Monday, December 28, 2015

The exploitation and death of Vlad Kolesnikov

Media such as KPHG and Radio Free Europe are full of the suicide of Vladimir Kolesnikov. They paint it as yet another symptom of the lack of freedom in Russia.

The problems of this 18-year old boy started when last june he went to his school in a Moscow suburb with a T-shirt featuring a Ukrainian flag and the words: "Return Crimea." He got trouble in his school and with his grandfather with whom he lived and he was repeatedly beaten up. After some time he was sent to his father who lives in some small provincial town. There his trouble continued, made even worse by his homosexuality. In the end he gave up and committed suicide.

As the title ("How My Friend, Vlad Kolesnikov, Was Driven To His Death In Putin's Russia") of the article written by Claire Bigg for Radio Free Europe already suggests it is a real tear jerker.

However, I see the situation from the opposite side. Far from being his best friend - as Bigg presents herself - I see someone who took advantage of a lonely boy who desperately wanted to belong to something. It must have been easy to convince him of the superiority of Western culture with its tolerance of homosexuality. It gave him 2000 Facebook "friends" and "friends" such as Bigg who lived thousands of kilometers away. But these were false friends - keeping him disconnected from his own environment and preventing him from making up with those who were close to him.

A true friend of Vladimir would not have filled his head with nonsense about how brave he was doing this. It would instead have explained to him that this is a sensitive issue in Russia and that of a lot of Russians have died in Ukraine and that for those reasons he should be subtle in his support for Ukraine.

Sunday, December 20, 2015

The Syria peace plan that wasn't

The Security council has adopted resolution 2254, that is presented as a peace plan. The BBC summarized it as follows:
- Calls for ceasefire and formal talks on a political transition to start in early January
- Groups seen as "terrorist", including Islamic State and al-Nusra Front, are excluded
- "Offensive and defensive actions" against such groups - a reference to air strikes by US-led coalition and Russia - to continue
- UN chief Ban Ki-moon to report by 18 January on how to monitor ceasefire
- "Credible, inclusive and non-sectarian governance" to be established within six months
- "Free and fair elections" under UN supervision to be held within 18 months
- Political transition should be Syrian-led

It is a lot of hot air that very likely won't produce any result.

First of all the plan is not realistic:
- there is no strict separation between Islamic State, Al-Nusra and the rest. They often fight together against the government and fighters regularly switch from one group to another.
- as al-Nusra and ISIS are part of the rebel groups in many areas it will be impossible to maintain an armistice there.
- more than half the Syrian rebels subscribe to an Islamist extremist ideology. If one group disappears they will just join another group.
- "free and fair elections" is a joke in a climate were there are many fighting groups that don't believe in democracy. Neither do they believe in tolerance and equal rights for other groups that is among the foundations without which democracy is impossible. There is probably a majority of the Syrians who are democratically minded, but in the present power distribution they would lose the fight for control and democracy would be short-lived.
- "Credible, inclusive and non-sectarian governance" sounds good. Unfortunately that assumes also an inclusive attitude from the opposition. Yet that is definitely absent among much of the armed opposition. If Syria had a law that prevents sectarian parties to participate in elections - as some countries have - almost none of the opposition groups would be allowed to participate.

And then there is the question whether all parties voted for this resolution in good faith:
- A look at Ukraine learns that the US has accepted there similar peace plans and that nothing ever came of it. The typical pattern is that the US becomes serious about peace plans when the side that it is supporting is losing and is in danger of breaking down. After the peace plan is adopted the accompanying armistice is used to rearm and retrain that side until it is strong enough to attack again. In the meantime the peace negotiations lead nowhere. The US supported side ignores the concessions it did in the peace plan and makes demands that it knows are unacceptable for the other side. When it resumes hostilities the US government is quiet or tries to blame the other side. The Western press and the other Western governments mostly slavishly follow suit.
- It is already clear that the US and the parties it supports will - once negotiations start - again demand the immediate departure of Assad. So a compromise is impossible.
- So the most likely goal of the circus is to put a brake on the Russian attacks against the "moderate" opposition.

Saturday, December 05, 2015

The EU gave in to Erdogan's blackmail and helped him to get elected

There is one rule when it comes to blackmail: if you give in there is a good chance you will face more of it.

When Erdogan suddenly opened the borders and flooded Europe with "refugees" there was little doubt that this was blackmail. Yet soon lots of high level EU diplomats could be found in Turkey and when Erdogan a little later visited the EU he got a red carpet treatment and almost everything he had asked for. It will be made easier for Turks to get a visa for the EU - although the details still need to be negotiated -, Turkey will get 3 billion euro to support its refugees and an EU progress report that critical of the situation in Turkey was postponed until after the Turkish elections of 1 november.

To top it off Merkel visited Istanbul shortly afterwards and declared there that the agreement between the EU and Turkey on the refugees had brought a Turkish EU membership closer. She could as well have shouted "Vote for Erdogan!". Unsurprisingly Erdogan won the elections - getting much more votes than the opinion polls had predicted.

One can only wonder what made the Eurocrats so stupid that they gave in to Erdogan's blackmail - and doing so helped him win an election. For some of them it will have been mere stupidity. But I suspect that US pressure played an important role. A weakening of Erdogan's position would have put in doubt Turkey's commitment to America's regime change project in Syria. Obama has named Erdogan as one of his top five international friends. And it was another of Obama's top 5 - Merkel - who helped to explode the opening of Turkey's borders into a crisis by declaring begin september that Germany would accept any refugee from Syria.

Soon after the gates opened in Turkey articles started to appear that suggested that the flood of refugees was no coincidence but the result of deliberate decisions at the top in Turkey. This was confirmed by an Erdogan advisor.

It didn't help that the EU had egg on its face as its memberstates had been very busy slashing their contributions to the World Food Program, that as a consequence was forced to slash its support for Syrian refugees in Lebanon, Jordan and Turkey.

As could be expected Turkey has only partially stopped the flow of refugees since the agreement. It knows very well that once the pressure subsides the EU may start to come back on some of its promises. So it does enough to give the impression of an effort while it does on the other side little enough to keep up the pressure on the EU. And once the EU starts delivering it will without doubt find ways to increase its demands: asking for more money and also repeating its demands for a military intervention in Syria - its main demand that wasn't concurred with. According to Amnesty Turkey has found yet another method to keep up the pressure: maltreatment of refugees and even sending some back to Syria.

Recently we have seen the EU heaping the blame on Greece for not guarding its border better. But Greece doesn't have much incentive to do so as registering the refugees would also bring the obligation to keep them. And what sense does it make to register refugees when you can't send them back. Besides that: Greece registering the refugees would do nothing to stop the flow. It looks like Greece is singled out as a scapegoat by Eurocrats who don't want to anger Turkey.

The EU could have taken the opposite approach. It could have scolded Erdogan for unleashing the refugee flood. It could have declared very publicly that as long as Erdogan is in power an EU membership for Turkey is impossible. Punishment is sometimes a better strategy than rewarding blackmail.

Now the EU has adopted crazy plans to adopt 160.000 refugees. It will help nobody. There should be adequate money for refugee shelter and support in the region and also in Syria itself. The stated logic is that it is better when we make our own selection instead of waiting for who comes by himself. But such a selection will do nothing to stop the flow crossing illegally the borders. On the contrary: one can expect it to increase.

Saturday, November 28, 2015

The neocon trick of the double lie

There is now almost consensus that the Iraq invasion in 2003 was a failure. Interestingly, almost all discussions about it are about the absent WMDs. That is strange, because even if Saddam had had some chemical weapons the invasion would have been a bad idea.

This strategy of keeping us busy with red herrings seems a standard neocon strategy.

We see it again with the discussion about the intervention in Libya. All the attention goes to the question whether some diplomat got enough protection. Doing that the attention is diverted away both from the chaos that Libya has descended in thanks to the US led intervention and the fact that the murdered ambassador Stevens very likely was organizing the transport of weapons to fuel the Syrian uprising. In that light Stevens himself seems responsible for the death of many Syrians.

Now we have the downing of a Russian Su24 by Turkey. Here our attention is diverted by the question whether the plane had crossed into Turkish territory. But the real discussion should be about the fact that - even if the plane had crossed into Turkish territory - this action would have been completely unacceptable. There are ways to deal with such incidents. And Turkey, that routinely violates the airspace of its neighbors (Greece, Iraq and Syria) knows that better than anyone else. Would anyone accept it if Russia shot down an American plane that had been in its airspace for 17 seconds?

