Results tagged “europe”

I just couldn't resist the alliteration temptation. What we're looking at here is the broader directions that should result from next week's Obama-Medvedev powwow.

Former U.S. National Security Adviser Zbigniew Brzezinski offers a three-pronged strategy in the Financial Times for President Obama when he travels to Moscow next week. In the July/August issue of Foreign Affairs, Robert Legvold offers a template for improving US-Russia relations in general. Since this is a blog, and not a newspaper or brick-sized bi-monthly periodical, I'm going to re-engineer the formats of these two articles into what should be an easy reference in the future for those not willing to plow through a 6,000-word appeal to the Obama Administration to redesign relations with Russia NOW. First, Brzezinski:

Remember this number

Grigory Pasko, journalist

Если Вы хотите прочитать оригинал данной статьи на русском языке, нажмите сюда.

I recently had the pleasure of participating in a screening of my short documentary film on the Nord Stream pipeline project in the cinema hall of the Berlin historical museum.  Our modest event was graced with some impressive attendees: Nord Stream AG Jens Müller (who heads up their public relations), Neel Strøbæk of Rambol (the group which carried out the environment assessment report in accordance with the Espoo Convention); Tobias Münchmeyer of Greenpeace, Bundestag Deputy Rainder Steenblock and around 70 audience members. A discussion took place after the showing of the film.

I can't help but notice a pattern of multiplicity taking place.  When we first showed the film inside the Swedish Parliament, just one Nord Stream representative showed up.  When we were invited for a screening in the Finnish Parliament, there were two waiting there for us.  And finally, when we came to Berlin, there was a foursome.  Logically, I suppose we can expect eight Nord Streamers to come to the next showing.

A friend of mine sharply rebuked me the other day for not writing enough on my blog.  While I can assure you all I haven't exactly been napping in the recliner, I will do my best to start picking up the slack while still juggling my legal workload (which lately consists several sharp knives, a hot potato, a bowling ball, and a nuclear warhead - let's hope I don't drop anything).  To begin with, why not revisit one of my favorite subjects:  the murky machinations of Gazprom-related business in Hungary, where the goulash state corporatism and Russia's most cheerful barracks live on despite the ravages of the economic crisis.  Although much of this story is background for the initiated, there is some wild news about Emfesz uncovered by Roman Kupchinsky that merits discussion.

The last few times I have checked in on this story, we've seen the Austrian company OMV backstab the Hungarians (with Russian help) in an attempt to take over MOL, South Stream vs. Nabucco continued to roil Hungarian politics (while Russo-skeptic Viktor Orban's party Fidesz made big advances in the EP elections), and lastly the tricksters behind the much maligned RosUkrEnergo trading company dissolved this shadowy group only to replace it with another proxy, known as RosGas.

George Friedman of Stratfor gives some interesting and less interesting opinions on the Obama-Medvedev summit coming up next week.  Friedman believes the the "sphere of influence" question will be the central issue of the meeting, while he doesn't expect any major breakthroughs, just more cosmetic agreements.  Beware of high flying assumptions and weighty clichés (like Obama showing that he is "tough as Putin"!).

It was clear to many observers that the Canadian auto parts manufacturer Magna was acting partly as a front company Trojan horse to help get Russian state interests deep into Germany's industrial sector with the purchase of a majority stake in Opel from the bankrupt General Motors.  Although it appeared to be a done deal at first (thanks to Sberbank and the Kremlin pressing their client party, the SPD, to push the sale through), now it appears that Opel is taking in other offers - apparently GM feels that Magna/Sberbank group are using heavy-handed political leverage to influence the terms.  The outcome of this transaction will be very interesting in terms of illuminating Germany's future political and business ties to Russia.

From the Financial Times:

Magna, with which GM signed an MoU to buy 55 per cent of Opel alongside Russia's Sberbank in May, remains in a leading position to sign a definitive sale agreement. The Canadian group has the support of the Social Democratic part of Germany's government, regional governments and unions.

However, talks have hit obstacles over future access to GM's global technology, which Magna wants to secure on behalf of its Russian partners. If the sale proceeds, Magna and Sberbank plan to build Opel-based cars in Russia with Gaz, Oleg Deripaska's car company.

Some in GM feel Magna is using its political backing to press for unfair terms. GM also wants the future right to buy back some or all of the stake.

There's an interesting post over at RCW's Compass blog on the new memorandum of understanding signed between the French defense giant Thales and the Russian state arms exporter Rosonboronexport to jointly manufacture and sell arms to third parties, beginning with a focus on naval applications.

