Now’s the time to shake hands with Vladimir Putin

By Tony Brenton

Russia’s president is here to stay and his weakened country is looking to do a deal

For a man whose country is reportedly on the economic rocks, President Putin looked remarkably confident at his annual press conference yesterday. These conferences have become a high point of the Russian political year. Putin, without notes, fields unscripted questions from more than a thousand journalists. This year, inevitably, the major issues were the economy and Ukraine. On the economy, he acknowledged problems caused by the collapse in the oil price but claimed that Russia would adjust within two years. On Ukraine, he was uncompromising. Russia’s actions were legitimate. Sanctions were wrong. The West wanted to “chain and defang” the bear, but would never be able to do so.

A brave performance. But in a week where the value of the rouble has oscillated by more than 30 per cent, how justified by the facts? To what extent were we looking at a sort of reincarnation of “Comical Ali” – the Iraqi information minister who continued to proclaim ultimate victory for Saddam Hussein even as Western tanks rolled into Baghdad? The list of problems that Russia now faces is formidable, from the halving in price of its principal export commodity to the imminent tightening of both the EU and US sanctions. To what extent are the skids under Putin and his regime?

Viewing Russia From the Inside

By George Friedman

Last week I flew into Moscow, arriving at 4:30 p.m. on Dec. 8. It gets dark in Moscow around that time, and the sun doesn't rise until about 10 a.m. at this time of the year — the so-called Black Days versus White Nights. For anyone used to life closer to the equator, this is unsettling. It is the first sign that you are not only in a foreign country, which I am used to, but also in a foreign environment. Yet as we drove toward downtown Moscow, well over an hour away, the traffic, the road work, were all commonplace. Moscow has three airports, and we flew into the farthest one from downtown, Domodedovo — the primary international airport. There is endless renovation going on in Moscow, and while it holds up traffic, it indicates that prosperity continues, at least in the capital.

Our host met us and we quickly went to work getting a sense of each other and talking about the events of the day. He had spent a great deal of time in the United States and was far more familiar with the nuances of American life than I was with Russian. In that he was the perfect host, translating his country to me, always with the spin of a Russian patriot, which he surely was. We talked as we drove into Moscow, managing to dive deep into the subject.

From him, and from conversations with Russian experts on most of the regions of the world — students at the Institute of International Relations — and with a handful of what I took to be ordinary citizens (not employed by government agencies engaged in managing Russia's foreign and economic affairs), I gained a sense of Russia's concerns. The concerns are what you might expect. The emphasis and order of those concerns were not.

Russia's Moment of Crisis: Moscow Might Be Down, but Not Out

By Nikolas K. Gvosdev

Sanctions, falling oil prices and a plummeting currency will put tremendous strain on the Russian government. But to assert that Russia is on the verge of collapse seems a bit premature.

Western commentators reporting on events in Russia have a tendency to swing from one extreme to the next. Seven months ago, when oil prices were high and the Kremlin had seemingly amputated Crimea off from Ukraine without firing a shot, the narrative was about an unstoppable Vladimir Putin who would soon be overrunning all Eastern and Central Europe. Today, he is being placed on deathwatch, with prognosticators speculating about precisely when the Russian economy will collapse and Putin will be overthrown. With the precipitous fall in the value of the ruble—something a major interest-rate hike by the Russian Central Bank seemed unable to reverse—some pundits are even crowing that the Ukrainian hryvnia is doing better than the Russian currency.

It helps to step back and put the larger picture in perspective. The hryvnia is the currency of a country facing a major contraction in its GDP and on the verge of bankruptcy; investors are gambling that beyond the $27 billion aid package from the International Monetary Fund, the European Union and the United States will fund an additional $15 billion bailout. Ukraine's energy supply is also quite tenuous, depending on a fragile agreement brokered with the Kremlin and conditional upon prepayment for supplies. Take out any of these factors from the equation and the hryvnia looks much less attractive as a bet.

The collapse in global energy prices, the impact of Western sanctions and the free fall in the ruble's value are all quite serious economic problems for Russia. They will put tremendous strain on the Russian government and may even force radical revisions in some policies. But to assert that Russia is on the verge of collapse seems a bit premature. Moreover, Putin believes that he can ride out the short-term turbulence without having to make serious concessions to the West.

