Opinion

The Great Debate

from Breakingviews:

Gazprom/Ukraine dispute is proxy for Putin’s whims

By Pierre Briançon 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Europe has long been used to the perennial drama of “Ukraine versus Gazprom,” but this year’s version is not your run-of-the-mill gas price dispute. Making good on a longstanding threat, Gazprom has said it will deliver gas to Ukraine only if it has been pre-paid. This comes after the Russian energy group failed to settle a dispute with Naftogaz, its Kiev-backed counterpart, over what it claims are more than $4 billion of overdue bills.

As summer nears, the decision will have limited immediate consequences on Europe’s energy supplies. Gazprom says it will continue to provide gas to the rest of the continent and has the means to bypass Ukraine. The two sides may be headed to international arbitration – by far the best way to settle the dispute. Gazprom has some grounds for feeling that it has been too patient with its Ukrainian client.

But Gazprom is now asking Kiev to pay for arrears amassed by the previous, pro-Russian government. Ukraine, on the other hand, is contesting the 80 percent hike that Gazprom slapped on gas deliveries in the heat of tensions between Russia and Western powers over the annexation of Crimea. Of course, Kiev at some point can – and probably will – raise the question of how many billions it is owed by Moscow after the confiscation of part of its territory.

Gazprom’s toughening comes just after renewed military activities by Russian separatists in the east of Ukraine. Hopes for a normalisation of the situation between Kiev and Moscow are premature at best. The fact that the Ukranian and Russian presidents have started talking at last doesn’t mean that the region’s problems are over. And it is still hard to understand the Kremlin’s strategy – if there is one.

Post Iraq, U.S. must rely on covert action

devine -- afghan-militia-1024x736

Covert actions are now crucial to U.S. foreign policy. After the wars in Afghanistan and Iraq, Washington should rely more on CIA-driven covert operations and less on military force in the world’s hotspots.

Ukraine could be a case in point. For covert action means not just collecting information (espionage), but also political or paramilitary efforts that help support political organizations, local media and on occasion, insurgents. Under the CIA’s charter, the government maintains plausible deniability for all these actions.

I’ve long advocated for greater use of this tool of statecraft — and not only because I ran the CIA’s Afghanistan Task Force during the successful effort to drive the Russians out of Afghanistan in 1986-87, along with many other covert operations during my 32 years at the intelligence agency.

from Breakingviews:

Russia puts gas-hungry China in a bear hug

By Ethan Bilby
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Russia has signed a long-awaited gas pipeline deal with China, and it leaves the People’s Republic in a bear hug. Russia gets a new market outside the increasingly frosty European Union. Oil major PetroChina gets to balance out some losses from low regulated prices at home. But the optics of the deal shred Beijing’s pretensions to political neutrality.

Russia could use a friend. EU countries have been planning to diversify supply away from dependence on Russia, which provides a third of their energy needs – especially after a dispute in 2009 saw gas cut off. Annexing Ukraine’s southern Crimea region has raised the temperature further. New pipelines from places like Azerbaijan are designed to limit Moscow’s leverage.

The best role for Kiev provisional government? Exiting.

kiev rally

Successful provisional governments are quickly forgotten. Failed provisional governments, like the one during the 1917 Russian revolution, can be remembered forever.

Ukraine’s current provisional government already has, in many ways, outstayed its welcome. If the May 25 presidential election produces a definitive result, however, it still has a chance of quietly leaving the stage.

Provisional governments have one essential task: restore legitimate rule. In virtually all cases, it is a race against time. Indeed, the designation “provisional” carries a lame-duck status, since it conveys a sense of temporariness that undermines the stability of a regime.

from Breakingviews:

Rob Cox: Solving America’s homegrown Putin dilemma

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

As the eagle flies, it's a long way from Bunkerville, Nevada to Slovyansk, Ukraine. Right now, though, the two places have something insidious in common: armed vigilantism. That parallel sadly seems to escape the many American policymakers who have accused President Barack Obama of adopting the logic of appeasement in his dealings with Russian President Vladimir Putin. They're missing a big point. If the United States can't uphold the rule of law at home, it can have no credibility abroad.

