Monday 28 February 2022

Ukrainian crisis being fueled by owners of military complexes

Reportedly, Ukrainian ambassador Oksana Markarova told a bipartisan group of senators Monday that her country needs more help from the United States and could run out of military supplies to fend off a Russian invasion.   

Senate Majority Leader Charles Schumer, who attended the meeting with roughly a dozen Republican and Democratic colleagues, said everyone in the room was unified in support of doing more for the country, which Russian troops invaded Thursday on several fronts.  

“It’s no secret they need more help. They’ve got the weapons they need right now but they’re going to run out of what they need soon so we’ve got to get a supplemental [spending bill] passed quickly,” Chris Murphy told reporters after the meeting.   

Murphy said a looming humanitarian crisis along the Polish-Ukrainian border and dwindling military supplies are putting pressure on Congress to act quickly.  

Senators say the need to pass an emergency spending bill to provide weapons and humanitarian aid is becoming more important than passing sanctions legislation, something that senators were negotiating before the Presidents’ Day recess.  

“I think you’re talking about something in the neighborhood of US$10 billion to do the job,” said Murphy, a member of the Senate Appropriations Committee. “This is the most dangerous moment since the Cuban missile crisis.”

Markarova confirmed reports that Russian forces are increasingly targeting civilian buildings and warned that civilian casualties are likely to mount.   

“She talked about two five-story buildings being hit today full of civilians,” Murphy said.  

Ben Cardin, who also attended the meeting, said Ukrainian forces are “well-organized, doing the best they can but they need additional help.”  

“They’re managing their equipment as best they can. They do need more help, absolutely. They certainly need more anti-tank and anti-aircraft type equipment because the numbers from Russia are so large,” he said.  

Other Ukrainian leaders on Monday pressed the House Ukrainian Caucus to back a no-fly zone over the country, warning that casualties could mushroom without stronger foreign intervention. 

However, senators who spoke to reporters after meeting with Markarova said they did not hear her request that the US and its NATO allies impose a no-fly zone over Ukraine, which could risk a direct military confrontation with US forces.  

Murphy earlier in the day warned that trying to impose a no-fly zone over Ukraine would be dangerous.  

“There’s been a lot of loose talk from smart people about ‘close air support’ and ‘no fly zones’ for Ukraine. Let’s just be clear what that is — the US and Russia at war. It’s a bad idea and Congress would never authorize it,” he tweeted.  

Murphy later told reporters that the military conflict could quickly escalate in a dangerous way.  

Schumer after the meeting said there’s strong bipartisan support to help Ukraine fend off the Russian invaders.  

“In that room, from one end to the other, we want to help Ukraine in every way that we can and they’re valiant. They’re amazing and we’re exploring all the ways that we can help them,” he said. 

But one major potential complication is the need to pass an omnibus spending bill to fund the US federal government beyond March 11.  

“The problem is we need a budget to get a supplemental,” Murphy said. “We’ve got to get serious in the next couple days about getting a budget done so that we can have a supplemental to that budget.”  

“I’m worried that our petty fights over the border are going to prevent us from getting a deal on a budget and thus a deal on the supplemental spending bill for Ukraine,” he added. 

That could delay congressional action on more assistance for Ukraine.  

Richard Shelby, the top-ranking Republican on the Appropriations Committee, said he wants a supplemental spending package for Ukraine to move separately from an omnibus spending package.  

 “I think it ought not to be part of the omnibus but ought to be moving at the same time. Because it’s a separate thing, we’re talking about emergency money as opposed to the regular order,” he said.   

Asked if the omnibus spending package can get done by the March 11 deadline, Shelby said, “I don’t know.” 

“We’re still talking. We’re making progress. Sometimes it’s a step forward and a step sideways,” he said.  

 

US imposes sanctions on Russian central bank

The Treasury Department on Monday banned transactions with the Central Bank of Russia and the Russian foreign investment fund, imposing strict financial sanctions on a Russian economy. 

The new penalties effectively cut the Russian central bank from the US$ and severely limit Russian President Vladimir Putin’s ability to dampen the blow of previous sanctions. 

While the US has imposed similar sanctions on North Korea, Venezuela and Iran, there is no precedent for so many countries imposing such strict penalties on an economy the size of Russia's. Economic and financial experts warn Russia could respond with its own limits on oil and natural gas exports, which could cause energy prices to spike after years of rising energy costs across the world.

US individuals and businesses are now unable to make any financial transitions with or on behalf of the Central Bank of the Russian Federation, National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation. The sanctions also ban any foreign financial firm from sending US$ to the Russian central bank, finance ministry and wealth fund.

The Treasury Department said it would make exceptions for certain energy-related payments in a bid to prevent a sharp spike in global oil and natural gas prices. But US officials said Monday the new penalties would still push the Russian economy deeper into a collapse they blame on Putin’s invasion of Ukraine.

“Our strategy, to put it simply, is to make sure that the Russian economy goes backwards as long as President Putin decides to go forward with his invasion of Ukraine,” said a senior Biden administration official on a call with reporters.

The US and Western allies announced Saturday they would target more than US$600 billion in reserves held by Russia’s central bank — which they described as Putin’s war chest to stave off sanctions. The announcement of pending sanctions alone caused the ruble to drop more than 30 percent against the dollar Monday and prompted the Russian central bank to hike its baseline interest rate.

Freezing Russia’s foreign reserves will prevent the country bolstering the value of the ruble by selling the currency of other nations. As the value of the ruble plummets, Russians will face severe challenges affording food and other basic necessities. The new penalties could also limit Russia's ability to stabilize major banks after they were cut off from the global financial system in previous rounds of sanctions.

“This is a vicious feedback loop that's triggered by Putin’s own choices and accelerated by his own aggression. It's a very raw deal Putin is giving to the Russian people, as the world's disconnects Russia from the global financial system and all its benefits,” said a senior Biden administration official.

The central bank sanctions are the latest and most significant step in an unprecedented campaign to derail the Russian economy and force Putin to reconsider the domestic consequences of attacking Ukraine.

Despite initial wariness among European nations, the U.S. and its allies have largely locked Russia out of the global financial system and international commerce with few exceptions for the energy sector and humanitarian aid. Even Switzerland, which has historically remained neutral in geopolitical conflicts, is poised to freeze Russian assets held in its banks.

 

Sunday 27 February 2022

Russia enjoys edge over United States

The global reliance on Russian petroleum and natural gas is a major hurdle for Joe Biden, President of United States and Western allies as they attempt to dial up economic pressure on Russian President Vladimir Putin. 

Sanctions on Russian companies and asset freezes, are leading to a lot of nervousness among people in the global system. You could argue that even though the sanctions aren’t really targeting Russian crude ... they’re already having an impact.

The US and European Union are reluctant to target the Russian energy sector and drive oil and gas prices even higher after months of rising costs for consumers. The dynamic gives Putin important leverage and could undermine unity among the US and its European allies in how they respond to his invasion of Ukraine.

Biden and European leaders have imposed strict new penalties on Russian banks, state-owned companies and business leaders close to Putin — and on Friday announced sanctions on Putin himself. But Western allies have avoided taking steps that could interrupt access to Russian oil and natural gas. While fossil fuels make up more than half of the US total imports from Russia, President Biden said that the country would avoid sanctioning them.

“In our sanctions package, we specifically designed to allow energy payments to continue,” he said.

Russia is the world’s third-largest oil producer, after the US and Saudi Arabia, and the second-biggest natural gas producer, after the US. Oil and mineral fuels, such as petroleum, coal and natural gas, make up a majority of its exports. While oil is a global commodity, the natural gas market is more localized, meaning that Europe and Asia are its biggest markets.  

“Energy sanctions that directly targeted Russian crude or product exports — they would hit the Russian economy harder than any other measures, but they also present the most risks to the global energy markets,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies at Energy Security and Climate Change Program. 

Asked Thursday during a press briefing about oil, Daleep Singh, the White House’s Deputy National Security Adviser for international economics, said the administration didn’t want to disrupt the energy market at this point. 