5 reasons you should care about Russia’s falling ruble

By Michael Birnbaum

Russia’s ruble was tanking on Tuesday faster than journalists could type, hitting levels against the dollar that were unimaginable even a week ago.

1)      So why should I care about a weak ruble?

Russia’s plummeting ruble is swiftly upturning the nation’s broader economy and threatening instability in a major world economy. When Russia defaulted in 1998, it helped set off a global financial crisis that caught fire in many emerging markets. So far, Russia’s problems are mainly confined to home. But that could change, and neighbors that are closely connected to Russia such as Belarus and Kazakhstan are already worrying. A weaker ruble makes it harder for Russian businesses to repay any dollars or euros they borrowed. Some businesses might not be able to pay anything back at all.

2)      What does this mean for Putin?

It’s unclear, although a plunging ruble certainly isn’t good for him. Russians have weathered worse – in 1998, many people’s life savings were wiped out.

Interview with Dmitry Peskov

TNI Editor Jacob Heilbrunn spoke with Dmitry Peskov, a deputy chief of staff and the press spokesperson for Russian president Vladimir Putin.

Editor’s Note: Dmitry Peskov is a deputy chief of staff and the press spokesperson for Russian president Vladimir Putin. He spoke with TNI’s editor Jacob Heilbrunn about U.S.-Russian relations.

Heilbrunn: There are two views in America about relations with Russia. One is that we should try and reach a mutual accommodation and the other is that we need to pursue a more hostile containment policy. Do you believe that there is a mutual solution that can be found in Ukraine that could improve U.S.-Russian relations?

Peskov: Neither Moscow nor Washington can solve the problem of Ukraine, and neither Washington nor Moscow are part of the conflict. This is a conflict inside Ukraine, and it can be fought only by Ukrainians. We do not hide, and we are not trying to hide, our unwillingness to understand attempts by Washington to recognize and to facilitate the takeover that took place in Kiev.

We sincerely cannot understand why Washington was supporting those who took part in that takeover, in that coup, to get rid of the legal president of that country, and why Washington was very proud to acknowledge an illegitimate transfer of power that occurred in Kiev after the takeover. And we were sure that that takeover was the main reason for the whole mess that we witness now in Ukraine.

At the same time, I said previously that Russia in no way can be treated as a part of the conflict. Russia cannot make an order to those people in Donetsk, in Lugansk, saying that you should do that or you should do this. The understanding can be reached only between Kiev and those people, and the understanding can be reached only through dialogue. Unless we see a dialogue, we cannot hope for a really long-lasting solution. These days the only thing that we can do is to help them to ensure a sustainable situation in the region in order to make civilian populations safe from shelling by artillery. This will take huge efforts from all of us in order to rebuild mutual confidence. Now it’s very hard to expect that they would trust each other in terms of implementing conditions of an agreement, and we see how complicated the way is with implementing the conditions of the Minsk agreement.

Russia-NK Opening Sends Message to Region

By Dmitri Trenin

The recent visit to Russia by a special representative of North Korean leader Kim Jong-un has highlighted Moscow's new opening to Pyongyang. It comes after other visits and meetings between Russians and North Koreans that have become more frequent of late. 

Evidently, Russia is bidding to play a more active role on the Korean Peninsula and in Northeast Asia as a whole. By reactivating its policy on Pyongyang, Moscow is sending messages to Seoul, Tokyo, Washington and Beijing. These should be properly understood.

The message to Seoul is that Moscow has regained a bit of influence in the North, which it can use in dealing with the South. This can refer both to stability-building economic projects, such as the proposed Trans-Korean gas pipeline and the rail link, and to security concerns such as the nuclear issue and the military standoff across the Demilitarized Zone.

Clearly, Moscow expects Seoul to stay away from the US-led sanctions drive against Russia. The Kremlin regards the sanctions as a means of war, and considers the sanctioning countries as unfriendly.

New York Times Exposed: Finally the Truth about Ukraine and Putin

By Patrick Smith (Salon.com)

After a prolonged propaganda campaign, a rare breath of fresh air from The Washington Post, Foreign Policy and Henry Kissinger

Well, well, well. Gloating is unseemly, especially in public, but give me this one, will you?

It has been a long and lonely winter defending the true version of events in Ukraine, but here comes the sun.

