13 4 / 2014

First came the uprising against Viktor Yanukovych with an attempted crackdown, followed by the Russian takeover of Crimea. 

Now, a civil war looms in the eastern regions of Ukraine, with a possible Russian involvement while western nations are desperately trying to figure out what to do about it all. 

Acting Ukrainian President Oleksandr Turchynov has just announced a full-scale military operation in the east after pro-Russian militants again seized government buildings there. 

Clearly, the new government in Kiev is in no mood to allow a repetition of what happened in Crimea in March when pro-Russian “defense units” suddenly appeared on the peninsula and the local assembly voted to join Russia, a request Moscow quickly obliged. 

As before, NATO has voiced ‘concern’ and the US ambassador to the UN, Samantha Power,  said the attacks this weekend bore the "tell-tale signs of Moscow’s involvement." 

Not surprisingly, the Kremlin denies any involvement in the current events in eastern Ukraine.

All of this is potentially very dangerous if Kiev goes ahead and tries to remove the pro-Russian militants in eastern Ukraine by force. How will Moscow react if ethnic Russians are gunned down by Ukrainian government troops?

What will NATO countries do if Putin sends his troops across the border to aid the pro-Russian rebellion? An estimated 40,000 Russian troops have been amassed along the Ukrainian border already.

Even if both NATO and Russia avoid direct military intervention, it could get pretty ugly if the violence continues, one Ukrainian officer has already been killed in a gun battle with pro-Russian militants. 

The West will now intensify the diplomatic efforts but there still aren’t a lot of viable options.

US Vice-President Joe Biden is scheduled to visit Ukraine next week to discuss the latest developments. In the meantime, US Secretary of State John Kerry keeps calling his Russian counterpart Sergei Lavrov. So far, those phone calls have not resulted in a de-escalation of the crisis.

29 3 / 2014

China’s President Xi Jinping is currently visiting Europe and he could not have come at a more propitious time. With all the attention on Russia’s unacceptable behavior in Ukraine, Xi should have no trouble presenting his country as an invaluable trading partner, despite the obligatory criticism of China’s human rights record.

Ahead of his arrival in Berlin on Friday, the Chinese leader expressed his hope for even better economic ties with Germany, which is already Beijing’s most important trading partner in Europe.

In an op-ed in the Frankfurter Allgemeine Zeitung, Xi described Chinese-German cooperation as the “common advance of two countries which each achieved their own economic miracle.”

Clearly, there are opportunities here for China in a European Union that won’t be happy with Vladimir Putin for quite some time, assuming that Russia will not reverse its decision to annex Crimea.

Germany, the ‘motor’ of the EU economy, certainly seems to be looking for new partners in the energy sector. On Thursday, Chancellor Angela Merkel told Canada’s prime minister Stephen Harper that Germany is rethinking its dependency on Russian natural gas.  

But getting that natural gas from North America is fraught with problems and China won’t be any help, either. Quite the opposite: Russia will now be trying to sell its crude, fuels and gas-based industrial feedstock to the People’s Republic in the east, if the west starts to boycott Moscow. 

And if Beijing starts buying it, the US and the EU won’t be happy about it. But still, as long as Putin is in the doghouse over Crimea, the West will be more inclined than before to do business with China. Good thing then that Xi Jinping brought a 200-strong economic delegation on his Europe trip.

17 3 / 2014

Looks like the crisis in Eastern Europe triggered by the ouster of Ukraine’s Viktor Yanukovych won’t go away any time soon. 

On Monday, the United States and the European Union announced travel bans and asset freezes against a number of Russian and Ukrainian officials. 

It’s a fairly mild response so far, following Sunday’s referendum in Crimea, in which a large majority supposedly voted for leaving Ukraine to join Russia. Pro-Russian forces have been in control of Crimea since late February.

A quick recap: Russia’s leader Vladimir Putin had hoped to keep what he clearly views as EU encroachment in his sphere of influence at bay by making Yanukovych cancel an association agreement with the European Union last year.  

However, that move angered so many Ukrainians that they came to demonstrate in arctic temperatures for weeks on Independence Square in Kiev. When Yanukovych finally sent in his security forces to stop the protests last month, he himself was voted out by the Ukrainian parliament, a move Russia immediately denounced as an “illegal coup.”

Suddenly, the Ukrainian revolution became a direct conflict between Putin’s Russia and the new government in Kiev over the strategically important Crimean peninsula. 

Moscow simply will not accept losing the home of its Black Sea fleet to a pro-western Ukraine which might join NATO and the European Union in the long run. 

Could it come to war over this? 

Unlikely: Ukraine has no realistic military options against Russia and will have to accept whatever annexation Moscow is going to impose, especially, in the absence of western military intervention. 

And there is no real prospect of that, despite the loud protests of the European Union and the United States. 

The US cannot go to war with a nuclear power over this and just got out of two very long and unpopular wars in Iraq and Afghanistan. 

There is certainly no popular support for military action against Russia in the European Union and no desire to return to the bad old days of the Cold War, either.

