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Pro-Russian separatists have proclaimed an independent Eastern Ukraine, in a manner similar to Crimea after seizing critical government buildings in three Ukrainian cities last night. In addition, a Ukrainian officer was killed by Russian forces after an argument between Russian and Ukrainian forces in Crimea. After a brief lull, these developments represent a significant escalation in the crisis and there are plenty of other developments below the fold.

While sanctions have been the weapons of the West in dealing with the Russian aggression, Ron Paul said that they were counterproductive and that it was still not our fight.

Well, it won’t. It’s going to make it worse, it’s just pestering and interfering…one thing is that my goal has always been to have cooperation and diplomacy rather than antagonism and talking back at each other, and sanctions; they don’t do any good at all! So, I’ve always been more on the optimistic side since the Cold War ended, because we were trading more, and talking more, and traveling more with Russia and China and different places in the world. So, to me, if you trade with people, you do better. So any time you suspend anything like that, it’s negative. So I’m sorry to hear that and certainly I don’t think it’s going to do any good to improve the relationship; it will just encourage both sides to keep going at each other.
The crisis is continuing to expose gaps between the US and their European allies right when a unified front is needed. The US and Germany are continuing to bicker over the NSA having spied on Merkel personally; she is making a special trip to Washington in what might be a futile effort to resolve this. And the US and Germany have philosophical differences on what to do in the crisis.
Since then, Germany's defense budget has shrunk from 3 percent of gross social product to just 1.2 percent. The country's army, the Bundeswehr, now has 185,000 soldiers -- a number that is set to fall even further -- and is focused less on defending Germany than it is on participating in select foreign missions. Instead of tanks and howitzers stationed at the Fulda Gap, the emphasis is now on paratroopers and helicopters for places like Kosovo, Afghanistan or Africa.

Nobody is interested in reversing the trend. And arming for both scenarios would cost billions of euros that aren't available.

This crisis is once again raising fears that Estonia would be the next target. Der Spiegel interviewed Estonia's lone ethnic Russian MP, who did not think it was going to happen.
The situation here is in no way comparable to that in Crimea. It is possible that there were attempts on the Russian side in the past to stir up the population, but they haven't been successful. I don't know anyone who would say that Putin is their protector. Or that they would prefer to live in Russia instead of Estonia. Of course many Russians here watch Russian state television, and this does color their view of the Crimea crisis. Nevertheless, at least half of them are also of the opinion that Putin violated international law by annexing Crimea.
But he said that there were still plenty of contentious issues.
Of course there are many contentious issues. The unemployment rate is higher among Russians than it is for the rest of the population. It also remains a challenge to bring the Russia-language education system in line with the Estonian standards. And our history contains a number of contentious issues. Many Estonians view the Russians as the descendants of the very occupying force that incorporated the country into the Soviet Union during World War II. However, the latest studies show that, privately at least, there are hardly any tensions. Some 95 percent of those polled say they think positively about the people they know, respectively, from the other group.
But polling shows that most Ukrainians, even in the east, support the current unitary state and strongly opposed the federated state that Putin proposed as a means of defusing the crisis. However, since Russia does not have sufficient influence in that area, his only alternative, if he wants more, is to use force according to one Russian economist.
The only option Vladimir Putin has if he is to advance his policies in Ukraine is to use force because the majority of Ukrainians in every region of that country do not support him, do not believe what he says, and do not want what he wants, according to Russian economist Andrey Illarionov.
Russia is continuing to allege that Neo-Nazi influences are present in the Ukrainian government. Recently, the Duma passed a law criminalizing Nazism in Russia.
“Our country has not simply defended itself. We have defended the whole world from Nazism. Our people suffered the greatest casualties in this war. For us, the rehabilitation of Nazism will always be a crime against our country and our people. Rehabilitation of Nazism is not only a shot fired at the past and mocking millions of victims. It is also a shot fired at the future, an instigation for new crimes against peace and security,”one of the main sponsors of the bill, the head of the Lower House Committee for Security Irina Yarovaya said as she presented the bill to MPs.