We now have open acknowledgment in high places that Washington is indeed responsible for this mess, the prime mover, the “aggressor,” and finally this term is applied where it belongs. NATO, once again, is revealed as causing vastly more trouble than it has ever prevented.

Washington, it is now openly stated, has been wrong, wrong, wrong all along.

The commentaries to be noted do not take on the media, but I will, and in language I use advisedly. With a few exceptions they are proven liars, liars, liars — not only conveying the official version of events but willfully elaborating on it off their own bats.

Memo to the New York Times’ Moscow bureau: Vicky Nuland, infamous now for desiring sex with the European Union, has just FedExed little gold stars you can affix to your foreheads, one for each of you.

Sad but true

Why Putin Is Winning The New Cold War?

By Rakesh Krishnan Simha

The US wants to bring Russia down but it can’t get past Vladimir Putin

There are 7.2 billion people on this planet but the United States fears only one man — Vladimir Putin. That’s because on virtually every front of the new Cold War, the Russian president is walloping the collective challenge of the West. Fear can make you do strange things — for the second year running, Forbes magazine has named Putin as the world’s most powerful person.

It is said about the Russians that they take a long time to saddle their horses, but they ride awfully fast. After patiently nursing the collapsed Russian economy back to health from 1999 to 2007, Putin started pushing back against the western encirclement of his country. In Syria, Crimea and Ukraine, the West has faced humiliating setbacks and melted away at his approach. In the high-stakes game of energy, it will be Russian — not western — pipelines that will dominate the Eurasian landmass.

But instead of scorekeeping, a more instructive exercise would be to try and understand how Putin has managed to keep Russia ahead in the game.

More than any other leader, the Russian president by virtue of his KGB experience understands how the US operates. The American modus operandi — in sync with the British — is to organise coups, rebellions and counter-revolutions in countries where nationalist leaders come to power. Iran, Chile, Ecuador, Venezuela, Panama and Ukraine are the classic examples.

Bottoming Out in Europe

By Andrew A. Michta

Europe is mired in deep denial about the historical currents driving Russia’s actions in Ukraine.

Europe’s policy towards Ukraine is in disarray, and nowhere is this more apparent than in the growing divergence of priorities among key European players, and of late the deepening polarization within Germany’s coalition government over how to deal with Russia. The deadlock is fundamentally this: a political solution to the Russian-Ukrainian war, short of just conceding Russia a sphere of influence in Eastern Europe, has been exhausted. Few among Europe’s leadership elite are inclined to draw the obvious conclusions from the events following the failed Eastern Partnership summit in Vilnius in 2013. Instead, Europe clings to the notion that somehow there is a fix out there; the reality that it confronts in Russia a revanchist state bent on a revisionist project is too difficult to accept. And thus Europe continues to believe that—notwithstanding the stern denunciations leveled at Putin, most recently in Brisbane—the only path forward is to try harder.

Germany, one country with the ability to take the lead, is deadlocked over intra-governmental differences on policy and continues to cycle through old mantras, as when Chancellor Merkel condemned “spheres of influence” thinking at the last G20 summit. With persistence worthy of a better cause, Europe continues to drift into collective Micawberism, hoping that somehow a political solution that doesn’t amount to all-out surrender on Ukraine will just turn up. The harsh truth is that it won’t; it’s time either to develop a real comprehensive strategy to contain Russia, or to stop pretending there is already such a strategy in place.

How Russia outmanoeuvred the west in Ukrainian finance

By John Dizard

“F*** the EU!”
Victoria Nuland, US assistant secretary of state, commenting on Ukrainian
policy on her mobile phone, as recorded and publicly distributed by the Russian
special services in February 2014

“Treason is a matter of dates.”
Attributed to Prince Charles Maurice
de Talleyrand-Perigord, drawing up European borders at the Congress of Vienna, 1815

The quality of US representation in eastern Europe seems to have declined, sadly, since the days of George Kennan and George Marshall in the 1940s and 1950s. European diplomacy, though, appears to have maintained the tradition of ethical flexibility that Prince Talleyrand embodied.
Whatever your opinion of the morality of Russia’s intervention in Ukraine, or whether the Putin government’s larger strategy will have more gains than losses for the Russian state, there is no doubt the Russians have tactically outmanoeuvred the US and Europe in the financial markets. I am told the Pentagon is already studying Russia’s financial market moves in Ukraine to see how similar tactics might be used in future military crises.