Thursday, March 13, 2014

Ukraine situation key news items , including live updates - March 13 , 2014 -- Russia is ready to retaliate with counter sanctions against the EU and US if they go ahead with economic measures against Russia over tension in Crimea, the Russian Economic Ministry has said ........ Former chief of Ukraine’s Security Service , Aleksandr Yakimenko , has confirmed allegations that snipers who killed dozens of people during the violent unrest in Kiev operated from a building controlled by the opposition on Maidan square. ........

Late news items......

From Zero Hedge ........

Where The Russian Troops Are - The Full "Pre-Takeover" Infographic

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As we reported yesterday, Crimea is last week's story. Now it is all about east Ukraine. In that vein, moments ago John Kerry's latest stand up comedy routine hit the tape which contained, besides the usual laugh lines, this particular pearl:
Is that so? We provide this map showing the latest distribution of Russian military forces on the Ukraine borders so that readers can make up their own mind.

And here is another map compiled by Dmitry Tymchuk, a former Ukrainian military officer, who has established an organization, the Center of Military and Political Research on Kiev, to effectively collect and gather data about military-related facts.
Kerry concluded:
We'll know just what those are by Sunday night. The only question: will Referendum Sunday be the new Lehman Sunday...

US says " No soup for you ,  Ukraine "  !

Ukraine Requests Weapons From US, Is Rejected (For Now)

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Shortly after Ukraine found out that financial aid from the US will not be forthcoming (thanks to politicial gridlock); it appears they will be disappointed by the US once again:
It would appear that what is good for US-assisted Syrian Al-Qaeda rebels is not good enough for the vastly outmatched and outnumbered Ukrainians.
The UN Security Council does not sound hopeful:
As clashes breakout in Dontesk (with a tleast 10 injured):
With tear gas and stun grenades being used.


Ukraine Aid Delayed Due To, What Else, Congressional Bickering

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With Russia warning of "boomerangs" and China threatening "unforeseeable consequences" it appears gridlock in Washington is (coincidentally) enabling the US to sit out the first round of shenanigans responses over this weekend's Crimea referendum.
But as AP reports, Congress won't be able to authorize aid to Ukraine until after March 24 amid disagreements among several Republican. Simply put, No Aid For You...

Via AP,
Congress won't be able to authorize aid to Ukraine until after March 24 amid disagreements among several Republican.

The Senate is unlikely to vote before leaving for recess Thursday evening on a bill approving $1 billion in loan guarantees to Ukraine, sanctions on Russia and International Monetary Fund reforms. Four Republicans backed it as the Foreign Relations Committee voted 14-3 in favor Wednesday.

Meanwhile, House Speaker John Boehner urged the Senate anew Thursday to adopt House-approved legislation for the loans, without sanctions or IMF provisions.

Many in his caucus reject expanding the IMF's lending capacity, which every other major country has approved.

They say it increases U.S. taxpayer exposure; the counterargument is it immediately releases money for Ukraine.

Other Republicans oppose paying for the loans with unused military money.
Of course, the timing is perfect for the administration to look like they are moving forward and yet not... actually avoiding the sanctions that will likely come back to bite.
It seems, however, Ukraine's Yatsenyuk thinks it's a done-deal...
Ukrainian Prime Minister Arseny Yatsenyuk has met with the top three figures in the U.S. House of Representatives - Speaker John Boehner, majority leader Republican Eric Cantor and minority leader Nancy Pelosi - during a working visit to the United States.

"The American lawmakers made assurances of their intention to consolidate bipartisan efforts for giving urgent and long-term assistance to Ukraine and its government for urgent reforms. They pointed out that safeguarding the territorial integrity and sovereignty of Ukraine is a matter of principle for the House of Representatives," the Ukrainian government said in a statement.

Yatsenyuk expressed hope that the United States would soon legalize a quota redistribution that would enable Ukraine to obtain an extra $600 million.
American "promises" and political "principles"?

Ukraine sending out an SOS......

Head Of Ukraine National Defense Council: "Ukraine Is Facing The Threat Of A Full-Scale Invasion From Various Directions"

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A few moments ago we showed a map of the various Russian military units amassing near the Ukraine border (whose movements we had been tracking for the past several days), so the ongoing less than stealthy escalation by Russian forces in preparation for what by all accounts looks like a preparation to take on east Ukraine should come as no surprise to anyone. And yet, it appears to have surprised Othe head of Ukraine’s National Security and Defense Council, Andriy Parubiy, who earlier today claimed that Russian forces near the border totaled more than 80,000 solders, 270 tanks, 370 artillery systems and 140 combat aircraft: precisely what Zero Hedge readers know already. His assessment: "Ukraine today is facing the threat of a full-scale invasion from various directions."
Aleksandr Golts, an author and military analyst, noted that the operations were not training exercises like the huge one Mr. Putin ordered at the end of February that require notification of neighboring states under a series of conventional arms agreements.

