NCSEJ WEEKLY NEWS BRIEF Washington, D.C. January 9, 2015 1

NCSEJ WEEKLY NEWS BRIEF
Washington, D.C. January 9, 2015
1. Russia's Lavrov Discusses Ukraine With French, German PMs; U.S. Congressman 'Particularly Disturbed'
By RFE/RL Baku Raid; Moldova's Pro-European Parties Resume Coalition Talks; EU Proposes Extra $2
Billion in Financial Support for Ukraine
Briefs, January 5 – January 9, 2015
2. More than 1 million flee, Ukraine close to "humanitarian catastrophe"
By Kieran Guilbert
Reuters, January 8, 2015
3. News Analysis: Bombing Campaign Opens New Front In Battle For Ukraine
By Robert Coalson
RFE/RL, January 8, 2015
4. Wiesenthal Center pans Svoboda march but many Ukrainian Jews aren’t worried
By Sam Sokol
Jerusalem Post, January 4, 2015
5. EU leaders raise hopes of Putin breakthrough over Ukraine
Bloomberg, January 8, 2015
6. EU mulls response to Russia's information war
By Andrew Rettman
EUObserver, January 8, 2015
7. Aleksei Navalny, Defying Kremlin Again, Declares End to House Arrest
By David Herszenhorn
New York Times, January 5, 2015
8. Who’s Afraid of Alexei Navalny?
By Joshua Keating
Slate, December 31, 2014
9. Armenia picks Russian economic ties but tries to keep foot in the West
By Karoun Demirjian
Washington Post, January 6, 2015
10. What's The EEU And What Are Its Chances?
By Daisy Sindelar
RFE/RL, January 02, 2015
11. Ruble's woes spread to other ex-Soviet currencies
By Marc Jones
Reuters, January 7, 2015
12. Putin’s Eurasian Dream Is Over Before It Began
By Reid Standish
Foreign Policy, January 6, 2015
#1a
Russia's Lavrov Discusses Ukraine With French, German PMs
RFE/RL, January 8, 2015
Russian Foreign Minister Sergei Lavrov has discussed the conflict in Ukraine with his French and German
counterparts by telephone.
The Foreign Ministry said Lavrov spoke with French Foreign Minister Laurent Fabius and German Foreign Minister
Frank-Walter Steinmeier on January 8.
Representatives of the Germany, France, Russia, and Ukraine met in Berlin on January 5 to discuss efforts to end
the conflict between government forces and pro-Russian separatists in eastern Ukraine, and the four nations'
leaders may meet on January 15 in Kazakhstan.
The Russian Foreign Ministry said that in the conversation between Lavrov and Steinmeier, "the need for the sides
in the conflict to unweaveringly observe" the terms of a September 5 cease-fire deal was "noted."
Meanwhile, Ukrainian Prime Minister Arseniy Yatsenyuk says Russia is still sending military forces into Ukraine
despite a September 5 deal on a cease-fire and steps toward peace.
Yatsenyuk demanded Moscow remove what he called its "bandits" from Ukraine.
Speaking alongside German Chancellor Angela Merkel after their talks in Berlin, he said Russia has "sent troops to
Ukraine's regions and continues sending its troops there."
"All this being done on the orders of Russian President Vladimir Putin," Yatsenyuk said.
Merkel said the Minsk agreement must be met in full for sanctions imposed on Russia to be lifted.
Russia denies involvement in the conflict in eastern Ukraine despite what Kyiv and NATO say is overwhelming
evidence it has sent troops and weapons across the border to support pro-Russian separatists.
Yatsenyuk said that Russia "has not fulfilled a single point" of the Minsk agreement.
Theministry said Lavrov offered Fabius condolences over the deadly January 7 attack on a satirical weekly in Paris.
It said both believe the attack "confirms the need for further joint efforts in the fight against the terrorist threat."
#1b
U.S. Congressman 'Particularly Disturbed' By RFE/RL Baku Raid
RFE/RL, January 6, 2015
A U.S. Congressman has said that he was "particularly disturbed" by a December 26 raid on RFE/RL's bureau in
Baku and the targeting of international nongovernmental organizations in Azerbaijan.
In a January 6 statement, U.S. Representative Bill Keating (Democrat-Massachusetts), a ranking member of the
House Subcommittee on Europe, Eurasia, and Emerging Threats, said Azerbaijan's actions are "clearly not
conducive for stability and should not be taken lightly."
Keating said the December 26 police raid on Radio Azadliq and the arrests of investigative reporter and RFE/RL
contributor Khadija Ismayilova, human rights activist Lelya Yunus and her husband, Arif, as well as others raise
"serious concerns over the intentions of the Azerbaijani leadership and their desire to partner with the US and the
West."
The congressman urged the Obama administration to "prioritize" raising concerns with Azerbaijan.
#1c
Moldova's Pro-European Parties Resume Coalition Talks
RFE/RL, January 7, 2015
Moldova's three pro-European parties have resumed consultations to form a new government following last year's
parliamentary election.
The Liberal Democratic Party (PLDM), the Democratic Party (PD), and the Liberal Party (PL) obtained a combined
total of just over 45 percent in the November 30 poll.
That would be enough to take some 54 seats in the 101-seat parliament if the parties can agree, but they have
clashed in the past and more tough bargaining is expected.
After two hours of negotiations on January 6, the leaders of the three parties -- PD's Marian Lupu, PLDM's Vlad
Filat and PL's Mihai Ghimpu -- told the media they hoped to come to an agreeement on forming a government
before next week's parliament session.
Two pro-Russian parties, the Socialist Party and the slightly more moderate Communists, won a combined total of
38.8 percent -- short of the majority needed to form a goverment.
#1d
EU Proposes Extra $2 Billion in Financial Support for Ukraine
By Gabriele Steinhauser and Nick Shchetko
Wall Street Journal, January 8, 2015
The European Commission on Thursday proposed an extra €1.8 billion ($2.13 billion) in financial support for crisishit Ukraine.
The money, designed to help Ukraine overhaul its economy and keep up government payments, still needs to be
approved by the European Parliament and European Union governments. Distribution of the EU funds could take
until early 2016 and will be conditional on “reform actions” to be taken by the government in Kiev, as well as new
aid for Ukraine from the International Monetary Fund, the commission said.
“We want to help the Ukrainian government to put its reform agenda into practice and trigger real change for the
country and its people,” said Commission President Jean-Claude Juncker.
The commission wants Kiev to further reduce government spending, overhaul its energy and banking sectors and
reform its judicial system. In 2014, the EU executive already paid out a total of €1.36 billion in loans to Ukraine. A
final €250 million slice from that aid package is scheduled to be transferred this spring.
A delegation from the IMF restarted talks with the Ukrainian government in Kiev on Thursday discussing the next
measures the government will have to take. Ukrainian authorities hope the IMF visit will unlock several billion dollars
from an existing $17 billion loan package and recommend the extension of the credit lifeline, which officials and
analysts say needs to be nearly doubled to yield results.
Ukraine is reliant on international financial aid to avert its economy’s collapse. The country’s central bank estimates
the economy shrank 7.5% in 2014, while inflation soared to 24.9%, the highest in 14 years. Ukraine’s national
currency, the hryvnia, has lost almost half of its value against the dollar and its foreign-currency reserves have
plunged below $10 billion for the first time since 2004.
The new pro-Western authorities in Ukraine blame the previous corrupt government, ousted after months of street
protests in 2014, for its economic problems. The government also lost at least one-fifth of its revenue after proRussian rebels claimed a large part of the industrial east.
#2
More than 1 million flee, Ukraine close to "humanitarian catastrophe"
By Kieran Guilbert
Reuters, January 8, 2015
More than one million people have been driven from their homes by the conflict in Ukraine, hampering aid
efforts and leaving the country on the verge of a humanitarian catastrophe, aid agencies said on Thursday.