Of course the Turkish claim that the SU24 was in its airspace is rather suspicious. They had camera crews ready, on the ground there were well equipped search teams looking for the pilots and they claimed that the downing had been approved by the Turkish prime minister. That all points to a well prepared action.

Don't expect the neocons to be fearful to lose the argument. These are red herrings. They deliberately take positions that are undefendable in order to detract the attention from the real issues. By having us discussing facts - on which we lack access - they prevent us from discussing policy and morals. Nobody asks who initiated the attack on Iraq and what his real reasons were. Many have advised Hillary to be open about her email account - assuming that the continuing scandal harms her. But in fact it serves her by making her adversaries boring naggers. And the discussion about whether the SU24 violated Turkish airspace deflects the attention from the questions of why the US supported Turkish aggression and whether it was involved in planning it.

Tuesday, October 06, 2015

How the anti-Assad propaganda works

With the arrival of Russian troops Syria has once again become big news. And once again I see the same propaganda tricks in the media. An overview:

80% of the Syrians is Sunni
This was in a recent article in the NY Times. Estimates before the war gave 70% Sunni, 12% Christians, 12% Alawites and 6% Druze, so very likely this puts the number of Sunni way too high.
More important is the suggestion that Assad is supposed by those 70 or 80%. Yet it is far from the truth. This number includes the Kurds (15% of the population) and many Arab Sunni's (mostly in the cities) who prefer Assad over the rebels. The rebels know this and they one of their demands at the negotiations is that Assad should not be allowed to take part in coming elections. The clearly aren't sure that they would win.
The only thing that those claims make clear is the sectarian motives of the countries that support the uprising.

Assad started the conflict by using violence against unarmed protesters
According to the law Assad would have the right to do so - provided it the violence is measured. Governments don't have the monopoly of violence for nothing. Against a color revolution that aims to gradually take over the state - first occupying the central square and then overrunning the parliament - it certainly would be justified.
But there are more lies in this claim. It also ignores that the protests never were nonviolent. On the first day of protest in Daraa the Baath party headquarters and the building of a mobile phone company owned by an Assad relative were set on fire. This would become standard operating procedure in following protests in other cities.
The protests also had another violent element that seldom is reported. While the main protests happened peacefully on the main square of a city in the streets around that square there were violent groups of youth who battled the police and prevented it as long as possible from reaching the square.

Assad is using violence against his own population
Obama has a standard operating procedure: first he instigates the population of a country to start an uprising and then he accuses its government of using violence against its own population. Pure hypocrisy!

the uprising is spontaneous
Saudi Arabia, Qatar and Turkey have spent billions of dollars on funding the uprising. They pay for its arms and they pay the rebel fighters a wage that is much higher than what the subscripts in Assad's government army receive. Without this money the uprising would have ended long ago.

Assad is only interested in prolonging his own rule
Any suggestion that Assad has non-selfish motives is discarded. The rule of law, the secular character of Syria or even the protection of the Alawites: all such arguments by Assad and his supporters are discarded with a wave of hand.

Putin wants to distract the attention from the bad economic situation at home
Many newspapers have published theories like these. It is a dirty discussion tactic because questioning someone's motives deflects the attention from the facts on the ground. Besides that motives are usually mixed and impossible to prove as they happen in someone else's head. A reader of the NY Times ("Carolyn") made nice comment on this: I don't know why so many feel compelled to assign ulterior motives to the Russia government when it's doing exactly what it declared it would do. There's no mystery; no "testing NATO," no "testing the U.S.", no embarking on a Cold War. Russia does not have "an inferiority complex," nor does she want to "assert herself" as a world power because she IS a world power, and HAS BEEN since WW II. Russia has two objectives as was openly declared: supporting Assad and wiping out terrorists. That's exactly what she's doing; no guess work needed.

Monday, September 21, 2015

Croatia foolishly misses the point in the refugee crisis

Latest news has it that in the fight against the refugee stream the Croats are bussing the refugees towards the Hungarian border.

Their assumption is that this will force the Hungarians to let them through. But what they forget is that it will also tell refugees who are still in Serbia that it is a good idea to go to Croatia. As a result it will lead to an increase of the refugee stream. And as an EU member Croatia will in the end be forced to shoulder its part.

Sunday, June 28, 2015

The myth of stagflation

Oil prices rose fast in the 1973 and 1979 oil shocks. As oil cost more some prices in the Western world rose and this was registered as “inflation” and the Western central banks jumped to the conclusion that they had to raise the interest rates to fight this inflation.

Inflation itself is not as bad as is often claimed. Sure, Weimar type inflation where the money that you receive in the morning has lost most of its value in the evening is destabilizing. But people can very well live with a stable inflation of around 10%. Countries like Italy have industrialized and become wealthy in such circumstances.

The main job of the central banks is not to fight inflation: it is to maintain a stable environment and to prevent bubbles and the resulting disastrous boom and bust economic cycles. And there is no question of bubbles in those circumstances: the driver of those rising prices is not excessive demand but the fact that the prices of some imports are rising due to circumstances that are not related to the national economy.

One could still make the argument that the prices are rising and that those rises will result in other rises and could so cause a standard inflationary cycle: workers are demanding wage increases to correct the inflation and companies are increasing the prices of their products because their raw materials and workers cost more.

Yet there is also another mechanism at work: the terms of exchange have worsened and now the country needs to export more to pay for its imports. This will take time: new trade relations have to be established and new markets have to be conquered. It may also take some time before the newly rich countries - like the oil sheikhs in the 1970s - start spending their new wealth. Over time internal consumption may have to fall to release production capacity for the new exports. However, that will only work once the new export links have been established. Reducing demand before that time by "inflation fighting" will only drive companies into bankruptcy and reduce the capacity of the economy to make those exports.

However, it is very questionable whether rising interest rates to fight inflation is the best way to achieve those results. In the 1970s and 1980s they caused stagflation. The Western economics seemed stuck in stagflation until the mass spending of Reagonomics got it out of the swamp. It looks like the best way to address this kind of situation is to let the price hikes have their course without taking anti-inflationary measures. Initially the government might even spend more to make up for the extra money flowing over the borders - while simultaneously redirecting the economy to export more.

Interestingly we see the same discussion now in oil exporting countries and specially in Russia that immediately following the sinking oil prices saw its currency fall. As a result imports cost more in terms of the local currency and the central bank is signalling rising inflation and taking "appropriate measures" that may well be very inappropriate.

Thursday, June 25, 2015

When friends commit crimes

In its ambition to be world ruler the US always has had its share of misbehaving friends. Mobutu was probably the most famous among them, but there have been many others. Out of fear of losing their support the West tended to ignore their misbehavior.

Nowadays Israel and Saudi Arabia are among the misbehaving friends. And we see the US bending backwards in order not to lose their friendship.

Doing so the US is showing itself a false friend. Good friends occasionally tell each other the truth. Forcing Israel to behave better towards the Palestinians could in the long run be better for Israel's future.

In the case of Saudi Arabia this issue is even more clear. By starting a war against Yemen the royal family has painted itself into a corner. The main initiator of the war is crown prince Muhammad, king Salman favorite nephew. Stopping the war would be a major defeat for Muhammad. This is by excellence an opportunity for the US to show itself a true friend: by stopping all support for the war and starting humanitarian support for Yemen it could force Saudi Arabia to end its war. On the short term the Saudi's certainly would blame Obama - also in an effort to save Muhammad's face. But in the long term they would have to admit that it was the best option.

Yet this kind of behavior takes courage. And until now that has been missing.

Friday, June 19, 2015

The limits of international justice

In traditional societies conflict resolution is done by usually older men who are respected for their wisdom. As their respected status shows they are deeply rooted in their society and subscribe to its values.

In modern society judges are supposed to follow the written law. Judges have become rather anonymous people whose main accomplishment is often just finishing the right education. Yet it is not difficult to see that their verdicts are still highly influenced by the surrounding society. In racist societies verdicts of the discriminated minority tend to be harsher. And when society becomes more tolerant on issues like abortion this is reflected in the verdicts - even when the law doesn't change. Yet one thing has changed: there is now a bureaucracy behind those judges that determines who gets appointed and who gets promoted and this bureaucracy has considerable influence too.

But nowhere are judges less connected to society than in international justice. International judges are very dependent on those who appoint them and that makes their allegiance to neutral justice questionable. Recently this became apparent in two cases: the release of Sudan's president Bashir by South Africa - in spite of an extradition request by the ICC - and the 50 billion dollar verdict against Russia in the case brought by the Yukos shareholders.