Over the weekend, South Carolina Senator Lindsey Graham joined the chorus of Republicans branding Obama the new Neville Chamberlain. He told CBS's "Face the Nation" that the president is "delusional" and his latest economic sanctions "should have been called the Russian economic recovery act" for helping bolster the Russian stock market and rouble last week.

from Anatole Kaletsky:

Why the Russian sanctions don’t work

putin!!

Why did the U.S. and European sanctions against Russia earlier this week trigger a rebound in the ruble and the Moscow stock market?

To understand this paradox it is worth recalling Yes Minister, the British TV comedy about a blundering politician who stumbles from crisis to crisis with the same justification for every panic response: “Something must be done. This is something --– therefore it must be done.”

The problem with this syllogism is that doing something may be worse than doing nothing -- and the Western decision to rely on economic sanctions in the Ukraine crisis is a case in point.

Don’t cry for the Nabucco pipeline

The site of a newly opened distribution hub of the gas pipeline Gazelle is pictured in Primda

It is too late for regrets. With Europe worried that Moscow could cut off gas deliveries to Ukraine, which would trigger price volatility and supply risks throughout the continent, the failure of the Nabucco pipeline project stands out.

Created to carry Caspian gas into Europe by bypassing Ukraine, Nabucco would have given Europeans and Americans a much-needed sense of supply security — though the pipeline would have carried its capacity of 31 billion cubic meters of gas annually only near the end of this decade. Instead, Europeans are left scratching their heads and searching for alternative energy supplies.

Russia, meanwhile, is likely to remain Europe’s chief natural gas supplier through at least 2020, despite the anticipated growth of diversified gas shipments to Europe, including liquefied natural gas (LNG) from the vast U.S. shale-gas resources.

U.S. v Russia: Searching for Kennan

No matter how counterintuitive it may seem, Washington needs to stop lecturing Russian President Vladimir Putin if it wants to resolve problems with him.

In George Kennan’s celebrated 1946 “long telegram,” the diplomat and scholar explained why Russia’s conduct was so often duplicitous. Kennan might well have been writing about Putin when he laid out the West’s problems with the Kremlin leaders’ behavior. Being annoyed with them wouldn’t help, Kennan advised, since their conduct was based on a fierce Russian nationalism complicated by a serious streak of insecurity about Moscow’s position in the world, evident whenever Joseph Stalin felt the Soviet Union was not receiving the respect he believed it was due.

We see this pattern in Putin’s conduct today. He insists that the United States “treats Russia like the uninvited guest at a party,” freely interfering in his country’s affairs, which he won’t tolerate — no matter the cost. Confronted with his outright hostility, the West seems at a loss as to how to deal with the bellicose Kremlin.

No drama in Obama’s Ukraine policy

Many are asking: How can we stop Russian President Vladimir Putin from moving into Ukraine and seizing a large chunk of its territory in the east? The actions of forces that resemble the Russian special operations troops who created the conditions for annexation of Crimea suggest that other parts of Ukraine may also be in the Russian strongman’s sights.

The fact is, however, we cannot stop Putin. Or, to be more precise, we should not try to stop him physically. Doing so would require military threats or troop deployments to Ukraine. The stakes do not warrant such a step. It is not worth risking World War Three over this.

Ukraine is not a member of the North Atlantic Treaty Organization. It does not have a formal security treaty with the United States, and its strategic importance is not great enough to warrant such escalation. Though we can feel for Ukrainians — and reject what Putin is doing — this is a classic case of where the old axiom “We can’t be the world’s policeman” does apply.

Odessa: Ukrainian port that inspired big dreams

Tensions have been rising in many corners of Ukraine as the threat of a Russian intervention looms. Ukraine’s Black Sea port of Odessa is one such corner of dispute between Moscow and Kiev, where macro-battles have been transformed into a seemingly endless chain of micro-conflicts.

Supporters of both countries have taken to marching through the streets, ominously threatening each other. The Ukrainian government is trying to wrest control of the local oil refinery — one of the country’s most important — away from a Russian bank. Tension is visible in the smallest aspects of life.

Odessa’s role as a site of unbridled Ukrainian-Russian competition is not surprising. Though within Ukraine, the city is overwhelmingly Russian-speaking. Prominent Russian political figures regularly proclaim their right to take back what was theirs — from Alaska to Finland.

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