The number of people uprooted within Ukraine, 610,000, and of refugees who have fled to neighbouring
countries, 594,000, has more than tripled since August, figures from the United Nations Office for the
Coordination of Humanitarian Affairs (OCHA) show.
The U.N. said an estimated 5.2 million people in Ukraine were living in conflict zones, of whom 1.4 million were
highly vulnerable and in need of assistance as they face financial problems, a lack of services and aid, and
harsh winter conditions.
The conflict between Ukraine and pro-Russia separatists, killed more than 4,700 people last year and
provoked the worst crisis in relations between Russia and the West since the Cold War.
Denis Krivosheev, deputy director of Europe and Central Asia at Amnesty International, said residents in
separatist-controlled Luhansk and Donetsk could barely afford food and medicines, especially vulnerable
people such as pensioners.
"While it may be too early to call this a humanitarian catastrophe, it's clearly progressing in that direction,"
Krivosheev told the Thomson Reuters Foundation by email.
The provision of humanitarian aid was being hampered by pro-Kiev volunteer battalions that were increasingly
preventing food and medicine from reaching those in need in eastern Ukraine, he said.
"Attempting to create unbearable conditions of life is a whole new ballgame... using starvation of civilians as a
method of warfare is a war crime."
The battalions often act like "renegade gangs" and urgently need to be brought under control, Krivosheev
added.
Social benefits, including pensions, have also become a major concern for those in eastern Ukraine following
Kiev's decision to transfer the payments to government-controlled areas, the U.N. refugee agency (UNHCR)
said.
UNHCR spokesman William Spindler said those unable to leave their homes, such as the elderly and the sick,
and people living in institutions were not receiving the help they needed.
The problem was made worse by the fact that humanitarian organisations had limited access to the areas
controlled by armed groups fighting the government, he added.
The crisis blew up after street protests in Kiev overthrew the Moscow-backed president last February and a
pro-Western leadership took over, committed to integrating the former Soviet republic into the European
mainstream.
This set Kiev and the Western governments backing it at odds with Russia, Ukraine's former Soviet overlord,
which wants to keep Ukraine within its political and economic orbit.
#3
News Analysis: Bombing Campaign Opens New Front In Battle For Ukraine
By Robert Coalson
RFE/RL, January 8, 2015
Hardly a day goes by in Ukraine these days without headlines about some terrorist incident or about the
country's security forces breaking up a would-be plot or capturing a cache of weapons or explosives.
In recent weeks there have been dozens of small bombings across the country, with the epicenters being
Kharkiv, Odesa, Mariupol, and Kyiv. There were at least six bombings in Odesa in December alone.
Most of the attacks have targeted the offices of pro-Kyiv organizations during nighttime hours, while a few have
targeted infrastructure, the security forces, or Ukrainian politicians.
In the worst incident, 11 people were injured on November 9 when a bomb went off in a bar in downtown
Kharkiv.
It seems to be a new phase of the conflict in Ukraine that is likely to last for some time.
Kharkiv, Odesa, and Mariupol seem to be in the crosshairs because they are geographically close to the proRussian separatist regions in eastern Ukraine and have significant ethnic-Russian populations.
Analysts and local officials are quick to say the attacks in those cities do not indicate broad support for joining
the anti-Kyiv rebellion.
"The creation of an Odesa People's Republic now is inconceivable," says local journalist Serhiy Dibrov.
The relatively low level of damage and casualties caused by the attacks to date could indicate the goal is to
sow anxiety and discontent, as well as to sap the government's resources.
Authorities and most Ukrainians are convinced that the attacks are directly linked to Russia. They seem to fit
into Moscow's doctrine of hybrid warfare, which envisions waging a conflict throughout the depth of the
enemy's territory using a wide variety of tools and tactics.
Stepping Up Security
The attacks have already forced the resource-strapped Ukrainian security forces to respond, stepping up
measures throughout the country.
"We are implementing many preventive and prophylactic measures aimed at uncovering and averting
violations of public order and provocative acts by radically oriented groups or movements or individuals," says
Ivan Katerynchuk, head of the local branch of the Interior Ministry in Odesa.
Security forces have stepped up patrols and have launched several public-awareness campaigns. Officials
have also asked the public to avoid holding demonstrations or other public events that could be targeted.
Such measures, however, can be used by pro-separatist and pro-Russian organizations and media outlets to
portray Kyiv as a failing or undemocratic government.
Authorities turned to the courts to try to prevent the Soviet-style, pro-Russian group Kharkiv Labor from holding
a demonstration outside the office of the oblast administration.
"We wanted to register our strong protest under the norms of the constitution and relying on the fact that we
have a democratic, law-based government," Kharkiv Labor leader Pavel Tishenko told RFE/RL's Ukraine
Service.
Nikolai Holmov, who blogs from Odesa [LINK: http://www.odessatalk.com/], writes that the bombing campaign
is likely to last for the foreseeable future. He says the best response is openness on the part of the authorities,
responsibility on the part of the mass media, and patience on the part of the public.
According to Holmov, the campaign will test the "political will" of Kyiv and its Western partners and "the
resilience of the Ukrainian public."
Threatening Letters
Ihor Rosoha is an activist and co-founder of the Coordinating Office of the Territorial Defense of Kharkiv. The
goal of the office, he says, is to unite civic organizations and individuals to help the government counteract the
campaigns being waged to undermine Ukraine.
He tells RFE/RL that his group will accompany security patrols in the city and help officials interact with locals
and to try to counter what he calls "information aggression from Russia." They urge people not to believe
"gossip" on social media, which they allege is placed by Russian agents.
"Our goal is not to replace the military or the state security organs," he says. "Our goal is to mobilize society
itself to repulse any aggression, to maintain the peace in our region."
Of particular concern in Kharkiv is an organization called the Kharkiv Partisans, which regional prosecutor
Yuriy Danylchenko says is "constantly supported materially and tactically from the neighboring state," meaning
Russia.
Danylchenko says the organization's only purpose is "committing terrorist attacks."
In mid-December, many locals in Kharkiv found disturbing season's greetings in their mailboxes from the
Kharkiv Partisans.
"In the envelope was a postcard with an emblem on which was written 'Kharkiv Partisans' and the text: 'We will
come for every Nazi scum,'" said one woman, who asked to be identified only as a volunteer with Rosoha's
civic coordinating center.
"I know for certain I am not the only one who got such a card -- several people I know received the exact same
message," she added, saying that she had evacuated her family from the city.
#4
Wiesenthal Center pans Svoboda march but many Ukrainian Jews aren’t worried
By Sam Sokol
Jerusalem Post, January 4, 2015
A new year’s torchlight march through downtown Ukraine in honor of Holocaust era-Ukrainian nationalist
leader Stepan Bandera drew harsh criticism from the Simon Wiesenthal Center on Sunday, but failed to elicit
condemnations by Ukrainian Jews.
Members of the ultra-nationalist Svoboda Party and the Right Sector movement marched down Khreshchatyk
Street, one of Kiev’s main boulevard’s and the site of last year’s EuroMaidan revolution, to celebrate the one
106th birthday of Stepan Bandera, whose faction of the Organization of Ukrainian Nationalists helped murder
thousands of Jews during the Second World War.
Five thousand people participated in the march, according to organizers, The Kyiv Post reported.
The “current government came to power using Bandera’s slogans, so it has to follow his ideas,” Svoboda
leader Oleh Tyanhybok said before the march began, according to the Ukrainian newspaper.
“Holocaust perpetrators are the last people on Earth who deserve to be glorified, regardless of their nationalist
credentials. This phenomenon, currently so common in post-Communist Eastern Europe, and especially in
Ukraine and the Baltics, clearly shows that these countries don’t fully comprehend the obligations of true
democracy,” SWC Jerusalem bureau director Dr. Efraim Zuroff said in a statement.