He added that the operations were clearly intended as a warning of Russia’s readiness to intervene, if necessary, noting that the parachute drop was on a scale not seen since the collapse of the Soviet Union. They also served to tie down Ukraine’s beleaguered military and prevent any effort to challenge the secession of Crimea.

“The goal is very clear: not to permit Ukrainian troops from moving toward Crimea,” he said. He later met with his national security council in Sochi.
As long that's the only goal. Interpreter adds:
While the Russian government claims that these are training exercises, it’s also worth noting that those have to be pre-announced to neighbors under conventional arms agreements. They were not. In fact, the existence of this mobilization was denied by the Kremlin until today.
It adds that the last time Russia conducted "drills", Crimea was quickly and quietly annexed. In the meantime, we hope Europe has a significant "Strategic Gas Reserve." It will likely need to use it quite soon.

China weighs in again......

China Warns West Not To Enforce Sanctions Against Russia

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"Sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences," warns China's envoy to Germany adding that "we don't see any point in sanctions." On the heels of Merkel's warning that Russia risked "massive" political and economic damage if it did not change course, Reuters reports ambassador Shi Mingde urged patience saying "the door is still open" for diplomacy (though we suspect it is not) ahead of this weekend's referendum. Russia's Deputy Economy Minister Alexei Likhachev responded bypromising "symmetrical" sanctions by Moscow. So now we have China joining the fray more aggressively.
China's top envoy to Germany has warned the West against punishing Russia with sanctions for its intervention in Ukraine, saying such measures could lead to a dangerous chain reaction that would be difficult to control. In an interview with Reuters days before the European Union is threatening to impose its first sanctions on Russia since the Cold War, ambassador Shi Mingde issued the strongest warning against such measures by any top Chinese official to date.

"We don't see any point in sanctions," Shi said."Sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences. We don't want this."


Using her [Merkel's] toughest rhetoric since the crisis began, she warned in a speech in parliament on Thursday that Russia risked "massive" political and economic damage if it did not change course in the coming days.

Russia's Deputy Economy Minister Alexei Likhachev responded by promising "symmetrical" sanctions by Moscow. But Shi urged patience, saying the door for talks should remain open even after a referendum on Sunday in which Ukraine's southern region of Crimea could vote to secede and join Russia. Merkel and other western leaders have denounced the referendum as illegal and demanded that it be canceled.

"We still see a chance to avoid an escalation. The door to talks is still open. We should use this possibility, also after the referendum,"Shi said.
After the Referendum, so when Russia is already in control. More importantly, China joins the fray with threats over West's sanctions. Perhaps BTFWWIIID will make a re-appearance any minute now.

Winning - that would be Putin not Obama.....

Putin's Approval Rating At 3-Year Highs (As Obama Hits Record Low)

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On the heels of President Obama's approval rating plummeting to 41% - a record low - it is perhaps ironic that the supposedly despotic (amid shrouded in Hitler-comparisons and homosexual hatred) Vladimir Putin has seen his approval rating soar to 71.6% - a 3 year high - as Interfax notes "we now have a complex society that supports the president, primarily because of his stance on Ukraine." Interestingly 64% saw Ukraine as a key current event while 32% said that success at the Olympics was most important.

Via Interfax,
The rating of Vladimir Putin registered by the All-Russia Public Opinion Research center (VTsIOM), which exceeds the rating he had after his inauguration in 2012, will most likely stay high and may even increase, Nikolai Mironov, general director of the Institute of Priority Regional Projects, said.

"Putin's rating is even higher than it was in May 2012, when he became president. His rating has now reached the highest point. I believe it may stay at this level and may even increase," Mironov told Interfax on Thursday.

"We now have a complex society that supports the president, primarily because of his stance on Ukraine. It's not only 'Putin's majority' we spoke about earlier and which was composed of people from specific social groups. We now have a much broader consensus. We have managed to achieve the consolidation of society, which is expressed in this rating," he said.

"The stable increase of the president's rating is due to the successes in two Sochi Olympics: the main Olympics and the Paralympics. But the main thing is the president's stance on the political situation in Ukraine and in Crimea. This stance is aimed at defending the interests of the country and helping Russian people. It's very important to voters and respondents. No doubt, that influences the rating," Mironov said.

Putin's approval rating has now reached 71.6%, which is the highest point in several years, a poll conducted by VTsIOM shows.

Russians have been positive about Putin's work for several weeks now, since mid February, and the president's approval rating has gone up 9.7%, the public opinion poll says.

Putin's rating is increasing on the background of the political crisis in Ukraine and the situation in Crimea, which 64% of the respondents called the main events of the past week, and the success of the Russian national team in the Sochi Olympics and the beginning of the Paralympics (32%).

Russians have generally approved of the president's work for the past few years (60%). The previous highest rating of the president was registered in May 2012 (68.8%), immediately after Putin's inauguration as head of state.
So Obama needs to invade another country, have a successful home Olympics, and ban homosexuals?

Germany huffs and puffs but still need Russian natural gas and still needs trade with Russia .....