“When it comes to energy, this is the one area where Russia has systemic importance in the global economy. We’re not going to do anything which causes an unintended disruption to the flow of energy as the global economic recovery is still underway.” Daleep Singh

As a net exporter of oil and natural gas with a sturdy strategic reserve, the US has more flexibility to handle rising prices than its European allies, who could face severe energy shortages if Russia pulls back its supply. Sanctions on the Russian energy sector could also backfire if Russia can offset lower sales with higher prices. 

“Russia has been known to use energy as a weapon to cut exports, sometimes under the guise of additional maintenance or other issues,” said Rachel Ziemba, founder of macroeconomic advisory firm Ziemba Insights.

“Even to the extent that Europe and the US have said, ‘Well, we don't want to impact or impede too much domestic short-term energy trade,’ We don't know exactly what the Russian entities will do,” she added.

But because oil is a global commodity, less availability of Russian oil could impact US prices.

“I think that’s why the Biden administration and especially the Europeans are hesitant to impose direct sanctions on the oil sector, because it is somewhat self-defeating because you end up harming European and US consumer and businesses if there’s not enough spare capacity or strategic reserves or alternative supplies to provide a medium-term alternative to that Russian oil,” said Robert Johnston, a senior adjunct scholar at Columbia University’s Center for Global Energy Policy. 

And the issue is politically difficult for the Biden administration, as Republicans have repeatedly criticized him over high gasoline prices even though presidents have a limited impact on its cost. 

Putin promised unprecedented “consequences” for nations that try to hinder Russia’s invasion of Ukraine, and both Biden and his European allies face serious domestic blowback if sanctions cause a massive energy shock. US gasoline prices rose 40% year over year in January, and an interruption to global supplies would add even more fuel to inflation — particularly if both the U.S. and Europe lean more on American energy sources. 

"Vladimir Putin realizes what we all know, which is that a good chunk of allies in Europe are highly dependent on Russian oil and natural gas. Even if we impose these huge sanctions, they're only sustainable for American allies for a certain amount of time,” said Jamil Jaffer, founder and Executive Director of George Mason University’s National Security Institute. 

With Biden hamstrung by Putin’s leverage over the energy sector, the US has dialed up the pressure on Russia through its own power over the global financial system.

The Treasury Department on Thursday announced new sanctions meant to limit Russia’s financial sector and ability to raise money through global markets, including severe restrictions on major Russian banks with limited carve outs for energy transactions and humanitarian aid.

The new sanctions block any US-based financial firm from processing payments and transactions for Sverbank, effectively preventing Russia’s largest financial institution from access to the US$. The Treasury Department also blocked all business with VTB Bank, the country’s second-largest financial firm, along with its subsidiaries and three other Russian banks.

More than a dozen state-owned Russian firms and wealthy business leaders have also been blocked from the US financial system, days after Biden imposed a ban on any purchase or sale of Russian debt by US firms. 

The sanctions not only prevent Russian firms from most business within the US, but also makes it nearly impossible to conduct transactions in US$. Roughly 80% of the US$46 billion in foreign transactions processed each day by Russian banks use US$, according to the Treasury Department.

Financial sanctions imposed so far have already roiled the Russian economy and markets. Russian stocks crashed earlier this week, borrowing costs have spiked and the value of the Russian ruble fell to its lowest level in history — to worth just more than a US penny.

“This is not the outcome we wanted,” said White House Press Secretary Jen Psak during a Thursday briefing.

“It's both a tragedy for the people of Ukraine and a very raw deal for the Russian people. But Putin’s war of choice has required that we do what we said and to ensure this will be a strategic failure,” she said.

And while oil was left out, some noted that sanctions on the financial sector could have indirect impacts on the country’s energy sector.

“If you look at the pricing for Urals blend, which is the main export blend that goes to Europe from Russia, Urals blend is already trading at a big differential … buyers are very wary,” Cahill said.  

 

Saturday 26 February 2022

Germany to send anti-tank weapons and missiles to Ukraine

Germany will provide anti-tank weapons and surface-to-air missiles to Ukraine, German Chancellor Olaf Scholz announced Saturday. This is a major reversal of Berlin’s longstanding policy of banning weapon exports to battle zones.

“The Russian attack marks a turning point. It is our duty to do our best to help Ukraine defend against the invading army of Putin. That’s why we’re supplying 1,000 anti-tank weapons and 500 Stinger missiles to our friends in Ukraine,” he wrote in a Twitter post.

US President Joe Biden had authorized an additional US$350 million in military assistance from Pentagon inventories, including anti-armor, small arms, various munitions, body armor, and related equipment. The White House also reportedly asked Congress to provide US$6.4 billion in extra funds to assist Ukraine.

 Ukrainian President Volodymyr Zelensky welcomed Germany’s change of stance: “Keep it up, Chancellor Olaf Scholz! Anti-war coalition in action!”

Berlin Saturday authorized NATO partners the Netherlands and Estonia to deliver German-made weapons to Ukraine.

The batch of weapons included 400 RPGs from the Netherlands and old GDR howitzers from Estonia.

Germany has a long-standing policy of not exporting weapons to war zones, rooted partly in its bloody 20th-century history and resulting pacifism. Countries aiming to pass on German weapons exports need to apply for approval in Berlin first.

Scholz had repeatedly referred to this policy in recent weeks when refusing to deliver weapons to Ukraine.

As the Russian invasion of Ukraine is entering the third day, fighting broke out at the outskirts of the Ukrainian capital city Kyiv, which is regarded as the primary goal of the Russian forces.

United States and UK officials said the Russian forces were about 18 miles, or 30 kilometers, from the city center.

The speed of the advance has been slowed “likely as a result of acute logistical difficulties and strong Ukrainian resistance”, the UK’s Ministry of Defense said.

However, a Pentagon official warned the situation may change rapidly.

“It’s a battlefield and events on the battlefield are dynamic and they can change very, very quickly,” the official said.

More than 100,000 Russian troops have entered Ukraine, Zelensky said in a Twitter post.

United States and allies getting ready to kick certain Russian banks out of SWIFT

The White House on Saturday announced that the United States and allies will kick certain Russian banks out of a major international banking system, a significant step in a bid to cripple the Russian economy in response to its invasion of Ukraine. 

The Biden administration and European allies agreed to cut Russia out of access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a rapid shift from just days ago when it appeared such a move was unlikely in the near future.

The US and European nations also committed to imposing measures to prevent the Russian Central Bank from using its reserves to undermine sanctions and boost the ruble.

The announcement came via a joint statement from the leaders of the United States, the European Commission, France, Germany, Italy, the United Kingdom and Canada. The leaders called Russian attacks on Ukraine "an assault on fundamental international rules and norms that have prevailed since the Second World War, which we are committed to defending."

"We stand with the Ukrainian people in this dark hour. Even beyond the measures we are announcing today, we are prepared to take further measures to hold Russia to account for its attack on Ukraine," they said in the statement.

Banks across the world use SWIFT to finalize transactions and transfers. Cutting Russia off from SWIFT would make it incredibly difficult for its banks to operate efficiently but could also wreak economic havoc for European nations that depend on Russian oil and natural gas exports. 

If a Russian bank that has been removed from SWIFT wants to make a transaction with a bank located outside of Russia, it will need to use the telephone or a fax machine, a senior administration official told reporters.

Biden on Thursday had indicated kicking Russia out of SWIFT was not part of the initial rounds of sanctions because not all European allies were on board with the measure. But as fighting intensified in Ukraine in recent days and Russia moved close to the capital of Kyiv, pressure grew for Western nations to offer a tougher response.

Additional measures announced on Saturday included limitations on the use of so-called golden passports that allow wealthy Russians with connections to the Kremlin to become citizens of other countries and access their financial systems.

The US and its allies also said they would announce a task force to ensure the effective implementation of the coordinated sanctions being imposed on Russia.