Many African leaders face a similar problem that Bashir faces: insurgent regions. They may not like Bashir's bloody approach, but at the same time they know that it is not always possible to solve such problems bloodless. And so they consider that if they consent to Bashir's extradition now they might be targeted next - when Western politicians might find it useful. At the same time they have little trust in the judicial process at the ICC: they have seen the murky process in which judges are selected and they have seen judges schmoozing with Western diplomats. They also see that the US is supporting Ukraine in its use of scorched earth tactics and random shelling against the insurgence in its Eastern regions.

We see similar problems in the Yukos case. The excuse for submitting the subject to international judges and not leaving it to local judges in Russia is that some holding was stationed in Cyprus. But what would happen if the US banks and other financial companies that got a haircut in the financial crisis used their foreign subsidiaries as an excuse to take the US government to an international court? It is well known that many of the judges in those commercial cases previously worked for lawyer firms representing companies in similar cases. And when they quit as a judge these same firms may offer them a well paid consultancy job. Given this context these judges may know their laws well, but their neutrality is questionable.

Traditionally this impossibility of justice was solved by diplomacy. This approach certainly had its defects too. But one has to wonder whether the new approach is better.

Wednesday, May 13, 2015

Will Israel help ISIS to victory?

The New York Times has a strange article today: Israel Says Hezbollah Positions Put Lebanese at Risk:

As Israel prepares for what it sees as an almost inevitable next battle with Hezbollah, the Shiite Lebanese organization that fought a monthlong war against Israel in 2006, Israeli military officials and experts are warning that the group has done more than significantly build up its firepower since then.
Effectively, the Israelis are warning that in the event of another conflict with Hezbollah, many Lebanese civilians will probably be killed, and that it should not be considered Israel’s fault.

The big question is: why now? Hezbollah is very busy in Syria and would be plainly foolish to open a second front with the Israeli's.

Israel's former ambassador Oren has several times that he prefers Al Qaeda over Assad.

So the big question is: is Israel contemplating to attack Hezbollah in order to help AL Qaeda win in Syria. These sudden threats may point in that direction and may be meant to prepare the public opinion for it.

Sunday, May 03, 2015

Saudi's and Israeli's are reaping what they sowed

Israel and Saudi Arabia are making a lot of noise these days about the fact that an American agreement with Iran would make that country the local superpower. What they forget to mention is that twenty years ago that wouldn't have been the case. At that time Iraq and Syria were the natural counterweights against Iran. Unfortunately both countries were destroyed by the US - thanks to much lobbying from ... Israel and Saudi Arabia.

So they are just facing the internal inconsistencies of their foreign policies. Now they want the US to destroy Iran. And if that is finished they will bring up the next candidate for destruction - very probably Turkey - that will then be the regional hegemonist.

Maybe it is time that Israel learns to live with its neighbors in peace. Maybe it is time that Saudi Arabia stops exporting its extremism and learns to accept that it isn't the regional superpower that some of its leaders want it to be but that it never will be as it is too divided internally.

Friday, April 24, 2015

John Brennan - key figure in the Obama administration

Buzzfeed has a portrait ("The Untouchable John Brennan") of John Brennan, the director of the CIA.

Brennan defended torture, played a very important role in the drone killings and managed to get away with spying on the Senate. The key: he has a very close relationship with Obama.

The article also mentions that he spent two periods of several years in Saudi Arabia. It doesn't elaborate on that, but it may very well be the explanation why the Obama administration is so eager to do what the Saudi's want: a.o. in Syria, and now in Yemen.

The Yemen play

Iran advised the Houthi's not to take Sanaa. The Houthi's took it anyway when they found that it was virtually undefended. But for a long time they prefered to stay there and didn't make much effort to conquer the rest of the country.

The main focus of the Houthi's has always been Al Qaeda. One of their motives for their uprising was their perception that Hadi was supporting Al Qaeda and its hate campaign against the Zaydi's. The Houthi's only started their offensive towards the south after the murderous bombing of two Zaydi mosques in Sanaa.

The Zaydi's are "fiver" Shiites and in many ways closer to the Sunni than the Iranian branch of Shiism. They are estimated to constitute around 40% of the Yemeni population. Zaydi kings ruled over northern Yemen for over 1000 years. The Houthi movement consists mostly of Zaydi's but contains also some Sunni's.

Unfortunately for Yemen foreign interventions - always done with money rather than soldiers - are very popular in Saudi Arabia. And after the problematic outcomes in Syria and Iraq they are longing for a success story. Yemen looked like an easy target - and so the new king sought to raise his popularity by targeting it. It doesn't matter that the storyline of Iran-fueled Shiite aggression is fake: the Saudi public opinion loves it.

All signs are that the Houthi's are open to dialogue. But it is much less clear whether the Saudi's are.

Thursday, April 23, 2015

The doomed discussion on the Armenian genocide

It is a very human trait not to want to admit your mistakes - especially not when there might be consequences.

Part of the ease with which Germany excused itself for the war crimes in World War II can be explained by the fact that there wouldn't be consequences: the West needed Germany much too much as an ally in the Cold War. It didn't make up with the countries to its east until much later but nobody expected that in the heat of the Cold War.

Japan on the other hand had a more vulnerable position. In its region the Cold War was much less important. And many countries demanded excuses and indemnifications. Taking a humble approach would only result in more demands. So Japan had to adopt a rather strict approach. Sure, they might have been more forthcoming. But there is no way they could have satisfied their former victims.

That brings me to Turkey and the Armenians. Nobody knows what the legal consequences will be when Turkey finally admits that it was built on mass murder. And so one sees that even people who advocate a more open attitude become more reticent when they are in a position of power where they could make a real difference.

In my opinion it is better not to pay too much attention to this genocide question. Normal relations between Turkey and Armenia are much more important. Turkey keeps holding its border with Armenia closed - even though it has promised the EU to open it. Instead of scoring cheap points with the genocide question the EU politicians should put serious effort in pressuring Turkey to finally normalize its relations with Armenia.

Once the two sides agree to treat each other like normal human beings an important barrier has been taken. It may still take decades before they formally agree on what happened during World War I but the discussion will be less tense and more open.

Don't get me wrong: it is important that Turkey one day recognizes what happened. However, I believe that there is very little that pressure can achieve in this respect: a favorable international situation (no tensions with Armenia) and a leader who feels himself strong enough to make such a move are much more important.

Saturday, April 18, 2015

Putin's nuclear remarks in the Crimea documentary

There are several fully (2 1/2 hours) subtitled versions of the documentary "Crimea: the way back home" on the internet: This seems to be the official version.

Putin made some comments about nuclear readiness at about 1:30:00 in the documentary and its context is a report about the US destroyer that set course towards Crimea, had the whole of Crimea within the firing range of its Tomahawks and reversed its course when Russia installed their Bastion anti-ship missiles on the Crimea coast as defenses. What the documentary doesn't say is that the Donald Cook only entered the Black Sea on 10 april - long after Russian control over the peninsula had been established. However, the context is still relevant as this was the point where the threat of a confrontation between the US and Russia was most acute. Further in the documentary it is also mentioned that when the Donald Cook was withdrawing from the neighborhood of Crimea some Russian fighter planes flew closely over it. This may well have been a warning that - even outside the range of the Bastion system - it shouldn't do foolish things on Crimea.

Here a transcript of the relevant section. This is from the Liveleak version and not the official translation so it may be wrong on some details:

Q: When you talked with Western leaders was it clear to you right away that there wouldn't be any military interference from their side?
A: Of course not. This couldn't be clear right away. That's why, at the first stage, I had to give certain directions to our armed forces - not only directions but direct orders - about the possible actions of Russia and our armed forces in any possible events.
Q: Do your words imply that our nuclear forces were also put on standby?
A: We were prepared to do that. I talked to the colleagues, and I was open with them, as I am with you now. This is our historic territory. There live Russian people. They are in danger now. We can't leave them alone. It was not us who staged the coup.It was done by the nationalist and the people with far-right views.
You supported them. But where do you live. Thousands of miles away.
But we live here - this is our land. What do want to fight for there? You don't know, do you? But we do know, and we are ready for it. This is an honest and open position. That's the way it is.
So I don't believe anyone wanted to fan some world conflict out of it. But we were not looking for a fight. There simply forced us to take these actions. And I repeat, we were ready for the worst case scenario. But I presumed that it wouldn't happen. It was unnecessary to aggravate the situation too much.

Commentator: Later, in the Ministry of Defense, we were told that at that time some military experts has suggested Vladimir Putin as Commander-in-Chief to use all available means to demonstrate that Russia was ready to protect its national interests. The president replied: although the situation is complex and dramatic, the Cold War is over, and we don't need international crises like Caribbean. Moreover, the circumstances do not require such actions and it would run contrary to our own interests.
As for our nuclear deterrence forces - added the president - they are always on standby anyway.