Merkel Warns Putin Of "Massive Damage", Russia Continues Piling Troops, Pro-Russia Oligarch Arrested, Gazprom Speaks

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It's crunch time for Ukraine.
With just over two days to go until the Crimea referendum, all the actors are stepping up the diplomacy to a fever pitch in a desperate attempt to talk Putin out of formally annexing the peninsula following results which are well-known in advance will show the population's allegiance to mother Russia. But while the generic rhetoric is well-known, one surprising place of escalation over the past 24 hours has been Germany's Angela Merkel, who for the most part had been willing to stay on the sidelines in the war of words, has suddenly stepped up her own phrasing, and warned Moscow on Thursday that it risked "massive" political and economic damage if it refused to change course on Ukraine, saying Western leaders were united in their readiness to impose sanctions on Russia if necessary.
Reuters reports that the chancellor, using her strongest language since the start of the crisis and removing any suspicion that Germany might seek to avoid a confrontation with President Vladimir Putin, said his actions would lead to "catastrophe" for Ukraine and much more.
"We would not only see it, also as neighbours of Russia, as a threat. And it would not only change the European Union's relationship with Russia," she said in a speech in parliament. "No, this would also cause massive damage to Russia, economically and politically."
Merkel has acknowledged that her efforts to persuade Putin to negotiate via a "contact group" with the transition government in Kiev - which he accuses of ousting Russian-backed president Viktor Yanukovich unlawfully - have failed and time is running out.
"To be absoultely clear, none of us want it to come to such measures but we are all ready and determined to if they are unavoidable," said Merkel.
Germany receives over a third of its gas and oil from Russia and over 6,000 German firms are active there. A poll last week showed that a majority of Germans oppose sanctions against Russia. So is Merkel doing the Western thing, and bluffing in a last-ditch effort to convince Putin she isn't, or does Putin still believe he has all the trump cards, and can bring the German economy to a crawl if Merkel acts out on her threat? We will known as soon as Sunday night.
Elsewhere, John Kerry headed out to London for some last ditch Russia talks on Ukraine. Expect this "effort" too to lead exactly nowhere.
In the meantime, Russia's response is well known, which is more of the same - and the Russian Ministry of Defense made it quite clear what the next steps are when it announced that the large-scale maneuvers near the Ukraine border now involve some 8,500 troops, 270 tanks and 180 APCs.
An indication of how "seriously" Russia takes the diplomatic threats was the news that it is ready to impose counter-sanctions. WSJ reported that Russia’s economy ministry is looking at what the consequences of possible sanctions from the West would be and stands ready to impose similar penalties, deputy economy minister Alexei Likhachev said Thursday.
We are ready for any developments, all options are being considered. But we hope that it will impose specific political sanctions but not a wider range of some trade and economic decisions,” Mr. Likhachev said.

Mr. Likhachev said Europe is unlikely to impose harsh sanctions against Russia as both sides have strong business and trade ties.

Unlike Europe, which is Russia’s major trading partner, the U.S. has more room to impose sanctions, he added.

“Our sanctions will be symmetric,” Mr. Likhachev said.
But it wouldn't be a Russian response if Gazprom didn't make an announcement or two. Which it did:
  • Gazprom CEO: Ukraine’s Failure to Repay Gas Deliveries Debt Puts Company Dividend Policy At Risk
  • Gazprom CEO: Ukraine Debt for Gas Deliveries Now at $1.8 Billion, Keeps Growing
  • Gazprom CEO: Ukraine Political Crisis Detrimental For Company’s Investment Program
  • Gazprom CEO Seeking Clarity On Gas Payments From Ukraine
  • Gazprom CEO Doesn’t “Want A Gas Crisis”
  • Gazprom CEO Doesn’t Address Cutting Off Gas Supplies In Statement
And while diplomacy is failing all around, and a trade and all too real war are potentially on the horizon, the real issue was and continues to the money. Which is why it was surprising to learn that earlier today the a Ukrainian oligarch, Dmytro Firtash, was arrested in Vienna this week at the request of U.S. authorities, the Austrian government sources said on Thursday.  Reuters reports that Firtash, 48, is one of Ukraine's richest men, an oligarch whose close links to Russia and involvement in the gas, chemicals, media and banking sectors gave him substantial influence, notably during the administration of recently ousted, Moscow-backed President Viktor Yanukovich.
The Federal Criminal Office, had identified the man taken into custody only as Dmitry F. and said he had been under investigation by the U.S. Federal Bureau of Investigation since 2006.
As a reminder, Stratfor's take on the richest Ukrainians was that they would play a "decisive role" in the conflict:
With presidential elections set for May 25 and parliamentary elections likely to be held later in the year, Ukraine's current administration will need the continued support of the oligarchs. More immediately, with Crimea on the verge of leaving Ukraine, the new government's urgent challenge is to keep mainland Ukraine together. Eastern Ukraine is crucial to this -- the region is a stronghold for pro-Russia sentiment and the main site of opposition, after Crimea, to the Western-backed and Western-leaning government.