Earlier, Yarovaya has told the press that the urge for such a law is especially evident today in times of the violent political crisis in Ukraine launched and supported by radicals and neo-Nazis. “Ukraine is a living witness of what can be the result of such a policy, when Nazism is standing tall and manifests itself not only through propaganda but through actual crimes,” the Interfax news agency quoted the lawmaker as saying.

Once passed the bill would make it illegal to publicly deny the Nuremberg Tribunal verdict and the anti-Hitler coalition’s effort to defend international peace and security during the Second World War. The ban is also extended to knowingly spreading false reports about the crimes of anti-Nazi armies during the war and the fabrication of proof of such crimes.

This could be laying the groundwork for the arrest of Ukrainians living in Russia if the government deems that they are instigating "crimes" against "peace" and "security." And Gazprom is predicting a US default if they were to follow through and impose more sanctions on Russia.
"We think Western banks are unlikely to stop cooperating with us, but in any case we have paved a way to Asian lenders as well... plus there is a domestic market," Dyukov added.

There is an opinion that any restrictions by the US directed at halting dollar operations, in the long-term, may lead the United States to a default, Dyukov says.

"The US currency is already loosing positions…The usage of the dollar as an instrument of punishment may decrease its weight as the reserve currency…Taking into account its huge national debt, at some instant there will be a problem with its refinancing as dollar assets will become interesting to nobody," the top manager said.

Putin is continuing to race against time given that his popularity is showing signs of erosion. In Novosibirsk, a Communist candidate gained a surprise victory for mayor in a by-election.
Yesterday, Communist Anatoly Lokot defeated Vladimir Znatok, the United Russia candidate and acting mayor, in a special election in Novosibirsk. Lokot got 43.75 percent of the vote, while Znatok received 39.57 percent, the result of a decision of other opposition figures to withdraw in Lokot’s favor.

In an article in today’s Yezhdnevny zhurnal entitled “The Opposition has Learned to Defeat the Party of Power” Ivan Starikov says that on 29 January 20th, he, Ilya Ponomarev, Lokot and a number of other candidates signed an agreement which required them to withdraw in favor of whoever among the opposition was in the lead a week before the vote.

While many journalists treated this agreement as something unlikely to be fulfilled, it was, Starikov says, and the result was the defeat of the Kremlin’s man and a victory for the opposition. This outcome reflects some highly specific local conditions in Novosibirsk, he acknowledges, but it carries with it a lesson for the opposition across the Russian Federation.

Starikov himself had successfully challenged Znatkov’s status as a candidate in court, creating “an unprecedented situation” in which someone fulfilling the duties of mayor and a member of the ruling United Russia party “was removed from the elections by a decision of a court.” He added that if Znatkov had been returned by the voters, he would have continued to pursue this case “to the end.”

With Putin's popularity at its peak, there are, nonetheless, signs of erosion. And businesses are fleeing Russia and Crimea in droves. Therefore, if there is to be an invasion of Ukraine, it will be sooner rather than later. If it is done later, Russia will not have the economic resources to be able to risk war; also, Ukraine will have significantly strengthened their military. But the risk for Putin, besides the obvious one that the West will impose even more sanctions, is that even more businesses will pull out of Russia and Eastern Ukraine.
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Comment Preferences

  •  Estonia should lock down their border (2+ / 0-)
    Recommended by:
    commonmass, Lawrence

    to keep out Russians sent to "protest mistreatment".

    The "protesters" in Eastern Ukraine were likely sent there by Putin, much like the "local self defense forces" that supposedly took over in Crimea who were really Russian troops. They might even be the very same people.

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

    by bear83 on Mon Apr 07, 2014 at 12:01:41 PM PDT

  •  This situation is far more complex than (1+ / 0-)
    Recommended by:
    amyzex

    many of the talking heads and former military-industrial complex folks realize.

    I have said in other diaries that we have to remember that many of our European allies are dependent upon Russian gas. Putin has a big stick.

    This entire exercise reminds me of something, but I can't quite place it. ....Well, I can place it, but I'll leave it up to others to say it.