Tuesday, April 14, 2015

The Neocon idea of conflict resolution

Few people still believe that the Minsk-2 agreement will hold. When the government in Kiev declared that it only would grant autonomy to the Donbass after elections had been held according to its laws it effectively killed the agreement.

In the Minsk-2 agreement Kiev had to make more concessions than in Minsk-1. But as neither the population of the Donbass nor Putin is enthusiastic about continuing the conflict it is still in a strong position. As long as it doesn't go too extreme it has a good chance to more or less imposing how the peace will look like. The main limitation is that it has to look like a compromise – without revenge against those who fought on the “Novorussian” side. So Kiev has very little to win from its confrontational stance while it has a lot to lose: new fighting will bring more death and more destruction.

The real push to undermine Minsk-2 comes from Washington that uses its influence as an ally of the government in Kiev to push it to these decisions. But what does Washington win by obstructing peace?

For the neocons peace is not an important value. They are always pushing for new wars. They see continuing conflicts at Russia's borders - both frozen and hot - as in their interests. They keep Russia busy, cost it a lot of money and help to turn Russia's neighbors against it. It is a familiar pattern that we have seen before in former Yugoslavia and South-Ossetia, Abkhazia and Transdniester. The only kind of conflict resolution that is acceptable to the neocons is victory.

In the early 1990 nationalist Georgian militias committed massive ethnic cleansings among the local minorities. It was against that background that Russia sent in peacekeepers. At that time it made sense and had widespread support within the Caucasus.

The logical next step would have been that Georgia made up with its minorities and some compromise was reached. But it never happened. The US often accuses Russia from obstructing solutions in order to make life hard for its former fellow Soviet Republics. But in fact it has been the Georgian side that has consistently taken extremist positions that made a solution impossible.

Expelled minorities, such as Ossetians who used to live south of Gori, have in theory the opportunity to go back. But in reality bureaucratic red tape makes it nearly impossible. And instead of dialog Georgia has concentrated on intimidation to win its lost territories back: with road blocks, economic sanctions and – in the case of Abkhazia – even terrorist attacks. Predictably this has only antagonized these areas. The political discourse in Georgia doesn't help either: it is very hostile towards Ossetians and Abkhazians.

The US often accuses Russia of maintaining their support for those secessionist provinces as a way to pressure and blackmail Georgia and other former Soviet states. More likely it is the other way around: it is the US that has encouraged Georgia to take an uncompromising and aggressive position. Here too the only acceptable solution for the neocons seems humiliation of Russia – as was tried to achieve in the 2008 war.

Recently Putin has taken some steps to integrate those provinces into Russia. It looks like he has given up on a solution that includes Georgia.

In former Yugoslavia we already saw a similar patterns. In the early 1990s Croatia was more or less forbidden to consider border changes that would do more justice to ethnic interests. After 1999 the same happened with Kosovo.

In Bosnia the Republika Srpska is held in a semi-pariah status. The logical step forward for Bosnia would be a kind of federation with regions in each of which one of the ethnic groups has a great majority. By giving veto power to those regions the explicit veto powers for ethnic groups could be removed from the constitution and a big step towards normalization could be set. This solution has some problems but it looks like these could be overcome. But here too the West – under guidance from the US – has decided that they prefer to let the situation fester. They want their preferred reform – centralization: what would mean defeat for the Serbs – or else nothing.

This brings me back to Ukraine. Just like the Georgian, Moldovan, Croat and Bosnian leaders the Ukrainian leaders have been steady encouraged by the US to take extremist positions. And just like those other leaders they have believed the propaganda and acted accordingly - to the detriment of themselves and their countries.

The pattern of rejecting dialogue and trying to impose solutions with violence that we see now in Ukraine is very familiar to what happened in Georgia.

Recently there are some signals that the EU politicians are becoming somewhat aware of the game that is being played. However, there is still a long way to go before this becomes the dominant story in the Western press.

Monday, April 13, 2015

What US politicians really think about the Ukraine crisis

The article below is a translation of the article Was US-Politiker WIRKLICH ├╝ber die Deutschen in der Ukraine-Krise denken. This article was also quoted in the Spiegel article Victoria Nuland: Amerikas Krawall-Diplomatin.

What US politicians really think about the Ukraine crisis

Munich - 2 februari 2015 - While a bloody war rages, at a security conference in Munich the next dangerous conflict is started. A diplomatic nerve war on the question whether the West should arm the government in Kiev. The adversaries are actually allies: the US against Europe, specially Germany.

Behind the sound proof doors of the conference rooms in Hotel „Bayerischer Hof“ the Americans speak straightly unfavorable about the Germans.

Friday evening, shortly after 19:00 hour. According to BILD-information at the sixth floor in the luxury hotel American four-star-generals, diplomats and high ranking US politicians meet for a confidential conversation in the „Briefing Room“ and vent their mood on the Germans.

• „Defeatist“ a US-Senator calls Minister of Defense Ursula von der Leyen (56, CDU), because she doesn't believe any more in a victory of the Ukrainians. The word „German defeatist“ can - according to BILD information - be heard several times in this round.

• Obamas top-diplomat for Europa, Victoria Nuland, characterizes the journey of the Chancellor to Putin as „Merkels Moscow-thing“, another US foreign politician speaks about the „Moscow-bullshit“ of the European.

• ANd US-Senator John McCain talks himself into a rage: „History shows us, that dictators will keep taking more if you let them. They will not be dissuaded from their brutal behavior, when you fly to them in Moscow - just as one flew once into this town.“ [a reference to the 1939 Munich conference that is nowadays seen as ineffective appeasement of Hitler - translator].

Merkels diplomatisc initiative in the Ukraine-crisis stands at the center of the American anger. The reason"the Americans don't believe that Putin can be moved to an agreement without massive pressure. But the Europeans don't want to further increase the pressure.

„They fear damage for their economy and counter-sanctions from the Russians“, says Nuland. „It is painful to see that our NATO-partner are getting cold feet“, says another US-politiciancaccording to BILD-information.

It is Obamas close confident Victoria Nuland, who at this kick-off evening whips up her American colleagues: „We can fight against the European, fight them rhetorically ...“

Several US-politicians seem to hesitate about arming Kiev. One asks whether this is "just a tactic", a "false promise" to get the Europeans to put more pressure on Putin. „No, it is not a tactic to prod the Eurpeans“, Nuland answers dryly. „We will also not send four divisions in Ukraine, as the Europeans fear. This is about a rather moderate supply of anti-tank arms.“

„But what will we tell the Europeans, when we really decide in favor of arms deliveries?“, asks a US member of Congress. „What is then our story?“

► Nato-Commandant General Philip Breedlove is also present at the meeting. He answers: „We would not be able to deliver so many weapons that Ukraine can defeat Russia. This is not our goal. But we must try to raise the price for Putin at the battle field and delay this whole problem so that sanctions and other measures can do their work.“

Again chips in Nuland, who is fuent in Russian and served Dick Cheney as security advisor: „I must fervently ask you to use the expression defensive arms, that we will supply against Putin's offensive arms.“

► General Breedlove explains the US-Politicians, how such arms deliveries could look in reality: „Russian artillery kills by far the most Ukrainian soldiers. So they need systems with which they can locate this artillery and quickly return fire. The communication of the Ukrainians become either disrupted or completely intercepted. So they need interception-proof communication devices. Then I am not going to talk about some anti-tank missiles, but we see massive supply movements from Russia to Ukraine. The Ukrainians need the ability to stop these transports. And then I would add a few small, tactical drones. "

Brisant: The planned weapons and systems are technically so demanding that US troops would probably need to train the Ukrainian army. Thus, the United States would intervene with their own troops in the conflict.

The last time there was so much disagreement between Europeans and Americans at the Munich security conference was in 2003 - shortly before the Iraq War. Tomorrow Chancellor Angela Merkel travels to US-president Barack Obama in Washington. They have much to discuss ...

Tuesday, March 24, 2015

Setting Yemen up for civil war

The crime of the year of the "international community" was the recent departure of all the Western diplomats from Sanaa in Yemen. The official argument was safety. But Sanaa was at that moment still quite safe, so everybody could understand that in reality it was a public rejection of the Houthi's and the announcement that the West would take steps to undermine their government. Once again the West had subscribed to the agenda of the hatred of the Saudi regime.

And indeed we saw soon an increase of Al Qaeda attacks. Former president Hadi escaped mysteriously from Sanaa and - after having moved to Aden - renewed his claim to the presidency. Most likely the Saudi's had spent a lot of money to bribe his guards to let him escape. Hadi's most recent move has been to call for a military intervention by the Gulf States.