While Bandera and his faction initially fought on the side of the Germans, they later turned against Berlin and
Bandera wound up in a concentration camp. He was killed by the KGB in Munich in 1959.
“The march has more to do with the systematic Holocaust distortion prevalent in post-Communist Eastern
Europe, which has a very fundamental anti-Semitic component, than outright anti-Semitism,” Zuroff told the
Post.
The march is a good example of three separate phenomena, he continued: “hiding or minimizing the role of
local Nazi collaborators in Holocaust crimes; promoting the canard of equivalency between Nazi and
Communist crimes; and glorification of anti-Communist freedom fighters (the new heroes of these countries),
who were local Nazi collaborators who participated in Shoa crimes.”
Right Sektor has made efforts to disassociate itself from anti-Semitism, with its leaders meeting with
community representatives and protesting in favor of Israel during last summer’s Gaza war.
Svoboda, known as the Social-National Party of Ukraine until 2004, has been accused of being a neo-Nazi
party by Ukrainian Jews and while party leaders have a history of making anti-Semitic remarks, their rhetoric
has toned down considerably over the past years as they attempted to go mainstream.
Prior to the revolution the party had 36 seats out of 450, or roughly eight percent of the total representation in
parliament, but the party failed to make the election threshold in October’s election.
While Svoboda has several lawmakers in the legislature who were elected in direct elections in their districts,
the party’s representation is now minimal. Parliamentary seats are apportioned through both a proportional
representation system and by direct election of candidates by region.
Ousted president Victor Yanukovich’s predecessor, Viktor Yushchenko, engaged in an effort to rehabilitate
figures such as Bandera, posthumously awarding him the title of “Hero of Ukraine” in 2010, riling the Jewish
community.
“To glorify Bandera is to reject Stalin and to reject any pretension from Moscow to power over Ukraine,” one
academic explained at the time.
Ukrainian Jews were more sanguine about the march than the Simon Wiesenthal Center, however.
The march had “nothing in common with anti-Semitism,” Eduard Dolinsky, the executive director of the
Kievbased Ukrainian Jewish Committee, told the Post.
According to Dolinsky, the march was a celebration of “Ukrainian striving for independence and resistance to
Russian aggression.”
Despite this, however, he added that “the dark part of Ukrainian Jewish history should be duly researched,
documented and recognized despite attempts of some Ukrainian historians to draw a picture of friendship and
cooperation between Ukrainian fighters and Jews under Nazi occupation.”
According to David Fishman, a professor of Jewish history at New York’s Jewish Theological Seminary who
has written a number of articles about Ukrainian Jewry, Ukrainian society is “fiercely divided” over Bandera.
“Some of the Ukrainians who glorify Bandera as a national hero are unaware of his anti-Semitism and yearlong
support of the Nazis (before he turned against them). Others willfully choose to deny Bandera’s anti-Semitism
and that of the Organization of Ukrainian Nationalists he led, so that their hero remain ‘pure,’” he explained.
“But there are those, in Svoboda and in society at large, who embrace Bandera’s fascist and anti-Semitic
legacy. They are a troubling minority on the fringes of Ukrainian society that can, if not checked, grow and
wreak havoc, much like white supremacists and neo-Nazis in America.”
“Are the Ukrainian authorities in Kiev doing enough to counter them?” Fishman asked. “They are not. The
authorities seem to believe that the fascist and anti-Semitic fringe will die off on its own, if ignored. That is a
major mistake.”
While Ukrainian leaders have condemned anti-Semitism, some charge that the government has turned a blind
eye to the ascension of racist figures such as neo-Nazi Vadim Troyan, who was appointed to head the Kiev
Oblast regional police on October 3, due to their role in combating separatists in the east of the country.
Ukrainian Jews have largely indicated that they are unworried by anti-Semitism and that the bigger danger lies
in the destruction wrought by the current war.
While the organizers of the march are undoubtedly anti-Semitic, said Dnepropetrovsk Rabbi Shmuel
Kaminezki, the majority of Ukrainians does not support such sentiments.
Noting Svoboda’s failure to pass the election threshold, the rabbi said that while Ukraine’s past should not be
ignored, the problem is not anti-Semitism but the “difficult financial situation and lack of security and political
stability which has resulted in a large number of Ukrainian Jews immigrating to Israel and, unfortunately, to
Germany.”
Zuroff, however, sees things differently, saying many Jews living in Ukraine “believe that in order to secure
their existence in today’s Ukraine, they have to turn a blind eye to the glorification of people like Bandera.”
In response, Kaminezki stated that Ukrainians see Bandera as a national hero rather than as an anti-Semitic
figure, similar to how Scotts view William Wallace or the Italians see Garibaldi, and do not always associate
him with anti-Semitism.
“My perception out of what I hear and see: In contemporary Ukraine Bandera has nothing to do with antiSemitism, but more with national self-identity of Ukrainians,” said one Ukrainian Jew who asked not to be
identified, explaining that support for Bandera for many has less to do with anti-Semitism than anti-Russian
sentiments.
“In his time Bandera’s hatred of Jews was the extension of the hatred to the Soviets and part of the struggle for
Ukraine’s independence,” she said, “but today Jewish figures such as oligarch Ihor Kolomoisky are seen as
major components of Ukraine’s war effort.”
#5
EU leaders raise hopes of Putin breakthrough over Ukraine
Bloomberg, January 8, 2015
EU leaders have talked up the prospects of a breakthrough with President Vladimir Putin over Ukraine amid a
divisive debate over whether to ease or lift European sanctions on Russia.
In a flurry of diplomatic activity German and Ukrainian leaders met in Berlin and the Latvian foreign minister
headed to Kiev and Moscow. Momentum gathered behind a proposed summit in Kazakhstan next week
between the Russian, Ukrainian and French presidents and the German chancellor.
Speaking in Riga, where this week Latvia assumed the six-month rotating EU presidency, Federica Mogherini,
the EU’s foreign policy coordinator, spoke of “limited but positive” signals from the Russians in recent weeks
over the conflict in eastern Ukraine and raised the possibility of lifting EU sanctions “partially or fully”. “The
situation on the ground is slightly better than some months ago,” she said. “ There seems to be a different
Russian attitude … I hope this is part of a new time, a new era.”
Putin’s actions on Ukraine have triggered the worst post-communist crisis in relations between Russia and the
west over the past year. But, as well as muting his hardline policies on Ukraine recently, Putin was proving
more cooperative on other sore points such as Syria and nuclear issues, she said.
Latvia, which along with the two other Baltic states has led the EU’s hawks on relations with Moscow, also
talked up the chances of a breakthrough. There is a growing sense in EU capitals and in Moscow that Putin is
looking for a way to save face on eastern Ukraine where Russia supports rebel separatists because the
collapse of the oil price and the rouble, and the impact of sanctions are causing great distress to the Russian
economy.
“We have a feeling they really want a lowering of sanctions,” said Edgars Rinkēvičs, the Latvian foreign
minister. “This is an opening we can use.”
He will travel to Kiev on Friday and to Moscow on Sunday to explore the usefulness of staging a summit in
Astana, the Kazakhstan capital, next Thursday. While the Latvian prime minister, Laimdota Straujuma, said the
German and French leaders would negotiate with Putin soon, Mogherini said the Astana summit was not yet
confirmed. Chancellor Angela Merkel of Germany, Putin’s key interlocutor, said she would decide in the
coming days whether to take part.
The French and the Germans are at odds over whether to ease sanctions on Moscow, while the Americans are
likely to take a dim view of relaxing the pressure on Putin.
The EU has to decide between March and July whether to renew sanctions on Russia imposed because of
Russia’s annexation of Ukraine’s Crimean peninsula and its fomenting of rebellion against Kiev in eastern
Ukraine.
