Ukraine, Russia, the EU and the US

Ukraine is now divided and Russia has occupied Crimea. The following information and analyses were quite helpful for me to understand the situation and shape my thoughts.

Some background from Dennis Kucinich in his article “Is NATO’s Trojan Horse Riding Toward the ‘Ukraine Spring’?“:

But while the draft of the EU “Association Agreement” is being sold as an economic boon for Ukrainian citizens, in reality it appears to be NATO’s Trojan Horse: a massive expansion of NATO’s military position in the region.

“The Parties shall explore the potential of military and technological cooperation. Ukraine and the European Defence Agency (EDA) will establish close contacts to discuss military capability improvement, including technological issues.”

The draft of the Agreement’s preamble links Ukraine to “ever closer convergence of positions on bilateral, regional and international issues of mutual interest” including the Common Foreign and Security Policy (CFSP) of the European Union and the Common Security and Defence Policy (CSDP) — which underscores the military nature of the agreement.

Most notably,

If the EU Agreement is ratified, Ukraine will inevitably spend a higher percentage of its GDP for military purposes, steering critical resources from social programs and job opportunities. In 2012, Ukraine’s military budget already increased 30 percent — to $2 billion, representing a comparatively low 1.1 percent of GDP. NATO members agree to spend at least 2 percent of GDP on defense. (my emphasis)

NATO members are also under pressure to contribute more and more of their GDP to military expenditures. “It is time to move beyond the ‘2 percent rule,'” says the Center for Strategic and International Studies.

For Greece, Spain and others, EU membership hasn’t turned out to be a shining economic savior. The return of austerity policies reminds one of Naomi Klein’s warning about the perils of disaster capitalism, in which instability opens the door for exploitation from outside forces.

For the protesters in Kiev, standing tall for democracy and economic opportunity, there’s suddenly a new worry: Disaster Militarism. Ukrainians may be pro-EU, but are the EU and NATO pro-Ukrainian?

A good analysis of why and how this whole terrible episode has happened this way and what it might mean for the near future from Anatol Lieven “Why Obama Shouldn’t Fall for Putin’s Ukrainian Folly“:

If there is one absolutely undeniable fact about Ukraine, which screams from every election and every opinion poll since its independence two decades ago, it is that the country’s population is deeply divided between pro-Russian and pro-Western sentiments. Every election victory for one side or another has been by a narrow margin, and has subsequently been reversed by an electoral victory for an opposing coalition.

During George W. Bush’s second term as president, the U.S., Britain, and other NATO countries made a morally criminal attempt to force this choice by the offer of a NATO Membership Action Plan for Ukraine (despite the fact that repeated opinion polls had shown around two-thirds of Ukrainians opposed to NATO membership). French and German opposition delayed this ill-advised gambit, and after August 2008, it was quietly abandoned. The Georgian-Russian war in that month had made clear both the extreme dangers of further NATO expansion, and that the United States would not in fact fight to defend its allies in the former Soviet Union.

The West has stood by in silence while the rump parliament in Kiev abolished the official status of Russian and other minority languages, and members of the new government threatened publicly to ban the main parties that supported Yanukovych—an effort that would effectively disenfranchise around a third of the population.

The implication and probable consequence of a full-scale invasion of Ukraine by Russia:

The result would be horrendous bloodshed, a complete collapse of Russia’s relations with the West and of Western investment in Russia, a shattering economic crisis, and Russia’s inevitable economic and geopolitical dependency on China. (my emphasis)

In these circumstances, it is essential that both the West and Russia act with caution. The issue here is not Crimea. From the moment when the Yanukovych government in Kiev was overthrown, it was obvious that Crimea was effectively lost to Ukraine. Russia is in full military control of the peninsula with the support of a large majority of its population, and only a Western military invasion can expel it.

For now, the overwhelming need is to prevent war. War in Ukraine would be an economic, political, and cultural catastrophe for Russia. In many ways, the country would never recover, but Russia would win the war itself. As it proved in August 2008, if Russia sees its vital interests in the former USSR as under attack, Russia will fight. NATO will not. War in Ukraine would therefore also be a shattering blow to the prestige of NATO and the European Union from which these organizations might never recover either.

Then Ben Judah gave his interesting explanation to the question “Why Russia No Longer Fears the West” and just invaded Ukraine by choosing to gamble its significant economic ties with the West. Essentially, it is this:

Western leaders are stunned because they haven’t realized Russia’s owners no longer respect Europeans the way they once did after the Cold War. Russia thinks the West is no longer a crusading alliance. Russia thinks the West is now all about the money. (my emphasis)


Once Russia’s powerful listened when European embassies issued statements denouncing the baroque corruption of Russian state companies. But no more. Because they know full well it is European bankers, businessmen and lawyers who do the dirty work for them placing the proceeds of corruption in hideouts from the Dutch Antilles to the British Virgin Islands.

We are not talking big money. But very big money. None other than Putin’s Central Bank has estimated that two thirds of the $56 billion exiting Russia in 2012 might be traceable to illegal activities. Crimes like kickbacks, drug money or tax fraud. This is the money that posh English bankers are rolling out the red carpet for in London.

Moscow is not nervous. Russia’s elites have exposed themselves in a gigantic manner – everything they hold dear is now locked up in European properties and bank accounts. Theoretically, this makes them vulnerable. The EU could, with a sudden rush of money-laundering investigations and visa bans, cut them off from their wealth. But, time and time again, they have watched European governments balk at passing anything remotely similar to the U.S. Magnitsky Act, which bars a handful of criminal-officials from entering the United States.

Back in the 1980s, the USSR talked about international Marxism but no longer believed it. Brussels today, Russia believes, talks about human rights but no longer believes in it. Europe is really run by an elite with the morality of the hedge fund: Make money at all costs and move it offshore. (my emphasis)


This article “The Much-Too-Special Relationship” by Nicholas Shaxson explains why The City of London threatens U.S. security and Britain will oppose any measures that would close London’s financial centre to Russians:

We Brits have just over 60 million people, a far smaller democratic counterweight, and banking assets equivalent to over 400 percent of GDP, which is a multiple of the figure for the United States. Bank of England Governor Mark Carney recently crooned over the prospect that, on current growth rates, this might rise to 900 percent by 2050.

Thus, hard though it may be to believe, the City’s political capture of Britain is deeper and more encompassing than anything that could ever be tolerated on the American side of the pond. …

The truth is that the City of London is a greater potential threat to the national security of the United States than almost anyone supposes. That story, told true and right, has three main parts.

The first part shows that the United Kingdom is the single most important player in a global system of offshore tax havens, and has facilitated and even enthusiastically—if discreetly—encouraged the élite looting of pretty much every country in the world, from Pakistan to Greece to Libya to Mexico, typically via U.S., British and Swiss banks. This is a national security issue par excellence, now revealed in its fullness through the Crimea affair, let’s call it. This British offshore system is a fast-growing cash cow for the City, which will fight to protect it.

The second part of the story tells of how the City of London has spent half a century building a business model based on thwarting and opposing U.S. laws and regulations. It is crucial to understand that this is a deliberate feature of the modern City, not an incidental side effect.

The third reveals the aforementioned depth of Britain’s political capture by the City of London, which makes Britain a thoroughly untrustworthy ally not only with regard to Russia, but many other portfolios as well.