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Yesterday in a phone conversation with Angela Merkel Putin claimed that he was pulling back troops from the Ukrainian border. Today NATO Secretary-General Anders Fogh Rasmussen challenges that claim.

NATO sees no sign of Russian pullback from Ukraine border

Some NATO members are cautious about taking steps that could aggravate the crisis, particularly after Moscow said on Monday it had pulled some troops back from near the Ukrainian border.

But a NATO military official, speaking on condition of anonymity, said Russia still had 35,000 to 40,000 troops stationed near the border and that there was no sign of any significant reduction in their numbers.

The NATO foreign ministers are meeting in Brussels today to discuss plans for responding to the situation in Ukraine. There is a proposal on the table for a comprehensive approach to strengthening ties with the former USSR states.
Before the meeting, a Nato committee drafted plans "for promoting stability in eastern Europe in the current context" by increasing military co-operation with Armenia, Azerbaijan, and Moldova – all in Russia's "near abroad" and considered by Moscow as falling within its sphere of influence.

A confidential seven-page paper leaked to the German news weekly Der Spiegel proposed joint exercises and training between Nato and the three countries, increasing the "interoperability" of their militaries with Nato, and their participation in Nato "smart defence" operations.

The paper also proposed opening a Nato liaison office in Moldova, military training for Armenia, and projects in Azerbaijan aimed at securing its Caspian Sea oil and gas fields.

Meanwhile Gazprom, the Russian gas monopoly, is putting the financial screws to Ukraine.
Russia’s natural-gas export monopoly raised prices for Ukraine 44 percent after a discount deal expired, heaping financial pressure on the government in Kiev as it negotiates international bailouts.

OAO Gazprom (GAZP) said Ukraine is losing its right to pay less because it has piled up a debt of more than $1.7 billion since 2013. Ousted President Viktor Yanukovych won a lower price at the end of last year as he grappled with protests after ditching an association agreement with the European Union, on top of a previous discount in April 2010. That may also be overturned, according to Russia’s government.

This is happening at the same time that Ukraine has negotiated a loan arrangement with the IMF which requires the elimination of consumer gas subsidies.

The plot thickens and the kettle boils. Anybody who is looking for a quick and triumphal end to this situation is likely in for a disappointment.

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Comment Preferences

  •  lots of policy sausage casings being made (3+ / 0-)
    Recommended by:
    Skyye, Louisiana 1976, bear83
    Anybody who is looking for a quick and triumphal end to this situation is likely in for a disappointment.

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013 (@eState4Column5).

    by annieli on Tue Apr 01, 2014 at 08:41:00 AM PDT

  •  seems entirely reasonable (3+ / 0-)
    Recommended by:
    native, limpidglass, LanceBoyle

    that Ukraine should pay market price for natural gas if it chooses to ally with the "common market" (EU).  Maybe they can work something out with Germany to pay their bills for them.

    When it becomes independent (or joins Russia) East Ukraine will probably get something more like the old deal (or domestic Russian pricing).

    Fake Left, Drive Right . . . not my idea of a Democrat . . .

    by Deward Hastings on Tue Apr 01, 2014 at 09:32:34 AM PDT

    •  yeah, what does the EU have against the free (2+ / 0-)
      Recommended by:
      Deward Hastings, native


      When Ukraine was part of the USSR, they got a discount on natural gas. When they stopped being part of the same country as Russia, Russia stopped giving them the discount and required Ukraine to pay closer to market price, which is a perfectly reasonable thing to do.

      The Russians offered a discount as part of a deal in which Ukraine would join the Russian Customs Union. Once that deal was scuttled, they stopped offering the discount again. None of this is unreasonable or unfair.

      If it were a private company doing this, and not a state-owned firm like Gazprom, there would not be a peep from the West. A private company could manipulate the fuck out of the market, establish a monopoly, and force the Ukrainians to pay twenty times what they're paying now, and it would all be just good business. But the Russians do something much more modest, require them to pay the same price that Europe pays, and suddenly it's neo-Stalinist tyranny and energy warfare.