“If there is no change in Russian behaviour and they [EU] don’t continue the sanctions, that would be
absolutely extraordinary. We don’t want to contemplate that,” said a senior US official.
But argument is raging within the EU over the efficacy of sanctions, over their impact on Russia’s imploding
economy and on European business. The Czechs, Slovaks, Hungarians, and Austrians are fierce opponents of
sanctions, while Berlin and Paris are increasingly on opposing sides. President François Hollande of France
spoke this week of the need for sanctions to be stopped, while Merkel stressed on Thursday that they have to
be continued, subject to Russian behaviour.
“The key for us is a united EU position,” Rinkēvičs told the Guardian. “It’s difficult. Countries have very different
approaches.”
After meeting Putin for four hours in Australia in November, Merkel voiced exasperation with the Russian
leader. It is thought she will only go to Kazakhstan if confident of what she deems to be a positive outcome.
#6
EU mulls response to Russia's information war
By Andrew Rettman
EUObserver, January 8, 2015
The Netherlands is funding a study on how the EU can fight back against Russia’s “information war”, in one of
several counter-propaganda initiatives.
The Dutch-sponsored study was launched in the New Year by the European Endowment for Democracy
(EED), a Brussels-based foundation.
Alastair Rabagliati, the EED’s director of operations, told EUobserver: “We’ve launched an initiative, with the
support of a Dutch government grant, which will develop a feasibility study with clear recommendations on the
way forward for the development of independent Russian language media initiatives”.
“It’ll aim to consolidate different free media and enable new actors in the Russian language info-sphere - TV,
social media, internet portals - in order to optimise co-operation.”
EU sources say the grant is worth about €500,000 and the report is due before a summit of former Soviet and
EU states in Riga in May.
Poland’s former foreign minister, Radek Sikorski, last spring initially floated the idea of creating an EU-funded,
Russian-language TV station.
But little happened until the Netherlands stepped in with the EED grant after a passenger plane, flight MH17,
was shot down over east Ukraine killing 193 Dutch nationals and 105 other people.
Evidence indicates Russia-controlled rebels caused the disaster using a Russia-supplied rocket system.
But Russian state media have tried to sow suspicion the Ukrainian air force did it in order to prompt Western
intervention in the conflict.
The EED study is one of several initiatives.
Denmark, Estonia, Lithuania, and the UK are drafting an informal paper on how EU institutions and Nato can
co-ordinate “strategic communications”.
The Baltic states, which host large Russian-speaking minorities, have begun funding Russian-language
broadcasts at home.
Meanwhile, Latvia, which currently holds the EU presidency, will try to revive the Sikorksi TV station idea at a
meeting of EU foreign ministers in Brussels on 19 January.
Its foreign ministry spokesman, Karlis Eihenbaums, told this website that around 15 EU states back the project
and that the news broadcasts should be available in Russia if they can get past its “jamming system”.
But Riga is trying to play down expectations of a quick result.
“I don’t think we can come to an agreement among the 28 [EU leaders] to come up with a new TV station in
Russian. Euronews is already doing news in Russian, so it’ll be difficult to get an additional channel”, Latvian
PM Laimdota Straujuma told press in the Latvian capital on Wednesday (7 January).
Information monopoly
The Russian propaganda campaign is bigger than MH17.
Russian state media have mobilised support for the war on Ukraine by demonising Ukrainians as “fascists” and
by alleging that last year’s revolution was a US-fabricated “coup” designed to harm Russia.
They are also feeding anti-EU and anti-US sentiment in Europe, in part by depicting Russia as a defender of
orthodox values against EU promotion of gay rights and multiculturalism.
Well-funded Russian broadcasters, such as RT, have hired big names, including former CNN anchor Larry
King, and air programmes in English, French, German, and Spanish as well as Russian.
Their work is backed up by pseudo-NGOs.
Putting the Dutch grant in perspective, the British think-tank, Chatham House estimates the Russian “NGO”
component alone is worth $100 million a year.
In one example, Russian groups in 2013 circulated leaflets in Ukraine claiming that an EU free trade treaty
would force parents to give up children for adoption by gay men.
Western media have caught Russian media using fake pictures and fake witness accounts of alleged Ukrainian
atrocities.
But experts, such as David Welch, say they get away with it in Russia and in Russian-speaking enclaves in
Europe because there is no one to contradict them.
“What is dangerous is not propaganda but a monopoly of it … understanding the message requires a widening
of access to information so that people can shape a well-informed opinion,” the British historian, who set up a
centre for propaganda studies at Kent University, told this website.
Latvia’s Eihenbaums noted: “When you see these things repeated over and over, they begin to stay in the
mind.”
“The Russians are smart in the way they mix their message with entertainment, such as soap operas and
gameshows with women in short skirts, in order to make it more attractive.”
Good propaganda?
One problem for the EU side is how to react without harming its own journalistic values.
Looking at the difference between “news” and “propaganda”, Welch said: “News presents its audience with a
straightforward statement of 'facts’, which have nevertheless been chosen and edited. But propaganda
packages this information in order to evoke a certain response.”
But he said there is nothing wrong with disseminating “propaganda” so long as it “serves a constructive
purpose”.
Eihenbaums noted that any EU news channel “must be attractive, but with accurate information … it must not
be a propaganda organ”.
He cited RFE/RFL, a US-funded broadcaster, and the BBC as models because they do both Ukraine-critical
and Russia-critical stories.
EU reactions aside, Welch added Russian propaganda is less effective today than one year ago.
He said Russian leader Vladimir Putin lost credibility by refusing to disown the suspected MH17 perpetrators:
“Putin's instincts deserted him - he could have distanced himself by blaming it on 'rogue elements' among the
rebels”.
He added: “His increasingly oppressive measures at home, together with EU and US sanctions and the fall in
oil prices have all led to more open questioning of the Russian message inside Russia”.
Latvia’s Eihenbaums agreed.
“The best thing we could do would be to take people 10km east of the Latvian border and show them what the
economic situation there is really like”.
#7
Aleksei Navalny, Defying Kremlin Again, Declares End to House Arrest
By David Herszenhorn
New York Times, January 5, 2015
Taunting the Kremlin yet again, the Russian political opposition leader Aleksei A. Navalny on Monday snipped
the electronic bracelet used by the authorities to monitor his whereabouts and personally declared an end to
his more than 10 months of house arrest.
Mr. Navalny’s latest challenge to the authorities came six days after a Moscow court convicted him of criminal
embezzlement charges but issued a three-and-a-half-year suspended sentence, sparing him jail time.
Mr. Navalny, a lawyer who rose to prominence as a blogger crusading against pervasive state corruption, has
emerged in recent years as President Vladimir V. Putin’s chief domestic antagonist.
Organized opposition to Mr. Putin has weakened in recent months. But the reluctance of the authorities to put
Mr. Navalny in prison suggests that he poses a conundrum as they try to restrict his political activities, while
not turning him into a martyr.
Mr. Navalny has been under house arrest since late February in connection with the criminal case. He and his
younger brother, Oleg, were accused of defrauding a Russian subsidiary of the French cosmetics company
Yves Rocher by overcharging for shipping services provided by a courier company they owned.
Lawyers had said they had expected Mr. Navalny’s house arrest to end as soon as the verdict and suspended
sentence were officially registered with the correctional authorities. In a statement on Monday, however, Mr.
Navalny said no paperwork had come through and that he would no longer remain confined to his apartment
on the outskirts of Moscow.
“It’s stupid to boast about this,” Mr. Navalny wrote in the statement, which was posted online. “But I’m the only
man in the history of the Russian courts to sit in house arrest after the sentence was issued.”
