Thursday, October 02, 2014


The Power Vertical

Podcast: Perestroika, Putin-Style

Is Putin offering the Russian elite a new deal?
Is Putin offering the Russian elite a new deal?
Is it the winds of change, or just changing political winds?

President Vladimir Putin's campaign to compel Russian officials to repatriate their foreign-held assets represents a major change in the unwritten contract between the Kremlin leader and the broader elite.

Under the old deal, officials were allowed to line their pockets and bend the rules in exchange for unswerving loyalty. But if this is no longer the case, then what is the new deal? And what are its risks?

In the latest edition of "The Power Vertical Podcast," I discuss these issues with co-host Kirill Kobrin of RFE/RL's Russian Service and special guest Andras Toth-Czifra, a Brussels-based political-risk consultant and author of the blog "No Yardstick." 

Enjoy…
Power Vertical Podcast: Perestroika, Putin-Style
Power Vertical Podcast: Perestroika, Putin-Stylei
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Tags: Vladimir Putin,Russian elite,Power Vertical podcast

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Comments
     
by: Idrian from: Surrey, BC
March 02, 2013 02:54
It's a good thing the podcast has mentioned Limonov, even if for a short time. Would it be possible for The Power Vertical to either have a blogpost or podcast about the lesser-known figures and organisations of the Russian opposition, especially those who are not on good terms with what is headlined as 'the Russian opposition' like the abovementioned Limonov? (Other Russia, Russian Soc. Mov't, the anarchists etc)
In Response

by: plots in mahabaleshwar from: Pune
March 04, 2013 04:36
Political wind is blowing in russia.
In Response

by: La Russophobe from: USA
March 04, 2013 13:01
Not sure what you mean by not having good relations, but Limonov and Zyuganov were allowed to participate with the so-called opposition from the beginning, and that was it's biggest mistake. Thoughtful analysts realized from that one sign alone that the mainstream opposition leaders were both helplessly weak and hopelessly incompetent, and that there could be no hope that they would actually make any real change in Russia. The best proof of this has been the fact that Udaltsov, yet another hardcore wacko, has risen to a prominent place in the current "opposition" and that even Navalny can be tied to any number of very unsavory nationalist ideals.
In Response

by: Idrian from: Surrey, BC
March 05, 2013 22:19
Limonov did join up with the opposition at the beginning, but left when he realised they won't accept his plan of continuing all the way to Red Square, that's what I've heard from him. He's now in no good terms with them.

by: Eugenio from: Vienna
March 03, 2013 17:12
If there is anything in today's world that reminds me of the Gorbachev's "catastroyka", it is the process of austerity that a number of NATO member states (such as Greece, Spain, Portugal, US or Italy) are going through these days: all these societies have run out of money and have to cut spending severely, which leads to an irreversible societal collapse.

by: Escalator India from: Pune
March 04, 2013 07:24
I feel that President is doing real good work for that we have to praise him.

by: Ben
March 04, 2013 11:51
Western support of the oppozition,Magnitsky list,foreign property,bank accounts of elite are the cause of some measures of the "patriotic" style so the"`s corruption fight" have begun from the dismissal of the disliked by the militaries-Minister.Patriotic reaction on the West influence for the national unity will be the dominat.Successors` intrigue-is the Russian usual carrot.

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LIVE In this space, I will regularly comment on events in Russia, repost content and tweets I find interesting and informative, and shamelessly promote myself (and others, whose work I like). The traditional Power Vertical Blog remains for larger and more developed items. The Podcast, of course, will continue to appear every Friday. I hope you find the new Power Vertical Feed to be a useful resource and welcome your feedback. More

RBK'S LIST OF SOLDIERS KILLED IN UKRAINE

HUMAN SHIELD TACTICS IN DONETSK

PUTIN SAYS HE WON'T INTERFERE IN BASHNEFT CASE

Of course he won't. Everybody already knows how this movie is supposed to end...