      What does the West have against capitalism?

      "In America, the law is king." --Thomas Paine

      by limpidglass on Tue Apr 01, 2014 at 11:59:14 AM PDT

      [ Parent ]

  •  Ukraine is about to get screwed (4+ / 0-)

    It's not surprising that Russia is going to stop giving Ukraine subsidized gas.
    Nor is it a surprise that the IMF is going to insist on draconian austerity measures.
    Nor is it a surprise that those Ukrainian loans are going to immediately leave the Ukraine and head to foreign banks (Russian and otherwise).

     Ukraine is still poorer than it was under the Soviets, and it is about to get more poor.

    "The oppressors most powerful weapon is the mind of the oppressed." - Stephen Biko

    by gjohnsit on Tue Apr 01, 2014 at 09:46:17 AM PDT

  •  Ukraine could still stick it to Russia (0+ / 0-)

    Most of Russia's gas exports to Europe go through western Ukraine.

    Ukraine—and Europe more broadly—does have some leverage over Russia to prevent the situation from deteriorating further
    "...the gas pipelines, as well as critically important gas storage facilities, all go through Western Ukraine," he says. "Until Russians build additional bypass pipelines…they are still highly dependent on Ukraine to transit gas exports to Europe." And Ukraine's supplies, mostly in the pro-reform western part of the country, could withstand a four-month Russian blockade, according to Reuters.

    Tim Boersma from Brookings says Europe is in a good place right now to apply pressure: "Both parties have a lot to lose here," he says. "But I would argue that Russia has more to lose than Europe at the moment. Russia needs European markets. Russia needs European demands. It is making roughly $100 million dollars a day from hydrocarbons."

    Seems to me Ukraine could impose a tax on that gas that's passing through their country to offset Russia's price hikes - or halt the flow completely for 'maintenance', just like US refineries do to drive up gasoline prices.

    Election Day is Nov 4th, 2014 It's time for the Undo button on the 2010 Election.

    by bear83 on Tue Apr 01, 2014 at 10:39:38 AM PDT

    •  Russia now has two other routes (0+ / 0-)

      for shipping gas to Europe. Any leverage that Ukraine might have is considerably diminished. Russia could just shut down the pipeline going to Ukraine. The total lack of gas would cripple Ukraine while Russia would only have diminished revenues. Russia also has the option of negotiating increased gas sales to China which is in process.

      •  Half of Russia's gas exports to Europe (0+ / 0-)

        still go through Ukraine

        New Gazprom pipelines via Belarus and the Baltic Sea to Germany (Nord Stream) have cut the proportion of Gazprom's Europe-bound exports that transit via Ukraine to around half the total, meaning only about 15% of Europe's gas now relies on Ukraine's pipelines.
        and shutting off Ukraine would be a very expensive move for Russia and Putin
        Europe accounts for around a third of Gazprom's total gas sales, and around half of Russia's total budget revenue comes from oil and gas. Moscow needs that source of revenue,

        Election Day is Nov 4th, 2014 It's time for the Undo button on the 2010 Election.

        by bear83 on Tue Apr 01, 2014 at 11:25:36 AM PDT

        [ Parent ]

  •  I don't see that Russia is threatening (1+ / 0-)
    Recommended by:

    either Armenia, Azerbijan, or Moldova, such that increasing NATO military involvement with those countries would be justified. At least, not for purely defensive purposes. Why must we continually provoke?

    •  that thing (0+ / 0-)

      about living up to your reputation is too hard to overcome.

    •  Actually, Moldova is nervous. (2+ / 0-)
      Recommended by:
      Richard Lyon, native

      It's East (Transnistria) is a part of the country that was settled by Russians to keep the Moldovan SSR in line.  

      Armenia does not want in NATO at the moment;  it prefers Russian guarantees for places like its exclave in Azerbaijan, Nagorno-Karabakh.  Azerbaijan does not like Armenia very much, and especially does not want Armenia to claim a corridor between its homeland and Nagorno-Karabakh.  

