conflict between two sovereign states but rather conflict over national identity of the Russian people, with Ukraine laying a claim to Russia’s heritage and accomplishments rather than trying to stake out its own independent identity. Sokolov also notes that Galicia (“Ukraine’s Piedmont”) is nowhere to be seen on the political scene anymore and that even in Russia itself the so-called “liberal opposition” was busy promoting the idea of Ukraine as Russia 2.0, a “new and improved”, “Europeanized” and “de-imperialized” version of Russia that would meet with the approval of the West and which would present the Russia 1.0 with a choice of either joining Ukraine or perishing. What Sokolov doesn’t mention that, at the time, much of the US reporting on the Maidan Revolution were positively salivating at the prospect of Ukraine’s unrest spreading to Russia. Of course, that was about a year ago…The fact that even outlets like Novaya Gazeta are looking on the Ukrainian project with skepticism, even criticism, suggests the outcome of that particular round of struggle is already in sight.

Baltic Fleet once again on the front line

While during the Cold War the most modern fleets were the Northern and Pacific, these days it’s the Baltic Fleet that has priority for new ships, due to the recent upsurge of NATO activity and the deterioration of relations with the West that has been ongoing for the past several years before seriously escalating in 2014. To a certain extent Baltic Fleet’s modernness has to do with the fact most of the new ships are relatively small corvettes not suitable for oceanic duty, and the construction of two new frigate classes means  that the other fleets will soon receive their own upgrades.

Russia officially stops the transit of NATO weapons to Afghanistan

The 2008 Russian government has expired and was not renewed. There were earlier calls to cancel the transit, due to NATO’s stance on issues of concern to Russia’s security.

Move over Proton, here comes Angara

Rogozin and others suggest it is time to retire the 50-year-old Proton design and replace it with the heavy version of the Angara, whose development dates back to only the 1990s, and which has many advantages over the Proton, including the use of kerosene as fuel, higher payload, and the ability to use cosmodromes located on Russia’s territory (Protons are launched only from Kazakhstan’s Baikonur). However, the heavy variant of Angara so far has performed only one launch (in December of 2014), and the rocket still requires considerable testing which will take a few more years to complete.


DPR MFA chief: Novorossia project closed for the time being

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 Aleksandr Kofman said that, for the time being, the pro-Novorossia sentiment in places like Odessa, Kharkov, Zaporozhye regions is too weak to warrant the continuation of the project. According to Kofman, the deaths in Odessa were due to the absence of an appropriate political movement capable of articulating the interests of the pro-Russian segment of the population. Discussing the future of DPR and the two main options, remaining part of de-nazified Ukraine or joining the Russian Federation, Kofman opted for the former, since in the event of the Donbass becoming part of the RF, Ukraine would become a major Nazi enclave.

Akhmetov closed part of his business on the Donbass

Thirty-two gas stations belonging to an Akhmetov-owned firm shut down due to the impossibility of obtaining and shipping fuel from Ukraine proper to the Donbass.

Who is violating Minsk Agreements?

The news here is not so much that it’s mainly Ukraine that’s violating them in word and deed, but that the Russian liberal newspaper Novaya Gazeta reports the facts as they are. Only recently Novaya Gazeta published an MH17 investigation which pointed the finger at the UAF, thus raising the ire of its faithful readership.

NATO Deputy Secretary Vershbow: Donbass too small to dictate terms to Ukraine

Of course, if that’s a problem, it could be solved pretty quickly…


Ukraine: forward into bright feudal future

The sad reality is that Ukraine’s main attractiveness to foreign investors is that its workers are “willing” to work for the equivalent of $300 a month–which is actually something that a Poroshenko Block deputy Sergey Leshchenko bragged about in an interview by Financial Times. But even that doesn’t seem to be enough, because Ukrainian businesses are experiencing extreme difficulties penetrating foreign markets. Many of Ukraine’s earlier export successes were achieved in cooperation with Russian firms. In the absence of that cooperation they are not faring nearly as well.  In the longer term, Ukraine’s economy is facing the alternative of regressing to the stage of a developing country or resuming cooperation with Russia.

Klimkin: Ukraine captured “two Russian officers”

 However, Klimkin would not answer TASS’s question whether the Russian government was officially so notified. UkroGenStaff chief Muzhenko claims the two are from GRU special operations brigade and will be put on an “open trial” for their “war crimes.” LPR claims the two are members of their militia, wounded and captured during a UAF raid on their position. There are Russian officers on the Donbass, including some rather senior officers–they are serving with the OSCE coordinating mission and have come under UAF fire more than once. Lifenews subsequently reported that the two prisoners, Aleksandr Aleksandrov and Evgeniy Yerofeyev, are in fact citizens of the Russian Federation who once served in the Russian military, but were no longer on active service.The Russian MOD is demanding their immediate release.

UAF troops are mutinying in Lvov

 The mutiny is taking place at the Yavorovo training ground near Lvov–which also happens to be where the US troops are training Ukraine’s National Guard. The several hundred mutineers demand they be issued boots (!) and receive proper training, or else be sent home. They are also unhappy with the GenStaff favoring the volunteer battalions of the National Guard with resources, while allowing regular UAF units to go without.

Boycott of Russian goods fails

Ukrainian nationalist nutters activists went so far as to produce “Made in Russia” labels which they placed on Russian goods in supermarkets. To no avail. Russian-made consumer goods (in particular, food) don’t have much competition from either domestic or imported products, so Ukrainian consumers continue to buy them in roughly the same amounts as before the boycott.

Ukraine is demanding $1 million a day for Russian flights to and from Crimea

Ukraine is lodging a complaint against Russia with ICAO, demanding that it pay penalties for “violations of Ukrainian airspace” by Russian airliners servicing Crimean connections.

Nuland: Kiev does not intend to resume military operations on the Donbass

How does she know that? Because Poroshenko told her so.

Other Former Soviet Republics

Latvia is investigating a petition drive to create a “Russian ghetto”

So far the petition received 1586 signatures. It calls for creating special “protected areas” where individuals without Latvian citizenship or possessing Russian citizenship would be…concentrated. 

The Rest of the World

The Macedonian premiere: a new color revolution or the beginning of a new Balkan war?

The number of protesters is now reaching tens of thousands, organized by the Social Democratic Union, the country’s main opposition party whose main demand is that the current Prime Minister Gruyevsky step down. The triggering event was the killing of a 21-year-old student who was accidentally killed by the police during a political event, but whose killing the Macedonian government did not wish to acknowledge. Social Democrats are led by Zoran Zayev, a former Communist who is in favor of Macedonia joining both EU and NATO, even though the country itself is one of the poorest in Europe and the EU is in no hurry to accept it. So the situation resembles that in Ukraine all too closely, with a political divide made even more serious by a serious inter-ethnic split.

Action in support of Macedonia’s Prime Minister launched in Skopje

Macedonia’s government is clearly drawing lessons from last year’s Kiev events. And it also means battle lines are being drawn, because no matter how many people are participating in that rally, it’s a fair bet there isn’t a single Albanian present in the mix.

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