He described the unexplained technicalities that appeared to prolong his house arrest even though the judge’s
ruling had been issued. “Everyone asks me, ‘Have you already filed the appeal? When will there be an
appeal?’” Mr. Navalny wrote. “Of course, there is no appeal yet, and there can’t be one. There is no text of the
verdict, and there is nothing to appeal. This is the genius stroke of Putin’s justice.”
The embezzlement case was widely understood as retribution for Mr. Navalny’s political opposition to Mr.
Putin, and was one of several criminal prosecutions that have been brought against him in recent years.
Oleg Navalny also was convicted in the embezzlement case, but his sentence was not suspended and he was
jailed immediately after the verdict was issued.
Aleksei A. Navalny, the Russian opposition leader, spoke after a judge suspended Mr. Navalny’s jail sentence,
but ordered his younger brother to serve a prison term of three and a half years.
Video by Reuters on Publish Date December 30, 2014. Photo by Pavel Golovkin/Associated Press.
On the night of the verdict, supporters of Mr. Navalny held an unsanctioned protest just outside the Kremlin
walls. Infuriated by his brother’s incarceration, Mr. Navalny set off to join the protesters, still wearing the
tracking bracelet, but nonetheless daring the authorities to throw him in jail.
He was intercepted by the police, but they simply returned him to his apartment and posted five officers outside
his door. It was unclear if this latest show of defiance would yield a different result.
The Interfax news agency, citing an unidentified law enforcement source, reported that the Federal
Penitentiary Service was investigating the report that Mr. Navalny’s bracelet had been removed in violation of
the terms of his house arrest. If confirmed, the violation would be reported to the court, Interfax reported.
Along with his statement, Mr. Navalny posted a photograph of the monitoring bracelet, which he noted required
some effort to remove but was ultimately clipped with kitchen scissors.
Mr. Navalny wrote that he was not planning to go far, lest the authorities were concerned, and he noted that
they could soon impose a new house arrest under what he described as new pretenses.
“My travel needs boil down to the commute from home to office, and back, and leisure activities with the
family,” he wrote.
#8
Who’s Afraid of Alexei Navalny?
By Joshua Keating
Slate, December 31, 2014
Monday, in a surprising move, a Moscow court suspended Navalny’s three-and-a-half-year sentence on fraud
charges that were widely seen as a laughably trumped-up pretext to punish him for his outspoken opposition to
the Russian government.
This isn’t the first time Navalny had gotten off with a warning: In July 2013 he was
freed on bail after receiving a five-year sentence for embezzlement that prompted massive street protests by
his supporters in Moscow. This time, however, the court didn’t just let Navalny go; it jailed his brother Oleg, a
former postal worker, instead. Not only is the Russian criminal justice system blatantly being used to punish
the Kremlin’s critics; courts are now apparently willing to take family members as hostages to get the point
across. (The brothers are alleged to have masterminded a plot to overcharge a subsidiary of the cosmetics
brand Yves Rocher for its shipping to Russia, though the French company never issued a complaint.)
If the intent in letting Navalny out but jailing his brother was to keep Navalny under control without turning him
into a martyr, it appears to have backfired. Hundreds of demonstrators gathered despite freezing temperatures
to protest Oleg’s fate in Moscow’s Manezh Square, including Navalny himself, who showed up in violation of
his house arrest from his earlier conviction, apparently still wearing his court-ordered ankle bracelet, and was
quickly rearrested along with more than 100 others.
The demonstrators were also met by a large crowd of counterdemonstrators, who accused Navalny’s
supporters of trying to turn Manezh into a “Maidan”—a reference to the “Euromaidan” protests that toppled
Ukraine’s Russian-backed government in February. Even dissident performance artists Pussy Riot, who seem
to have given up their DIY punk rock aesthetic for perfume-commercial glam, released a new video for the
occasion in support of Navalny.
What is it about this 38-year-old lawyer that has given Russia’s recently lackluster protest movement a spark,
and Russia’s leaders, normally master manipulators of public opinion, such a headache? Navalny first gained a
following as an online muckraker, exposing corrupt officials and business leaders on his popular LiveJournal
blog. In addition to his painstaking probes into powerful interests including major oil companies and ministries,
he distinguished himself by being blunt. (His description of the ruling United Russia party as the “party of
crooks and thieves” in 2010 became a rallying cry for the anti-Putin opposition.) When major street protests
broke out in late 2011 after disputed parliamentary elections, Navalny emerged as the most visible head of the
movement, organizing the marches and earning rapturous applause for speeches blasting Putin.
In 2012 the Russian opposition overwhelmingly elected him leader in an informal online poll. Last year he ran
against a Kremlin-backed candidate for mayor of Moscow, earning an impressive 27 percent of the vote. A poll
last year showed him with a nationwide name recognition of 37 percent, huge given the government’s tight
control over the news media.
Navalny describes himself as a nationalist democrat, and his ideology can be a bit difficult to place, beyond
being anti-Putin. Though he has earned comparisons in the international media to figures ranging from Julian
Assange to Nelson Mandela, there’s a bit of Pat Buchanan mixed in there as well. Navalny has called for
Russia’s liberal opposition to unite with far-left and far-right groups who share an antipathy to Putin but have
very different ideas about who or what should replace him. He has unapologetically appeared at rallies with
ultranationalist, xenophobic groups. He was expelled from Russia’s largest liberal party, Yabloko, over his
nationalist ties in 2007. Fellow members of the opposition have also accused him of intolerance to criticism and
compared his occasionally hectoring, macho tone to that of Putin himself.
But the fact that Navalny is difficult to pigeonhole is probably a large part of his appeal: He’s a street activist
and a savvy political campaigner at the same time and is just as comfortable talking to Russian nationalists as
with readers of the New York Times. He’s certainly a far more dynamic figure than most of the intellectuals,
spurned ex-politicians, and oligarchs who have dominated the leadership of the marginalized Russian
opposition in the Putin era.
Still, Navalny has a long way to go if he hopes to grab more than headlines. Navalny’s case has rallied his
base—mainly educated, middle-class urbanites—to come out in the cold, but opposition to Putin is still a niche
issue for most Russians and despite this month’s currency collapse, the president is still overwhelmingly
popular nationwide. Navalny’s following is an irritation for the government, and it will be interesting to see what
they do with him now that it’s clear he’s not going to stay quiet to protect himself and his brother. But the
government has survived rounds of Moscow street protests before and will likely weather this storm as well.
The bigger question going forward is whether Russians will begin to blame Putin’s policies for the slumping
economy and rising consumer prices. Based on recent experience, it’s far from clear that they will. But if
Russians do start to turn on Putin, Navalny is certainly the opposition figure in the best position to capitalize.
And so far, the authorities have been surprisingly incapable of shutting him down. Monday’s arrest did not help
that cause.
#9
Armenia picks Russian economic ties but tries to keep foot in the West
By Karoun Demirjian
Washington Post, January 6, 2015
When Armenia broke ranks last year with other former Soviet states marching toward Europe and pledged to
join Russia’s new customs union instead, the goal of keeping a foothold in both the East and the West didn’t
seem all that challenging.
It wasn’t the first time the country had pulled off such a high-stakes balancing act: For years, Armenia has
been the only full member of the Collective Security Treaty Organization, the Russian-led military alliance, to
also participate in NATO peacekeeping missions. And with the United States and European Union promising to
continue economic development efforts, there seemed little to lose by joining Russia.
But that was before the Ukraine crisis, before Western-Russian relations sank to their lowest point since the
Cold War, and before the ruble started plummeting erratically — pulling down currencies such as the Armenian
dram along with it.
Now, as Armenia settles into its role as the smallest member of Russia’s new Eurasian Economic Union
(EEU), the country is bracing for what even government officials acknowledge could be a rough ride.
“I never heard of a situation where turmoil in a partner country was a helpful thing,” said Vache Gabrielyan,
deputy prime minister and head of a new government ministry for international economic integration.