      Not mentioned on this list is Belarus, which has made noises favorable to joining NATO considering what happened in Ukraine.  

      "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

      by Yamaneko2 on Tue Apr 01, 2014 at 02:05:03 PM PDT

      [ Parent ]

      •  I don't think NATO has any military business (1+ / 0-)
        Recommended by:

        in any of these countries, whether or not they want to join, and whether or not they are nervous. Wouldn't you agree that such actions are provocative, and tend to escalate hostilities?

        •  They may be provocative. (0+ / 0-)

          The problem is that Russia has shown its imperialist side in South Ossetia and Georgia, and the other nations on its southern and western flanks do not want to be next.  It's not only NATO that's provoking, but Russia as well.  The former Soviet republics and Warsaw Pact nations that have joined NATO are its best propagandists, so other former Soviet republics want to join.  

          "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

          by Yamaneko2 on Wed Apr 02, 2014 at 11:29:50 PM PDT

          [ Parent ]

  •  eye opening quote (4+ / 0-)
    Recommended by:
    amyzex, Richard Lyon, native, limpidglass
    This is happening at the same time that Ukraine has negotiated a loan arrangement with the IMF which requires the elimination of consumer gas subsidies.
    We know why Russia (Gazprom) requires more money for its gas.

    Why does the IMF require the elimination of subsidies?

  •  Armenia is likely to look askance at NATO (0+ / 0-)

    because of the influence of Turkey on that alliance.

    The Stars and Bars and the red swastika banner are both offerings to the same barbaric god.

    by amyzex on Tue Apr 01, 2014 at 10:47:29 AM PDT

  •  so NATO's answer is to expand NATO (2+ / 0-)
    Recommended by:
    whizdom, native

    to Azerbaijan, Armenia, and Moldova, an action that Russia will consider a provocation and will respond to accordingly, with forceful moves. Brilliant.

    Just who the fuck runs NATO, anyhow? It is yet another out-of-control octopus, consuming and growing endlessly without any other purpose besides consuming and growing.

    I wonder if and when the day will come when NATO military might is used to enforce the will of the US on European soil, and the status of Europe as an American colony becomes clear for the whole world to see, causing a massive geopolitical earthquake and leaving America without its last remaining real ally. Nuland's "fuck the EU" sneer expresses a view more and more common among the American foreign policy elite. The next neocon Republican to sit in the White House will think as she does.

    Ironic that the alliance intended to protect European security might end up shattering it for a generation.

    "In America, the law is king." --Thomas Paine

    by limpidglass on Tue Apr 01, 2014 at 11:31:09 AM PDT

    •  NATO should have been dissolved in 1991 (2+ / 0-)
      Recommended by:
      native, Richard Lyon

      after the Warsaw Pact and the USSR collapsed. It no longer has a purpose. But it seeks to manufacture rationales to keep itself alive, because it reinforces American hegemony over Europe and generates huge profits for arms dealers. NATO is an inherently imperialist project.

      •  I don't think it can be easily dissolved, (1+ / 0-)
        Recommended by:

        not unless Europe develops its own defense institutions.

        To just end NATO and break it down would be horrendously destabilizing for Europe. It's not clear what effect that would have on the already fragile EU, but I doubt it would be a good one. The security vacuum might encourage nuclear proliferation in Europe as individual nations sought a nuclear deterrent in the absence of NATO security guarantees. That would be very dangerous.

        The other alternative to the stalemate in which we find ourselves is for Russia to join NATO. Putin himself suggested it might be possible, years ago.

        Even Putin, in his first days in the Kremlin, seized on the issue. In March 2000, in his first interview with a foreign reporter -- the BBC's David Frost -- Putin shocked critics and fans alike, saying, "We believe we can talk about more profound integration with NATO, but only if Russia is regarded as an equal partner." Asked outright if Russia could join NATO, Putin shot back: "I do not see why not." He also added a dark warning: Any NATO attempt to exclude Russia from the debate over the alliance's eastward expansion would only provoke "opposition."
        And I think this is what will ultimately happen. The US will have to have visionary leaders willing to grasp their opportunities, however.