It should be noted that an international industrial group Thales is one of the world's leading manufacturers of defense products. In 2008, according to the Stockholm International Peace Research Institute, the company delivered its products to customers in the amount of more than $9.3 billion, taking tenth place among other top defense corporations in sales volume. Memo to Pentagon: Thales also actively participates in supplying technology and products to NATO countries, so how exactly will its cooperation with Moscow affect French military relationship with Washington? Especially given how much Russia and US compete on the global arms market? Anyone?

Yevgeny Bendersky goes on to note that it is possible that the French could help the Russians rescue a long dormant project to build the "Belgorod" - by far the largest submarine in the world.

With all of Silvio Berlusconi's torrid scandals in recent weeks, one may expect the colorful prime minister to hold some regrets and seek national reconciliation, while asking the country to put the past behind them.  Here's a quote from the AP:

"We want to forget (the past) and resume total cooperation on all the issues on which we have decided to collaborate," Mr. Berlusconi told journalists on his arrival at the meeting. 

But no, Berlusconi wasn't talking about Italian politics or his allegedly high-priced houseguests.  He was talking about the resumption of NATO-Russia diplomatic relations, which had been severed since the war last August.  The NRC Summit held in Corfu was only attended by two European heads of state - Mr. Berlusconi and Greek PM Costas Karamanlis, and while an important issue, this is just one stop on a long international road show by the Italian PM (and staunch Kremlin ally) to improve his international image.

I see that Anders Aslund from the Peterson Institute née IIE is defending Latvia's currency peg again, this time in the Moscow Times. Given the dearth of such defenders among the conventional economics wisdom crowd, and considering Russia's kabuki-like rhetoric over its own currency policy, I thought this something worth drawing attention to. Not only that, but I dare say currency peg cheerleaders are a dying breed. This is not to say that pegs are uncommon, but simply that nowadays no country is ultimately considered to be fully developed until it can float its own currency in the international foreign exchange market, somewhat like sitting for an exam without a crib sheet to consult (Hong Kong is an obvious exception, but also not technically a country).

Now, I could get all petty-nitpicky-snipey with Aslund's defense and quibble that rejecting a comparison to Russia c. 1998 and ignoring a comparison to Argentina c. 2001 while choosing to compare Latvia with Denmark and Barbados - all while contending that Latvia is a special case - is a non-sequitur, self-serving, disingenuous and lazy all wrapped up in one. Or, I could get all econo-geeky and point out that substituting the triple-whammy of wage cuts, tighter government spending and deflation for a currency devaluation is tantamount to trading six for half a dozen when faced with an asset-liability mismatch as deeply embedded as Latvia's.

But that's not what I want to do here, in part because plenty of others have already taken enough of a swat at it from an economic standpoint (and indeed, those predicting a devaluation are many: Business Monitor International, Paul Krugman, Edward Hugh, Ambrose Evans-Pritchard, Marxist theoretician Boris Kagarlitsky, and, with an Op-Ed that frankly reads as though it was penned by one of his underpaid student assistants, Nouriel Roubini). No, what I would rather do is propose the Latvia currency situation as an example of politics trumping economics.

In attempting to get somewhat closer to understanding what on earth could possibly be going on inside the head of Belarussian President Alexander Lukashenko, Europe's last dictator, RFE/RL interviews two analysts, Uladzimir Padhol and Leonid Radzikhovsky, and produces a very interesting discussion. 

RFE/RL: Lukashenka seems to enjoy acting as though he is bringing his interviewers in on a big secret -- real or imagined. "Did you know that it was thanks to me that there was no blockade of Abkhazia under [former Georgian President Eduard] Shevardnadze?" "Did you know that Russian [Finance] Minister Aleksei Kudrin's dire forecast about the Belarusian economy was meant to create panic?" Is this a tactic, or a philosophy?

Padhol: This is not only a philosophy but a self-preservation instinct as a politician. Being a supra-authoritarian dictator, he is constantly making mistakes in the course of governing. For instance, trade with Russia resulted in the construction of over 100 new dairy plants. And what's to be done with them now?

He constantly has to conceal the fact that he's the one who's the source of these mistakes. And he's constantly inventing these conspiracy theories to create a picture of the world in which he is always the infallible one, the one who made the best decisions. This secrecy thing allows him to constantly perform his "I am the best" shtick. Why's he waging such a battle with the independent media? Because they immediately expose him: "There you said one thing, here you say another."

One need not look further than today's edition of the Times of London to find the degeneration of dialogue between Georgia and Russia. I will let the quotes speak for themselves...

In an article headlined, "Vladimir Putin wants to see Mikheil Saakashvili hanged 'by the balls'", we have the following:

President Medvedev has set out the Kremlin's policy just as graphically, calling Mr Saakashvili a "political corpse" who "no longer exists in our eyes". He told Western analysts that his Georgian counterpart was "mentally unstable".