People walk through Republic Square last month in Yerevan, Armenia. (Karoun Demirjian/The Washington
Post)
“The situation, of course, has changed,” he added. “But I don’t yet see any change that fundamentally alters
the choice we made.”
Armenia’s decision to scrap negotiations with Europe over an association agreement — the sort that the E.U.
recently signed with Ukraine, Georgia and Moldova — and join Russia’s nascent trade bloc was announced
abruptly after a September 2013 meeting between the president, Serge Sarkisian, and Russian President
Vladimir Putin in Moscow. Western diplomats said they were surprised, and some members of the opposition
said the deal was the result of Russian blackmail.
Members of the Armenian government justified the decision as one that will give Armenia the opportunity to
improve economic ties with both the E.U. and the EEU.
“In the framework of our humble abilities, we strive to serve as a bridge for these two organizations,” said
deputy foreign minister Shavarsh Kocharyan, one of the key negotiators of the deal to bring Armenia into the
EEU. Picking a side was simply a necessity, he added, because “nowadays, every state needs to be in an
economic cooperation bloc. Germany, France — are they on their own? Heh.”
The idea that Armenia could help build E.U.-EEU economic ties appears to have some support in the Kremlin.
Last week, Russia’s E.U. ambassador told the EU Observer, a news Web site, that Armenia is one of several
countries that could facilitate trade between Russia’s new customs union and Europe.
What few in the Armenian government will acknowledge, however, is that in choosing to side with Russia, they
didn’t have much choice.
Armenia declared its independence from the Soviet Union 23 years ago. But Russia remains the tiny country’s
most vital link to the outside world.
From left, Armenian President Serge Sarkisian, Belarus's President Alexander Lukashenko, Russian President
Vladimir Putin, Kazakh President Nursultan Nazarbayev and Kyrgyz President Almazbek Atambayev at the
Eurasian Economic Union summit in Moscow on Dec. 23. (Maxim Shipenkov/AP)
Russia hosts the largest population of Armenians outside Armenia and is the largest source of remittances,
which accounted for more than a fifth of Armenia’s national income last year. Russia has a monopoly on selling
Armenia cheap gas through 2043, and state-funded Russian television broadcasts are how many Armenians
get news and information.
While Europe remains Armenia’s largest export market, Russia is the key destination for non-raw-material
goods, which Gabrielyan says will help Armenia diversify its economy — especially, he said, because Armenia
is not yet ready to compete in Europe.
Few public officials, even those who have criticized the president, discount those ties. Last month, Armenia’s
parliament voted overwhelmingly to approve joining the EEU.
The EEU dealmaking process “was misguided and should have been done differently,” said Vartan Oskanian,
Armenia’s former foreign minister and a member of Prosperous Armenia, parliament’s second-largest party.
But lawmakers backed EEU membership “given the importance we attach to Armenia’s relations with Russia.”
Yet the most important factor driving Armenia’s participation in Russia’s new economic union isn’t economic.
“We have a security issue which demands us to take faster steps,” Kocharyan said, explaining that benefits of
European association would take longer to realize than joining the EEU. “Such long-term projects are very
important, but we can never exclude the possibility that the day after tomorrow, we may have to impose peace
on our neighbors.”
Russia is Armenia’s chief supplier of arms, at discounted prices, and maintains a military base in the country.
Armenians consider that a vital asset in their two-decade-long, frozen conflict over the status of NagornoKarabakh, an ethnic Armenian enclave within Azerbaijan that declared independence as the Soviet Union was
coming apart.
There is fear of endangering the Russian military support especially because there is no real Western
alternative. Although Armenia is recipient of one of the highest levels of U.S. aid per capita, that money isn’t for
buying weapons.
But some opposition members worry that joining the EEU may undermine the economic and strategic security
Armenia seeks to preserve through closer association.
“Many Armenians think that Russia can only solicit Azerbaijan to join the EEU by bargaining on Karabakh,”
said Nikol Pashinyan, an opposition member of parliament who spent a few years as a political prisoner under
Sarkisian’s presidency.
In recent years, Russia began selling arms to Azerbaijan — a shift Armenia believes fueled a spike in crossborder skirmishes last summer. And Armenia only narrowly avoided having trade with Nagorno-Karabakh
subjected to customs tariffs in EEU negotiations.
Pashinyan said EEU membership could also hurt deals between Armenia and other neighbors, such as Iran,
where a rollback of sanctions could present lucrative opportunities to transport oil to Europe. Through the EEU,
Russia could stymie such plans.
Such concerns are why some government opponents maintain that joining the EEU is tantamount to
“surrendering by our own signature . . . the independence we gained 23 years ago,” said Raffi Hovannisian, the
U.S.-born leader of Armenia’s Heritage Party who ran for the presidency last year and made accusations of
fraud after losing.
When asked about such scenarios, government officials said Armenia will not shy away from vetoing EEU
decisions it doesn’t like, even under Russian pressure — and stressed that Armenia will still seek closer ties
with Iran, the West and others as an EEU member.
But even if Armenia is able to walk that geopolitical tightrope, some believe that by moving toward Russia, the
country lost something it can’t replace.
“You know, yesterday, we were not Europeans, yesterday we were not a democratic country. But yesterday we
had the hope of becoming a democratic country, with European standards,” said Stepan Safaryan, a political
analyst and former Heritage Party leader. “Tomorrow, we will not have this hope. And that is the problem.”
#10
What's The EEU And What Are Its Chances?
By Daisy Sindelar
RFE/RL, January 02, 2015
Five years ago, Moscow had every reason to feel secure about its neighborhood.
Ally Kazakhstan was settling in as the first post-Soviet state to chair the Organization for Security and
Cooperation in Europe. Belarus had acquiesced to new oil-supply terms from Russia. And all three countries
had just joined forces in a new Common Economic Space, a partnership they hoped would eventually
outweigh or even absorb the European Union.
The common space, formally known as the Eurasian Customs Union, this week emerged from its five-year
cocoon as the Eurasian Economic Union (EEU), an organization once anxiously anticipated by former U.S.
Secretary of State Hillary Clinton as a move to "re-Sovietize" the former U.S.S.R.
But as the new union quietly steps into existence, any threat of a reemerging Soviet empire seems wildly off
the mark.
Here's what you need to know about the EEU.
What It Is
Structurally, the EEU is modeled on the EU, comprising a single market with its own commission, court, and
bank -- based in Moscow, Minsk, and Almaty, respectively. But while Russian President Vladimir Putin would
like to see its writ expanded to include a political function, the union remains largely economic at the insistence
of its other members, focusing on the free flow of capital, goods and services, and workforce throughout a
common market with an estimated output of $2.4 trillion and comprising more than 170 million people.
It Started Out With Three Members. Now It Has... Four
Vladimir Putin once spoke grandiosely of a Common Economic Space stretching from Vladivostok to Lisbon.
But so far, the EU has rejected direct negotiations with the supranational body. Post-Soviet neighbors have
had doubts, as well. Ukraine has steered clear of the group since narrowly avoiding being pressured into
membership ahead of the Maidan protests. Energy-rich Azerbaijan has nixed any interest in the group.
Armenia, which abandoned closer ties with Europe in the face of Russian coercion, joined the group on
January 2; Kyrgyzstan is set to join the group in May.
But the absence of a populous country like Ukraine and a rich one like Baku leave the EEU decidedly lopsided,
with Russia playing the dominant partner both in terms of population and GDP.
Two Of The Members Already Have Doubts. Big Ones
Kazakh President Nursultan Nazarbaev was, in fact, the first to conceive of a Common Economic Space, more
than 20 years ago. But his thoughts on the issue have evolved along with his country's economic well-being.