The oligarchs are key to keeping control over eastern Ukraine, not only because Ukraine's industrial production is concentrated in the east -- thus anchoring a shaky economy -- but also because many of the oligarchs have a stronger and more manageable relationship with Russia than the current government, which Moscow sees as illegitimate. Many of these business leaders hail from the industrial east. They have business ties to Russia and decades of experience dealing with Russian authorities -- experience that figures such as Klitschko and Yatsenyuk lack.

So far, the new government has been able to maintain the support of the country's most important oligarchs. In general, the oligarchs want Ukraine to stay united. They do not support partition or federalization, because this would compromise their business interests across the country. But this support is not guaranteed over the long term. There have been recent complaints about the new government, for example over the arrest of former Kharkiv Gov. Mikhail Dobkin. Akhmetov came out in Dobkin's defense, saying the government should not be going after internal rivals right now, but rather focusing on concerns over Russia. This can be seen as a warning to the new administration: The oligarchs' loyalty to the current regime is conditional and should not be taken for granted.

Ultimately, the biggest threat to the oligarchs is not the current government, over which they have substantial leverage, but Russia. The oligarchs stand to lose a great deal if Russia intervenes in eastern Ukraine. If Russia takes over eastern territories, it could threaten the oligarchs' very control over their assets. Therefore they have an interest in bridging the gap between Russia and Kiev, but it is Moscow they fear more. The oligarchs have substantial power to shape the Ukrainian government's decision-making as it moves forward. Their business interests and the territorial integrity of the country are at stake.
As always, follow the money, especially when some of the richest money ends up directly in prison in a country far away, under the orders of that global moralizer, the United States.


German Exporters Fire Warning Shot About Russia “Sanction-Spiral,” Banks At Risk

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It took a while. But it had to come, the public warning shot – after what must have been a ferocious lobbying campaign behind closed doors. No one in Germany is allowed to get in the way of the sacrosanct exporters. The German economic model, to the chagrin of neighboring countries, is based on them.
It wasn’t as bombastic as US Secretary of State John Kerry’s blast to lawmakers that the Ukrainian debacle could “get ugly fast,” and “in multiple directions,” but it had the heft of the German export industry.
Anton Börner, president of the German Association of Exporters (BGA), which represents 120,000 companies, the lifeblood of the economy, warned at apress conference in Berlin that further escalation of the crisis in the Ukraine could hit exporters very hard. He said that the BGA expected exports to rise 3% to €1.13 trillion and imports 2% to €914 billion for a trade surplus of €215.6 billion – the highest in history. But “if the crisis in the Crimea escalates further,” these wondrous forecasts of endlessly growing exports and surpluses “could turn very quickly into a mal-calculation.”
The sanction spiral
Further intensification of “the most serious political crisis in Europe since the end of the war in former Yugoslavia” would degrade bilateral economic relations between the EU and Russia. He warned not to underestimate the drag of secondary and tertiary effects on the world economy. “Russia itself, Europe, Germany, and the whole world have a lot to lose,” he said. “But if there’s a sanction-spiral, Germany has the most to lose.”
About 6,200 German companies were trading with Russia or had invested there. The bilateral trade volume was over €76 billion last year. And German companies have invested €20 billion in Russia. The “sanctions-spiral” that is currently gaining momentum could have “unforeseen consequences,” especially for Russia, he said. They’d be “painful for the German economy, but life-threatening for the Russian economy.”
And there’d be a price to pay, not only of economic nature, but also of political nature, he warned.
Better than pushing someone into a corner
“We merchants are always in favor of keeping a communication channel open,” he said. Within the Western world, Germany had the best connections to Russia, politically, diplomatically, economically, and culturally. So it would have to play a decisive mediator role, Börner said. “Talking is better than pushing someone into a corner.”
Given the “inexperienced and opaque” Ukrainian government, there were additional uncertainties – another reason to deescalate the crisis. The EU would need to integrate Russia and Putin in the decision-making processes, “at eye level and as part of the solution.” Putin should be given the “widest possible understanding for his situation,” but at the same time, it should become clear that unilateral changes of international contracts and borders would “lead his country to the sidelines.”
And the banks?
It isn’t just German exporters that are fretting, and lobbying with all their might. Russia, with an economy that is already stagnating, and dogged by vicious bouts of capital flight, has $732 billion in foreign debt. Relatively little of it is sovereign debt, but nearly $700 billion is owed by banks and corporations – most of them owned or controlled by the Kremlin. Oil major Rosneft and gas mastodon Gazprom owe $90 billion combined to foreign entities; the four state banks Sberbank, VTB, VEB, and Rosselkhozbank owe $60 billion. Some of this debt matures this year and next year.
US banks are marginally involved. Between Bank of America, Citigroup, JPMorgan, and Wells Fargo, they have only $24 billion on the line. But European banks and insurance companies are up to their dirty ears in this suddenly iffy and potentially toxic Russian debt.
When it comes due, it will have to be rolled over, and some of the companies will need to borrow more, simply to stay afloat. Alas, the current sanction regime of visa bans for the elite, asset freezes, and trade restrictions could make that difficult. Then there’s the threat, now more broadly but still unofficially bandied about, that Russian companies should simply default on this $700 billion in debt in retaliation for the sanctions.
Some European banks, including some German banks, might crater. Even the possibility of a major loss would further rattle the confidence in these banks with their over-leveraged and inscrutable balance sheets and their assets that are still exuding whiffs of putrefaction. And this sort of fiasco, as the financial crisis has made clear, has an unpleasant way of snowballing – and taking down the already shaky global economy with it.
During the financial crisis, German exports collapsed, banks toppled and got bailed out, and the economy experienced its two worst quarters in the history of the Federal Republic. No politician in Germany has any appetite to re-experience that. And the banking industry, with its powerful and long tentacles winding their way through the hallways and doors of the German government, has been assiduously at work, quietly and behind the scenes, to whittle any sanctions down to irrelevance.
Washington’s defaulting on an agreement with Russia about Ukraine’s future, and the prospect of NATO troops in Ukraine, convinced Putin and much of the Russian elite that there’s no point in negotiating with the US. Big risks lie ahead. Read....From Now On, No Compromises Are Possible For Russia