AFTERNOON NEWS ROUNDUP

From RFE/RL's News Desk:

PUTIN SEEKS TO CALM INVESTORS' WORRIES OVER SANCTIONS

Russian President Vladimir Putin has told potential investors in Moscow that "unwarranted" Western sanctions won’t stop the economy from developing.

In a bid to calm investors, Putin told an investment conference on October 2 that Russia remains committed to developing an economy that is “strong, flourishing, free, and open to the world."

Prospects for foreign investors in Russia have been dampened by Western sanctions over Moscow's role in the Ukraine crisis.

Putin said Russia aims to “actively” use national currencies in trade deals with China and other countries -- implying a shift away from the U.S. dollar.

He also said Moscow doesn’t plan to introduce restrictions on cross-border capital and currency movements after a dramatic decline of the value of the ruble.

Putin also said the state is prepared to support economic sectors and companies that are being hit by sanctions.

(Based on reporting by Reuters, AFP, TASS, and Interfax)

RUSSIA LANUCHES PROBE AGAINST UKRAINIAN MILITARY LEADERSHIP

Russian authorities say they have launched an investigation against Ukraine's defense minister and other senior military officials. 

The spokesman for the Russian Investigative Committee, Vladimir Markin, announced on October 2 that Ukraine's military leadership, including Defense Minister Valeriy Heletey and General Staff chief Viktor Muzhenko, is facing genocide and war crimes charges.

On September 29, Russia accused top Ukrainian political and military leaders as well as nationalist organizations of committing "genocide" against Russian-speaking people in eastern Ukraine. 

Ukrainian authorities dismissed the accusations and opened a criminal investigation against officials of Russia's Investigative Committee.

Ukrainian forces and pro-Russian separatists have been fighting for six months in eastern Ukraine, leaving at least 3,000 people dead and causing hundreds of thousands to flee their homes.

(Based on reporting by TASS and Interfax)

PRO-RUSSIAN SEPARATISTS PUSH TO SEIZE DONETSK AIRPORT

Rebel forces in eastern Ukraine are pushing to capture the government-held airport in the city of Donetsk. 

The Ukrainian military said on October 2 that pro-Russian separatists continued an offensive begun the previous day, on "a broad front."

Army spokesman Vladyslav Seleznyov said Ukrainian forces repelled four attacks on the airport in the evening of October 1, destroying a tank and killing seven rebels. 

The rebels used tanks, multiple-launch rocket systems, artillery, and mortars, Seleznyov added, resuming their attacks on the morning of October 2. 

Aleksandr Zakharchenko, prime minister of the self-proclaimed Donetsk People's Republic, was quoted as saying on October 1 that separatist forces control “90 percent of the airport's territory” and plan to have it fully under their control “in two or three days at most."

The airport has been a focus of fighting between government forces and the insurgents despite a September 5 cease-fire in the conflict which has killed more than 3,000 people since April.

Meanwhile, shelling has repeatedly been reported in the rebel-held city of Donetsk.

On October 2, Interfax reported that the city became the target of an artillery strike a day after about 10 people were killed in shelling in the rebel-held city.

Three people were reported killed on October 1 when a shell exploded on a school playground, while several others died when a shell hit a minivan on a nearby street.

The blasts occurred as pupils returned to school after the start of the school year was postponed from September 1 due to fighting.

Meanwhile, diplomatic pressure on Russia continued as German Chancellor Angela Merkel told Russian President Vladimir Putin via phone on October 1 that Moscow has a duty to exert influence on the separatists in Ukraine. 

According to a German government spokesman, the two leaders expressed concerned that violence was still being used in Ukraine every day.

Merkel said the border between Ukraine and Russia needed to be monitored and the Organization for Security and Cooperation in Europe (OSCE) had a big role to play in that. 

Earlier, new NATO Secretary-General Jens Stoltenberg said the cease-fire in Ukraine offers an opportunity but Russia still has the power to destabilize the country.

Stoltenberg also had conciliatory words for Russia, saying he saw no contradiction between aspiring for a constructive relationship with Moscow and being in favor of a strong NATO.