Peter Baker was right when he concluded in a recent op-ed piece that “ finding powerful levers to influence Mr. Putin’s decision-making will be a challenge for Mr. Obama and the European allies.” 

German chancellor Angela Merkel has warned the crisis would cause “massive damage to Russia, economically and politically.”

Economic sanctions would come at a high price for everybody, though: “Russia exported $ 160 billion worth of crude, fuels, and gas-based industrial feedstocks to Europe and the US in 2012.” 

Shutting that off would harm the Russian economy but also be fairly unpleasant for European energy consumers in particular.

Germany’s position is especially delicate here, Berlin’s influence over EU decisions is stronger than ever before, at the same time Russia is supplying a large chunk of Germany’s energy needs, so don’t expect too much here. 

It is feared that Russian counter-sanctions could cost the German economy “upwards of 300,000 jobs.”

We’ll soon find out how serious the US and Europe are about punishing Moscow, at least economically: If Russia is suspended from the G-8 group of leading industrialized nations, the June summit scheduled to take place in Sochi, Russia could be moved to London instead. 

That at least would be a fairly strong signal, and the summit would have a new item on the agenda: the impact of sanctions against Russia on the global economy. 

23 2 / 2014

It’s been an incredible week in Kiev. After the government of President Viktor Yanukovych tried to end the protests on Independence Square by force starting Tuesday, the week culminated with the Ukrainian parliament voting to dismiss Yanukovych and appointing an interim president on Sunday. 

The whereabouts of Yanukovych, who described parliament’s decision as a “coup,” are still unclear at this point.

For now, the revolution has won. 

That victory came at enormous cost: more than 80 people (mostly protesters) died in the running battles with the security forces. 

And it might not be quite over yet: after her release from jail, former prime minister Yulia Tymoshenko urged the crowd on Independence Square to stay put and continue with the protest.

Interim president Oleksandr Turchynov, who is a close associate of Tymoshenko, called forming a unity government a “priority task.”

"We don’t have much time," one of the opposition leaders, former world champion boxer Vitaly Klitschko, said as parliament began its debate.

The White House said the US was keen to see Ukraine build a new government and hold early elections, and it welcomed Tymoshenko’s release. 

But there’s wariness in western capitals, too. Britain’s foreign secretary William Hague warned of “many dangers” with Russia’s reaction still “uncertain.” 

Tymoshenko already had a phone call with German chancellor Angela Merkel who reportedly admonished her to make serious efforts to include people in the eastern part of Ukraine, the pro-Russian power base of ousted President Yanukovych. 

Much will depend on what the international sponsors of the political opponents in Ukraine will do now. Many observers see Ukraine as being caught in a kind of modern version of the “Great Game” in which Vladimir Putin wants to make Russia a global economic player, rivaling the US, China, and the European Union.

Not too long ago, it looked like Putin had stopped any eastern expansion of the EU into Ukraine for the time being by making Yanukovych renege on an association treaty with Brussels. 

But that move triggered the mass protests that now seem to have caused the downfall of Putin’s ally.

Whether Ukraine can stabilize will become clearer after the next election which now could take place in May. 

It’s all happened before: in 2004 Yanukovych was forced out by the Orange Revolution, only to return as prime minister in 2006 and to be elected president in 2010.

09 2 / 2014

Swiss voters narrowly backed a referendum proposal on Sunday to bring back strict quotas for immigration from European Union countries.

Final results showed 50.3% voted in favor. The vote invalidates the Swiss-EU agreement on freedom of movement.

Fiercely independent Switzerland is not a member of the EU, but has adopted large sections of EU policy.

The editorial in the Neue Zürcher Zeitung calls the vote a “turning point for Switzerland.”

“What the result means for the relationship between Switzerland and the European Union is yet to be determined but it seems certain that it won’t be good  for the Swiss economy and thus for the prosperity of the Swiss,” writes Markus Spillmann in the Swiss daily.

The German neighbors are concerned, too.

“The leaders of the [Swiss] government and economy will have their hands full to contain the negative consequences of the vote against “mass immigration” for the collaboration with the EU,” writes Jürgen Dunsch in the German daily Frankfurter Allgemeine Zeitung.

German Finance Minister Wolfgang Schäuble said the vote would cause “a host of difficulties for Switzerland”.

France’s Foreign Minister Laurent Fabius described the outcome of the Swiss referendum as “bad news” and said France would “review its relationship with Switzerland.

The European Commission also voiced regret and said it would now “examine the implications of this initiative on EU-Swiss relations as a whole.

The United Kingdom has also seen a lively debate about immigration lately and, predictably, the Swiss vote was “hailed as significant victory by the UK Independence Party, which said it showed how countries with concerns over immigration could stand up to “bullying” from Brussels,” as the British Telegraph reports.

France’s right wing National Front, expected to do well in France in the European elections in May, also congratulated the Swiss voters on the result. Similar anti-immigrant parties are popular in the Netherlands, Austria and Scandinavia.

Many people in Switzerland and elsewhere went on social media to voice their frustration with the Swiss referendum: