Kiev Losing Control

Not having posted on Ukraine since the sham OSCE round table talks the middle of May, there is a good place to dip back. Sabrina Tavernise has an interesting story this morning, "Separatists Storm Border Post in Eastern Ukraine." What is interesting about it is the story undercuts its own headline. But I'll get to that in a minute.

First, a few words about Sabrina Tavernise. I remember her as a reporter in Iraq covering the U.S. occupation during the period of time preceding the surge. She is very attractive, which is memorable, but I also thought she was intelligent. I didn't follow her in Lebanon, but recently she has been covering public health in the United States. (I did a post on a story she did about the low life expectancy in the U.S. compared to other developed countries.)

That's why it is sad for me to find her in Donbass peddling the U.S. Department/Gray Lady line: the Russian-speaking east of Ukraine is experiencing a Putin-contrived violent rebellion against the people-powered democratic government in Kiev.

This morning she reports that a border control headquarters in the city of Luhansk was attacked by "Hundreds of separatist fighters":

The attack in Luhansk, Ukraine’s easternmost province, began at 4 a.m. and fighting was still raging at noon. Oleg Slobodyan, a spokesman for the Ukrainian state border service, said about 500 rebels had stormed the district headquarters building in the Mirny neighborhood, using automatic weapons and rocket launchers with snipers posted in nearby apartment buildings.

Five rebels were killed and eight wounded, Mr. Slobodyan said, though there was no independent confirmation of that count. Seven border guards were injured, he added.

Then five paragraphs later she refutes the first part of the story and says it was the Right Sector dominated Ukrainian National Guard that attacked the border control HQ:

The rebels gave a different view of the fight, saying that their forces were battling members of the ultranationalist Ukrainian group Pravy Sektor and the National Guard, a quasi-governmental force that includes many of the so-called defenders of Maidan who were part of the protests in Kiev that toppled the government this year. 

According to an account from the Russian news agency Itar-Tass, citing the press service of the separatist Luhansk People’s Republic, several hundred armed men took up positions around the border patrol building and began shooting at around 4 a.m. It was not clear who the men were, but the agency characterized the fight as being between Ukrainian nationalist radicals and central government forces. 

It also said that the Ukrainian military had sent a fighter jet to defend the building. Mr. Slobodyan acknowledged that a jet had been dispatched, but he said it flew over without taking action because the fighting was taking place in a residential area.

This squares with plenty of information about the reluctance of the Ukrainian military to get involved in the fighting going back to the beginning of the Donbass uprising. Right Sector is there to guarantee that the Ukrainian military fights. Here is how The Saker describes it in a post from Saturday:

Right now the junta is using an old Bolshevik technique: they send conscript units into combat and right behind them they use "blocking squads" - special Right Sector death squads which will summarily execute anybody not willing fight. While such methods are more or less doable in open terrain they are absolutely impossible to use in an urban environment. Thus, those Ukrainian army forces which might be able to competently execute an urban assault (paratroopers) are rarely willing to do so, while those who would be most willing to do so would either be killed in minutes ("street rioter turned national guardsman in 2 weeks") or to cowardly to try (death squads).

Tavernise basically paints the same picture in her story:

The attack was a deeply troubling sign for Ukraine’s new government, whose president elect, Petro O. Poroshenko, has pledged to crush the separatist movement in the country’s east. That promise may prove difficult to keep, particularly in the lawless areas of southeastern Luhansk, where separatists control large swaths of territory that have become combat zones for Ukrainian forces. 

The assault also raised the question of how strong the central government’s forces are in the east, where many members of the police and other state security forces have either melted away or joined the rebels. Border guards are one of the few forces left in eastern Ukraine, but are not particularly practiced in combat.

If you take the forty minutes or so to watch Frontline's "The Battle for Ukraine," which was broadcast May 27, you come away with a similar impression. The country is being pushed towards anarchy and civil war by the Ukrainian ultra-nationalism of Right Sector. The reporting is strongly skewed toward the Western perspective. The Donbass uprising is portrayed as violent and lawless and paid for by Russia; the bloody attacks on the Maidan in February are entirely the fault of Yanukovych's security forces; Yanukovych abandoned the government in Kiev instead of escaping from a Right Sector death squad; Stepan Bandera was a nationalist hero who fought both the Soviets and the Nazis without a word about the ample role of Bandera's Ukrainian Insurgent Army (UPA) in the Holocaust; the strong turnout for the independence vote in Donbass was downplayed; etc.

