Poroshenko’s Close Ties with Russian Elites

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August 12th, 2015

By: Christina Melnikova for Novorosinform – 
translated by J. Arnoldski

[Editor’s Note: This article describes a dynamic we have covered before:  After the US suffered its major setbacks with Crimea’s secession and the Novorossiya uprisings, they needed the EU and Russia to help re-manage part of the situation.  So much for ‘F*ck the EU’, and Nuland’s attempt to alienate other interested parties. Poroshenko was an optimal compromise candidate; he was someone that the Three Powers involved could more or less live with.  The US and Russia both have mechanisms at their disposal to push Poroshenko in various, often contradictory, ways.  This article helps to explain why the Russians saw Poroshenko as someone they could minimally work with – J. Flores]

Experts: Part of the Russian governing class is closely connected
with Poroshenko

Visible manifestations of Russia’s support for the Ukrainian
economy and, as a result, the Kiev regime, are really there. But on the
question of how much they are capable of significantly affecting the economic
situation in Ukraine, experts’ opinion diverge. Many political analysts,
writers, and simply indifferent observers, blame the Russian government,
convicting it of evil intent in their aspiration to maintain good relations with the
West, by protecting the Kiev authorities who are waging war against the rebellious
Donbass.

So by what ways and, above all, for what is Russia, albeit
indirectly, contributing to the maintenance of the positions of the hostile
powers of the puppet and criminal Ukrainian “elite?”

Granting discounts on gas
and electricity supplies at preferential prices

In order to justify here the policy of “Gazprom,” the argument
can be made that, first of all, Ukraine is a transit territory for Russian
natural gas, and attempts to establish an alternative path of transit have thus
far been unsuccessful. The objective reality is such that, dependent on
resource exports, Russia is compelled to make concessions. The second argument
is a concern for the “brother Ukrainian people” which, of course, it is
impossible to regain due to the unhealthy actions of the leadership of Ukraine. 

But, given that the bills for the population as a result of Russian discounts
in Ukraine do not at all decrease, and
social policies are not gravitating to be wider encompassing, this argument
also appears unconvincing. Moreover, experts notice that discounts on gas are
one of the most important areas of unofficial support for Kiev from Russia’s
side.

In the case of electricity, it’s also possible to reference the
dependent status of Crimea on Ukraine on this question. The peninsula is
currently 70% dependent on Ukrainian electricity. In the words of the Minister
of fuel and Energy of Crimea, Sergei Egorov, the peninsula could independently
provide for basic energy needs by 2018, when private energy generation will
reach 950 MW per day.

Russia’s mild position in
relation to Ukrainian debt

It is understood that one needs to help friends – this is true
not only for a human but also for a state. But here, where to financially help
those who with all of there strength maintain animosity and hatred and use
financial resources instead of paying back debt, hardly anyone agrees. However,
the requirement of the early payment of debt would mean direct confrontation
with Ukraine and the “civilized” world – because by returning this money it is
unlikely that there would be a Ukraine. In support of this, Ukraine continues
to insist on restructuring debt to Russia, and in Ukrainian media “expert
appraisals” appear explaining why Russia should agree with this.

For the effectiveness of international mechanisms of influence on
this matter, it does not lend towards hope given the prevailing unfavorable
situation for Russia. Therefore, it is possible that Russia, in order to save
its face, is trying to build “a good sport amidst a bad game,” demonstrating
the nobility and breadth of the Russian soul, which even if it does not forgive
enemies of their debts, at least doesn’t dispose of them in their favor.

“The term of redeemed repayments by Russia of eurobonds of
Ukraine expires in December, 2015. Minister of Finance of the Russian
Federation Anton Siluanov already reserved for the possibility of “some kind of
temporary process for reclaiming these resources. One can also understand this
as a willingness, under certain circumstances, 
to delay the payment of debt. Perhaps this is evidence that Moscow
already now doesn’t see effective tools allowing for the collection of
Ukrainian debt on time”, – said political analyst Mikhail Neyzhmakov.

He recalled that the lenders of Greece took very serious efforts
and time to force her to  accept their
plan for the restructuring of debts.

“Meanwhile, for Athens the European lenders were the main source
of external financial assistance. But in the relations of Moscow and Kiev, the
situation is different, Ukraine finding other sources of external financial
support. The IMF has not yet and is unlikely to 
exert clear pressure on Kiev on the issue of its debts to Russia. And
this means that the Ukrainian side, even refusing to answer for debts to
Moscow, can continue to receive credits from other sources. In this way, once
it will be difficult for Russia to compel Kiev to pay its debts, then the
instrument of political pressure on Ukraine in this situation comes out weak” ,
– explained the expert.

The policies of Russian
banks supporting the financial system of Ukraine

About this the public figure Oleg Tsarev wrote as previously
reported by IA Regnum. He noted that Russian state-owned banks are increasing
their share in the assets of the Ukrainian banking system – for 2014 their
share has increased up to 12%. In addition, Tsarev drew attention to the fact
that Ukrainian enterprises en masse do not return and do not tend to their
taken credits, and the courts, “driven by financial incentives received from
the borrowers as well as patriotic sentiments”, en masse withdrawing assets out
from underneath bank mortgages, do not recognize loan agreements. “The return
on loans todays does not exceed 20%. Russian banks in Ukraine are ready to give
80% discounts just to get back at least part of the funds given out” – Tsarev
ascertained. He also recalled that in the previous year, the “daughters” of
Russian Sberbank and VTB were all involved in the issue of war bonds.

The economist Vladislav Zhukovsky explained the actions of banks
by the desire to save their positions and their revenues and noted that the
root of the problem is to be found in more fundamental causes.