I believe it was fundamental mistake to turn on the Houthi's. Like it or like it not: they had conquered the power. So challenging them is interference in the internal affairs of Yemen and setting the country up for a civil war.

Thursday, March 19, 2015

How Netanyahu won the elections

One of the basic principles of discussions is that for winning it is important that you are the one who frames the questions. We see this in elections times and again.

A good example were the economic policies of Reagan and Thatcher. They had some luck that the end of a recession seemed to confirm their policies. But much of their success was due to pure bluff. It also helped that after two decades of leftish policies people were ready for something new. But one thing is certain: they changed the political dialogue. Since then leftish demands like equality and fairness are taboo and rightish issues like lower taxes and privatisations are the norm. And we see that even successful leftish politicians like Clinton and Blair are following those norms. Interestingly they typically show a split personality: in their talks they question those norms but in their actions they are often even more fanatic than their right-wing colleagues.

However, people prefer the real stuff. If rightish policies are the norm they will show a preference for rightish politicians.

That brings me to Israel. In Israel establishing settlements has been the norm for several decades now. And leftish politicians have often done that even more enthusiastically than their rightish colleagues. So when Netanyahu rejected the two-state solution and when he denounced Arab participation in the elections he stated things that implicitly have been accepted as the norm by all sides for decades. He just showed the courage to say it explicitly.

Doing that he brought the parties on the left in a difficult position. They could denounce him. But if someone would challenge them they wouldn't have an argument as they had de facto supported similar policies in the past. They are incapable of bringing an alternative. Think of it as something similar to Bush sr's "Read my lips, no new taxes". It was an irresponsible statement and Bush had to swallow his words later on. But during those elections it was something that his Democratic colleague couldn't beat.

The controversial nature of the statement focuses the attention on this issue - at the expense of other issues. So Netanyahu could draw the attention away from the economy and inequality - where he is weak - to security issues where he is strong.

We see the same principle now also in the US. Except for Obamacare Obama has been very unsuccessful in reframing the public discussion. In his foreign policy he has been completely unable to get rid of the neocon influence with its absurd demand that the US should always stay the absolute ruler of the world. The end result may well be that one day the US may suddenly find itself in the same position as Britain: rotten at the core. In finance he has similarly failed to confront the "rulers of the universe". Only now, in his last two years, do we see some timid efforts to change the discourse.

On the left side of the political spectrum president Roosevelt is probably the person who did most to change the norms. It probably helped that he came from a wealthy establishment family. He didn't feel a revolutionary: he just did what needed to be done. In contrast we see in Obama someone who is in awe of the establishment and afraid that he will do something wrong. It is what made me have a preference for Romney in the last US presidential elections. He might be more conservative, but he looked also more of a man who would follow his own conscience than Obama.

Friday, March 06, 2015

Monday, March 02, 2015

The EU rules that undid South Stream

It would go too far to repeat the whole drama that led to the cancelling of the South Stream oil pipeline project by Russia. One thing however stands out: the EU objected against the pipeline on the basis of its "energy competition" rules that separate the ownership of the pipes from the ownership of the gas.

The EU adopts here the cloak of protecting the interests of the EU consumer. However, in fact it is doing the opposite. These rules look like designed by lobbyists for LNG suppliers.

Pipelines are a much cheaper way to transport gas than LNG ships. However, the investment for pipelines is more fixed. Russia needs to spend many billions of euro's to build a pipeline just to arrive at the border of the EU. That piece of pipe is useless at the moment the EU decides to buy elsewhere. So if Russia builds the pipeline to the EU border without control over the following pipes it becomes dependent on the pipeline owners. That dependency can easily be abused. Russia makes itself also vulnerable to political blackmail.

The official rationale of the EU for these rules is that Europe shouldn't become too dependent on one supplier. However, they clearly favor LNG suppliers that are mostly based in the Persian Gulf. This suggests that a lobby from the Gulf and from the US - that hopes to become a LNG exporter in the future - has achieved a big victory in Brussels.

The EU has now declared that it wants to be informed on gas deals of its member states and that it wants to introduce standard contract clauses “to ensure that the EU speaks with one voice in negotiations” for energy contracts.

It seems to me the fox guarding the chickens.

Friday, February 13, 2015

How to dissolve the Eurozone

Some time ago (in 2012) I wrote "How to dissolve the eurozone". My conclusion was that it was much easier to have the strongest countries leave the eurozone then to have the weakest leave. So it doesn't look good that a grexit is once more seriously discussed.

Below I reprint it:

The EU likes to see itself as an organization that helps its members to become rich. Thanks to this reputation poor European countries are eager to become members. From this point of view it was very happy to see countries like Greece, Spain and Ireland showing fast economic growth.

But the EU has been a bit too enthusiastic about signs of growth and ignored signals that the Southern European countries lived above their means. Those countries enjoyed a consumption boom thanks to foreign investment in real estate and easy credit. But these are not sustainable sources of growth and when they stopped Southern Europe suddenly found itself living far above its means.

Normally a country would devalue its currency to get out of such a situation but with the euro that road is cut off. So instead those countries have no alternative for government budget cuts and wage cuts. The problem is that this is a very painful way to cut expenses and that it tends to put economies in a negative tailspin that causes serious harm.

So we have seen a quite a lot of discussion of a breakup of the euro recently. One popular scenario is a North-South division of the eurozone – resulting in a “neuro” and “seuro”. Another scenario is the dropout of the weakest links: Greece and maybe one or two other countries. The problem in both cases is what to do with the many financial links – contacts and loans – that would be broken by such a currency split. Mismanagement of the transition can lead to panic and chaos. As the Lehman collapse in 2008 has learned such a chaos can be much more economically damaging than the direct damage itself.

Unfortunately quite a few European politicians seem convinced that an orderly transition is impossible. As a consequence they are determined to defend the euro at all costs. Yet history has known quite a few currency unions that were dissolved. Most recently the dissolution of the Soviet Union and Yugoslavia also meant that the common currencies were dissolved. Their transitions were rather chaotic but we can learn from them how such a process can be managed. Unfortunately Western countries were in both cases instrumental in pushing the dissolution of those countries. Analyzing what went wrong means also taking responsibility for what we did wrong. Many of the Western leaders and academics involved would rather avoid such a disgrace. But such an attitude is harming us now.

It should be noted that the fact that there are many variables involved also means that there is a lot of space for creative solutions.

A departure of Greece won’t work
It would not be a good idea for Greece to leave the euro in the present situation. The weak competitive position of the Greek economy and the semi-insolvency of its government will combine to produce a sharp fall of the new Greek currency – let’s call it drachme. Those who have assets in euro’s or debts in drachmes will be favored while those with assets in drachmes or debts in euro’s will be disadvantaged. This is not a fair solution and it doesn’t provide the kind of continuity that people expect under the rule of law. It will lead to capital flight and chaotic circumstances that might do more harm than the transition itself.

On itself these damages might be taken for granted. In the past numerous countries have suddenly applied major devaluations to their currencies. The unjust effects are seen as just bad luck for those concerned. However, separating a country from the eurozone will take weeks or even months. Banknotes and coins will have to be created and distributed and that takes time. This is a problem. A devaluation happens in a split second and that means there is no opportunity to exploit the gap in valuation. In contrast the long time needed for splitting a country from the eurozone offers ample opportunity to exploit this gap. So one should expect effects like a major capital flight. And given the level of connectedness of the European economies it will be impossible to stop such transactions.

One might think up measures to counter this movement. Greece might manage to secretly create new money and distribute it very fast or the EU might have some general emergency money that could be used if a country left the euro. But even if it would be possible that way to stop the damage caused by the capital flight the effect on the next domino’s (most probably Spain and Portugal) would still be there. They would see a major capital flight in anticipation of being the next to leave. And even if the ECB would counter that effect with monetary infusions these countries would still see sinking investment – what would hurt their economies in the longer term.

Another consequence will be that the European banks will be hurt. This might happen directly – when their loans to Greek companies and people are converted in drachmes - or indirectly – when the loans stay in euros but those Greek companies and people are no longer able to repay euro loans with their devalued drachmes – but the effect is the same. It is very likely that as a consequence some banks will need government support. Greece itself might need support from the EU too to bridge the transition period. The eurozone governments will likely react to those extra expenses with budget cuts elsewhere. This restrictive economic policy will make it harder for Greece to export to the eurozone and cause the drachme to sink even lower.