        "In America, the law is king." --Thomas Paine

        by limpidglass on Tue Apr 01, 2014 at 12:11:09 PM PDT

        [ Parent ]

        •  Russia later took the position (0+ / 0-)

          that they would not be willing to join NATO. The problem seems to be that the Russians are unwilling to see themselves as just another European state in a confederation where they would not be the dominant partner. That isn't just a matter of Putin. It is a notion of national destiny that has deep cultural roots.

      •  It keeps Europeans from each others' throats. (1+ / 0-)
        Recommended by:

        Europe has a long history of tearing at its throat, and plunged the entire world into war on at least two occasions.  Our French and Indian War was the Seven Years' War.  Our Revolution brought France, Britain and Spain to war.  Our War of 1812 was the Western Hemispheric branch of the Napoleonic Wars.  

        Greece and Turkey have longstanding disagreements over Cyprus and a border that snakes through the Aegean islands, coming quite close to the Turkish mainland.  Greece has a problem with the Republic of Macedonia's name.  Macedonia, Albania and Bulgaria have a nasty history with each other, and the only thing that kept Bulgaria from cleansing its Turks during its period of nationalism was that NATO and the EU would be closed to them.  

        "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

        by Yamaneko2 on Tue Apr 01, 2014 at 01:25:15 PM PDT

        [ Parent ]

        •  Let the EU form its own collective security org (1+ / 0-)
          Recommended by:

          But it should exclude the US, which has been using NATO to try to perpetuate its global hegemony. Everyone would be better off if this were a multipolar world.

          An interesting side-note: I'm reminded of the case of the Delian League, an anti-Persian alliance of Greek city-states-- which the Athenians commandeered after the defeat of Persia (they even embezzled its treasury) and used to enforce Athenian hegemony. They used the League with such a heavy hand they eventually isolated themselves and lost the Peloponnesian War.

  •  a surprising take on the IMF-Ukraine deal (1+ / 0-)
    Recommended by:

    from the pages of Forbes, not usually known as a hotbed of progressive economic thought:

    In other words, the quid pro quo of austerity-for-aid is at the heart of Ukraine’s bailout program, and it promises to devastate Ukrainian living standards, according to the take by analyst Vlad Signorelli of Bretton Woods Research in Mt. Tabor, New Jersey.

    Among some of the details coming to light are a 47% to 66% increase in personal income tax rates; a 50% increase in monthly gas bills; a 40% increase on gas tariffs for heating companies; and an increase in taxes on agribusiness. In addition, while some at the IMF have speculated the currency’s devaluation against the dollar year-to-date (35+%) is enough to satisfy the fund’s penchant for ‘correcting imbalances,’ others are maintaining the currency needs to get even weaker…

    For his part, Yatsenyuk has characterized his approach as a “kamikaze mission”.  He admitted that such policies will likely cause GDP to shrink by 3% and inflation to rise to 12-14% during the next twelve months as subsidies, primarily from Naftogaz, are axed under the austerity regime. Worse yet, Gazprom will no longer honor below market rate gas supply deals cut with Ukraine in December when ousted President Viktor Yanukovych rejected a trade deal with Europe to please Moscow.

    This is a massacre, plain and simple. It might have been kinder if the West had simply sent in soldiers to shoot all the Ukrainians. Draconian does not begin to describe what the IMF has in store for that beleaguered country. 12%-14% inflation and 3% dip in GDP in a year--who is going to stand for that? 35% devaluation against the dollar not enough?

    Yatsenyuk will need every Right Sector thug lined up behind him if he wants to enforce this. Once a new president is voted in he'll have to flee the country just like his predecessor, in order to avoid being lynched by the angry mobs on his heels.

    So the only question is: will it be the proven failure Tymoshenko, or the chocolate tycoon that gets to eat the blame for administering this austerity bomb to Ukraine?