Same day, another article with the headline, "Mikheil Saakashvili says Russia started war to gain energy supplies":

"This is Georgian territory and this is bulls**t that we started war in our territory! We didn't attack Russia. We didn't go there and bomb Moscow," Mr Saakashvili told The Times. "If there are idiots who say we started the war, they are wrong."

"They want to do Checkpoint Charlie in my own country, exactly 20 years after the fall of the Berlin Wall."

And then Saakashvili again over here:

"I do not know what is playing out in Vladimir Putin's [the Russian Prime Minister's] head. I think everybody but him wants peace."

Pardon me, but I just can't help thinking about a certain exchange between two other adversaries of years past:

I would be very interested to hear some reactions to this one...

Sabine Leutheusser-Schnarrenberger, a former German minister of justice and an observer at the first trial of Mikhail Khodorkovsky, has released a very important report on the politically motivated abuses of courts in members of the Council of Europe, which includes a section detailing violations in Russia. The report summarizes the extraordinary pressures placed on judges, the safety of defense attorneys, and two emblematic cases of legal nihilism:  the Yukos trials and the HSBC/Hermitage affair.  The report also contains a draft resolution and recommendations for the PACE to consider.

Philip Pan from the Washington Post has a nice write up of the news:

Der Spiegel has supposedly obtained confidential documents written by the EU team led by Ambassador Heidi Tagliavini that is investigating the war last summer. There are quite a few interesting little nuggets in Der Spiegel's write-up. Here are a few:

The confidential investigative commission documents, which SPIEGEL has obtained, show that the task of assigning blame for the conflict has been as much of a challenge for the commission members as it has for the international community. However, a majority of members tend to arrive at the assessment that Georgian President Mikhail Saakashvili started the war by attacking South Ossetia on August 7, 2008. The facts assembled on Tagliavini's desk refute Saakashvili's claim that his country became the innocent victim of "Russian aggression" on that day.

The experts found no evidence to support claims by the Georgian president, which he also mentioned in an interview with SPIEGEL, that a Russian column of 150 tanks had advanced into South Ossetia on the evening of Aug. 7. According to the commission's findings, the Russian army didn't enter South Ossetia until August 8.

But the report apparently doesn't let Russia entirely off the hook. From Hamburg-based international law expert Otto Luchterhandt, another commission member:

Georgia's attack, Luchterhandt argues, constitutes a breach of this agreement, thereby giving Russia the right to intervene. Nevertheless, he writes, the Kremlin, with its overwhelming intervention in western Georgia, can be accused of "violating the principle of proportionality."

FIRST BLOOD

Lukoil will expand Russian energy companies' push into the European market with a $725 million bid for a 45% stake in a Dutch refinery owned by France's Total.

The stake, previously owned by Dow Chemical, was slated to be purchased by US-based Valero until Total exercised its pre-emptive rights to purchase the stake and simultaneously agreed to sell the holding to Lukoil. Total will keep a 55% stake in the refinery.

The transaction coincided with President Medvedev's visit to the Netherlands.

Total officials explained the last-minute switch to Reuters:

"Russian crude oil, for which LUKOIL is one of the major suppliers, represents one of the main sources of the Vlissingen refinery," Europe's largest refiner, which retains a 55 percent stake in the plant, said in a statement.

"More broadly, this type of crude oil represents a significant portion for the supply of Total's European refineries."

George Soros is pledging $100 million to charities in the former Soviet republics, eastern Europe and the Balkans to help counteract the effects of the global recession. The money will be distributed in 20 countries based on recommendations by local Soros foundations. The charities could include anything from cultural institutions at risk of closing to helping families buy lunches in schools, according to a Soros spokesperson.

The FT, which broke the story, carries this statement from Soros:

"The political risk is very severe and the rise of the chauvinistic, xenophobic far right is a disturbing development," said Mr Soros, in a reference to the advances made by extremist parties in the recent European parliament elections, including Jobbik in Hungary, the Slovak National Party and the Greater Romania Party.

"The EU must do more in terms of providing support, including financial support. The International Monetary Fund programmes [launched in Hungary, Ukraine, Latvia and about five other countries] are very severe in terms of cutting budgets. The EU must solidify support for EU values," said Mr Soros.