Morning items......

From Zero Hedge ......

Crimea Bank Runs Begin As "Bail-In" Risks Arise

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While the sight of Russian flags, pro-Russian troops, and Russian navy ships in Crimea is now a day-to-day thing; this morning brings a new normal for the eastern Ukraine region - long lines at bank ATMs as the bank runs have begun. We noted last night the dreaded inversion of Ukraine's yield curve, the greater-than-50% yields on 3-month Ukraine government debt, and the pressures on local bank debt maturities as the ability to garner dollars cost-effectively was becoming a problem but on the heels of concerns by the head of the central bank that moving cash in Crimea was difficult, ATM withdrawal limits have been cut. People in long ATM lines are reported to be concerned because "banks are closing" but it is Deutsche Bank's comments this morning that raised many an eyebrow as they suggest that Ukraine's debt is pricing in a "burden-sharing" haircut for bondholders (which as we have seen in the past - in Cyprus - can quickly ripple up the capital structure and become a depositor haircut).
Quiet calm bank runs are beginning in Ukraine...
h/t @MarquardtA

As Deutsche Bank raises the prospect of bail-ins and Private-Sector-Involvement (PSI) in bailing-in the banks and government...
...given the recent experience of IMF programs it is natural to ask whether some form of 'private sector involvement' (PSI) will be proposed as part of any package of support.

The IMF itself recently published a consultation paper arguing that private sector debt restructurings had “often been too little, too late” and that the fund should look at ways to avoid its “resources being used simply to bail out private creditors”. The ongoing consultation process which this paper initiated is one reason why concerns over IMF-sponsored restructuring are more prevalent for Ukraine now than they have been in similar situations in the past. However, we think it unlikely that there will be  significant change in the Fund’s approach towards Ukraine, given that the consultation is still ngoing, views are divided and its outcome remains uncertain. Nevertheless, that does not mean that some form of PSI will not be considered, condoned, encouraged or even mandated and so it is useful to consider the pros and cons from the perspective of the Ukraine (and its potential official sector financiers) and the implications for private sector creditors.
[Of course PSI can take on many forms from debt-extensions to bondholder haircuts to further up the capital structure depositor haircuts]
...current market prices are relatively consistent with such a scenario of PSI-lite. Indeed, the current relative pricing of Ukrainian bonds are very unusual: the pricing of short-dated bonds are distressed, implying a relatively high probability that they won’t redeem at par, but on the other hand the narrow range of prices across the curve suggests that the market assumes a high recovery in the event of a default/restructuring.
Such pricing would be fair,considering a baseline scenario involving an IMF program and an orderly adjustment. However, it leaves little compensation for a more disorderly scenario. Tensions with Russia show no sign of abating and could escalate further. Also there is no guarantee that the new government has a strong enough popular mandate to carry through the necessary reforms. PM Yatseniuk has emphasized that the road ahead for Ukraine will not be easy, but only time will tell how united the country will be in following the path he intends to take.
We suspect a brand new populist PM is unlikely to remain in power long if depositor haircuts were engaged - and would certainly not imbibe the eastern Ukraine region with the country's new leader.

It is also notable that these bank runs are focused on local Ukraine/Russian banks...
PT At nearby BNP Parisbas branch, short ATM line, no limit if accountholder. But passed Oshad Bank, another massive line.

From Russia Today ....