(With reporting by Interfax and the BBC)

PUTIN SAYS HE HOPES UKRAINIAN ELECTION WILL BRING STABILITY

Russian President Vladimir Putin has expressed hope that Ukraine's parliamentary election later this month will help bring stability to the country.

Addressing the annual "Russia Calling" investment conference in Moscow on October 2, Putin said economic and political stability in Ukraine was in Russia's interests.

The Russian president said Moscow wants a "predictable" and "reliable" relationship with Ukraine and that he regards the former Soviet republic as Russia's "most brotherly" nation.

The elections to the Ukrainian Verkhovna Rada are scheduled for October 26.

Government forces and Pro-Russian separatist continue to battle in eastern Ukraine despite a September 5 cease-fire in the conflict which has killed more than 3,000 people since April.

(Based on reporting by Reuters and Interfax)

And here are some comments by Putin at the annual VTB Capital investment forum in Moscow.

On Ukraine:
"Russian national interests will be met if Ukraine exits its political and economic crisis -- and this country has indeed plunged into a deep political and economic crisis -- restores its economy, political, social spheres. We are interested in having a reliable and predictable partner and neighbor."


"I hope that both Ukrainian parliamentary election is conducted with dignity and a long awaited political stability sets in. However, I cannot fail to mention that we expect all people living in any part of Ukraine to be able to fully enjoy their rights enshrined both in the international and Ukrainian law, that no one is discriminated either for the language they speak, or ethnicity they belong to, or religion they follow. This is the only way to preserve the country's territorial integrity and the only way to return it its unity."

On charges of money laundering in a deal to acquire a regional oil company against one of Russia's richest businessmen Vladimir Yevtushenkov:
"There will be no review of the results of privatization [in Russia] on a massive scale. At the same time, one case always differs from another both systematically and qualitatively. Thus if law enforcement authorities found either [privatization matters] or asset movements questionable, we have no right to deny them their duty to investigate this particular case and make a decision."

"I hope all pending decisions will be made in the realm of civic laws and arbitration rather than that of the criminal code. In any case, I am not going to interfere and I am not going to issue any policy directives."

 

 

 

 

MORNING NEWS ROUNDUP FOR OCTOBER 2, 2014

Good morning. Here are a few items from RFE/RL's News Desk:

MERKEL URGES PUTIN TO PRESS SEPARATISTS IN UKRAINE

German Chancellor Angela Merkel says Russia has a duty to exert influence on pro-Russian separatists in eastern Ukraine.

Merkel made the remark during a phone call with Russian President Vladimir Putin on October 1.

According to a German government spokesman, the two leaders expressed concerned that violence was still being used in Ukraine every day.

Merkel said the border between Ukraine and Russia needed to be monitored and the Organisation for Security and Cooperation had a big role to play in that. 

She said Germany would continue to support the OSCE mission in Ukraine, adding it could play an important role in planned local elections in the regions around Donetsk and Luhansk. 

Earlier, NATO's new Secretary-General Jens Stoltenberg said the cease-fire in Ukraine offers an opportunity but Russia still has the power to destabilize the country.

(Based on reporting by TASS and Reuters)

MOSCOW LINKS SUSPENSION OF STUDENT EXCHANGES TO GAY U.S. COUPLE

Russia's child-protection ombudsman has linked Moscow's decision to suspend participation in the Future Leaders Exchange Program (FLEX)  to a gay American couple that established guardianship over a Russian high school student who was in the United States for the program.

Pavel Astakhov said on Twitter (https://twitter.com/RFdeti) on October 1 that Washington had violated its obligation to return Russian students to their country when  "a Russian teen stayed behind in the United States."

Astakohov said a homosexual couple established illegal "guardianship" over the boy.

But the U.S. administrator of the program says the events described by Astakhov occurred after the child had completed the exchange program and that the student's host family was not a same-sex couple as Russian officials have implied.

U.S. Ambassador John Tefft expressed regret over Russia's decision to withdraw from next year's FLEX program.