It is important to realize that the expected sharp drop is nearly the only reason why a breakup of the euro by the departure of Greece is problematic. If there was the expectation that the drachme would keep approximately the same value as the euro after the breakup there wouldn’t be much of a problem. A breakup would still be a lot of work for many people but it would be manageable.

So to put it bluntly: the very reason why we are under pressure to break up the eurozone is also the reason why it is so hard to do so. And the longer we wait the bigger that reason is likely to become.

What if the north left?
These problems wouldn’t occur if instead the strongest economies left the euro. They would have the freedom to temporarily follow an expansive economic policy after the transition so that their currency wouldn’t rise too fast. And the block that they leave behind will be strong enough not to see the kind of melt-down that Greece alone would face. Also all the countries that might devalue would do so at the same time so that there wouldn't be a domino effect.

The leavers would be at least Germany and the Netherlands: the two countries with the biggest trade surpluses. As these trade surpluses are – specially in the case of Germany – the product of an economic policy aiming to increase their competitiveness that was out-of-synch with the rest of the eurozone this would also be a logical consequence.

Some of the smaller countries like Finland, Austria and Slovakia might choose to follow Germany because their economy is strongly connected with it, but the majority would stay with the euro. I won’t address the issue of whether these countries should adopt a common currency – what would result in a neuro-seuro configuration or that they would each re-introduce their own currency. Convenience will probably dictate the former option.

As the seceding countries are the stronger ones there would be a much better possibility to manage the transition. Yet it still would need to be managed. Preferably there should be an initial period in which there is a fixed rate while everyone is free to exchange his euro’s for the new currency. This would require a considerable commitment from Germany that might include a promise to keep interest low for the first year and to - initially - follow an expansionist monetary policy.

France – with a huge trade deficit – and Italy – with its budgets problems – would stay inside the euro. With those countries the remaining eurozone would be strong enough not to see the kind of disaster that would face Greece if it gave up the euro alone. Yet it would be weak enough to see its currency gradually weaken and its competitive position improve.

If Greece would leave the euro alone most bonds and financial obligations would stay in euros and that would hurt Greece. But if Germany leaves the euro most contractual obligations will stay in the weaker currency. Only when both parties are German should contracts be converted. That would mean that the stronger instead of the weaker party bears most of the pain.

An eurozone with a weaker currency will also benefit Eastern and South-Eastern Europe where many companies and private people have debts nominated in euro’s.

Having an expansionist economic policy will not be popular in Germany. But in this scenario it would have to happen only for a short time while if Germany stays in the euro it might have to be implemented for a very long time. It will also be stimulated to do so by the fact that not doing so will lead to the rise of its new currency what has as a consequence that the value of its bonds to the eurozone sinks and its competitive position towards that zone deteriorates.

In the end Greece might even be too weak for the reduced eurozone. But the EU would be in a much better position to handle it. The chance of a domino effect would be much smaller and competitiveness gap between it and the remaining eurozone members would be much smaller as the present gap.

What if the north doesn’t want to leave?
Germany was reluctant to join the euro and to give up its own strong currency. So a return to the mark or a neuro will not be unpopular in Germany. What might make it reluctant is the cost of the transition, both financial and in decreased competitiveness for its exporters when its new currency rises compared to the euro.

Germany’s politicians are now at the crossroads. Leaving the euro will have costs and risks and its risk-averse politicians would rather avoid that. But the longer they wait the higher the cost will become. They made that mistake before with Greece when they preferred band aid above real solutions for so long that a departure of Greece from the eurozone is no longer a realistic option. If they make the same mistake regarding a partition of the eurozone an anarchic breakdown may become unavoidable.

France has the key position in the future of the eurozone. Without it a southern euro zone would be too weak, both economically and in the negotiations about the conditions under which the euro should be split up. It will certainly take some swallowing for the French to choose to be grouped with the weaker economies. On the other hand: France would be able to play a leading role in the new eurozone while at the moment it is just acting as a servant of Germany. If France would make this choice it would leave Germany virtually alone and with little choice but to comply. The present trade deficit of France justifies a grouping with the South too.

We might see an intermediary step. In that phase Germany would be condemned for having a large trade surplus with the rest of the EU and for following policies that aim to even further enlarge this surplus. Germany might be ordered to lessen this surplus and be fined if it didn’t succeed with this. It would be the logical mirror image of the fines for countries with a too large budget deficit. The consequence of such a rule would be that Germany is forced to choose between two unattractive scenarios.

No country can permanently have a large trade surplus that isn’t supported by sustainable flows of money in the other direction. Germany has abused the EU to keep such an extra large trade surplus where a normally a rising currency would have countered it. It has no choice but to end this policy as it is untenable.

Psychological effects
The present setup of the eurozone offers Germany the wrong kind of incentives. It makes it feel that it would be better off with a restrictive fiscal policy than with an expansive fiscal policy. It allows it to blame others and have others partially pay for the resulting deficits in the South of the eurozone. And being a payer itself gives it a power position that allows it to continue this policy. When it has a separate currency it will no longer be able to do that as such actions will result in a rising currency. So psychologically a separate currency will make it more attractive for German politicians to follow a policy that also benefits the South of Europe.

The present configuration offers also the wrong incentives to the South. The monetary union makes it unattractive to follow a restrictive fiscal policy as it leads to a downward spiral – a spiral that would be less worse with separate currencies. On the other side it decreases the unattractiveness of nearly going broke as that is also the problem of the richer member states. The close connectedness of the economies in the currency zone makes that the Northern countries will be heavily harmed too if one of the Southern countries goes broke. And that makes them more prepared to pay for some kind of support.

Yet although the North has incentives not to let the South go broke it does not have incentives to let flourish. On the contrary: it would like to keep it as a willing market for its products.

As the EU primarily aims to keep its member states happy it doesn't have an incentive to change the situation either.

What should be converted?
Only those contracts where both parties are German (or member of the new neuro zone) should be converted to the currency. This could be explained as harming the creditors in favor of the debtors. However, as the new configuration will be more stable as a whole it already contains an element that favors the creditors.

Existing German government debt would stay in euro’s too. The market already has taken into account the difference of solvency of the different countries by awarding different interest rates. Converting debts into the new currency would be an unexpected and undeserved bonus for those having German bonds. This is money that can be better invested to keep the currencies on par for some time.

It is desirable that the German government takes effort to keep the new German currency at the same level as the euro for at least half a year so that most short term contracts can expire and there will be time to convert longer term contracts. This will mean low interest rates, increased government spending and maybe some fine that has to be paid to a stability fund if the mark rises too much.

If the currencies start to differentiate too soon those most vulnerable would be funds with obligations in the new mark – like pension funds. This might cause the need for legislation that binds their payout partially to the euro.

Of course the long term goal of the whole currency operation is to devalue the Southern currency with some 10 to 20% compared to the Northern so that its competitiveness improves. However, the EU countries should keep control of the pace of that devaluation, keep it gradual to diminish the damage and be prepared to crush speculators who want to force a faster devaluation. The transition period might take some two years. In that period the EU would have exchange rate targets comparable to the “Snake” that connected the European currencies before the euro.

The new configuration will contain two strong currencies instead of one. The new currencies will not have the standing of the present euro and may be less used as international reserve currencies. But that is the price we will have to pay for renewed stability.

A fiscal union?
One option that has been mentioned is a fiscal union. That will not really work.

The idea behind a fiscal union is that if everyone pays taxes to Brussels and Brussels distributes it over the countries no one will complain when it spends more on the poor member states than they bring in in taxes. Germany might still end up as a net payer and Greece a net receiver but it will be hidden by layers of obscure bureaucracy. So basically it is a trick to deceive the public.

This might be defensible if it would work but that is questionable. It looks more likely that the receivers will permanently become dependent on the richer countries, just like Southern Italy has been dependent on its North for over a century now.

The discussion is very similar to that about development aid to Third World countries. With them there is nowadays a near consensus that money transfers only create dependency and corruption and that only the opportunity to export agricultural and industrial products really helps their economy.

The EU is very proud about how much its poorer members have grown and likes to think that its money transfers have been an important contribution to that. But while certain investments – like in highways – may have helped much of the money did nothing to make its recipients more competitive. It may actually have made these countries less competitive by driving up their wages. The main reason the older countries paid for this was that it also created new markets for their companies.

This policy is quite comparable in both its motives and effects to the way Western countries for a long time looked at development aid. We not only gave aid but also pushed the developing countries to buy as much from us as possible – often things they didn’t need – and when they overspent we sent in the IMF to force them to have more “responsible” economic policies. If one considers Germany’s refusal to cancel Greek defense orders while it pushes at the same time for budget cuts in Greece it is hard to ignore the similarity.