Russia won't exclude sanctions to counter US and EU - Ministry

Published time: March 13, 2014 10:31
Edited time: March 13, 2014 12:10

RIA Novosti / Aleksandr Vilf
RIA Novosti / Aleksandr Vilf
Russia is ready to retaliate with counter sanctions against the EU and US if they go ahead with economic measures against Russia over tension in Crimea, the Russian Economic Ministry has said.
"We hope that there will only be targeted political sanctions, and not a broad package affecting economic trade,” Deputy Economic Development Minister Aleksey Likhachev said.
“Our sanctions will be, of course, similar,” he added.
One way Russia plans on shielding itself from pending sanctions is by boosting trade in other currencies, not the US dollar.
“We need to increase trade volume conducted in national currencies. Why, in relation to China, India, Turkey and other countries, should we be negotiating in dollars? Why should we do that? We should sign deals in national currencies- this applies to energy, oil, gas, and everything else,” Alexey Ulyukaev, the Minister of Economic Development said in an interview with the Vesti 24 TV Channel.
The Duma, Russia’s parliament, is drafting legislation to allow Moscow to freeze assets of Western companies and individuals in the event sanctions are imposed following the Crimea referendum vote on March 16.
The bill would give “the president and government opportunities to defend our sovereignty from threats,”according to its author, Andrey Klishas, as quoted by RIA Novosti on March 5.
The US Congress has already denounced Russia’s actions in Ukraine. On Tuesday, lawmakers passed a resolution that urges the US to “to work with our European allies and other countries to impose visa, financial, trade and other sanctions on senior Russian Federation officials, majority state-owned banks and commercial organizations, and other state agencies, as appropriate.”
Earlier this week the European Union threatened to impose further sanctions on Russia starting on March 17, after the referendum in Crimea takes place on Sunday.
The decision on sanctions was made, “especially on the procedure of introducing sanctions,” Poland's Prime Minister Donald Tusk said. “The consequence of this will be the start of sanctions on Monday,” he added.
However, China’s ambassador to Germany Shi Mingde, warns of the global economic affect sanctions against Russia could hold. Mingde said the geo-political tiff between Russia and the West could “spiral”into chaos.
President Putin and the foreign ministry have both said sanctions against Russia could backfire, and spill over into the global economy.
Foreign Minister Sergey Lavrov denounced any Western-led sanctions as “hasty and ill-considered”, and President Putin said squeezing economically would cause “mutual damage”.
If extreme Iran-style sanctions are imposed on Russian exports, the EU would be much more exposed than the US.
Europe imports nearly one third of its gas from resource-rich Russia, and some countries are completely dependent on Russian gas.
While the US and Russia trade very little, Russia is Europe’s biggest customer, and the $13 trillion economy would suffer if trade with Russia was halted overnight.

Kiev snipers shooting from bldg controlled by Maidan forces – Ex-Ukraine security chief

Published time: March 13, 2014 02:25
Edited time: March 13, 2014 12:03

Reuters / Konstantin Chernichkin
Reuters / Konstantin Chernichkin
Former chief of Ukraine’s Security Service has confirmed allegations that snipers who killed dozens of people during the violent unrest in Kiev operated from a building controlled by the opposition on Maidan square.
Shots that killed both civilians and police officers were fired from the Philharmonic Hall building in Ukraine’s capital, former head of the Security Service of Ukraine Aleksandr Yakimenko told Russia 1 channel. The building was under full control of the opposition and particularly the so-called Commandant of Maidan self-defense Andrey Parubiy who after the coup was appointed as the Secretary of the National Security and Defense Council of Ukraine, Yakimenko added.
Furthermore the former security chief believes that Parubiy has been in contact with US Special Forces that could have coordinated the assault.
“Shots came from the Philharmonic Hall. Maidan Commandant Parubiy was responsible for this building. Snipers and people with automatic weapons were ‘working’ from this building on February 20. They supported the assault on the Interior Ministry forces on the ground who were already demoralized and have, in fact, fled,” Yakimenko said in an interview with Russian television.
The police officers were chased by a group of rioters armed with various weapons and at that point, Yakimenko says snipers fired at pursuers themselves.
“When the first wave of shootings ended, many have witnessed 20 people leaving the building,” former chief says, noting that they were well-equipped and were carrying military style bag for carrying sniper and assault rifles with optical sights. Not only the law enforcers, but people from the opposition’s Freedom, Right Sector, Fatherland, and Klitschko’s UDAR party have also seen this, Yakimenko claims.
The former security head also said that according to the intelligence those snipers could be foreigners, including mercenaries from former Yugoslavia as well former Special Forces employees from Ukraine’s Defense Ministry.
Yakimenko claims that Parubiy was part of a group that was heavily influenced by the people associated with the US secret services. “These were the forces that carried out everything that they were told by their leadership – the United States,” Yakimenko explained, claiming that Maidan leaders practically lived in the US embassy.
Reuters / Vasily Fedosenko
Reuters / Vasily Fedosenko
According to Yakimenko, during the massacre the opposition leaders contacted him and asked him to deploy special force unit to scoop out the snipers from buildings in central Kiev, but Parubiy made sure that won’t happen.
“The Right Sector and Freedom Party have requested me to use the Alpha group to cleanse these buildings, stripping them from snipers,” Yakimenko said. According to him Ukrainian troops were ready to move in and eliminate the shooters.
“I was ready to do it, but in order to go inside Maidan I had to get the sanction from Parubiy. Otherwise the ‘self-defense’ would attack me in the back. Parubiy did not give such consent,” Yakimenko said noting that the Maidan leader had full authority over the access to weapons on Maidan, and not a single gun including a sniper rifle could get in or out of the square.
Aleksandr Yakimenko’s account supports previously voiced concerns over unknown snipers shooting both protesters and the police indiscriminately – who were the topic of the recently leaked phoneconversation between EU’s Catherine Ashton and Estonian Foreign Minister Urmas Paet.
In a leaked phone conversation that took place February 26 Ashton and Paet discussed rumors that snipers were hired by some of the opposition leaders.
“There is now stronger and stronger understanding that behind the snipers, it was not Yanukovich, but it was somebody from the new coalition,” Paet said during the conversation. “I think we do want to investigate. I mean, I didn’t pick that up, that’s interesting. Gosh,” Ashton answered.
Almost 100 people were killed and another 900 injured during the violent standoff near Maidan Square in Kiev last month that forced president Yanukovich out of the country and installed a new government. Ukrainian self-proclaimed authorities maintain that the shooting was authorized by Yanukovich.
On Wednesday Moscow suggested setting up a probe to investigate the crimes perpetrated by extremist and armed elements of the opposition over the past three months. The proposal to the Parliamentary Assembly of the Council of Europe (PACE) also seeks to examine the legitimacy of the post-coup Ukrainian government.