    "In America, the law is king." --Thomas Paine

    by limpidglass on Tue Apr 01, 2014 at 11:41:57 AM PDT

  •  Russian withdrawal relies on their definition of (0+ / 0-)

    'near the border'. They did move most of their troops further away so now only about 10,000 Russian troops are within 30 miles from the border. However, the rest of the troops (roughly another 50k) are still nearby.

    •  Perhaps as a symbolic gesture of good will? (0+ / 0-)

      I don't think Putin is looking for confrontation. He wants to negotiate. His proposals for greater provincial autonomy seem entirely reasonable to me, but Kiev will have none of it.

      •  Greater regional autonomy is a good (0+ / 0-)

        idea. Ukraine didn't have enough of it. In fact, current Ukrainian government is working on expanding it although it's not clear what they are going to come up with. However, Russia proposes smth else. They want Ukraine to be split into semi-independent regions. Sort of like US after Articles of Confederation. In normal circumstances Ukraine could have agreed to some compromise solution but now anything coming from Russia is likely to be rejected for obvious reasons.

  •  He claimed to have withdrawn a single motorized .. (1+ / 0-)
    Recommended by:
    Richard Lyon

    infantry battalion, at least from what I saw. That's apparently only about 500 troops, which isn't a very significant number in a total force of 30,000-40,000.

    Bin Laden is dead. GM and Chrysler are alive.

    by leevank on Tue Apr 01, 2014 at 12:22:51 PM PDT

  •  Here are Ukraine's options. (1+ / 0-)
    Recommended by:

    Ukraine's economic options are so dreadful that the IMF is the least noxious among them.  

    It can rejoin Russia's fold on Russia's terms.  That would not necessarily settle all of the debt.

    Ukraine can declare default, in which case it would be forced to declare a wide-ranging austerity in all sectors and contract the defense of the nation to the Right Sector and badly-organized militias with their own agendae.  

    Ukraine can try to get unguaranteed loans, but the interest on such loans would be crushing and lead to default.  

    Or, Ukraine can deal with the IMF.  Here are some of the steps proposed that released the first tranche of funding:  

    The 50% rise in fuel prices is a rise from levels that include a large subsidy.  Ukrainians who pay $20/month for gas (which is about the average) will now pay $30/month for gas.  This increase will fall hardest on Ukrainians with the largest homes.  Increases will take place over the next few years as well.  

    The Donetsk coal mines require a subsidy of UAH 13 billion/year.  Yuschenko is heading to Donetsk to propose that the government close the mines and simply give each worker UAH 80,000 (about $7400);  the government will save UAH 1 billion by doing so.  This is 10-20 months' salary.  

    Ukraine has a crippling VAT of 20%.  The individual income tax is flat, at 15%.  The proposal is to tax income over UAH 300,000/year at 20%.  Average salary ranges are from about UAH 60,000 to UAH 120,000/year.  

    Ukraine currently levies 100+ taxes on business;  the proposal is to reduce the number of taxes to eight.  

    "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

    by Yamaneko2 on Tue Apr 01, 2014 at 01:54:50 PM PDT

    •  I am unclear as to whether (0+ / 0-)

      Gazprom's price increase will mean a further increase in consumer fuel bills on top of the IMF requirements.

      I agree that Ukraine is simply between a rock and a hard place.

      •  Perhaps so, perhaps not. (0+ / 0-)

        The 50% increase in gas costs was before the Russian gas hike, but the budget anticipated Gazprom's price increase.

        The Ukrainian government also believes that it can purchase half of its natural gas requirements from Slovakia, at US$350 per thousand cubic meters instead of Russia's US$500.  

        The government expects a 3% hit to GDP, though private sources expect 0.5% GDP growth.  Inflation is expected to hit around 15% as the hryvnia is allowed to float (and sink) against the US dollar.  Europe has also dropped tariffs for Ukrainian agricultural products.  

        Yatsenyuk also proposes heating subsidies for 5-8 million low-income families to counteract the price increase.  The flip side is that gas will be metered for many families for the first time.  

        "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

        by Yamaneko2 on Wed Apr 02, 2014 at 11:14:33 PM PDT

        [ Parent ]

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