Nonetheless, the picture "The Battle for Ukraine" presents is clear. Right Sector is attacking the east and Ukraine is being torn apart. You have Dmytro Yarosh on camera saying so.

Geneva Statement on Ukraine Going Nowhere

At first blush the short statement released yesterday in Geneva by the four parties -- Russia, United States, European Union, Ukrainian putschists -- seemed like a Russian capitulation. Emphasis was placed on ending the occupation of public buildings and spaces with only vague language committing the putschists to an open dialogue in any forthcoming constitutional process.

My reaction was that there must be more here than meets the eye. To understand what that it is check out this morning's post "DECONSTRUCTING THE RESULT OF THE FOUR PARTY TALKS" by Da Russophile:

As its text makes clear what this document is in reality is not an an agreement to settle the Ukrainian crisis or even an outline of such an agreement but rather a statement of basic principles around which an agreement should be negotiated. The real agreement (if it comes about) will emerge from negotiations based on the principles set out in this document. 

A number of points: 

1. Kiev’s claims to the contrary notwithstanding, the statement that “all sides must refrain from all violence, intimidation and provocative actions” clearly rules out the “anti terrorist operation” in the eastern Ukraine that Kiev launched on Sunday; 

2. As Lavrov has correctly pointed out the provisions in the third paragraph that require the disarmament and dissolution of armed groups is clearly intended to refer as much to Right Sector and the Maidan Self Defence Force as it does to the protesters in the east. Note specifically that the statement calls for a general amnesty except for those who have committed capital crimes (ie. murder). So far no protesters in the east have murdered anyone. Even Kiev admits that none of its soldiers have so far been killed. The same obviously cannot be said of Right Sector and of the Maidan Self Defence Force even if one disregards their likely responsibility for the sniper killings in Kiev on 20th February 2014; 

3. The document clearly refers to Maidan itself, which it says must be cleared. Specifically alongside illegally occupied buildings the document refers to “all illegally occupied streets, squares and other public places in Ukrainian cities”. The reference to “squares” clearly is intended to refer to Maidan, which the militants in Kiev have said they will continue to occupy at least until the elections on 25th May 2014 and even beyond; 

4. Importantly there is NO time line in the document. There is no demand therefore that buildings be evacuated by any particular date or time. That has to be agreed and coordinated with the OSCE monitors on the ground. The people in the eastern Ukraine are therefore entirely within their rights to stay in the buildings at the moment until a timeline is agreed with the OSCE monitors, one requirement of which will surely be parallel evacuations of occupied squares and buildings in Kiev and the west including Maidan. 

5. The referral to the OSCE as the enforcement and mediation agency between the regime and its opponents gives Russia a formal role in the process since it is a member of the OSCE. By contrast the negotiations which took place before 21st February 2014 were negotiated and mediated by the EU of which Russia is not a member; 

6. The reference to the fact that in the negotiations concerning constitutional changes there should be “outreach to all the Ukraine’s regions and constituencies” (note especially use of the word “constituencies”) gives a role to the protesters in the east in the negotiations and not just to those formal official bodies currently recognised by Kiev. 

This document on its face therefore represents a shift towards the Russian/east Ukrainian side. Indeed it basically sets out principles Russia has been arguing for ever since Yanukovitch was deposed on 22nd February 2014.

The putschists have zero ability to project power by use of force. They will be unable to clear the Maidan; they will be unable to disarm Right Sector. Subsequently, the pro-Russian protesters will refuse to relinquish control of any public buildings in the east. The contours of this impasse are already taking shape. For a helpful roundup this morning consult Niqnaq's "right, let’s start with the post-sellout sitreps." One of the stories Niqnaq refers to appears in The Telegraph, "Russia and West reach surprise deal on Ukraine crisis":

In a demonstration of the difficulties ahead, a separatist leader in eastern Donetsk declared the first concession must come from the revolutionaries that drove out former president Viktor Yanukovych after occupying central Kiev for months. 

Alexander Zakharchenko, a protest leader inside the Donetsk regional government building, said: “If it means all squares and public buildings, then I guess it should start with the Maidan in Kiev. We’ll see what they do there before we make our decision here.”

As Da Russophile predicts,

Unfortunately that does not mean this road map is going to be successfully followed. Already Kiev is trying to argue that the “anti terrorist operation” it has ordered is somehow exempt from it (it isn’t) whilst the US is threatening to impose more sanctions on Russia if following the weekend Russia fails to impose pressure on the eastern Ukrainians to evacuate buildings they occupy without the US undertaking to put any corresponding pressure on its clients in Kiev (shades of Syria here). It is very easy to see how the US and its allies could then blame Russia for the failure of the road map whilst having caused that failure themselves.