The Biden administration and European allies have unveiled multiple rounds of sanctions in response to the Russian invasion of Ukraine, which began late Wednesday night. The US has sanctioned multiple Russian financial institutions to freeze their US assets as well as a list of several Russian oligarchs.

The White House on Friday announced additional sanctions against Russian President Vladimir Putin and a dozen of his top advisers, freezing any of their assets in the United States.

Imposing sanctions on Russia's central bank could crush the country's economy and financial sector; depending on how severely Western allies restrict its assets.

With limited access to its foreign reserves, Russia could face serious challenges keeping targeted banks afloat and mitigating the economic impact of sanctions. A total freeze on foreign reserves would likely devastate the Russian economy, cause a domestic financial crisis and leave the ruble worthless.

The United States has targeted the central banks of only North Korea, Iran and Venezuela with sanctions — nations with limited leverage over the global economy. Taking action against the Russian central bank could pose its own economic risks for the US and allies. The Biden administration and western allies have been wary of any sanctions that could limit access to Russian petroleum or natural gas exports.

"Our calculus is we have two choices," the senior administration official told reporters on Saturday. "Either we continue to ratchet costs higher to make this a strategic failure for President Putin, or the alternative, which is unacceptable, and that would be allowing unchecked aggression in the core of Europe."

 

Friday 25 February 2022

Ukraine left stranded to face Russia

In the escalating tensions between Russia and Ukraine, Kiev faces a barrage of explosions. Ukrainian President Volodymyr Zelensky reiterated that his country has been left stranded in an escalating tension with Russia.

"We have been left alone to defend our state," Zelensky said in a post-midnight video address to the nation. "Who is ready to fight alongside us? I don't see anyone. Who is ready to give Ukraine a guarantee of NATO membership? Everyone is afraid.”

He said that Russian forces had reached Kiev and asked residents to be watchful and adhere to a curfew.

Despite Russia's designation of him as target number one, Ukraine's President stated he and his family will remain in the country.

Kremlin spokesperson Dmitry Peskov noted in a statement that Russia will come to terms with Ukraine in case it agreed to stay neutral, and not maintain any Western weapons on its territory.

Peskov emphasized that discussions about the terms of surrender would generally involve Ukraine's demilitarization and denazification.

President Zelensky said that he is not frightened to discuss neutrality, despite the fact that his plea for NATO membership remained rebuffed by European leaders.

While Ukraine was left to face Russia, mercy appeals from the west have started pouring in.

The UN refugee agency was prompt to declare that approximately 100,000 people have been internally displaced; with thousands more having fled Ukraine since the fighting began.

The European Union launched what it called “the harshest package of sanctions” on Moscow early Friday targeting 70% of the Russian financial industry and critical state-owned enterprises.

In a press conference, President of the European Commission, Ursula von der Leyen, said that a fresh round of sanctions "will impose massive and severe consequences on Russia for its action, in close coordination with our partners and allies.” She added that Russian assets and banks' access to bloc’s financial markets will be frozen and blocked. 

On Thursday, the United States unveiled a fresh round of sanctions on Moscow, targeting five main Russian banks. Consequently, Canada, Australia, and UK have taken similar steps.

French President Emmanuel Macron announced on Friday that Paris remained useful to leave this path open so that the day when the conditions can be fulfilled, we can obtain a cessation of hostilities.

The US House Speaker Nancy Pelosi noted that lawmakers demand to provide Ukraine with US$600 million for lethal defense weapons.

"What we're doing with Ukraine is making sure that we have humanitarian assistance to help the people; that we have lethal defense weapons going into Ukraine to the tune of US$600 million for them to fight their own fight," she told reporters in San Francisco.

Moral of the story is, “The outcomes of trust on the Western countries bear no fruit. The western countries especially the United States have over and over proven that they will always lay out conditions to trigger a kind of crisis in various countries to capitalize on their weaknesses. Once fallen, these will be left stranded”.

Ukraine export disruptions likely to take edible prices to new highs

The recent dramatic rally in edible prices sparked by the Russia-Ukraine crisis is signaling more pain ahead for grocery shoppers already feeling the strain of soaring food costs.

Prices of staples from wheat to edible oils have rocketed to fresh highs on worries about supply disruptions in the Black Sea region. Ukraine is the world’s second-biggest grains shipper and Russia often tops the ranking for wheat exports. Together they also account for about 80% of sunflower oil trade.

Any disruptions to flows would quickly ripple through to buyers in Asia, Africa and the Middle East, boosting costs for bread and meat and potentially increasing demand for supplies from the Americas or Europe. Ukraine is a major seller of corn to China, and Russia sends wheat all around the world.

With wheat prices hitting the highest since 2008, soybeans touching a nine-year high, and palm and soybean oil near unprecedented levels, consumers are set to feel the pinch as those cost increases make their way to supermarket shelves. Expect more expensive pasta, chocolate, margarine, shampoo — you name it. 

While it’s true that commodity prices tend to be only a small proportion of the prices of final goods, the problem is being compounded by a supply chain that’s been stretched to its limit. Cargo capacity is tight, freight rates are still high, labor is expensive, while geopolitical tensions and an energy crunch are further boosting costs of fertilizers key to growing crops.

“Supply inelasticity is likely to continue as a result of expensive fertilizers, shrinking farmer margins and limited acreage expansion,” said Oscar Tjakra, a senior analyst at Rabobank in Singapore. “We should see these inflationary pressures upstream move along the supply chain to reach consumers in 2022.”

Russia’s invasion of Ukraine has commodity traders watching the country’s vast network of infrastructure. Ports are dotted along the Sea of Azov — which is connected to the Black Sea by a strait that runs between Russia and Crimea, which Russia annexed in 2014 — and on the Black Sea coast further west. 

Rich, fertile soils have helped Ukraine become the second-largest grain shipper and the Black Sea region to be known as the world’s breadbasket. The southwestern ports of Odesa, Pivdennyi, Mykolayiv and Chornomorsk handle almost 80% of Ukraine’s grain exports, according to researcher UkrAgroConsult.

 

China will invade Taiwan taking cue from Putin, warns Trump

Donald Trump former President of United States has warned that the Chinese regime will invade Taiwan after seeing Russian troops move into Ukraine.

Such an invasion against self-governing Taiwan will occur because Chinese leader Xi Jinping and Russian President Vladimir Putin are an example of twin sisters, Trump said during an interview on The Clay Travis and Buck Sexton Show. “China is going to be next,” Trump said.

“They’re waiting ’til after the Olympics. Now the Olympics ended, and look at your stopwatch, right? No, he wants that just like … It’s almost like twin sisters right here,” he added.

“Because you have one that wants Taiwan, I think, equally badly,” Trump added. “Somebody said, ‘Who wants it more?’ I think probably equally badly.”

He suggested that neither Putin nor Xi would make a move if he were the president.

“Putin would have never done it, and Xi would have never done it,” the former president said.

Putin and Xi met in China earlier this month. After their meeting, they released a lengthy statement, claiming that the two bordering nations enjoy strong ties in which there would be no limits in their partnership and no forbidden areas of cooperation.

Xi—who is likely to be handed an unprecedented third term in office at an important Chinese Communist Party meeting later this year—vowed in October last year that reunification of Taiwan with China would “definitely be realized.”

On February 23 this year, Taiwan’s President Tsai Ing-wen ordered the island’s national security agencies and military forces to ramp up their efforts to monitor and provide early warning of military developments in the Taiwan Strait and surrounding areas, following a high-level national security meeting on developments in Ukraine.

China and Taiwan are separated by the Taiwan Strait, which is about 80 miles wide at its narrowest point.

The Chinese regime sees Taiwan as part of its territory that must be united with the mainland, by force if necessary. However, Taiwan is a de facto independent country, where Taiwanese people elect their own government officials through democratic elections.

Republican Michael McCaul also hinted a connection between Ukraine and Taiwan, while speaking to ABC earlier this month.

“Xi is watching what is happening in Ukraine, our adversaries are watching,” McCaul said. “If Putin can go into Ukraine with no resistance, certainly, Xi will take Taiwan. He’s always wanted this.”