While the notion of open borders and free trade appealed to an impoverished Kazakhstan in its early years of
independence, it now enjoys handsome profits from its vast energy and mineral resources.
Nazarbaev has said the Kremlin's growing isolation from the West over Ukraine will "impact" attempts to build
the EEU, and has stressed that Kazakhstan will leave the EEU if its interests are infringed -- an apparent
reference to the Russian majority in its territorial north and the Kremlin's stated aim of protecting its crossborder kin.
Belarusian leader Alyaksandr Lukashenka, meanwhile, has criticized Moscow for banning imports of
Belarusian meat and dairy out of fears they may be repackaged versions of EU products, which are currently
banned by Moscow in retaliation for Western sanctions over Ukraine.
It's Hard To Launch An Economic Union When Someone's Economy Is Tanking
Moscow may seem like an appealing partner when oil's at $100 a barrel or the ruble's trading at 30 to the
dollar. But with Russia currently struggling to survive low oil prices and sweeping Western sanctions, it's
considerably less alluring to its union partners. The Kazakh exports to Russia are dropping as businesses fear
a loss in profits; remittances from Kazakh, Kyrgyz, and Armenian workers in Russia are also expected to drop.
Belarus has been forced to impose price freezes to avoid a run on foreign currency. Lukashenka, who likes
things steady, has purged a number of major government officials in recent days, including his prime minister
and national bank chief.
#11
Ruble's woes spread to other ex-Soviet currencies
By Marc Jones
Reuters, January 7, 2015
Falling energy prices and the plunge in the Russian rouble are hitting currencies across the former Soviet
states, with Belarus and Turkmenistan having already devalued this week and markets betting that Kazakhstan
will follow soon.
Countries of the former Soviet Union have had their own currencies for two decades but many still depend on
Russia, both for trade and for money sent home from workers living there.
Those with their own energy exports that are least dependent on Moscow, like Azerbaijan and Kazakhstan, are
seeing revenues hit by the same falling oil prices that wrecked the rouble after the Ukraine crisis threw
Russia's economy into reverse.
Financial markets are betting on a near 20 percent devaluation in the next three to six months in Kazakhstan's
pegged tenge currency, which was already devalued by 19 percent last year.
Others that float more freely like Armenia's dram and Georgia's lari are also expected to tumble further along
with bond and stock markets in the region.
"Obviously this sharp fall in the rouble and oil is putting heavy pressure on all of these countries," said Piotr
Matys, an emerging markets strategist at Rabobank.
A devaluation can be helpful in rebalancing an out-of-kilter economy, but it also creates problems by pushing
up the value and interest costs of any debt borrowed in international currencies like the dollar, and hiking
inflation.
As the second biggest of the ex-Soviet economies, it is Kazakhstan and its tenge that is being most closely
watched.
The benefits of last year's devaluation have been more than wiped out by the ruble's recent slump, and though
the central bank has said there will be no repeat, oil's 50 percent price drop now means it may have no choice.
"If you look across the universe of oil producers, those that haven't adjusted yet will, it's as simple as that," said
Jan Dehn, at emerging market specialist fund manager Ashmore. "The ostrich solution of sticking your head in
the sand and pretending it hasn't happened really doesn't work for very long."
Half of Kazakhstan's revenues last year came in one way or another from oil, so the state budget is likely to fall
heavily into the red. And with the year-end cut off for many of the government's key performance metrics now
passed, Kazakh watchers think a devaluation could come at any time.
"The NBK (Kazakh central bank) is trying to make a brave face of it and hold the line, but this line is really not
credible," said Demetrios Efstathiou, head of CEEMEA Strategy at Standard Bank
"We think they will eventually want to move, the only question is timing."
OIL PRESSURE
Azerbaijan, the other big former Soviet oil producer, has a more robust balance sheet, having been one of the
fastest growing economies in the world over the last decade. But it is bound to be hurt as oil and gas projects
get shelved.
The Azeri currency, the manat may fare better than the tenge. It has fallen only fractionally in recent months
and authorities have a decent arsenal of reserves. But the pressure remains.
"They haven't devalued before so the question is whether they will devalue now," said Efstathiou. "There is a
small chance, but I think Kazakhstan is much more likely."
It is not just the oil producers that are in trouble. Former Soviet states without oil of their own to sell tend to be
the ones that are still most dependent on trade and economic ties with Moscow: like Belarus, Armenia and
Ukraine itself.
Armenia relies on Russia for 80 percent of the remittances sent home by workers living abroad, a vital source
of capital to fund a balance of payments deficit of 10 percent of GDP. Those workers are now earning
devalued rubles.
Belarus sends Russia half its exports. Even distant Uzbekistan, with no Russian border, sends a quarter of its
exports there.
No ex-Soviet country has seen its intimate economic relations with Russia more starkly exposed by the
Ukraine crisis than Ukraine itself, which has been pushed to the brink of bankruptcy.
Its hryvnia was one of the few currencies to fall more than the rouble last year, and is now hovering just off an
all-time low, awaiting a decision from the IMF on a desperately-needed bailout.
Ukraine's economy has been hurt not just by the direct impact of war with Russian-backed separatists that
killed more than 4,000 people, but by the loss of cheap Russian gas imports and damage to its own Russiabound exports.
Gas debt repayments to Russia and spending to support the hryvnia have more than halved Ukraine's foreign
currency reserves during 2014 to a 10-year low and left them under $10 billion, barely sufficient to cover two
months of imports.
#12
Putin’s Eurasian Dream Is Over Before It Began
By Reid Standish
Foreign Policy, January 6, 2015
On Jan. 1, one of Vladimir Putin’s most ambitious foreign-policy projects and a longtime Kremlin dream
became a reality. Unfortunately for Putin and his colleagues in Moscow, nothing about the plan will work.
The Eurasian Economic Union — a post-Soviet economic bloc of Armenia, Belarus, Kazakhstan, Kyrgyzstan,
and Russia — was designed to allow the Kremlin to reassert influence in its backyard and counterbalance the
Brussels-based, 28-member-state European Union, which has inched towards Russia’s borders over the past
decade. Instead, the Kremlin’s prestige project, announced in 2011, but floated as an idea since 1994, limped
out of the start gate in 2015.
Since taking power in 2000, Putin moved to rewrite the history of Russia’s tumultuous 1990s, a decade marred
by war in Chechnya, an economic crisis in 1998, and a rudderless foreign policy in its former backyard. Putin
not only made Russia’s military relevant once again by modernizing it and setting up military bases in
neighboring countries, but also wielded influence with former Soviet countries by controlling economically vital
oil and gas pipelines. The Eurasian Union was meant to be the next step to secure Moscow’s standing as the
economic champion of the post-Soviet space.
The Eurasian Customs Union, the Eurasian Union’s precursor, formed in 2010 and designed to remove trade
barriers and harmonize tariffs between prospective members, has already faced its share of problems.
Originally comprised of Belarus, Kazakhstan, and Russia, the integration project expanded to include Armenia
and Kyrgyzstan in 2014, but has not delivered the economic boom that its members were promised. Both
Kazakhstan and Belarus have seen their exports become more expensive in the crucial Russian market due to
the ruble’s exchange rate troubles, while cheaper Russian goods have made it hard for domestic producers to
compete. As the ruble’s value tumbled some 20 percent in mid-December, consumers from Belarus and
Kazakhstan crossed the border into Russia to snatch up deals on anything from cars to fruit as they found their
buying power suddenly increased.
But the ruble’s fall will continue to create economic strain for the Eurasian Union’s four non-Russian members
and 180-million-person market. In the medium and long term, the economic bloc will likely fail to deliver on its
promises of breathing new life into its members’ industries and stimulating much-needed economic growth. “As
Russia’s economy grows weaker, the Eurasian Union becomes increasingly irrelevant and unappealing for its
other members,” says Luca Anceschi, a Central Asia expert at the University of Glasgow. “Eurasian integration
was supposed to be about economic development, but it’s coming with a much larger price tag than its
members expected,” adds Anceschi. With Belarus and Kazakhstan slowly realizing the economic costs of
allying with Russia, cracks in the Eurasian Union are already beginning to show even before the foundations
are set.