(With reporting by TASS and Interfax)

NATO'S NEW CHIEF SAYS RUSSIA STILL ABLE TO DESTABILIZE UKRAINE

NATO's new Secretary-General Jens Stoltenberg has said that the cease-fire in Ukraine "offers an opportunity" but says Russia still has the power to destabilize the country. 

Stoltenberg, speaking on October 1 in Brussels at his first news conference as NATO leader, said Russia must comply with international law and demonstrate it is respecting its international obligations.

He said: "We see violations of the cease-fire" in Ukraine.

But the new NATO chief said he saw no contradiction between aspiring for a constructive relationship with Russia and being in favor of a strong NATO.

Stoltenberg, a former two-term Norwegian Prime Minister, is NATO's 13th secretary-general in the trans-Atlantic organization's 65-year existence.

He replaced Danish former Prime Minister Anders Fogh Rasmussen. 

(With additional reporting by Reuters and AP)

LAVROV SEES CHANCE TO RESUME TALKS WITH NORTH KOREA

Russian Foreign Minister Sergei Lavrov said after meeting in Moscow with North Korea’s Foreign Minister Ri Su Yong on October 1 that he sees a possibility for six-party talks to resume on Pyongyang’s nuclear program.

But Lavrov said the resumption of the talks "will take a certain amount of time – not immediately."

He said the main conditions are "to achieve from all sides a calm, balanced approach" and to avoid "any abrupt steps that would only polarize positions."

North Korea, South Korea, Japan, China, Russia, and the United States began talks in 2003 with the aim of ridding the Korean peninsula of nuclear weapons.

But Pyongyang withdrew in 2009 and indicated it would not abide by a 2005 pledge to abandon its nuclear programs.

Ri, who is on a 10-day visit to Russia, said a "long tradition of relations" between Moscow and Pyongyang is "bonded with blood."

(Based on reporting by TASS and Interfax)

And this, via Reuters:

RUSSIA GAS DUEL DEEPENS WITH SLOVAKIA SUPPLY CUT

By Michael Kahn and Jan Lopatka

PRAGUE, Oct 1 (Reuters) - The cat and mouse game between Europe and Russia on gas intensified on Wednesday with Slovakia saying its supply from Russia was down by a half and its prime minister calling the move part of a political fight.

Since September, Russia's state-controlled Gazprom has sent less-than-requested deliveries to Poland, Slovakia, Austria and Hungary - after the European Union began sending gas to Ukraine - in a clear warning from Moscow ahead of the winter heating season which officially starts today, when the industry switches to higher pricing.

The 50 percent cut reported by Slovakia, a major transit point for Russian gas exports to Europe, was by far the deepest yet, and Prime Minister Robert Fico said he would call a crisis meeting of his government if the problems persisted.

Fico, who normally has warm relations with Russia and has criticised EU sanctions against it, said he saw political factors behind the cuts.

"The Russian side talks about technical problems, about the necessity of filling up storage for the winter season," Fico said. "I have used this expression and I will use it again: gas has become a tool in a political fight."

There was no immediate comment from Russian gas exporter Gazprom

Slovakia's western neighbour the Czech Republic became the latest former Soviet-bloc nation to experience reductions. RWE Czech Republic, its main gas importer, said it saw unspecified reductions on several days over the past week, although the flow seemed normal on Wednesday.

It was unlikely there will be any impact for now on consumers of gas in the Czech Republic, Slovakia, or the countries further West that receive it via there, because gas storage reservoirs throughout Europe are close to full.

As well as shipping Russian gas west, Slovakia also sends it east into Ukraine. That has irked Russia, which switched off gas deliveries to Ukraine to persuade Kiev to pay its arrears.

"Nobody should be surprised by what Russia does. They want to keep pressure on Ukraine... at the start of the heating season," said Michael LaBelle, a gas expert at the Central European University in Budapest.

Central European spot gas markets rose to over 25 euros ($31.52) per megawatt-hours (MWh), their highest levels since the Ukraine crisis broke out in February/March.

Russia is Europe's biggest supplier of natural gas, meeting almost a third of annual demand and in return, Gazprom receives around $80 billion in annual revenues from its European customers, making up the majority of its income.

