Thursday, April 17, 2014

Ukraine evening overview April 17 , 2014 - where things stand now -- Russian Foreign Minister Announces Four Party Agreement On Steps To De-escalate Ukraine Crisis ...... Ukraine immediately nixes -- So Much For The De-escalation? Kiev Says Military Operation In East Ukraine To Continue and Nato promptly ups the ante by sending 5 more ships toward Ukraine...... Obama and Putin trade tough talk as Rusia reserves right to use military force in Eastern Ukraine , while US prepares additional sanctions... Ukraine politics in focus - Donetsk Separatists begin organizing May 11 , 2014 Referendum....

More "De-escalation" - NATO Sends Five Warships To Baltic Sea

Tyler Durden's picture

The latest development out of NATO, which was already largely expected, must be part of the just announced elaborate de-escalation scheme.  From VOA:
NATO members are sending navy ships to the Baltic Sea to increase the security of the alliance's eastern European allies in response to the Ukraine crisis.

NATO's Maritime Command said Thursday it is sending four minesweepers and a support vessel to the Baltic Sea. The ships are from Norway, the Netherlands, Belgium and Estonia.

The alliance said Thursday it does not intend to escalate the situation in Ukraine, but rather to "demonstrate solidarity" and ramp up NATO's readiness.

NATO has made clear it does not want to get involved militarily in Ukraine, which is not a NATO member.
Ah yes, because the Geneva "de-escalation" statement explicitly did not mention anything about a military build up when it is solely for "solidarity demonstration" purposes, and not for "intimidation or provocation." At least we now know what loopholey, umbrella phrase the next Russian escalation in east Ukraine will be held under: "demonstrating solidarity" with ethnic Russians in the region.

So Much For The De-escalation? Kiev Says Military Operation In East Ukraine To Continue

Tyler Durden's picture

Everyone knows that the half-life of these pointless diplomatic summits aimed at "de-escalating" geopolitical tensions is measured in days if not hours... But minutes? Moments ago from RT, and literally minutes after the final Geneva "agreement" was blasted, we get this: "Kiev says Military operation in Ukraine southeast to go on despite Geneva agreement." The agreement, which as a reminder, said "All sides must refrain from any violence, intimidation or  provocative actions." That's right: not just "pro-Russian separatist terrorists", but all sides.
Despite calls for a peaceful dialogue in the document on Ukraine adopted in Geneva, the coup-imposed Ukrainian Foreign Minister said it will not affect the “anti-terrorist” operation in the East of the country and the troops will remain there.

Soon after the Geneva document, adopted at a four-side meeting between Ukraine, the US, the EU and Russia, was published, Ukraine’s acting Foreign Minister Andrey Deshchytsa said Kiev is not bound by its recommendations.

According to Deshchytsa cited by RIA Novosti, “the troops in the East of the country are carrying out a special operation and can remain where they are.”
So, everyone disarm as the same time... but the other side first.

Russian Foreign Minister Announces Four Party Agreement On Steps To De-escalate Ukraine Crisis

Tyler Durden's picture

Considering how successful diplomatic "solutions" to the Ukraine crisis have been in the past, it is no wonder almost nobody was paying attention to Geneva where today the four parties were holding talks to resolve the Ukraine situation, and moments ago they released, via Russia's Lavrov, a joint statement on "de-escalating the situation." From Bloomberg:
And, approrpiately enough, the Easter Egg:
In other words, more referendums? For now stocks aren't reacting exactly bullishly (perhaps because as UBS recently suggested, with a straight face, "war may be bullish for US stocks"), however, oil is lower on the news.

We wonder how long until this too "diplomatic" solution is promptly ignored and forgotten: days or hours ?

Prior to the non de-escalation talks , both Obama and Putin talked tough........

Obama: We are preparing additional sanctions against Russia

Published time: April 17, 2014 19:56
Edited time: April 17, 2014 21:07

US President Barack Obama delivers remarks from the Brady Press Room at the White House in Washington, DC, April 17, 2014. (AFP Photo / Jim Watson)
US President Barack Obama delivers remarks from the Brady Press Room at the White House in Washington, DC, April 17, 2014. (AFP Photo / Jim Watson)
United States President Barack Obama said Thursday afternoon that his administration is prepared to take further action against Russia if an agreement reached earlier in the day in Geneva concerning the crisis in Ukraine fails to materialize.
Hours earlier, US Secretary of State said from Switzerland that American representatives had just met with officials from the European Union, Russia and Ukraine, and all parties agreed to work diplomatically with one another during the next few days to destabilize the conflict between the Moscow- and Kiev-based governments as tensions continue to worsen in the region.