From Anti-War......

President Obama continues to talk up intervention in the Crimea, insisting that he promised the nation’s interim premier unconditional support for stopping the secession of the Crimea. Obama is sold on moves against Russia and has demanded Russia stop the Crimean referendum for them.
Less on board for the intervention is Ukraine’s own interim president Oleksandr Turchinov, who ruled out military intervention against the region, saying there is no way for Ukraine to force the Crimeans not to secede.
Turchinov was critical of the upcoming referendum, saying it was all Russia’s fault, but he seemed more or less resigned to the fact that it is happening, and said attacking the Crimea would leave their eastern frontier undefended.
The Ukrainian leader seems to be figuring on just not recognizing the vote, and leaving the matter officially unsettled, even if the referendum means de facto Crimean annexation into Russia. The US seems to be on a much more belligerent track, despite having little to no real interest in the Crimea.

Senate Panel Seeks to Impose ‘Tough Sanctions’ on Russia

Sanctions Stop Short of Targeting Banks, Oil Companies

by Jason Ditz, March 12, 2014
The Senate Foreign Relations Committee has voted 14-3 to push forward a bill seeking to impose what officials say are the “most significant” US sanctions against Russia since the breakup of the Soviet Union.
The sanctions are mostly non-specific, authorizing President Obama to unilateral impose whatever financial sanctions he sees fit on Russian officials that he determines are “to blame” for Crimean secession from the Ukraine.
Some hawks on the committee had pushed for sanctions targeting Russian banks and oil companies as well, but these were not included in the final bill, which will go on to the Senate floor.
In addition to the sanctions, the bill includes $1 billion in “loan guarantees” for the interim Ukrainian government, a move which concerned some senators who say they aren’t clear where that money is going to come from.

Belarus President Says Poland Exercises a 'Clear Escalation'

by Jason Ditz, March 12, 2014
The Belarussian Air Force is reporting Russia has promised to deploy several warplanes to its country in response to NATO’s war games in neighboring Poland, where the US has sent at least 12 F-16 fighters.
Belarus President Alexander Lukashenko had confirmed requesting the planes in response to the war games, which he dubbed a “clear escalation” along their border.
The US had couched the deployments to Poland as retaliation for the ongoing secessionist movement in Crimea, and support for the new interim government in neighboring Ukraine.
Russian officials haven’t confirmed how many planes would be sent, but the Belarussian officials said they had requested 12-15 planes in an effort to maintain parity with the NATO build-up in the area.

Live Updates.....

Thursday, March 13

12:26 GMT:
Of all the EU states, Latvia will suffer most if the EU imposes sanctions against Russia, Latvian Finance Minister Vyacheslav Dombrovsky told journalists on Thursday.

“I do not think it would be an exaggeration to say that of all the EU states, it is Latvia that has the biggest share in economic relations with Russia. Should the sanctions [against Russian in connection with the Ukrainian crisis] be imposed… we will feel their consequences the most,” Dombrovsky said, as quoted by Delfi.

According to the minister, 43 percent of Latvian agricultural/food exports go to Russia, and 70 percent of all the transit traffic is connected to Russia. Moreover, Latvia is “fully dependent” on Russian natural gas imports.
12:11 GMT:
Around 10,000 people have gathered in the eastern city of Kharkov for the rally in support of the detained mayor Gennady Kernes, ITAR-TASS reported.
The crowds are shouting slogans like “Hands off Gennady Kernes!” and “Give us back our mayor!”
“We’re seeing a complete breakdown of law and order in Ukraine. Freedom to Gennady Kernes! His detention mustn’t be allowed,” the head of the Afghan Veterans Union Sergey Lagutin said at the rally.
12:00 GMT:
Notorious Ukrainian nationalist, member of Right Sector group Aleksandr Muzychko was arrested in absentia by a Stavropol Region court in Russia, Interfax reports.