In light of its ambitions toward Taiwan and the broader Asia–Pacific region, Beijing has been engaged in an aggressive program of military modernization. Part of this includes expanding its nuclear arsenal, with a 2021 Pentagon report estimating that the regime might have 700 deliverable nuclear warheads by 2027, and as many as 1,000 by 2030.

The report pointed out different military actions the Chinese regime might deploy against Taiwan, including air and maritime blockades, precision airstrikes, and a full-scale amphibious invasion.

In recent years, Taiwan has been bearing the brunt of persistent Chinese military harassment, with military jets flying into the island’s air defense identification zone (ADIZ) on a regular basis. According to Taiwan’s defense ministry, the latest incursion happened on February 23, when two J-16 military jets entered the island’s southwestern ADIZ, prompting the island to deploy its military aircraft and air defense missile systems in response.

A recent survey conducted by the Taiwanese Public Opinion Foundation found that most Taiwanese do not believe Russia’s invasion of Ukraine would lead to Beijing attacking the self-governing island. The survey polled 1,079 people for two days ending on February 15.

The survey found that 62.9% said it was either unlikely or impossible that China would attack Taiwan. Meanwhile, 26.6% said it was either very likely or fairly possible that China would attack the island after Russia invades Ukraine.

On February 24, Putin declared a special military operation in Ukraine. Soon afterward, Ukraine President Volodymyr Zelensky announced martial law and said Russia had conducted strikes on Ukraine’s military infrastructure and border guards.

Russian aggression drew immediate criticism from Republican Ashley Hinson. Writing on Twitter, she stated: “I strongly condemn Putin’s unprovoked military attack on Ukraine. Americans stand with the Ukrainian people who deserve freedom and peace.”

“The world is watching us. We must ensure that our allies, like Taiwan, know they can rely on the US,” Hinson added.

The reasons United States wishes to bring Ukraine under NATO clan

Ever since Ukraine debacle has started I am being asked, why Russia wishes to subjugate Ukraine? Today I read a post in which reasons were given Russia wants to conquer Ukraine. Aren’t these the same reasons United States also wishes to bring Ukraine in the NATO clan. The game resembles old cowboy gun bout, where the winner was who pulled the trigger first.

Ukraine ranks:
1st in Europe in proven recoverable reserves of uranium ores;
2nd in Europe and 10th in the world in titanium ore reserves;
2nd in the world in explored reserves of manganese ores (2.3 billion tons, or 12% of the world’s reserves);
2nd largest iron ore reserves in the world (30 billion tons);
2nd in Europe in mercury ore reserves;
3rd in Europe (13th place in the world) in shale gas reserves (22 trillion cubic meters)
4th in the world by the total value of natural resources;
7th in the world in coal reserves (33.9 billion tons)

Ukraine is an agricultural country:
1st in Europe in arable land area;
3rd in the world by the area of black soil (25% of world’s volume);
1st in the world in exports of sunflower and sunflower oil;
2nd in the world in barley production and 4th in barley exports;
3rd largest producer and 4th largest exporter of corn in the world;
4th largest producer of potatoes in the world;
5th largest rye producer in the world;
5th in the world in bee production (75,000 tons);
8th in the world in wheat exports;
9th in the world in the production of chicken eggs;
16th in the world in cheese exports.
Ukraine can meet the food needs of 600 million people.

Ukraine is an industrialized country:
1st in Europe in ammonia production;
2nd in Europe’s and 4th largest natural gas pipeline system in the world (142.5 billion cubic meters of gas throughput capacity in the EU);
3rd largest in Europe and 8th largest in the world in installed capacity of nuclear power plants;
3rd in Europe and 11th in the world in rail network length (21,700 km);
3rd in the world (after the US and France) in production of locators and locating equipment;
3rd largest iron exporter in the world
4th largest exporter of turbines for nuclear power plants in the world;
4th world’s largest manufacturer of rocket launchers;
4th in the world in clay exports
4th in the world in titanium exports
8th in the world in exports of ores and concentrates;
9th in the world in exports of defence industry products;
10th largest steel producer in the world (32.4 million tons).

(Source: Andriy Futey)

Thursday 24 February 2022

United States to sanction Russian banks

President Joe Biden on Thursday said the United States would sanction major Russian banks and impose export controls on Russia to curtail Russian high-tech imports as part of a coordinated effort with allies to penalize the Kremlin for its military attack against Ukraine. 

However, the latest round of sanctions did not move to kick Russia out of the SWIFT international banking system, despite pleas from Ukraine and some members of Congress.

Biden condemned Russian President Vladimir Putin for ordering the attack against Ukraine and said that his actions would cost Russia dearly’.

“Putin is the aggressor. Putin chose this war, and now he and his country will bear the consequences,” Biden said. 

“Putin will be a pariah on the international stage,” Biden said later. 

Biden said the sanctions would target Russian banks holding a combined US$1 trillion in assets, including Russia’s two largest financial institutions, Sberbank and VTB Bank. He said the US would also impose sanctions on additional Russian elites with links to the Kremlin.

The Treasury Department said in a release that the administration would impose sanctions on VTB and Sberbank, cutting them off from processing payments through the US financial system.

The Biden administration is also imposing sanctions on three other Russian financial institutions: Otkritie, Novikom and Sovcom. 

The sanctions also target 10 Russian individuals, including those close to Putin and elites working in the financial sector, according to the Treasury Department. 

The export controls will restrict Russia’s ability to import sensitive US technology – like semiconductors, lasers, and sensors – and particularly target Russia’s defense, aviation, and maritime sectors, according to a White House fact sheet. Biden said that the restrictions, coupled with actions by European allies, would cut off more than half of Russia’s high-tech imports. 

 “It will be a major hit to Putin’s long-term strategic ambitions,” Biden said.

 “I will not be diplomatic on this. Everyone who now doubts whether Russia should be banned from SWIFT has to understand that the blood of innocent Ukrainian men, women and children will be on their hands too,” Ukraine’s foreign minister, Dmytro Kuleba, tweeted in advance of Biden’s remarks.

Biden cited concerns among some European allies about taking that step but argued the penalties being put in place were severe enough to make a difference. He indicated that kicking Russia out of the system could be a possibility in the future. 

“The sanctions we imposed exceed SWIFT,” Biden said in response to a reporter’s question about excluding the penalty. “The sanctions we imposed exceed anything that’s ever been done. The sanctions we imposed have generated two-thirds of the world joining us. They are profound sanctions. Let’s have a conversation in another month or so to see if they’re working.”

Nor did the sanctions package target the Russian oil or natural gas industries, which are major drivers of the Russian economy. European countries are dependent on Russia for gas.

White House Deputy national Security Adviser Daleep Singh told reporters at a briefing later Thursday that the administration intentionally scoped the sanctions to deliver a severe impact on the Russian economy while minimizing impact on the US and European allies.  

He said the administration would not do anything that causes an unintended disruption in global energy markets, including the flow of gas from Russia to the world.  

The Biden administration also announced plans to impose sanctions on individuals and entities in Belarus, accusing the nation of supporting and facilitating Russia’s invasion of Ukraine.

Biden made the announcement of new sanctions as the Russian assault on Ukraine was very much underway.

On Putin’s orders, the Russian military attacked Ukraine from multiple directions overnight Wednesday. The Pentagon has warned that the assault is only the first part of a multistage invasion.

“It is likely that you will see this unfold in multiple phases. How many? How long? We don't know. But what we're seeing are initial phases of a large-scale invasion,” a senior defense official told reporters on Thursday, before Biden spoke to the nation.

“They’re making a move on Kyiv,” the official said. 

The Biden administration has been working for weeks to develop a comprehensive sanctions package in the event of a Russian invasion, threatening harsh penalties as a means of deterring Moscow from launching a renewed invasion of Ukraine. 

But the threats, coupled with US and European diplomatic overtures, did not convince Putin to deescalate the situation. 

Biden imposed a first tranche of sanctions after Putin recognized two regions in eastern Ukraine as independent earlier this week.

