How can the West solve its Ukraine problem?

By Anatol Lieven, Professor, Georgetown University's School of Foreign Service in Qatar

Russia badly overplayed its hand last year when it tried to bring Ukraine into the Eurasian Union against the passionate opposition of many Ukrainians.

The European Union is now risking the same thing by trying to bring Ukraine into the West without reference to economic reality or the willingness of European publics to bear the enormous costs involved, and at a time when the EU itself is in deepening crisis.

Russia is suffering badly as a result of Western economic sanctions - but Ukraine's situation is far worse, with a predicted fall in GDP of 7% this year.

If this decline continues, the Ukrainian state will face collapse.

Throughout the 23 years since the end of the Soviet Union, too many members of the Western media and policy worlds have ignored or misrepresented key aspects of the Ukrainian-Russian economic relationship.

This allowed them in turn to ignore crucial features of the economic balance of power in Ukraine between Russia and the West.

In their zeal to denounce Russia for putting pressure on Ukraine over gas supplies, Western commentators usually neglected to mention that, through cheap gas and lenient payment terms, Russia was in fact subsidising the Ukrainian economy to the tune of several billion dollars each year - many times the total of Western aid during this period.

This allowed the same commentators not to address the obvious question of whether Western states would be willing to pay these billions in order to take Ukraine out of Russia's sphere of influence and into that of the West.

"De-Dollarization" Deepens: Russia Buys Most Gold In Six Months, Continues Selling US Treasuries

The rumors of Russia selling its gold reserves, it is now clear, were greatly exaggerated as not only did Putin not sell, Russian gold reserves rose by their largest amount in six months in December to just over $46 billion (near the highest since April 2013). It appears all the "Russia is selling" chatter did was lower prices enabling them to gather non-fiat physical assets at a lower cost. On the other hand, there is another trend that continues for the Russians - that of reducing their exposure to US Treasury debt. For the 20th month in a row, Russia's holdings of US Treasury debt fell year-over-year - selling into the strength. 

Buying low...

Russia gold reserves jump the most in six months in December, near the highest since April 2013...

and selling high...

Lessons from Paris

By Ron Paul

After the tragic shooting at a provocative magazine in Paris last week, I pointed out that given the foreign policy positions of France we must consider blowback as a factor. Those who do not understand blowback made the ridiculous claim that I was excusing the attack or even blaming the victims. Not at all, as I abhor the initiation of force. The police are not blaming victims when they search for the motive of a criminal.

The mainstream media immediately decided that the shooting was an attack on free speech. Many in the US preferred this version of “they hate us because we are free,” which is the claim that President Bush made after 9/11. They expressed solidarity with the French and vowed to fight for free speech. But have these people not noticed that the First Amendment is routinely violated by the US government? President Obama has used the Espionage Act more than all previous administrations combined to silence and imprison whistleblowers. Where are the protests? Where are protesters demanding the release of John Kiriakou, who blew the whistle on the CIA use of waterboarding and other torture? The whistleblower went to prison while the torturers will not be prosecuted. No protests.

If Islamic extremism is on the rise, the US and French governments are at least partly to blame. The two Paris shooters had reportedly spent the summer in Syria fighting with the rebels seeking to overthrow Syrian President Assad. They were also said to have recruited young French Muslims to go to Syria and fight Assad. But France and the United States have spent nearly four years training and equipping foreign fighters to infiltrate Syria and overthrow Assad! In other words, when it comes to Syria, the two Paris killers were on “our” side. They may have even used French or US weapons while fighting in Syria.

The New York Times Explains Why Kiev Sniper Massacre Was Likely a False Flag

-Describes Yanukovich as a flabby leader whose willingness to appease his opponents demoralized his police
-Means it's not very believable he would order a massacre, or that the police would carry it out for him

By Mark Nicholas

Last Sunday The New York Times had an in-depth article on the overthrow of Yanukovich in Ukraine.

That is if you can call in-depth an article that is full of omissions. Which you can't. So let's just say it was a very LONG article.

We should still be thankful for it, however, because it reminded us of the real Yanukovich.

This was a guy who took it upon himself to negotiate an association treaty with the EU and came within inches of signing it.

Yet in the western Maidan narrative he is cast as a pro-Russian authoritarian hardliner who would rather send out police to pile up bodies of demonstrators than let Ukrainians have democracy.

In reality Yanukovich was a centrist who approximated the policies of pro-western Ukraine politicians to the point where he had lost the active support of eastern Ukraine. Moreover during the Maidan standoff he proved himself an indecisive and timid leader.

2015: The Year of the Bear? 5 Ways Russia Can Regroup

By Nikolas K. Gvosdev

Russia closed out 2014 hurt by sanctions and its economic crisis. 2015 offers hope if Moscow can limit the damage in its Western vectors, push ahead with its Eurasian dream and strengthen its Asian options.

If I were a strategist advising the Russian government on key national-security objectives for 2015 (and I am not), here would be five priorities for the year:

First, the Kremlin needs to beat back the so-called “Maidan challenge” in Ukraine. Any consolidation of a westward-leaning administration, especially one that successfully undertakes the economic and security reforms that would make it easier to contemplate closer and more meaningful relations between Ukraine and NATO and the European Union, without also guaranteeing Russian equities, remains a critical danger to Moscow’s interests. This challenge, after the Orange Revolution in 2004, was met by the implosion of the coalition that spearheaded the dramatic political shift and by its subsequent inability once in government to deliver on any substantial reforms. While former Ukrainian president Viktor Yanukovych is now a spent force and unlikely to return from his Russian exile, what is critical (from Moscow’s perspective) is that Ukrainians develop the sense—particularly in the east and central portions of the country—that, compared with current developments, his administration wasn’t that bad after all. Moreover, it will be critical to show that the promises made at Maidan were empty, and the commitments offered by Western governments will not be fulfilled.

Even with the fall in oil prices and the economic crisis now underway in Russia, Moscow still has many levers to pull in Ukraine, from its support for the separatists to its control of energy resources. There are also many fracture points in the current coalition—reformers versus business figures, nationalists versus those who are open to some sort of practical accommodation with Moscow. Some of the Maidan activists are angry at what they see as a slow pace of change and may be inclined to put pressure on the government as 2015 continues. But there is also a risk that a growing number of Ukrainians in the east who did not cast their lot in with the separatists and supported both the presidential bid of Petro Poroshenko and his party in the Rada elections will become alienated from a government that does not succeed in restoring some degree of normalcy and predictability in the country’s relations with Russia.