Advocates of a fiscal union often mention the example of the US. But the US is one nation while Europe consists of many different nations and migration between their areas faces considerable resistance at both sides. Treating them as one nation would be a violation of the principle of self-determination of nations and will very probably backfire. In addition one should remember that the American civil war settled the principle that the states of the US are not allowed to secede and that they will be confronted with violence if they try. Do we really want German soldiers in Greece to prevent it from leaving the EU?

Budget control
Another idea is now being introduced: stronger control by the EU over the budgets of the member states. It is an illustration of the dysfunctionality of the European decision making process where every proposal that promises a tighter integration is adopted while proposals that results in decentralization become a priori rejected. The ever closer union is looking more and more like a tightrope.

In fact budget problems have played only a minor problem in the creation of the present situation and if the proposed rules had been in force they would have made no difference. Spain and Ireland had very healthy budgets until their real estate market collapsed and Greece seemed to be healthy with its forged figures. If the true figures of Greece had been widely known it would have been corrected by the bond markets. When the problems of those countries became apparent they were too deep for simple solutions and a fine from Brussels would only have made the financial position of those countries worse.

Forcing all countries to have a restrictive budget makes it harder for the Southern countries to bridge the competitiveness gap with the North. If anything, the Northern countries with a trade balance surplus should be forced to have an expansive economic policy.

The future of Europe
The growth in power and size of the EU in the past decades has not been driven by rational arguments or popular support. Instead we have the irrational call in the Treaty of Rome for an “ever closer union” and continuous reminders of the threat of war between European states. As our last war is fading from the memory of most Europeans advocates of the European Union have added new fears to advocate their cause. We are now told about the risk of a “loss of momentum” in building the EU and the risk of Europe “becoming irrelevant” in the face of the US and a rising China.

But fear is not a good adviser and it has prevented the EU from taking rational steps towards solving the present financial conundrum. Its eagerness to promote the euro has proven to be a bridge too far. But instead of making a tactical retreat the EU seems only prepared to accept solutions that increase the power of Brussels. Although it is clear that a common coin for counties that are at a different level of development creates a risky situation the EU hasn’t even withdrawn its requirement that new member states join the euro as soon as possible.

In the face of mega-units like the US and China a common EU market is a very rational choice. Most individual countries are simply too small to play any significant role on the world stage. Our common interest is what binds the European countries more than anything. In that light it is frightening to see that the EU has done nothing to retort claims that Greece might be thrown out of the EU if it leaves the euro. This is a denial of the common interest. No matter the merits of a punishment of Greece in this case we will have to consider that once pushing countries out of the free trade zone becomes a possibility every country will have to consider that it might be targeted for a similar measure in the future. And so they will take measures in order not to become too dependent on the EU. This strikes at the heart of the EU.

How the Ukrainian conflict resembles the Yugoslav one

Nearly 25 years after the breakup of Yugoslavia another country in the periphery of the EU is burning. Again there is a fight between pro-Western and pro-Russian forces mixed with local ethnic antagonisms. It could be a coincidence. But there are many similarities that seem to indicate that the EU plays an active role in the destruction of its neighborhood.

The problems started in periods when those countries were paralyzed politically and simultaneously suffered serious economic problems. Yugoslavia had failed to find a replacement for the party to tie the country together. Such a things takes time and it wasn’t granted that. Ukraine still hasn’t managed to restrict the power of the oligarchs.

In this situation of a weak state the West started to promote “pro-Western” forces. In Yugoslavia Slovenia and Croatia were encouraged to secede. In Ukraine a color revolution was organized. Vague promises of EU membership – seen by many as a promise of wealth - were used to attack supporters among the population.

In the process international law was violated. The secession of Slovenia and Croatia went not according to the Helsinki Declaration and the Yugoslav constitution, which both prescribed mutual agreement. The encouragement of the protesters on the Maidan by Western political leaders was a clear violation of the principle of non-interference in the internal affairs of other countries.

In the next step the West presented the results of these actions as the new reality. But the losers in the situation didn’t accept that. This made communication difficult. It didn’t help that the West refused to accept compromises. In Bosnia and Croatia their independence was presented as a new reality and from that it was concluded that those countries were now free to deal with their minorities as they wished. In the meantime their Serb minorities believed that their position was unsettled and needed to be negotiated first.

Such obstacles, like the Croatian Serbs who demanded autonomy or the Ukrainians who rejected the Maidan revolution, form a problem for the West. It doesn’t sound very democratic to demonize a whole segment of the population. And so their actions are attributed to the influence of some evil genius like Milosevic or Putin. Of course this is denigrating for those people, but most observers in the West won’t notice.

Role Play
Different segments of the “West” play different roles in those tragedies:

- Germany is inclined to ham-handed power politics. In the case of Yugoslavia it was its early recognition of Croatia. In Ukraine it was its refusal to let the EU pay attention to Ukraine’s relationship with Russia when it was negotiating a trade treaty with the EU.

- The EU is inclined to jump to conclusions when faced with problems in its neighborhood. This is due to a mix of feelings of responsibility, fear of irrelevance and US pressure. Unfortunately its bureaucratic nature makes it very difficult later to change its position. In the case of Yugoslavia it became stuck when it adopted the legalistic excuses of the Badinter Commission to ignore international law. In the case of Ukraine It was its adaptation of the Maidan protests.

- For the US the Cold War has never ended and every excuse is grabbed to reenact it. It is the US that helps “pro-Western” forces with training, arms or whatever they need. In the neocon view that is dominant in the US every compromise is a partial victory for Putin and for that reason repugnant. When Croatia and Kosovo seemed ready to talk about border changes this was blocked by the US. In Ukraine too they have pushed the government to be uncompromising.

In this constellation the West still regularly triest to achieve peace but it never succeeds. Every agreement is soon violated by both sides. And although both sides carry guilt only the “anti-Western” forces are sanctioned. When things go badly on the battle field for the “pro-Western” side you see a push for an armistice. But that truce is only an opportunity to rearm, not to achieve peace. Occasionally European politicians become hesitant. Then Washington sends in some high ranking guys like Biden or Kerry to put them under pressure. With help from friends from the Baltics and Poland they often achieve what they want.

Monday, February 09, 2015

The Ukrainian conflict is not about Ukraine

The big question of the Ukrainian conflict is: what do we want? Peace in Ukraine or teaching Putin a lesson? In the latter case the demands on Russia and the rebels will be much stronger and the preparedness to make concession much weaker.

All sign are that the US wants the latter. Russia is not respecting the rules of the post-Cold War world as the West - and specially the US - understands them. And implementing the logical solutions in Ukraine would mean accepting this Russian behavior. Russia interfering with a treaty between the EU and Ukraine, Russia occupying and annexing Crimea, Russia supporting an uprising in East Ukraine, Russia demanding that Ukraine doesn't become a NATO member: it is all unacceptable. It doesn't matter that the US tends to do similar things. It doesn't matter that Russia is reacting to a US sponsored "coup" (as they see it) in Kiev. It doesn't matter whether Russia's complaints about the authoritarian nature of the government in Kiev are true. For much of the Russian population these are circumstances that justify its policies in Ukraine. But many in the West see only an interference that they consider unacceptable. As a consequence we see in response Western policies that don't take the local circumstances in Ukraine in account but make it a kind of principle that what Russia does is wrong.

A good illustration is when General Breedlove talks about his reasons for wanting to arm Ukraine. He acknowledges that the government can't win no matter how many arms it would receive. "But", he says "we must try to raise the price on the battlefield for Putin to slow this whole problem down so sanctions and other measures have time to work". Freely translated this means that Breedlove is prepared to sacrifice many thousands of Ukrainians at a time when opinion polls show that 70% of the population wants to stop the war. His expectation that in the end Putin will give in under the pressure of sanctions is controversial. In the likely case that he doesn't thousands will have died in vain. The only people benefitting will be some hardliners who can claim that they have done all they could to rein in Russia.

The logical solution for the Ukrainian problem is autonomy for Donbass. Even before the conflict started there were demands for autonomy from both the Eastern and Western ends of Ukraine. It was also part of the Minsk agreement in September and the Ukrainian parliament adopted then a law to implement it. Unfortunately Ukraine's government blocked the law, claiming that it would create yet another Russian supported enclave like South-Ossetia, Abkhazia and Transdniester. That claim is not very credible: unlike those areas Donbass is not ethnically different from the rest of the country. Ukraine is just a very big country where the Western extreme of the country has grabbed the power at the moment and the Eastern extreme doesn't agree. Given time they will find a solution to live together again when power returns to the center.