Biden said Thursday it would take time for Putin to feel the economic pain of the penalties and suggested that it could cause the Russian leader to change course on his military campaign.

“He’s going to begin to see the effect of the sanctions,” Biden said. “It will so weaken his country that he’ll have to make a very, very difficult choice as to whether to continue to move toward being a second-rate power or, in fact, respond."

Biden condemned the assault in a statement late Wednesday, but his comments Thursday were his first extended remarks on the events unfolding in Eastern Europe. 

The announcement of new sanctions mirrored penalties unveiled by British Prime Minister Boris Johnson roughly an hour before Biden’s address. 

The White House has been closely coordinating with allies on the response to Russia’s military buildup and subsequent invasion of Ukraine.

 “Our actions, taken in coordination with partners and allies, will degrade Russia’s ability to project power and threaten the peace and stability of Europe,” Treasury Secretary Janet Yellen said in a statement Thursday afternoon.

“We are united in our efforts to hold Russia accountable for its further invasion of Ukraine while mitigating impacts to Americans and our partners.  If necessary, we are prepared to impose further costs on Russia in response to its egregious actions.”

 

Data wiping malware hits Ukraine computers

A newly discovered, destructive piece of software found circulating in Ukraine hit hundreds of computers, according to researchers at the cybersecurity firm Eset. 

That was just a part of what Ukrainian officials said was an intensifying wave of hacks aimed at the country’s tech infrastructure in the lead up to Russia’s invasion on Thursday morning.

In a series of tweets, cybersecurity firm Eset said the data wiping program had been "installed on hundreds of machines in the country". The attack, it said, had likely been in the works for the past couple of months.

Cybersecurity experts are racing to pick apart the malicious program. Researchers found it appeared to have been digitally signed with a certificate issued to an obscure, year-old Cypriot company called Hermetica Digital, which doesn’t appear to have a website.

Because operating systems use code-signing as an initial check on software, such a certificate might have been designed to help the rogue program dodge antivirus protections.

Getting such a certificate under false pretences – or stealing it – isn't impossible, but it's generally the sign of a sophisticated and targeted operator, said Brian Kime, a Vice President at US cybersecurity firm ZeroFox.

Who is responsible for the wiper is unclear, although suspicion immediately fell on Russia, which has repeatedly been accused of launching data-scrambling hacks against Ukraine and other countries. Russia has denied the allegations.

Ukraine has been repeatedly hit by hackers in the past few weeks as Russia massed troops around its borders. Earlier on Wednesday the websites of Ukraine's government, foreign ministry and state security service were down in what the government said was the start of another denial of service (DDoS) attack.

Twitter said it had mistakenly suspended around a dozen accounts that were posting about Russian military movements, and said the action was not due to a coordinated bot campaign or mass reporting of the accounts by other users.

"We've been proactively monitoring for emerging narratives that are violation of our policies, and, in this instance, we took enforcement action on a number of accounts in error," a Twitter spokesperson said in a statement. "We're expeditiously reviewing these actions and have already proactively reinstated access to a number of affected accounts."

Bitcoin slumped to its lowest in a month on Thursday after Russian forces fired missiles at several cities in Ukraine and landed troops on its coast, sparking a sell-off of riskier assets. The world’s most popular cryptocurrency fell by as much as 7.9% to US$34,324, its lowest since January 24 this year. Smaller coins that typically move in tandem with bitcoin also fell, losing as much as 10.8%.

Germany accused of weakening Ukraine

According to a Reuters report, the north German state of Mecklenburg-Vorpommern, where former Chancellor Angela Merkel was born, ties to Russia run deep – so deep, in fact, its leaders have defended a Kremlin project that the United States says helped cripple Ukraine.

At issue is a new gas pipeline project, which Germany halted on Tuesday in retaliation for Russia's decision to recognize two breakaway regions in eastern Ukraine, shortly before it invaded and brought Europe to the brink of a major war.

Mecklenburg-Vorpommern is the landfall site for the line, Nord Stream 2, which bypasses the former Soviet Republic. The United States long argued the line would weaken Ukraine; Germany and Russia insisted the project was purely commercial. Nonetheless, in 2019 Washington set sanctions on some companies and individuals who were helping to build it, maintaining the line is a tool for Russia to support aggression against Ukraine.

Last January, the regional premier, Manuela Schwesig, took action to support the Russian project. At her initiative, the state parliament voted to set up a special foundation whose charter said it could acquire, manage, own, provide or let land, tools and machines to help the completion of the pipeline.

"We believe that it is right to build the pipeline," Schwesig told reporters in January 2021. Advocating for the pipeline in the state parliament last January, Schwesig said the US sanctions were self-interested. "Nobody who is working on building the pipeline is doing anything wrong," she said. "The ones doing something wrong are those who are trying to stop the pipeline."

Nord Stream 2 would double the amount of gas Russia can pump directly to Germany, its biggest customer for gas, make Germany and Europe less vulnerable to supply interruptions caused by disputes between Russia and Ukraine, and bring economic benefits to Mecklenburg-Vorpommern, a relatively deprived region that used to be in the German Democratic Republic.

But this year as Russia stepped up pressure on Ukraine, questions mounted around the Foundation, called Klima-und Umweltschutz MV (Climate and Environment Protection Foundation). It would not reveal who was running its sanctions-busting operation beyond saying that the person was appointed by Nord Stream 2 AG, a company owned by Gazprom PAO, which is fully controlled by the Russian state.

The state auditor, the Court of Auditors, told Reuters on February 09, 2022 it was concerned that Mecklenburg-Vorpommern had largely given up control over the Foundation's assets. This meant there was no guarantee that the Foundation would always work in the public interest, said Sebastian Jahn, the court's spokesman, in a telephone interview.

The Foundation said on Wednesday it would stop helping the pipeline project, but declined to say exactly what it had done to aid it so far. In an account of its first year on its website, it said that to complete the pipeline, "the illegal threats of United States had to be countered with a wide range of measures, which for obvious reasons cannot be made the subject of public explanation."

Public records show it purchased a ship which entered the Baltic last July and which a US State Department report to Congress last November said had engaged in pipe-laying activities, on Nord Stream 2 or another sanctioned project.

"We did what is necessary, the pipeline is practically completed," Foundation Chairman Erwin Sellering told German broadcaster NDR on Wednesday, adding that this involved helping small and medium-sized companies do their work. "We can say we fulfilled our mandate," he added.

As Russia continues to pressure Ukraine, other questions are mounting about the links between the pipeline, Germany's ruling Social Democrat Party (SPD), and Moscow. The regional premier Schwesig is, like Chancellor Olaf Scholz, a member of the SPD, which traditionally advocates rapprochement with Russia.

Gerhard Schroeder, a former Chancellor who has described himself as Putin's personal friend. One of his last acts in office in 2005 was to sign the deal creating the Nord Stream 2 project. Soon after, he became chairman of the company behind it – the first of several directorial positions he has taken at Russian energy companies.

In 2019, Scholz rejected the US sanctions as interference in Germany's affairs. On Tuesday, after Russia formally recognized the two breakaway regions, he decided to halt certification of the pipeline. But some analysts say the damage to Germany is already done.

"Russia has succeeded in using the personal interests of prominent German political figures against Germany," said Marcel Dirsus, Non-Resident Fellow at the Institute for Security Policy at Kiel University.

"All this is doubly dangerous for Germany: It allows an adversarial foreign power to influence decision-making and it raises questions about Germany's reliability among the country's allies."

Kazakh delegation visits Tehran

A Kazakh delegation visited Tehran to hold talks with the Iranian authorities on February 22, 2022. The delegation, consisted of over 50 members. These included Deputy Ministers of Trade and Integration, Industry and Infrastructural Development, Agriculture, Ecology, Geology and Environment, Chairmen of State Revenue Committee and the Committee of Technical Regulation and Metrology. 

Others included were heads of “KazTrade” State Company, Kazakhstan Institute of Standardization and Metrology, National Accreditation Center, Aktau Sea Port as well as representatives of the Ministry of Foreign Affairs, Office of the General Prosecutor, SK-Pharmacy and others.