The long game belongs to Russia. Recall the Forbes story I linked to the other day, the one about the impending economic collapse of Ukraine:

Ukraine also faces enormous problems re-paying its debts, a substantial portion of which are denominated in dollars and other foreign currencies. Although it attracted little attention at the time, when it bought $3 billion worth of bonds at the end of 2013 Russia inserted a clause that stipulates that the total volume of Ukrainian state-guaranteed debt cannot exceed 60% of its annual GDP. If that threshold is breached, Russia can legally demand repayments on an accelerated schedule. Given the parlous state of the Ukrainian economy and its government’s extremely weak finances, this essentially means that if Ukraine’s debt exceeds 60% of its GDP Russia can legally force it to default. 

Current projections show that Ukraine could stay below the 60% cutoff through 2014. Maybe. The margin of error, however, is relatively small and some combination of weaker growth, a weaker Hryvnia, and a bigger deficit could easily push it past the limit. Given the relentlessly negative trajectory of the entire Ukrainian economy and the fact that virtually every forecast has had to be adjusted downwards, it seems like a safe bet that things will end up worse than the initial projections and that Ukraine’s debts will in fact head perilously close to that 60% limit. Given Russia’s extraordinary aggressiveness on every other front, it’s basically impossible to imagine that the Kremlin won’t use the debt lever to the fullest extent possible.

The same sort of assessment, more from a geopolitical perspective than an economic one, is quoted from a beltway think tank analyst in a story today by David Herszenhorn, "Away From Show of Diplomacy in Geneva, Putin Puts On a Show of His Own":

Mr. Putin’s view that the West has lied to Russia and humiliated him on numerous occasions, including its plans for Libya, explain why he will continue to talk — and act — tough on Ukraine even as he takes diplomatic steps toward resolving the crisis, said Samuel Charap, the senior fellow for Russia and Eurasia at the International Institute for Strategic Studies, a research organization in Washington. 

“They are going to keep the boots on Ukraine’s throat until they are 100 percent convinced that they have gotten what they wanted,” Mr. Charap said in an interview. “They believe that if they completely pulled back from the pressure they are applying, tomorrow the West would swoop in and try to steal Ukraine away again.”

Mr. Putin’s willingness to challenge the West aggressively also reflects his relatively strong position — militarily in post-Soviet space, and politically on the domestic front. “He’s at the top of his game,” Mr. Charap said. “In terms of the situation on the ground and Ukraine’s future, they have the upper hand.” He added, “There’s a sense you get watching him of someone who has an 80 percent approval rating and has been supported by the people he cares about most.”

So all in all the talks in Geneva yesterday and the statement that was generated mean very little. Some clock will be burned, some talking points generated, the upcoming debate that will erupt when neither Right Sector nor the People's Republic of Donetsk fade away will have a frame of reference. That is about it.

U.S. Support of Ukraine Putsch Payback for Syria?

As tens of thousands of Russian troops mass on Ukraine's border and secessionist unrest flares in the Russian-majority Crimea, now is a good time to stand back and consider the possibility that this ham-handed putsch, almost one-week old and rapidly fraying, that was implemented with fulsome U.S. support, is part of an effort to punish Russia for its defense of Syria, in general, and its "checkmate" of the Obama administration's rush to Tomahawk Damascus last summer, in particular.

Toward that end, allow me to quote a piece -- "Was the Ukraine Coup America’s Main Event at the Sochi Olympics?" -- written by Peter Lee that appeared yesterday on the Counterpunch web site:

[A]n alternate possibility is that the United States did it [back the putsch] for revenge, to punish Putin for not going along with the US program on Syria. 

That’s not great because, if so, the decision might have been made out of short-sighted spite, and the West might have taken sole custody of the Ukrainian tar baby just as its finances are teetering to collapse and the split between eastern and western Ukrainians threatens to turn into a permanent rift. 

It would be…ironic! There’s that word again!—if punishing Putin over Syria turned Ukraine into another Syria. 

I don’t think this revenge scenario is too outlandish. President Obama seems to be a man who likes his revenge served cold—icy cold—and maybe underneath that controlled façade he was itching to show Putin that Russia could not lightly defy US demands to withdraw support from Assad and collapse the Syrian government. I believe personal disdain and the need to assert his credentials as world’s numero uno big boss drives President Obama’s foreign policy with regard to Putin, with the Chinese leadership (ever since he was subjected to a finger-wagging tirade by China’s chief climate negotiator for America’s botched outing at the Copenhagen summit in 2010), and of course, his counterproductive crusade—now in its third dismal year with a promise of further escalation– to destroy Syria and further destabilize the Middle East in order to punish Bashar Assad for refusing to go when Obama told him to go. 

