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Mainstream, VOL LIII No 40, New Delhi, September 26, 2015

Ukraine tensions easing, but US won’t let go easily

Monday 28 September 2015, by M K Bhadrakumar


The endgame in Ukraine appears to be struggling to be born. The German account of the meeting of the Foreign Ministers of the ‘Normandy Format’, which took place in Berlin on Saturday (September 12), struck a positive note. ‘Significant progress’; ‘less confrontational’; ‘made headway in some critical things’; ‘very close’; ‘now needs to be further consolidated and secured’ — the expressions used by the German Foreign Minister Frank-Walter Steinmeier in his media briefing were meaningful. (RFERL)

How come such an optimistic estimation? Some background, first. Let’s rewind and cross over to Vladivostok in the Russian Far East. The date is September 4. The occasion: Eastern Economic Forum. Three major energy deals were struck on that single day between Russia’s Gazprom and European partners:

• A Shareholders’ Agreement on Nord 2 gas pipeline project forming a consortium comprising Gazprom (Russia), E.ON (UK), BASF / Wintershall (Germany), OMV (Austria), ENGIE (France) and Royal Dutch Shell (UK/Netherlands);

• Signing of a Term Sheet on long-term business projects between Gazprom and OMV whereby the Austrian energy giant will gain a stake in Siberia oil fields in exchange for a stake in its assets in Europe for the Russian partner; and,

• Russia’s Gazprom signs a whopping assets swap deal with Wintershall, subsidiary of Germany’s BASF, whereby the Germans will gain a stake in the Siberian oil fields in exchange for Russian stake in North Sea operations and full control of a gas trading hub in Germany with the largest underground gas storage facility in western Europe.

Now, what have these energy deals got to do with Ukraine? In fact, everything. The Newsweek magazine captioned the story appropriately— ‘Forget Ukraine. It’s Business As Usual Between Europe and Russia.’ In a nutshell, the energy deals mean the following:

The major European countries are reviving— and deepening and expanding—their energy ties with Russia, especially Germany, ignoring the Western sanctions against Russia imposed last year over the Ukraine issue. At the very least, they seem to anticipate a post-sanctions era in a conceivable future.

Despite all that hullabaloo about Europe cutting down its energy ties with Russia, the opposite seems to be the case. Europe and Russia are reinforcing their interdependency.

Russia, too, may have a ‘Look-East’ energy policy with focus on China, but the energy cooperation with Europe is still the goose that lays the golden egg. The European market is by far more lucrative and European oil majors bring in advanced technology.

The major European powers will use their influence in Brussels to bend the EU’s competition rules to accommodate Gazprom, because reciprocity is needed at a time Russia is opening up upstream projects.

The Nord 2 gas pipeline is actually all about Ukraine. It bypasses Ukraine, which has been historically the trunk route for Russian pipelines heading for Europe. Ukraine can no longer blackmail Russia and Europe also doesn’t want its Russian supplies being predicated anymore on Ukraine’s maverick behaviour. By the way, Nord 2 with a capacity of 55 bcm will also carry Russian gas from the vast Yamal gas fields all the way to Britain.

Unsurprisingly, the ‘pro-US’ set-up in Kiev is furious—so is Poland—but the major European countries of ‘Old Europe’ have their own priorities. Poland is the US’ number one Central European ally in the Ukraine crisis.

Let’s now move on to Donetsk in Donbass (Ukraine’s ‘pro-Russia’ eastern region). The date is September 9. The prominent figure in the rebel-held city of eastern Ukraine, Andrei Purgin, was suddenly ousted from the leadership role as the Speaker of the separatist legislature. Purgin was obviously ‘purged’ and he simply attributes his downfall to ‘intrigue’ but wouldn’t say more. Purgin was a ‘hardliner’ who’d sought the annexation of the rebel-held territories by Russia, something that Moscow is averse to. On the other hand, so long as Purgin stayed in a leadership role, the smooth holding of local elections scheduled for next month, as provided under the Minsk Agreement, would have been problematic. Of course, the new leader, Denis Pushilin, who replaced Purgin, is reputed to be close to Moscow and can be expected to play a positive role if a dialogue were to commence between Donetsk and Kiev, which is something Moscow wants to happen. (AP)

Thus, the picture is somewhat clear. The extremist leadership in Purgin has been replaced, which coincides with an end to the fighting, prepares the ground for a new phase of to commence, auguring negotiations between Kiev and the separatist regions. Moscow’s influence over the leadership in Donetsk has been fine-tuned accordingly. In sum, serious intra-Ukrainian political discussions are likely to commence soon.

Coinciding with the transition to a ‘moderate’ rebel leadership, Russian President Vladimir Putin held a phone conversation on September 9 with his counterparts within the framework of the ‘Normandy Format’—Germany, France and Ukraine—to review the situation in Ukraine and discuss the further implementation of the Minsk Agreement. The Kremlin readout said: “Particular attention was given to implementing the political provisions of the Minsk Agreements, first and foremost carrying out a constitutional reform in Ukraine, including legislating special status for the Donbass regions, as well as organising local elections and adopting a law on amnesty. In this regard, Vladimir Putin once again stressed the need to establish a full-fledged, direct dialogue between the Kiev authorities and representatives from southeast Ukraine.”

The four leaders agreed to meet in Paris on October 2. The September 12 meeting in Berlin at the level of the Foreign Ministers has obviously prepared the ground for the summit in Paris. Clearly, the trends are pointing in a positive direction.

Putin repeated the Russian expectations in an interaction with the media at Yalta, Crimea, on the same day (September 12). He hinted that despite the popular opinion in the Donbass region favouring annexation by Russia, Moscow seeks a unified Ukraine including the separatist region as visualised under the Minsk Agreement. He repeated the Russian demand that Kiev and the separatist leadership in Donbass should hold direct talks and that Kiev should implement its new legislation granting “special status” to the separatist region. He also sounded conciliatory as regards the issues on gas supplies to Ukraine through the winter season ahead.

However, the catch lies somewhere else. The US is not part of the Normandy Format and is not bound by the discussions taken there. The Kiev set-up is virtually under American control. It remains to be seen whether the neocons and the Russia-baiters driving the US’ Ukraine policies in Washington will throw in the towel just like that and give up.

The hawkish US Assistant Secretary of State Victoria Nuland, accompanied by the famous cold warrior Strobe Talbott (who used to be her boss in the Bill Clinton Administration), landed in Kiev in the weekend on a three-day trip. Their mission seems to be to do some finessing of the power structure in Kiev ahead of the crucial period ahead when political discussions commence. It is even mentioned that a former US State Department employee might be appointed as Ukraine’s Prime Minister.

At any rate, the Nuland-Talbott duo will have a shot at ensuring that American nominees hold all the key posts in the Kiev set-up so that if the Normandy Format process gains momentum and a new climate of cooperation emerges between Russia and the major European powers, the Kiev leadership would still remain firmly under Washington’s thumb and the US’ ‘containment strategy’ against Russia is not imperiled.

To be sure, Washington wouldn’t have liked the tidings from Vladivostok. The signs of revival of Russian-German cooperation, in particular, will worry the neocons in the Obama Administration. Significantly, Germany and Russia also seem to be on the same page with regard to accelerating the search for a political settlement in Syria. The Syrian refugee problem is a major issue for Germany. Influential German politicians have demanded that Russia should be in the forecourt in resolving the Syrian conflict.

Ambassador M.K. Bhadrakumar was a career diplomat in the Indian Foreign Service. His assignments included the Soviet Union, South Korea, Sri Lanka, Germany, Afghanistan, Pakistan, Uzbekistan, Kuwait and Turkey.

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