Since Western countries imposed the first round of sanctions on Russia in March, trade spats between Belarus
and Russia have become the norm. Despite the political alliance between Minsk and Moscow, Russia banned
meat imports from its neighbor in November, saying that Belarus had become a smuggling route for foods
banned under the Kremlin’s counter-sanctions against the West. Belarus’s autocratic President Alexander
Lukashenko called the restrictions “indecent.” This was followed by another incident, on Dec. 18, when
Lukashenko tried to head off devaluing the Belarussian ruble by ordering the government to denominate trade
with Russia in U.S. dollars or euros. About 40 percent of Belarus’s exports go to Russia, according to Belarus’s
Foreign Ministry, and much of the rest goes to other former Soviet countries closely linked to the Russian
economy. The Belarussian ruble lost 13 percent of its value against the U.S. dollar in 2014 and Minsk is clearly
worried about the spread of economic contagion from Russia and is looking for added protection.
In Kazakhstan, a key country for Moscow’s plans for Eurasian integration, relations with Russia have been
strained by mounting economic and political pressures over the past year. Like Russia, Kazakhstan relies
heavily on oil to finance its budget and has been hard hit by the price slump for crude. In February,
Kazakhstan’s government devalued its currency, the tenge, by nearly 20 percent in one day due to falling oil
prices. Sanctions on Russia have also taken an inadvertent toll on Kazakhstan, with the International Monetary
Fund (IMF) forecasting that growth in Kazakhstan will slip from 6 percent of GDP to 4.6 percent in 2014 as a
result of falling oil prices and the importance of trade with the Russian market.
To keep itself afloat and back its way out of Moscow’s economic shadow, Kazakhstan is trying to show the
world that it’s still a good place to do business. In November, Kazakhstan’s president of 25 years, Nursultan
Nazarbayev, announced a $9 billion stimulus from the country’s national oil fund to boost infrastructure
development and attract foreign investment. This summer, the government unveiled new exemptions that allow
foreign investors to avoid paying taxes for 10 years. The government in Astana has also announced that it is
prepared to offer 30 percent reimbursement of capital costs to investors once a foreign facility is up and
running in the country.
Meanwhile, Kazakhstan is also actively strengthening ties with Western Europe. The European Union is
already Kazakhstan’s largest trading partner, a relationship that will grow further after Brussels and Astana
signed an enhanced Partnership and Cooperation Agreement in October — a deal similar to the one Ukraine
signed in September. “The government is taking a gutsy approach to attracting foreign investment and it could
actually work,” says Janet Heckman, the head of the European Bank for Reconstruction and Development in
Almaty, Kazakhstan.
“Our foreign policy has always been about the national interests of Kazakhstan first and foremost,” Erlan
Idrissov, Kazakhstan’s foreign minister, told Foreign Policy in a recent interview. In addition to looking West,
Kazakhstan has also been deepening ties with neighboring China. In 2013, China signed $30 billion worth of
gas and oil deals and became the top investor in Kazakhstan’s Kashagan oil field — the largest in the world
outside the Middle East. The trend continued on Dec. 14 as China and Kazakhstan inked $14 billion worth of
infrastructure and energy deals — an important move for Kazakh economic independence, given that 80
percent of its oil exports are currently dependent on Russia-controlled pipelines and railways.
“We are not pro-Russian, pro-Chinese, pro-European, or pro-American in our foreign policy. We are proKazakh,” Idrissov said. “If Russia can help us, we will turn to Moscow, but if Russia can’t offer us what we need
to pursue our interests, we will turn elsewhere. It’s simply pragmatic.” In Oct. 2013, Nazarbayev accused
Moscow of erecting unfair barriers to trade, describing the Customs Union’s Russian-dominated regulatory
body as politicized and complaining that foreign trade distortions were causing major difficulties for his
country’s market.
Kazakhstan hoped that joining the union would help it develop a strong market for its local exports beyond
hydrocarbons, but since accession to the Customs Union in 2010 the country has been flooded with Russian
imports.
Kazakhstan hoped that joining the union would help it develop a strong market for its local exports beyond
hydrocarbons, but since accession to the Customs Union in 2010 the country has been flooded with Russian
imports.
All of this has raised fears in Astana, as well as Minsk, that the Eurasian Union they just entered will, as per
Russian design, lock the post-Soviet states into Russia’s political orbit. Fears over sovereignty were increased
following the annexation of Crimea in March. “In the eyes of Kazakhstan, Crimea’s annexation was an
announcement that Russia does not respect the sovereignty of post-Soviet states,” says Nargis Kassenova of
Kazakhstan’s KIMEP University’s Central Asian Studies Center. Crimea has left both Kazakhstan and Belarus
walking a diplomatic tightrope, unable to fully split with Russia, but weary of its new face. Lukashenko, despite
advocating support for Putin, called the annexation of Crimea a “bad precedent” for the region in March.
Speaking on Dec. 15, on the eve of two-day official independence anniversary celebrations, Nazarbayev said
that Kazakhstan will celebrate the 550th anniversary of the Kazakh Khanate in 2015 and urged his citizens to
defend the country’s independence. The speech appeared to be a direct answer to a statement by Putin in
August, who publicly said that Kazakhs had never had statehood before the collapse of the Soviet Union in
1991.
And while Kazakhstan and Belarus are diversifying their economic and political options, the Eurasian Union’s
smaller members seem resigned to accept their fates as Russian satellites. Armenia’s National Assembly
voted 103-7 on Dec. 4 to join the Eurasian Union along with Belarus, Kazakhstan, and Russia on Jan. 1. But
even lawmakers who voted “yes” were less than enthused about linking their future to Russia. “We cannot
survive without the Russian people,” said Mher Sadrakyan, a member of parliament from the ruling Republican
Party of Armenia, echoing the view that an alliance with Russia is a necessary evil. Without Russia, Armenia
would be left without support in its conflict with Azerbaijan over the predominantly ethnic-Armenian territory of
Nagorno-Karabakh. The conflict there has been in limbo since a Russia-brokered cease-fire in 1994. Russia
has a military base in Armenia and is the main supplier of arms to the Armenian military. “Without them [the
Russians], they will devour us,” Sadrakyan said, referring to Azerbaijan.
Kyrgyzstan will also become a member of the nascent union — but with caveats. Kyrgyz President Almazbek
Atambayev signed on the dotted line on Dec. 23, while noting that his country’s economy would not be ready
for accession until May 2015. Major doubts persist in Kyrgyzstan about how joining the Eurasian Union will
benefit the country’s economy, which relies heavily on the lucrative re-export trade of Chinese goods to other
former Soviet countries. Eurasian Union membership will place new tariffs on Chinese goods, which will
effectively strangle the re-export trade and could close major markets in the country — a development that the
Kyrgyz Ministry of Labor, Migration, and Youth warned could double unemployment. Still, Moscow is
Kyrgyzstan’s main benefactor, providing billions of dollars’ worth of aid to prop up its struggling economy. The
country’s leadership is not prepared to put that vital lifeline in jeopardy.
The Eurasian Union looks like a major dud. With Armenia and Kyrgyzstan reluctant members at best, and
Belarus and Kazakhstan looking for alternatives to closer ties with Moscow, it’s becoming clear that the
Eurasian Union won’t be the geopolitical game-changer Putin hoped for. Eurasian integration was meant to be
the final step in Russia’s return to dignity and leadership, but instead the union is evidence of the Kremlin’s
decaying foreign-policy aspirations.