Among the delegation were 15 Kazakh exporting companies producing food, milling, meat, edible oil, chemical, metal, IT, telecommunication products and construction materials.

The Deputy Prime Minister together with the Minister of Agriculture of the Islamic Republic of Iran Seyed Javad Sadati Nejad co-chaired the 17th Meeting of the Intergovernmental Kazakhstan-Iran Commission of Trade-Economic, Scientific-Technical and Cultural Cooperation during which a wide spectrum of issues on the bilateral cooperation in the fields of trade, economy, investments, agriculture, health, banking, transportation and logistics including air, road, railway and marine transportation, industry, mining, tourism, culture, energy, customs, standards, accreditation and conformity assessment, education, labor, social security, legal and judicial cooperation, as well as collaboration between Free Zones and Chambers of Commerce were discussed.

The Meeting resulted in signing the final Protocol of the Commission a Protocol between State Revenue Committee of Kazakhstan and the Customs of Iran, a Memorandum of Understanding between “KazTrade” State Company and Iran Trade Promotion Organization as well as three Memorandums between Standardization Organizations.

The Deputy Prime Minister and the Minister of Agriculture of the Islamic Republic of Iran together with the President of Iran Chamber of Commerce opened a Trade Mission of Kazakhstan to Iran and Kazakhstan-Iran Business Forum which were attended by over 200 companies. 

During the Mission and the Forum business contracts amounted to US$14 million including export of Kazakh meat, food products, flour and others were inked.

The Deputy Prime Minister met with the First Vice-President of the Islamic Republic of Iran Mohammad Mokhber to discuss ways of enlargement of trade-economic cooperation between Kazakhstan and Iran. It was agreed to put joint efforts in reaching the trade-turnover of US$3 billion in the recent perspective. Cooperation in the field of SWOP exchange with a wide range of goods especially food products was suggested as the main way of achieving the said target.  

In the framework of the visit the Deputy Minister of Trade and Integration of the Republic of Kazakhstan Kairat Torebayev met with Deputy Minister of Industry, Trade and Mines of the Islamic Republic of Iran – President of Iran Trade Promotion Organization Alireza Peymanpak and discussed the ways for increasing trade turnover and solving existed impediments in the bilateral trade. 

The Deputy Minister of Industry and Infrastructural Development of the Republic of Kazakhstan Ruslan Baimishev had a meeting with Deputy Minister of Industry, Trade and Mines – President of IMIDRO company Vajiholla Jafari and discussed issues related to cooperation with Iranian companies in mining. He also received Iranian companies working in mining and discussed possibilities of investing in Kazakhstan mining.

The Deputy Minister of Ecology, Geology and Environment of Kazakhstan Talgat Momyshev met with the Deputy Minister and Head of Iran Geological Survey and Mineral Explorations Organization Alireza Shahidi during which disc issues of development of cooperation in Geological Science and Technology, Natural and Mineral Resources were discussed. As result of the meeting the side agreed to sign an agreement on exploration of non-ferrous and precious metals.

He also had a meeting with the Head of Iran Forests, Rangelands and Watershed Organization Masood Mansoor during which issues of cooperation in water field. 

The Chairman of State Revenue Committee of the Republic of Kazakhstan Ali Altynbayev met with Head of Iran Customs Administration Alireza Moqaddasi. The main topic of that meeting was intensification of the bilateral cooperation in Customs.

The Chairman of the Committee of Technical Regulation and Metrology of the Republic of Kazakhstan Arman Abenov met with Iranian National Standard Organization Ehsan Sadeh and discussed some matters in the sphere of standards.

The Senior Assistant to the Prosecutor General of the Republic of Kazakhstan Zeinelgabden Kussainov met the Deputy Attorney General of the Islamic Republic of Kazakhstan Dr.Favaedi and the Director General of International Cooperation Office of the Ministry of Justice of the Islamic Republic of Iran Dr. Fallah. The both sides discussed issues in related matters. 

 

Wednesday 23 February 2022

Biden imposes Nord Stream 2 sanctions

Joe Biden, President of United States on Wednesday announced sanctions against Nord Stream 2, the company behind Russian natural gas pipeline in response to Moscow's decision to send troops into eastern Ukraine.  

Biden said in a statement that his administration would put sanctions on Nord Stream 2 AG, the parent company of the Nord Stream 2 pipeline, and its corporate officers.

"These steps are another piece of our initial tranche of sanctions in response to Russia’s actions in Ukraine. As I have made clear, we will not hesitate to take further steps if Russia continues to escalate," Biden said.

Last year, the Biden administration waived sanctions on the pipeline — generating pushback from Democrats and Republicans alike, who said it should take a harder line on Russia.

The administration’s decision to waive sanctions on the pipeline was widely viewed as a move meant to appease Germany after relations faltered under the previous Trump administration. 

But following Russia's incursion into breakaway regions in Ukraine this week, Germany also turned against the pipeline. On Tuesday, it announced that it would block its certification. 

The pipeline is completely built but was awaiting regulatory review before it could be operational. 

In recent weeks, Biden had promised to halt the Nord Stream 2 pipeline in the event of a Russian invasion of Ukraine, but German Chancellor Olaf Scholz had stopped short of explicitly promising to block the pipeline in an appearance at the White House earlier this month. 

Biden on Tuesday announced other sanctions against Russian financial institutions, elites and sovereign debt.

The administration also sent additional troops to Germany, Poland and Romania.

Biden administration officials have said the U.S. is prepared to impose more stringent sanctions if Russia launches a broader invasion of Ukraine.  

Domestically, the new sanctions against Nord Stream 2 move helped advance some of Biden's State Department nominees, as Sen. Ted Cruz said he would lift a hold he had placed on them in response to last year's waiver.

“President Biden made the right decision today," Cruz said in a statement. "Allowing Putin's Nord Stream 2 to come online would have created multiple, cascading, and acute security crises for the United States and our European allies for generations to come."

However, he also called for "additional steps inside the Biden administration and in Congress to permanently lock in sanctions."

The decision to sanction Nord Stream 2 AG also won Biden praise among Democratic critics of the pipeline. 

“I’ve long opposed NS2, which is why I wrote the bipartisan sanctions law to stop it,” Sen. Jeanne Shaheen tweeted. “Every diplomatic lever must be pulled to punish Putin for violating Ukraine’s sovereignty & threatening Europe’s security.”  

Biden delivered a speech on Tuesday announcing the first tranche of sanctions on Russia, saying Putin’s moves against Ukraine represented the beginning of an invasion.

Asked whether the White House could say definitively that the pipeline would not move forward permanently, Press Secretary Jen Psaki told reporters Wednesday the pipeline is “not moving forward right now.”

 “It’s currently dead at the bottom of the sea,” she continued. “It is not happening. It’s not moving forward. It hasn’t been operational for some time.”

Despite recent hurdles for the Nord Stream 2 pipeline, Russia is still a major supplier of fuel to the rest of Europe — providing about 35% of the continent's natural gas.

 

China criticizes sanctions against Russia

China on Wednesday criticized the expansion of economic sanctions against Russia, saying that penalties were unlikely to solve the Ukraine crisis, on the contrary these can hurt common man as well as the interests of Beijing, The New York Times reported.

“The position of the Chinese government is that we believe that sanctions have never been a fundamental and effective way to solve problems, and China always opposes any illegal unilateral sanctions,” Hua Chunying, a spokeswoman for China’s foreign ministry, said at a regular press briefing on Wednesday.

Member states of the European Union have given their green light, via their envoys in Brussels, to the first package of sanctions on Russia, an EU diplomat said.

The sanctions still need formal approval by the foreign ministers and will enter into force once these are published in the EU's official journal, a step expected later on Wednesday.

Ukraine on Wednesday urged the West to impose more sanctions on Russia that target the economy and the inner circle around President Vladimir Putin.