The New York Times editorial board has stepped forth on Russia's veto of the U.N. resolution extending UNOMIG's presence in Abkhazia in an opinion entitled "Small Minds in the Kremlin". I'm going to do my best here to strip out the polarizing language of the opinion and boil this down to what exactly Russia sacrificed, in the opinion of the Times, by sticking to its linguistic guns in the U.N. Security Council at the beginning of this week:

• Russia's larger interest lies in calming, not stirring up, secessionist ambitions in the Caucasus, a violently fractured part of the world that includes other restive regions like Chechnya.

• Whatever hopes the Russian-backed separatists in Abkhazia might still retain for a semblance of international legitimacy vanishes with the withdrawal of the United Nations mission.

• Abkhazia secessionists will be hard pressed to calm concerns about the treatment of minority ethnic groups when they expel the only neutral monitors from their territory.

• The fact that only Russia and Nicaragua recognized the Abkhazia's independence after last summer and that Russia voted alone on Monday further isolates it from the rest of the world on this issue.

I'm going to reiterate here that these are the Times' views, I am merely the messenger. I am also the facilitator though, so here's a question: considering that this resolution was only four months old and that one of the things the United Nations does best is punt on an issue, what if language had been drafted up that agreed to temporarily continue calling the mission the "United Nations Observer Mission in Georgia" for, say, another four months, at which point the Security Council would reconvene to agree on a better name for the mission? At the very least this would have bought everyone a little more time and it must have been considered at some point. But it was not to be. This leads to the next question: Assuming that it was Russia that prevented a punt, what does Russia gain by vetoing now rather than agreeing to punt? I have my own theories on this but am withholding them for now pending more developments.

The jury apparently is in for now - a Treasury Department official says that the $134.5 billion of treasury bonds recently seized at the Swiss-Italian border are fakes. As much as I wish there was something more to this story, sadly, there is not, and I'm generally not of the mind to conjure up conspiracy theories. I do, however, remain more than open to entertaining others' conspiratorial whims, so if anyone out there has an unsubstantiated theory that has a pig's chance of actually being something close to the truth, by all means let's hear it!

I don't typically like spending a lot of time on stories that have more coverage by blogs than actual news outlets, but this one is really too juicy to pass up and it also continues our ongoing conversation about the dollar's prominence as a global reserve currency. Two men were recently stopped by Italian authorities while trying to cross the border into Switzerland with a fake-bottomed suitcase containing $134.5 billion worth of US Treasury bonds. That's right - billion with a B. Let's take just a moment to review which of the United States' various creditors even hold that much US debt. According to the latest data from the US Treasury Department, this is what we have to work with through April of this year:

China ~ $763.5 billion
Japan ~ $685.9 billion
Caribbean Banking Centers ~ $204.7 billion
OPEC ~ $189.5 billion
United Kingdom ~ $152.8 billion
Russia ~ $137 billion

Caribbean Banking Centers include Bahamas, Bermuda, the British Virgin Islands, Cayman Islands, Netherlands Antilles and Panama.

From the above list, which is the most likely to attempt smuggling undeclared $134.5 billion in treasuries across the Italian-Swiss border? Which is LEAST likely to attempt it? Got your guesses? No cheating! Answer after the jump.

Russia vetoed a U.N. resolution extending the presence of a U.N. peacekeeping mission in Abkhazia. At issue was the language used to describe the mission. Georgian leaders wanted it to continue to be called the "United Nations Observer Mission in Georgia," while Russian officials wanted the description to reflect Abkhazia's independence. Russian ambassador to the United Nations Vitaly I. Churkin had this to say to the Washington Post:

"The Sakaashvili regime put an end to the territorial integrity of his country, and on the world map two new states emerged, the Republic of Abkhazia and the Republic of South Ossetia."

Alexander Lomaia, Georgia's ambassador to the United Nations, told the New York Times:

"It is very unfortunate and alarming that the Secretariat has submitted to Russian blackmail."

Of the 15 Security Council members, the 10 who voted in favor of the resolution were Austria, Burkina Faso, Costa Rica, Croatia, Japan, Mexico, Turkey, France, the UK and the US. Abstaining were China, Libya, Uganda and Vietnam.

The fact that Matthias Warnig, the CEO of Dresdner Bank and close business associate of Gazprom in Germany, was a former agent of the East German Stasi was first revealed by the Wall Street Journal and other Germany media a few years back.  Picking up the latest exchanges over the Nord Stream pipeline politics (Steinmeier may be backing off his support for the project to prepare for elections), Roman Kupchinsky has a new piece taking another look at Warnig, including some info from his declassified Stasi file.

Warnig's career was furthered by his alleged relationship with KGB Lieutenant-Colonel Vladimir Putin in Dresden. According to German press reports, the two men were allegedly collaborating on recruiting West German citizens to work for the KGB according to Warnig's former colleagues. Warnig has denied this accusation.