    Pope Francis: the Thumb of Christ in the eyes of the Pharisees.

    by commonmass on Mon Apr 07, 2014 at 12:11:27 PM PDT

  •  The Lokot victory is a complicated issue, (1+ / 0-)
    Recommended by:
    Eternal Hope

    but it's worth noting, in context of the diary, that his party supported the annexation of Crimea, too.  If Putin's popularity does any eroding in the near future, it'll only be because it's at such a high level that, once the euphoria of annexation wears off, it'll start settling back down to normal levels and for the usual reasons.  But I do think The Interpretor is trying to read more into Lokot's election than is there.  There's a bit of one-party weariness left over from the 2011 protests, and this is a rare case of that building to a successful anti-United Russia coalition.

    I'm curious to see how Russia's anti-Nazi policies are actually put into practice.  There's no doubt they're a rhetorical gesture aimed at Ukrainian neo-Nazis, but to say that Russia might have a similar problem is grossly understating it.  So is it merely symbolic, or will it be prosecuted at home?  And to what extent?  Would a televised exchange like this pass muster?

    Prokhanov: Don’t [Jews] understand that they’re hastening a second Holocaust with their own hands?

    Zamskaya: They hastened the first one, too.

    That's Holocaust-denial of a very particular sort, but it's less atypical, and garnered less of an outraged response, than it would if, say, it had happened on American television.  It also comes from a public figure who's been a vocal booster of Putin, especially in recent years.  So I'm curious to see how far this legislation extends, and if it is indeed intended to curb anything but political opposition.  

    Saint, n. A dead sinner revised and edited. - Ambrose Bierce

    by pico on Mon Apr 07, 2014 at 12:22:35 PM PDT

  •  Very informative diary (2+ / 0-)
    Recommended by:
    Eternal Hope, BMScott

    And very balanced too.  Thank you for producing this.

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

    by amyzex on Mon Apr 07, 2014 at 12:24:12 PM PDT

  •  "Businesses are fleeing Russia and Crimea in (0+ / 0-)

    droves".
    Really?

    "Fragmented and confused, we have no plan to combat any of this, but are looking to be saved by the very architects of our ruination."

    by BigAlinWashSt on Mon Apr 07, 2014 at 01:13:21 PM PDT

  •  Lagarde on Ukraine (1+ / 0-)
    Recommended by:
    amyzex

    Russia Helped Ukraine, But Now Ukraine Needs More, IMF's Lagarde Says

    Russia wasn’t all bad for Ukraine.  A 45% reduction in the price of natural gas and what was supposed to be an additional $15 billion in aid was a necessary “lifeline”, theInternational Monetary Fund’sChristine Lagarde said on Wednesday.

    Speaking to PBS News Hour on April 2,IMF'sIMF'sManaging Director Lagarde said, “The economy of Ukraine was against the wall and heading for disaster. It’s an economy that needed reforms, that needed profound transformation of its fiscal policy, monetary policy and on its policy on energy to mention just the key ones. Without the lifeline it was getting from Russia a few months ago, Ukraine was heading nowhere.”"" style="border: 0px none; vertical-align: bottom; visibility: hidden; display: none;" marginheight="0" marginwidth="0" name="google_ads_iframe_/7175/fdc.forbes/article-new_1_hidden" id="google_ads_iframe/7175/fdc.forbes/article-new_1_hidden_" frameborder="0" height="0" scrolling="no" width="0">

    Russia has since cancelled all of those life lines, includingGazprom'sGazprom's haircut on natural gas deliveries. Ukraine owes around $1.2 billion to Gazprom.

    Read the European view at the European Tribune

    by fran1 on Mon Apr 07, 2014 at 01:26:35 PM PDT

  •  Ah, the Crimea playbook all over again. (2+ / 0-)
    Recommended by:
    Eternal Hope, mookins

    I hope Putin is not crazy enough to send in troops, because - in contrast to Crimea - on mainland Ukraine it would lead to a brutal, all-out shooting war.

    Tipped and recced for keeping us posted.

    "A candle loses nothing by lighting another candle" - Mohammed Nabbous, R.I.P.

    by Lawrence on Mon Apr 07, 2014 at 03:49:20 PM PDT

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