US Deputy Treasury Secretary Wally Adeyemo said on Wednesday that the US is prepared to respond to further aggression by withholding technology and resources.

"We're going to cut him off from Western technology that's critical to advancing the military, cut him off from Western financial resources that will be critical for feeding his economy and also to enriching himself," Adeyemo said in an interview with CNBC.

In a phone call, Erdogan told Putin that military conflict in the region would not benefit anyone and repeated his offer to help achieve a solution, his office said. Erdogan also said he valued Putin's close cooperation on regional issues and wanted to continue this.

"President Erdogan, who renewed his call for the matter to be resolved through dialog, stated that it was important to bring diplomacy to the forefront, and that Turkey continued its constructive stance in NATO as well."

Earlier, Erdogan was cited by media as saying Turkey cannot abandon ties with Ukraine or Russia.

"First decisive steps were taken yesterday, and we are grateful for them," Ukraine Foreign Minister Dmytro Kuleba said in a tweet. "Now the pressure needs to step up to stop Putin. Hit his economy and cronies. Hit more. Hit hard. Hit now."

Ukraine's parliament on Wednesday approved imposing sanctions on 351 Russians, including lawmakers who supported the recognition of the independence of separatist-controlled territories and the use of Russian troops in eastern Ukraine.

The sanctions restrict almost all possible types of activities, in particular, a ban on entry into Ukraine, prohibiting access to assets, capital, property, licenses for business. The Security Council was due to impose the sanctions after the vote.

One of Europe's worst security crises in decades was unfolding after Russia recognized two areas of eastern Ukraine as independent. Ukraine accused Russia of wrecking peace talks on ending an eight-year-old conflict in the region.

The sanctions began to be imposed against Russia on Tuesday after Putin ordered troops into eastern Ukraine and threatened to go further if Moscow launched an all-out invasion of its neighbor. 




 

Tuesday 22 February 2022

Takeaways from Putin’s Ukraine speech

Russian President Vladimir Putin gave a long and important speech on February 21 as tensions with the United States over Ukraine reached new heights. While the media focused on certain aspects of the speech, particularly Russia recognizing two separatist areas in Ukraine as sovereign independent states, there is much more there to unpack.

Let’s begin at the end. “I consider it necessary to make a long-overdue decision to immediately recognize the independence and sovereignty of the Donetsk People's Republic [DPR] and the Luhansk People's Republic [LPR],” he said. These are two areas in eastern Ukraine that declared independence in April of 2014. Their decision was clearly motivated by a sense they had Moscow’s backing. They are in one of several small areas similar to this that have sought to become their own states with Russian backing.

Moscow usually does this as a way to keep its hands on the scales inside a former Soviet country. In Georgia, there is South Ossetia and Abkhazia, which sought independence in the 1990s – and there are other areas, such as Transnistria near Moldova.  

Putin’s decision was made after years of trying to manage a conflict in Ukraine. He claims the necessity of recognition now, apparently to do away with the pretense that these are just separatist areas. Russia cares about international laws and norms; even if it exploits them for its own needs, it cares to have an appearance of doing things by the book.

That is why Russia’s Tass reported, “Putin later ordered the Russian Foreign Ministry to establish diplomatic relations with the DPR and LPR and the Defense Ministry to maintain peace in the republics. According to one of the presidential decrees, the Defense Ministry was ordered to make sure that the Russian Armed Forces maintain peace in the Donetsk People’s Republic until a treaty on friendship, cooperation and mutual assistance is concluded. The Russian Defense Ministry received similar instructions in a decree recognizing the LPR.”

The point here is that Russia is exploiting the situation that it helped create in 2014 by now creating a legal fiction for sending troops into these areas. This will lead to the peacekeeping troops being on the line of potential contact with a Ukrainian army that Moscow says has sent 120,000 troops to the borders of these breakaway regions. Ukraine has called the operations against the separatists an anti-terror campaign.  

Let us look at how Putin has presented this to understand why it might matter far beyond Ukraine.

He began his 8,000-word speech by saying “the topic of my speech is the events in Ukraine and why it is so important for us, for Russia. Of course, my appeal is also addressed to our compatriots in Ukraine.” He said that the situation in the Donbas, where the breakaway areas are, has reached a critical stage.

For Russia, the area of Ukraine is what was once called the near abroad, a kind of buffer between Russia and the West. “Let me emphasize once again that Ukraine for us is not just a neighboring country. It is an integral part of our own history, culture, spiritual space. These are our comrades, relatives, among whom are not only colleagues, friends, former colleagues, but also relatives, people connected with us by blood, family ties,” the Russian president said.

Putin looked to history to justify this. He said, “Inhabitants of the southwestern historical Old Russian lands called themselves Russian and Orthodox. So it was until the 17th century, when part of these territories was reunited with the Russian state, and after.”

He noted, “The 18th century, the lands of the Black Sea region, annexed to Russia as a result of wars with the Ottoman Empire, were called Novorossiya. Now they are trying to obliviate these milestones of history, as well as the names of state military figures of the Russian Empire, without whose work modern Ukraine would not have many large cities and even the very exit to the Black Sea.”

Putin claimed, “Modern Ukraine was entirely and completely created by Russia: more precisely, Bolshevik, communist Russia.” He accuses the Soviets of actually reducing Russia’s control of Ukraine by separating parts of this area and creating the Ukraine Soviet Socialist Republic. Indeed, Crimea was eventually given to Ukraine under this process. At the same time, Ukraine was brutally treated by Stalin, and millions starved. Later, after the Second World War and the Holocaust, Ukrainian resistance against the Soviets continued for years.  

Ukraine did indeed change during this period. Areas that were once more Polish and more Jewish, such as Lvov, became more Ukrainian. Other areas are Russian-speaking. That is the nature of history and of war and tragedy: countries and places change.

Putin puts out this history by saying “Stalin already annexed to the USSR and transferred to Ukraine some lands that previously belonged to Poland, Romania and Hungary. At the same time, as a kind of compensation, Stalin endowed Poland with part of the original German territories, and in 1954 Khrushchev for some reason took away Crimea from Russia and also presented it to Ukraine.”

The president wants to redress some of this history. In his analysis, he is correct in noting that much of the world’s borders today resemble things done in 1945 or in the period up to 1960s. That was an era when European powers redrew the world’s borders. After doing so, many of them have said international law prevents any borders from being changed. This is largely a colonial-era illusion.

The same colonial era has created conflicts all over Africa and Asia and is responsible for the Israel-Palestinian conflict. It was the British who created partition and it was the UN that created the impossible borders presented to Israel in 1948. It is a colonial-era design that placed the Golan in Syria and conjured up an international Jerusalem, which has led countries not to move their embassies to the Israeli capital.

Be that as it may, Putin’s argument about Ukraine is that Russia is reaching back to what was done in 1917 and 1922 for its rights to do things there. He mentions Stalin, “People's Commissar for Nationalities, proposed building the country on the principles of autonomization that is giving the republics – future administrative-territorial units – broad powers when they join a single state.”

What he is presenting is a blueprint for breakaway or autonomous regions to do as they please. “Why was it necessary to satisfy any, unlimitedly growing nationalist ambitions on the outskirts of the former empire?” he asks, noting attempts regarding arbitrarily formed areas and administrative units, “Huge territories that often had nothing to do with them at all…to convey them together with the population of historical Russia to Ukraine.” He’s arguing that what was done arbitrarily in the 1920s, can now be undone.  

Of course, this opens up a big question about why other things that were done in the 1920s cannot be undone. Why should the Golan be part of Syria, a decision made at that time, which put the Golan under French and thus Syrian control? Why is Mosul part of Iraq and not Turkey? Why isn’t there an independent Kurdish state? Why is Hatay province part of Turkey and not Syria? We could go on and on and see how many areas in the Middle East were arbitrarily given to one country and not the other by colonial administrators, much as was done in Russia in the 1920s.  