Moscow halted gas flows to Ukraine three times in the past decade, in 2006, 2009 and since June this year, although this year gas for the EU via Ukraine has so far continued to flow.

Opening up gas flows eastward was part of the EU's response to Gazprom's decision to cut supplies to Kiev in June. Slovakia, Poland and Hungary can also send gas to Ukraine but so far deliveries have not been without incident.

Poland temporarily stopped deliveries to Ukraine last month after Warsaw said it was getting less gas from Russia than requested. Hungary stopped eastward supplies last week in order to fill its own storage tanks ahead of winter.

Slovakia, with the largest EU capacity to Ukraine, had maintained deliveries.

Analysts agree the moves are a warning to Europe that Russia is ready to retaliate should Brussels impose further sanctions on Moscow over its intervention in Ukraine.

"It (the Russian export reductions) could actually be in the end quite harmless. But the fact that they did not tell anyone in advance, (shows) that nobody should trust any explanation he or she gets, and that in itself is damning," Czech energy security ambassador Vaclav Bartuska told Reuters this week.

He added it would be foolish to expect gas to flow as usual through Ukraine this winter.

DEAL?

Traders have, however, pointed out that Russia's recent reductions to Europe, at least before the latest cuts to Slovakia, were within contractual allowances and came during times that EU gas storage tanks are well filled.

Gas Infrastructure Europe data show that the EU's gas storage sites are filled to an average of over 90 percent, compared to just 68 percent this time last year.

"Most of the EU has its gas tanks filled to the rims, so they don't need more gas at the moment, while Gazprom needs to still fill its domestic reserves ahead of the Russian winter, so I'm not surprised by its flow reductions to the EU, which were all within contractual allowances," one EU utility trader said.

While gas deliveries to Germany, Gazprom's biggest customer, should continue through the Nord Stream pipeline which bypasses Ukraine, the outlook is far less certain for central and southeastern European nations which receive most or all of their imports from Russia and via Ukraine.

To deal with a potential shortfall this winter, the European Union has prepared emergency plans and has also sought a compromise to safeguard winter supplies in a potential deal that would guarantee Kiev at least 5 billion cubic metres of Russian gas for the next six months if Ukraine made pre-payments.

The Russian energy ministry said on Wednesday that there would be not further gas talks with Ukraine and the European Commission this week. (1 US dollar = 0.7933 euro) (Additional reporting by Vera Eckert in Berlin; Writing by Henning Gloystein and Christian Lowe; Editing by William Hardy)

 

WHY COMPROMISE IN UKRAINE MIGHT BE IMPOSSIBLE

The always insightful -- and often provocative -- Alexander Motyl has a piece up at Huffington Post suggesting the Western and Russian positions on Ukraine are irreconcilable.

"Should the West therefore try to understand Russian perceptions even if it knows that they are completely wrong? Obviously, understanding Russian delusions can help the West and Ukraine craft a better response to Putin's expansionism. But it makes little sense to say that the West and Ukraine should try to accommodate these delusions in their search for peace in eastern Ukraine and the Crimea.

Should the democratic world have accommodated Hitler's perceptions of Jews? Or of Germany's need for Lebensraum? Or of the innate superiority of the Aryan race? The questions are rhetorical, but they are exactly the ones we should be asking about Russian perceptions.

The implications for policy are clear. Finding a compromise under such conditions may be impossible. And agreeing to disagree may be the best one can possibly achieve. Russia currently controls the Crimea and one third of the Donbas region in eastern Ukraine. Let it continue to do so. The West has imposed sanctions on the Russian economy and supports Ukraine. Let it also continue to do so. Finally, Ukraine has adopted a defensive position and appears intent on preventing further Russian incursions into its territory. It, too, should continue to do so.

There is no practical solution to the Russo-Ukrainian war. The most one can hope for is to "freeze" it and thereby transform hot war into cold war between Russia and Ukraine and between Russia and the West. That cold war will continue as long as Putin remains in power and continues to promote his delusional views of the world." 

Read the whole piece here.

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About This Blog

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It covers emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or