A criminal case against Muzychko has earlier been opened in North Caucasian Federal District by Russia’s Investigative Committee on the charges of “forming and supervising an armed gang organized for the purpose of attacking Russian citizens.”

According to the Committee’s spokesman, Vladimir Markin, Muzychko is suspected of personally torturing and killing at least 20 captive Russian soldiers during the First Chechen War in 1994-1995. Muzychko was one of the leaders of Ukrainian ultra-nationalist UNA-UNSO group fighting alongside insurgents against the Russian troops in Chechnya.
11:54 GMT:
The Collective Security Treaty Organization (CSTO), a security organization including Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan and Tajikistan, have noticed increased NATO activity near Belarus’ borders, Secretary General Nikolay Bordyuzha said.
“We are concerned with the deployment of a NATO aviation group near Belarusian borders. We notice the increased surveillance activity near that region. But at the moment we believe that taking countermeasures would be premature,” he said.
It comes after NATO deployed US fighter jets to Poland and Baltic states and started patrols of Airborne Warning and Control System (AWACS) aircraft over Poland and Romania.
The CSTO official added that organization is not preparing its joint military force over the crisis in Ukraine and does not consider Russia part of that conflict.
11:40 GMT:
The website of the All-Russia State TV and Radio Broadcasting company resumed functioning at 2:30 Moscow time (10.30 GMT) after a hacker attack.
The website of Russia’s Channel One, which was taken down earlier in a hacker DDoS attack, allegedly from Kiev, is functioning at the moment, ITAR-TASS reported.
“The channel’s website wasn’t working from 12:15pm Moscow time (08:15 GMT) until 1.53pm due to a DDoS attack from Kiev,” a Channel One representative said.
Over the last few days, the websites of Lifenews media outlet and Rossiyskaya Gazeta newspaper have also been attacked by hackers.
All the representatives of these media outlets link this with their coverage of the events in Ukraine.
10:40 GMT:
The OECD said on Thursday it had postponed all activities related to Russia's accession to the organisation following a request from its members.
The Paris-based Organisation for Economic Cooperation and Development also said its members had agreed to strengthen cooperation with Ukraine to help it address the "public policy challenges it faces". (Reuters)
10:40 GMT:
President Vladimir Putin said Russia did not instigate the current crisis currently embroiling Ukraine, adding that the 2014 Paralympic Winter Games had gone off without a hitch.
Meeting with the head of the Russian Paralympic Committee in Sochi, Putin said that “the Paralympics was "outside of politics” and had not been effected by the “difficult circumstances” in the region. Putin added that Russia has not been behind these “complex conditions” which served as the backdrop to the major international sporting event, which is slated to conclude on the same day Crimea holds a referendum on its status.
Vladimir Putin (RIA Novosti / Michail Klimentyev)
Vladimir Putin (RIA Novosti / Michail Klimentyev)

10:00 GMT:
The Crimean authorities have taken under protection the oil and gas deposits in the Black and Azov seas.
“Those deposits and platforms will pass into complete ownership of the Crimean Republic. We’re already guarding them. Those are our deposits, and we’ll fight for them,” Crimea’s parliamentary speaker Vladimir Konstantinov told RIA-Novosti.
08:30 GMT:
German Chancellor Angela Merkel said in a speech in parliament on Thursday that instead of acting as a partner for stability in the Ukraine crisis, Russia had sought to exploit the weakness of its neighbour.
"The territorial integrity of Ukraine cannot be called into question," she said, making clear that the situation in Ukraine's southern region of Crimea was not comparable to the case of Kosovo in the Balkans.
German Chancellor Angela Merkel addresses the Bundestag, the lower house of parliament, at the Reichstag in Berlin March 13, 2013. (Reuters / Tobias Schwarz)
German Chancellor Angela Merkel addresses the Bundestag, the lower house of parliament, at the Reichstag in Berlin March 13, 2013. (Reuters / Tobias Schwarz)

"Ladies and gentlemen, if Russia continues on its course of the past weeks, it will not only be a catastrophe for Ukraine," she said, using her strongest rhetoric since the start of the crisis.
"We would not only see it, also as neighbours of Russia, as a threat. And it would not only change the European Union's relationship with Russia. No, this would also cause massive damage to Russia, economically and politically." (Reuters)
08:14 GMT:
The Ukrainian Kommersant-Ukraina newspaper will be closed and severance packages shall be paid to its employees, the Kommersant publishing house director told RIA Novosti.
It was previously suggested that the closing of the Kiev bureau was for solely for economic reasons, but as director Pavel Filenkov put it, the Kiev office “was simply no longer needed”.
Part of the staff may be offered positions in the Kiev bureau of the main, Russian, edition of the newspaper.

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