But just like the demand of the government that the rebels return the land that they conquered since september the rejection of autonomy is in fact an excuse to say no. The same applies to the rejection of the Russian demand that Ukraine shouldn't become a NATO member. NATO membership was - until people got swept up in the heated rhetoric of the war - unpopular and most Ukrainians would happily give up on it if that could bring peace. The Ukrainian government isn't bothered about any of those points as such. It is aiming to win the war and is just grabbing the most credible sounding excuse to reject any peace initiative. It does so both under pressure of Washington - that sees the conflict in Cold War terms - and as it depends for its power primarily on right extremist militias and oligarchs and not on popular support it is afraid that some kind of recognition for Donbass would shift the balance of power.

The Ukrainian government has tried to turn the argument around by claiming that the rebels don't adhere to the Minsk agreement. They like to point to the clause that gives the government control of the borders. However, you cannot see that clause separate from the rest. The idea of Minsk is a situation where Donbass is an autonomous part of Ukraine. In that context it is logical that Kiev controls the borders. However, the clause does not mean that Kiev has the right to encircle and suffocate Donbass.

Merkel and Hollande have now proposed strong autonomy and a 50-70km demilitarised zone.
This proposal faces the risk to be rejected in the same way as Minsk was. The question is how Russia and the rebels will react. It looks like they see this initiative as the last chance. That if this doesn't work it doesn't make sense to once more conclude a truce that will only enable Kiev to rearm and attack once more. Instead they may launch a full scale attack in the hope that a massive loss of territory will bring Kiev to its senses. Given that the Ukrainian army just suffered a major blow at Debaltsevo that might go rather easy and bring less humanitarian costs than waiting.

Merkel and Hollande are supporters of the Maidan revolution and their sudden interest in peace comes mainly from the fact that Ukraine's army is in serious trouble in Debaltsevo. This raises some doubt whether they are really prepared to accept a peace where Russia and the rebels get some of their demands fulfilled. Their proposal contains basic elements like autonomy, but the devil is the details and those haven't been published. One rumor claims that they have set Putin a deadline and threatened with sanctions. Already one can see in pro-Russian media speculation that they may be cooperating with Obama in a good cop bad cop act.

The big question of the Ukrainian conflict is: what do we want. Peace in Ukraine or teaching Putin a lesson?

Sunday, February 08, 2015

Competing visions on Ukraine

Reading “pro-Russian” and “pro-Western” articles about the conflict in East Ukraine and hearing politicians on both sides talk about it one gets the impression of two different realities. The “conversation” below gives a good impression of the arguments used.

About the Maidan revolution

The Maidan revolution came from the desire of the Ukrainian people for more freedom and democracy.

The Maidan revolution was an US sponsored coup. It was a classical color revolution. See the leaked conversation between Victoria Nuland and US ambassador Pyatt as evidence.

Pro-Western: Opinion polls show that support for Yanukovich was very low at the time of the revolution.

Opinion polls show that only about 50% supported the “coup”. Most of the rest didn’t like Yanukovich but they believed that the constitution should have been respected and that Yanukovich should have been allowed to serve the rest of his term.

The new government will finally liberate Ukraine from the oligarchs and reform its economy.

Oligarchs control the new government. Since the revolution there have been almost no reforms. Very likely Yanukovich would have introduced more reforms. Not because he liked it, but because he would have been forced by the IMF. Since the revolution the Western countries have played sugar daddy for Ukraine, taking away the need to reform.

Ukraine is now democratic and free.

 Pro-Russian: Since the massacre of protesters in Odessa on 2 May and the farcical investigation of that disaster adversaries of the Maidan have become very careful about protesting. The coming lustration with very general criteria further adds to their fear.

Pro-Western: Russia is violating Ukraine’s independence by supporting the uprising in the East.

Pro-Russian: The US violated Ukraine’s independence by installing a puppet regime in Kiev.


Pro-Western: Poroshenko was democratically chosen.

There was no level playing field: a pro-Russian candidate was beaten up by protesters. Also Poroshenko betrayed his voters. Before he was chosen he promised that he would immediately start peace talks. After the election he increased the hostilities, claiming that true peace could only come through a total victory.

Pro-Western: The parliamentary elections showed that support for right extremist groups is low. Neither Right Sektor nor Svoboda passed the 5% threshold.

The power of right extremists in Ukraine is not rooted in their popularity but in the threat coming from their militias and in their occupation of key positions in the army and police.  Since the revolution the mainstream parties have copied much of their agenda.

The violence in the East

Pro-Western: The Russians and the rebels started the violence.

Pro-Russian: The violence started with Right Sektor and other Maidan militia harassing local administrators who didn’t support the Maidan and disturbing anti-Maidan protests.

Pro-Western: Without support from Russia the uprising would never have come from the ground. The rebels are armed from Russia. And without the influx of Russian soldiers in September the government could have ended the uprising.

Putin has said many times that he considers a defeat of the rebellion not acceptable. He wants a negotiated solution.


Pro-Western: The rebels shot the plane. There are lots of indications that the plane was shot by a BUK missile and that the rebels had such a missile at the time of the disaster.

Ukrainian government: Russian troops shot the plane. Only they had the knowledge and technology.

Pro-Russian: The plane was shot by an Ukrainian BUK or by an Ukrainian war plane. The Ukrainian government keeps refusing to disclose information such as the conversation with the cockpit and the radar images.

The Minsk Peace Process

Autonomy for the Donbass was at the core of the Minsk Protocol. But Ukraine refuses to give it.

Pro-Western: Autonomy for the Donbass would create yet another Russian “protected” enclave like South Ossetia, Abkhazia and Transdniester.

Pro-Russian: South Ossetia, Abkhazia and Transdniester have remained problems because the US has encouraged the regimes in Georgia and Moldova to be uncompromising. It is not only Russia’s fault. Also, those are ethnic conflicts in a sense that Donbass isn’t.

Autonomy is a standard solution shortly after conflicts when there isn’t trust between the parties. When trust comes back it can be gradually reduced. By refusing autonomy the West implicitly states that the conflict can only be solved by surrender of the rebels.

Pro-Western: The goal of the present rebel offensive is to increase the economic viability of their enclave. It is against the spirit of Minsk. They want to conquer Shchastya for its power plant, Andiivka for its coke factory and Mariupol for its steel mills. They want Donetsk airport because it blocks their northern expansion. They want Mariupol because it would open the road to a land
bridge towards Crimea. And they want Debaltsevo because that would make it easier to import weapons by rail from Russia and so enable an offensive elsewhere.

Pro-Russian: The goal of the present rebel offensive is to make the Donbass less
vulnerable for shelling by the government army and for sudden attacks. The reason why the government has so many troops in Debaltsevo is because they planned another attack from there.

Russia wants to control Ukraine’s foreign policy. They have made many demands in that direction for peace in Ukraine.

Russia’s demands are rather limited and are shared by a large segment of the Ukrainian population. It was the EU that tried to force Ukraine to a foreign policy that it didn’t want when it forced it to choose between the EU and Russia – instead of allowing it to maintain its traditional role as bridge between the two.

Saturday, January 10, 2015

Religion and respect

In all the "I am Charlie" upheaval about the attacks in Paris one can also sometimes hear a countervoice. That is a voice that says that "they had it coming" by insulting 1.6 billion Muslims in the core of their existence: you need only one madman who doesn't suffer in silence but takes action.

These approaches come from different cultural backgrounds. Those countervoices come from societies where religions live in mutual respect. They have the assumption that society is static and that people will die in the religion in which they were born. In such an environment religion is something like the color of your skin: it is a part of your identity and as such it should be respected. Atheists who want to denounce their former religion will find that their freedom to do so is severely restricted.

However, religion is not just a passive identity. It can be very active, both trying to recruit converts and to impose its vision on society. In that form religion looks a lot like ideologies and for ideologies we don't have this kind of respect. We don't mind people accusing communism of enslaving people or neoliberalism of stealing from the poor to give to the rich. We may not agree but we believe it is essential free speech. In this context we know the borders between free speech and respect. We may not agree with our communist neighbor or colleague but we will not use our arguments in a way that humiliates them. We still respect them as a human.

Similarly we usually know the limits of joking about religion. There are much more jokes about the "foot between the door" of the proselytizing Jehovah Witnesses than about the Virginal Birth because the first is an active "ideological" point while the latter is a basic part of the belief without consequences for non-believers.

Jihadi's are by excellence Muslims with an activist "ideological" agenda. Often they actively seek points of difference so that they can achieve small victories. See for example "Islamic banking" that was invented as an ideological statement yet has no long long history within Islam. In this context Charlie Hebdo's criticism of Islamist extremism is fully justified.