One hopes that twelve-dimensional chess is guiding US moves in the Ukraine. But if that policy is in the hands of a crude neo-con like “Fuck the EU” Victoria Nuland, maybe we’re looking at another one of those “nobody could have foreseen” bloody foreign policy botches that the US seems to specialize in nowadays. 

And Putin might have the last laugh, withholding Russia’s promised contribution of $15 billion while the EU scrambles to come up with the $30 billion Ukraine needs to get through the year (amazingly, the US has to date made no commitment to provide financial aid, something the EU is probably noticing; and thinking Thanks a Billion! Not! Vicky Nuland, since the aggressive US strategy blew up the transitional government negotiated by the EU that might have kept Russia in the game and on the hook).

With the putsch parliament clearing its choices for an interim government in a faux-Occupy consensus charade on the Maidan, the machinery is clunking into place to accept an IMF bailout along with its destabilizing, dehumanizing grab bag of austerity mandates.

The IMF needs the fiction of a "legal" government in place in order to begin negotiations on terms of the bailout. Yanukovych, now apparently in Russia, made a statement denying the legality of his removal. The U.S./EU, based on statements made yesterday by John Kerry, is standing behind the putschists.

Regardless of the legality of the yet-to-be seated interim government, and assuming that Russia does not intervene militarily to protect Russian-speaking Ukrainians, whose language is no longer officially recognized by the putsch parliament, the one insurmountable roadblock for the putschists is the IMF bailout.

This is from a story today by Annie Lowrey and Michael Gordon, "Policy Makers Devise Plans to Provide Money to Kiev":

Policy makers are already hotly debating a rescue package for Ukraine, with conversations about the economy dominating discussions on the sidelines of the Group of 20 meeting of economic officials in Sydney. 

The country’s finances are now “on the verge of collapse,” the Washington-based Institute of International Finance, which represents major banks around the world, warned in a report released this week.

“With the authorities mostly preoccupied with handling the political upheaval, economic policies have remained in limbo,” said Ondrej Schneider and Lubomir Mitov of the finance institute. “Risks of prolonged political uncertainty still remain substantial, however, raising odds of delays in implementing reforms with potentially disastrous consequences for financial stability and growth.”

***

“We will be ready to engage, ready to help,” Ms. Lagarde said this weekend. “We, of course, try to go further and play the catalytic role that the I.M.F. typically plays in such situations.” 

The I.M.F. is expected to insist that Ukraine raise domestic gas prices, cut government spending, tackle corruption and allow the country’s currency to float on the international markets.

What the IMF will catalyze is more street protests. But this time dopey Yanukovych will not be the target; it will be the putschists themselves. Then the reviled police or the Right Sector "self-defense" forces will be mustered to beat down the crowds in the Maidan. And this time there will be no complaints from John Kerry or William Hague about the rights of peaceful protesters.

Hard Times Ahead for Ukraine's Putsch

Things are only going to get worse in Ukraine. As long as the story stays focused on the predations of the disgraced President Viktor Yanukovych, who is currently on the run from the putschists, the depressing reality of the country post-putsch can remain somewhat obscured to both the casual news consumer in the West and the Ukrainian citizen enjoying a revolutionary high.

But as Hegel once remarked, "What is real is rational, and what is rational is real," or something along those lines. While the Gray Lady dutifully does her part as a member of the United States foreign affairs team, posting video of Ukrainians gape-mouthed wandering the grounds of Yanukovych's presidential palace, as well as soaring images of the victorious protesters massed on the Maidan, the truth finds its way to the surface in the reports filed by her staff.

Take for instance today's effective hit piece by Andrew Higgins, "An Unfinished Ukraine Palace and a Fugitive Leader’s Folly"; effective because it keeps the narrative squarely focused where the U.S./EU wants it, not on the machinations of the putsch government but on the illegal greed and corruption of President Yanukovych (who, by Western druthers, is to be considered a present-day Nicolae Ceaușescu).

Higgins describes workers walking off the construction site of a mansion Yanukovych was building for himself in an old-growth forest along the Crimean coast. Who can defend a plutocrat who illegally erects yet another mansion for himself, this time in an old-growth forest that had been used by regular folks as a place to hike? Certainly not your average reader of the New York Times.