What Putin argues is that the Soviets made a mistake in the 1920s. “At first glance, this is generally incomprehensible; some kind of madness. But this is only at first glance. There is an explanation,” he argues. He points out that the Soviets sought to remain in power by giving in to demands of various nationalities within the Soviet empire: Give them something for the great Soviet Union. Putin argues that the early Soviet decision was a mistake and this became obvious after 1991 with the wars and breakup of the USSR. 

Russian President suggests we speak about the events of the past with honesty. “This is a historical fact. Actually, as I have already said, as a result of the Bolshevik policy, Soviet Ukraine arose.” He accuses Ukraine of being an entity created by Lenin. “This is fully confirmed by archival documents, including Lenin's harsh directives on the Donbas, which was literally squeezed into Ukraine.”

He says it is ironic that modern-day Ukraine has taken down Lenin’s statue, hinting with typical Putin humor that they might have kept Lenin since in his view he created modern Ukraine. “We are ready to show you what real decommunization means for Ukraine.”  

Putin next takes listeners through a tour of Soviet history and discusses how the Soviet Republics had no real power. “In practice, a strictly centralized, absolutely unitary state was created... under the conditions of a totalitarian regime, everything worked anyway, and outwardly it looked beautiful, attractive and even super-democratic.”

Now Putin claims that the “bacillus of nationalist ambitions has not disappeared.” This term, bacillus, is likely borrowed on purpose from Winston Churchill, who said that regarding the sealed train that took Lenin and his Bolsheviks back to Russia from Switzerland in 1917 was sent like a “plague bacillus.” Putin’s point apparently is that Lenin helped appease this nationalism, creating the problems Russia now faces in Ukraine.  

Nationalism became like a mine waiting to explode, he claims. “In the mid-1980s, against the backdrop of growing socio-economic problems, the obvious crisis of the planned economy, the national question – the essence of which was not some expectations and unfulfilled aspirations of the peoples of the Union, but primarily the growing appetites of local elites – became more and more aggravated.” This led to 1989 and the decision by the party elites that "the Union Republics have all the rights corresponding to their status as sovereign socialist states."

Let’s recall where Putin was in 1989. He was in East Germany in Dresden, watching Communism collapse. A KGP officer, he spoke German, and tried to defuse tensions. He says that while the Soviets had harmed Russia and its people through “robbery” of lands provided to other states, “the people recognized the new geopolitical realities that arose after the collapse of the USSR; recognized the new independent states… our country provided such support with respect for the dignity and sovereignty of Ukraine.”

Putin argues that Ukraine did not deal fairly with Russia in the 1990s and began to move towards the West. “I will add that Kyiv tried to use the dialogue with Russia as a pretext for bargaining with the West, blackmailed it with rapprochement with Moscow, knocking out preferences for itself: saying that otherwise, Russian influence on Ukraine will grow.”

He claims “Ukrainian society faced the rise of extreme nationalism, which quickly took the form of aggressive Russophobia and neo-Nazism. Hence the participation of Ukrainian nationalists and neo-Nazis in terrorist gangs in the North Caucasus, and the increasingly louder territorial claims against Russia.” This is important because Putin came to power after Russia suffered failure in the Balkans when NATO bombed Serbia and after Russian setbacks in Chechnya.

From Putin’s point of view, Ukraine then became a tool in the hand of the West. In this complex history he argues that the West works with “oligarchs” in Ukraine. Putin meanwhile was busy in the early 2000s imprisoning or driving into exile the oligarchs who arose in 1990s Russia. “A stable statehood in Ukraine has not developed, and political, electoral procedures serve only as a cover, a screen for the redistribution of power and property between various oligarchic clans,” he says.

He then presents a picture of Ukraine as akin to the French revolution, swept over by “radicals” and Ukraine cities becoming victims of “pogroms of violence.” He says “it is impossible without a shudder to remember the terrible tragedy in Odessa, where participants in a peaceful protest were brutally murdered.”

Pro-Russia Ukraine president Viktor Yanukovych was driven from power in a 2014 coup, he said, which is in fact the Maidan protests. Putin then gives a laundry list of failures in Ukraine, arguing that the country has not supported its people. “Tens and hundreds of thousands of jobs have been lost.”  

Russia's president also delves into an issue that US President Joe Biden is likely familiar with from the Obama years. “There is simply no independent court in Ukraine. At the request of the West, the Kyiv authorities gave representatives of international organizations the pre-emptive right to select members of the highest judicial bodies - the Council of Justice and the Qualification Commission of Judges.” Biden was deeply involved in Ukraine policy under Obama and assured Ukraine that the US would back it despite initial attempts to “reset” relations with Russia.

Putin mentions the US Embassy’s efforts against corruption. “All this is done under a plausible pretext to increase the effectiveness of the fight against corruption. Okay, but where are the results? Corruption has blossomed as luxuriantly, and blossoms [now] more than ever.”

He then accuses Ukraine’s current government, which he sees as a government that was the result of a coup in 2014, as perpetuating corruption and being anti-Russian. He accuses it of persecuting the Russian language and Orthodox Church. He argues that Russia’s decision to annex Crimea from Ukraine was done to support the inhabitants of the peninsula. Then he accuses Ukraine of enacting a new military strategy against Russia. “The strategy proposes the organization in the Russian Crimea and on the territory of Donbas, in fact, of a terrorist underground.”

The real story of Russia’s claims are now laid out as Putin goes through a long list of weapons he is concerned will be used by Ukraine. He discusses Tochka-U operational-tactical missiles which have a range of 100 km, NATO presence in Ukraine, that “regular joint exercises have a clear anti-Russian focus,” airfields, and that “the airspace of Ukraine is open for flights by US strategic and reconnaissance aircraft, unmanned aerial vehicles that are used to monitor the territory of Russia, and the possibility of missiles and hypersonic missiles being deployed in Ukraine."

Russia also objects to Kyiv joining NATO. He claims that while Moscow was open to working with the treaty organization, it has rapidly expanded. “The authorities of some Eastern European countries, trading in Russophobia, brought their complexes and stereotypes about the Russian threat to the Alliance, and insisted on building up collective defense potentials, which should be deployed primarily against Russia. Moreover, this happened in the 1990s and early 2000s, when, thanks to openness and our goodwill, relations between Russia and the West were at a high level.”

Putin even claims he spoke to former President Bill Clinton about Russia joining NATO. “I won’t reveal all the details of that conversation, but the reaction to my question looked, let’s say, very restrained, and how the Americans really reacted to this opportunity can actually be seen in their practical steps towards our country.”

Russia doesn’t want the NATO expansion trend to continue. Putin says there were already five waves of NATO expansion, most recently with Albania and Croatia; in 2017 Montenegro; in 2020 North Macedonia…. As a result, the Alliance and its military infrastructure came directly to the borders of Russia. This became one of the key causes of the European security crisis.”

So for Russia, this is apparently an existential crisis. “Many Ukrainian airfields are located close to our borders. NATO tactical aircraft stationed here, including carriers of high-precision weapons, will be able to hit our territory to the depth of the Volgograd-Kazan-Samara-Astrakhan line. The deployment of radar reconnaissance assets on the territory of Ukraine will allow NATO to tightly control the airspace of Russia right up to the Urals.”

Putin understands US national security strategy and defense documents warn of “near-peer” rivalry with Russia and he knows that Washington sought to pivot from counter-terrorism to challenging Moscow. Once the US left Afghanistan in the summer of 2021, it was no surprise that a Ukraine crisis followed.

For Putin this all adds up to assertions that the West has ignored his proposals and demands. “There is only one goal of the West – to restrain the development of Russia. And they will do it, as they did before, even without any formal pretext at all…. Russia has every right to take retaliatory measures to ensure its own security: That is exactly what we will do.”

Putin says, “International documents expressly state the principle of equal and indivisible security, which, as is well known, includes obligations not to strengthen one's security at the expense of the security of other states.” Now he wants to test this and recognize parts of Ukraine as independent states in order to move forces into these new buffer states.

The end goal will be to see if the US will match this move with its own chess-like deployment. This could provide a casus belli for actual conflict. Putin clearly thinks he must move now to prevent whatever might come in the years to come.