“It’s not that our individual state-owned banks, state
corporations, private sector, or those close to the Kremlin’s oligarchical
structure continue to cooperate actively with Ukrainian counterparts, providing
direct or indirect economic support. In fact, what in Russia that is in power
in Ukraine is the raw offshoring of oligarchical capital”, – noted the expert.

Authorities in Russia and Ukraine, in Zhukovsky’s opinion, defend
not the interests of the working majority or the representatives of small and
medium-sized firms, but the interests of major raw capital and international
financial speculators. In addition, the elites of both countries aspire to
friendship with the West and are trying to enter the “waiting room of the
global managerial class, where they were allowed only the rights of the
whipping boy.”

“State-owned banks don’t just support the Kiev regime. As I
understand it, the lion’s share of the Russian governing class is very closely
linked to Poroshenko,” – the economist said. For this reason, in his view, the
referendum in the republics of Donbass was not recognized and the idea of the
Russian World didn’t find support as it threatened the Russian offshoring
aristocracy. “The oligarchs will always agree with each other and find common
ground. Our authorities, like our businesses, don’t want to quarrel with the
West, and our financial system is tied to the West,” – he stated.

With regard to the policy of Russian banks, for them it also
business and money. And their actions in Ukraine can be explained by their
desire to save sinking assets and keep afloat their subsidiaries and
affiliates. In this way the main support for the Kiev regime is not that of the
banks. “We are helping those whom we supply electricity at preferential prices
in installments, and to those whom we supply industrial metals. Support goes on
all fronts – credits and bonds for which we don’t require repayment ahead of
schedule, although also where they could do this, with the supply of gas, oil,
industrial metals, state orders which we place at Ukrainian enterprises. The
whole war is a big imitation”, – the expert summed up.

Political analyst Boris Kagarlitsky drew attention to the fact
that what is important in this situation turns out to be the position of
Russian banks throughout Crimea. He recalled the words attributed to German
Gref which were disseminated throughout Russian and Ukrainian media and from
which, it is true, Sberbank disassociated itself on its Twitter profile:
“Crimea is the territory of Ukraine from the point of view of the international
financial sector and we adhere to this position.”

Speaking plainly, for Sberbank “Crimea is not Russia” – the head
of Sberbank allegedly said this in an interview with the Germany radio host Udo
Pretenzel for radio WDR5. However, regardless of whether there was this
interview or not, the policy of “of Sberbank” in Crimea remains
unchanged – it actually continues to participate in the blockade of the
peninsula. In both the two Russian regions, the Republic of the Crimea and
Sevastopol, to this time there is still not a working branch of the leading
bank of the country.

In the words of Boris Kagarlitsky, banks do everything in order
to damage in Ukraine. “If the Russian authorities would take a tougher stance,
they would say: ‘You know, guys, chose, either you put hurt on Ukraine, or
Russia will suffer to a much greater extent.’ But the state, as the main
shareholder in Sberbank, sanctions the very same behavior in Gref,” –
Kagarlitsky believes.

Industrial and commercial
cooperation, including with military enterprises

At the height of hostilities in 2014, the media reported that the
Yaroslavl Diesel Equipment Plant (YaZDA), included in “GAZ Group,” which is
owned by Oleg Deripaska, continued the delivery of units (groups of diesel) for
the engines of tanks produced in the Kharkov plant of transport engineering
named aver V.A. Malyshev. It was reported in June-July YaZDA significantly
increased deliveries of its products to the Ukrainian side. Later followed
categorical refutations of this information from the side of “GAZ Group” and
YaZDA.

However, smoke doesn’t happen without fire, and as the political
analyst Boris Kagarlitsky said, these contracts could have been annulled
retroactively and some kind of such deliveries were nevertheless carried out.
The expert believes in the first stage of the war, there took place the
delivery of spare parts and the sending of Russian specialists to repair
Ukrainian weapons and military equipment fighting with Donbass.

Besides this, speaking of trade cooperation between the
countries, it should be noted that the dominant position of Russia is in the
export of coal to Ukraine. Russia, according to officially released figures,
was the leader in the ratings of coal exporters to the country in January-July
2015.

Replying to the question as to why Russia conducts such a
two-faced economic policy towards Ukraine, experts first of all pay attention
to the reluctance of the Russian elite to 
quarrel with the West. On this Kagarlitsky is sure, observing that
Russian authorities with all their strength are trying to reconcile with
Ukraine and the West, in every way demonstrating their good will, but the other
side stubbornly refuses to reciprocate.

In turn, department head of the Russian University of Economics
named after Plekhanov, Ruslan Dzarasov, is convinced that the spinelessness of
Russian political in regards to Ukraine and its half-hearted position in
support of Donbass have the same origin. Russia hopes for the success of the
Minsk process, which could find support among Europeans for a peaceful
settlement even if this does not fit the pressure of the United States in its
geopolitical strategy.

“If you go on for a peace plan which pushes our leadership, then
the entire strategy of the Americans is undermined, meaning more than 20 years
of working on the subordination of Ukraine. And Russia is counting on it, hence
our half-hearted support for Donbass. We stubbornly cling to peace plan which
is unacceptable to the Americans. They keep it as a carrot for us, so that our
support of Donbass would be ineffective and not match the scope of the support
for the Kiev regime by the West. Here lies our economic aid to the Ukrainian,
anti-Russian regime by the fact that we want to leave the door open, we do not
want to burn the bridges, so that the West would  compromise with us on these conditions, which
we consider acceptable for ourselves,” – he said.

The economist Vasiliy Koltashov clarified that the Russian policy
of economic mildness is based on the fact that presidents come and go, but the
country remains, and with it it’s necessary to work and negotiate. In his
opinion, one should not exaggerate the significance of the economic support for
the Ukrainian economy from the side of Russia, for it doesn’t help Ukraine in
any way – the economy of the country is still in critical condition.

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