But like many a reporter under the Gray Lady's yoke (for example, Beirut bureau chief, Anne Barnard), Higgins finds a way to subvert the narrative (venal, Ceaușescu-like despot as the personification of evil) at the story's end:

“Why does he need a palace every few kilometers? He thought he was a czar,” said Mr. Pilti, who was in Kiev on business during Saturday’s takeover by protesters and was staggered to see the size of Mr. Yanukovych’s captured spread outside the capital. 

Sergei, the contractor, said he did not like the new government in Kiev at all but was “still happy about what has happened — it had to happen sooner or later.” Ukraine, he added, desperately needs a more open system so the people can clearly know what is going on when a valued public forest suddenly gets fenced off and cut down to make way for a private mansion. 

His chief quarrel with Mr. Yanukovych’s opponents, he added, is not that they ousted a good leader, but that they, too, are deeply corrupt and will soon be building villas of their own if they manage to hang on to power. 

“Everyone knew what was happening here,” he said, gesturing at the concrete extravaganza he helped to build, “but they didn’t say anything because they were doing the same thing, only smaller.”

"Why does he need a palace every few kilometers?" is of course a question those of us who reside in "The greatest nation on Earth"™ ask ourselves. You see, we have oligarchs of our own.

And this is what will be the undoing of the putsch: getting rid of Yanukovych is not going to rid the country of its predatory oligarchs; aligning itself with the U.S./EU will not reopen shuttered hospitals and put the unemployed back to work and lessen corruption.

First off, member states of the European Union are loath to float a financial rescue because of prevalence of corruption in Ukraine regardless of party. This is from a story today by Steven Erlanger and David Herzsenhorn, "Tentatively, European Union Weighs Its Options on Support for a New Ukraine":

The European Investment Bank can also help with quick money but, Mr. Rehn [European Commissioner for Economic and Monetary Affairs and the Euro] noted, “E.U. resources lie predominantly with member states” — hence the idea of a donors’ conference. But there is little obvious enthusiasm among member states, many of them still in recession or just emerging from it, to pump large amounts of money into an unreformed Ukraine that has been famous for crony capitalism and corruption. 

Poland, for example, which has been a key interlocutor on Ukraine, has said that it wants to see significant structural change in the country first. On Monday, Prime Minister Donald Tusk said that a stable Ukraine was in Poland’s interest. As for foreign aid, he said, “Poland will not sweat its guts out.” 

Ukraine needs to show that it can absorb foreign aid and not waste it, Mr. Tusk said. “It cannot be that we will organize huge funds for Ukraine and Ukraine will continue to waste this money by, for example, corrupt governments or oligarchs,” he said.

Ukraine needs $35 billion to keep from going bankrupt. Since the money is not likely to come from the EU, this means that the bailout has to come from the International Monetary Fund. And we know what that means. Brutal austerity. Hence the delay by the putsch parliament in forming an interim government. No one wants to sign off on IMF austerity because he/she will be ending his/her political career. Rada members are attempting to avoid this outcome by making it appear that they are consulting the EuroMaidan protesters and getting their consent. This is from an illuminating piece by David Herzsenhorn, "Infighting Poses Hurdle to Formation of New Coalition in Ukraine":

“This government will be legitimate not when it is voted in the Parliament but when it receives support of the people who stood on Maidan,” said Arseniy P. Yatsenyuk, a lawmaker in the party Fatherland who is a leading contender to serve as acting prime minister. 

Mr. Yatsenyuk also pleaded with colleagues to end their infighting and swiftly reach an agreement on the designation of an interim government, which is needed to formally request emergency economic assistance from the International Monetary Fund. 

“The deadline is Thursday,” he told reporters outside the Parliament chamber. “This government will face tremendous challenge. And we have to say absolutely openly that those who go into this government are rescuing the country on one hand, but on the other hand they should be aware that they are committing political suicide.”

Originally, the agreement brokered with Yanukovych last Friday by France, Germany and Poland would have avoided all this. Yanukovych would have appointed a new, "technical government" to oversee the U.S./EU/IMF austerity mandates. After this, Yanukovych's political career would have been terminated. Not to worry though, he would have had that mansion in the old-growth forest on the Crimean coast in which to comfortably enjoy his retirement. But this was upended by the putsch, a foolish move. Now the putschists are on the hook for the onrushing austerity.

Russia still holds all the cards. Russia is Ukraine's largest trading partner and supplies the country with its fuel. Russia's bear claws are resting on Ukraine's jugular. Additionally, Europe has to remain respectful of Russian interests since Germany receives a significant amount of natural gas from Gazprom.