Speaking from the White House that same afternoon, however, Pres. Obama expressed uncertainty over the Geneva agreement and said his administration will further sanction Russia if they don’t uphold their end of the bargain and “we don’t see actual improvement” as promised.
“I don’t think we can be sure of anything at this point,” Obama told reporters with regards to what will come next of the crisis. “I think there is a possibility — a prospect — that diplomacy may deescalate the situation.”
Speaking of the newly-reached agreement, Pres. Obama said “There was a promising public statement that indicated the need to disarm all irregular forces and militias and groups that have been occupying buildings” in eastern and southern Ukraine.
“The Russians signed on to that statement, and the question now becomes, will in fact they use the influence that they exerted in a disruptive way to restore some order so that Ukrainians can carry out an election [and] move forward with the destabilization,” he asked, “…and start getting back on the path to growth and democracy.”
Pres. Obama also said that he plans to speak later in the day with German Chancellor Angela Merkel and British Prime Minister David Cameron to discuss possible sanctions to be waged against Russia if it fails to adhere to the agreements of the Geneva deal reached earlier that day, but reaffirmed that the US has taken the option of military force off of the table.
“We have to be prepared to potentially respond to what would continue to be efforts of interference from the Russians in eastern and southern Ukraine,” Obama said.
In the meantime, though, the president said he urges Russia to help “create an environment in which irregular forces disarm, that the seizing of buildings cease [and] that a national dialogue by Ukrainians — not by Russians, not by Americans or anyone else by Ukrainians — takes place.”

“My understanding is that the Ukrainian prime minister gave a detailed and thorough presentation about the reform they intend to introduce, including reforms that provide assurances for Ukrainians who live in eastern and southern Ukraine — that they will be fully represented, that their rights will be protected, that Russian speakers and Russian natives in Ukraine will have full protection of the law,” the president said..
The most important agreement reached during the talks, according to Russian Prime Minister Lavrov, states that the Ukrainian crisis “must be resolved by the Ukrainians themselves concerning an end to the conflict” including those related to “detaining protesters, occupying buildings” and, in the long run “the start of true constitutional reform.”

“Among the steps that have to be taken are: the disarmament of all the illegal armed groups, and the return of all the occupied administrative buildings,” Lavrov told journalists after Thursday’s briefing.
According to Russia’s RIA Novosti news agency, acting Ukrainian Foreign Minister Andrey Deshchytsa said Thursday that Kiev is not bound by the recommendations reached during the Geneva deal, and added that “the troops in the East of the country are carrying out a special operation and can remain where they are.”
Sec. Kerry, meanwhile, said that thousands of Russian troops remained posted on the country’s border with Ukraine, though some have been withdrawn “in response to the efforts we’ve made to insist on some movement.”
Russia, Kerry said, “made it clear that over a period of time, assuming this can de-escalate, and it does de-escalate, as the rights of the people they are concerned about are represented, as the constitutional process unfolds and the future government of Ukraine takes place, they are absolutely prepared to begin to respond with respect to [withdrawing] troops in larger numbers.”
Both Obama and Kerry said they hope for the de-escalation efforts to become evident by early next week at the latest.


Putin says oil wars with Russia will make West bleed

Published time: April 17, 2014 12:00
Edited time: April 17, 2014 13:00

Reuters / Henry Romero
Reuters / Henry Romero
Opportunities for the West to hurt the Russian economy are limited, President Vladimir Putin said Thursday. Europe cannot stop buying Russian gas without inflicting pain on itself, and if the US tries to lower oil prices, the dollar will suffer.
If the West tries to damage Russia’s influence in the world energy market, efforts will likely backfire, the Russian President said during his twelfth annual televised question and answer session.
To really influence the world oil market a country would need to increase production and cut prices, which currently only Saudi Arabia could afford, Putin said.
The president added he didn’t expect Saudi Arabia, which has “very kind relations” with Russia, will choose to cut prices, that could also damage its own economy.
If world oil production increases, the price could go down to about $85 per barrel. “For us the price fall from $90 to $85 per barrel isn’t critical,” Putin said, adding that for Saudi Arabia it would be more sensitive.
Also the President said that being an OPEC member, Saudi Arabia would need to coordinate its action with the organization, which “is very complicated.”
Meanwhile, Russia supplies about a third of Europe's energy needs, said Putin. Finland, for example, is close to Russia economically, as it receives 70 percent of its gas from Russia.
“Can Europe stop buying Russian gas? I think it's impossible…Will they make themselves bleed? That's hard to imagine,” the Russian president said. 
Since oil is sold internationally on global markets cutting the price would mean lower dollar circulation, diminishing its value in the global currency market.
"If prices decrease in the global market, the emerging shale industry will die,” Putin said.
The US shale industry has boosted domestic production, helping the US become independent and situating it to overtake Russia as a producer.
Russia’s economy largely relies on energy. In 2013 more than 50 percent of the national budget was funded by gas and oil revenues. The main revenue comes from oil, as last year, oil revenues reached $191 billion, and gas $28 billion.
“Oil and gas revenues are a big contribution to the Russian budget, a big part for us when we decide on our government programs, and of course, meeting our social obligations,” the president said.


Thursday, April 17, 2014 11:01 AM

Putin Threatens Military Intervention in Ukraine; Obama's Hypocritical Response

In his strongest message yet to Ukraine, the EU, and US, Putin says Russia ready to act in Ukraine 
 Russian President Vladimir Putin has warned of his readiness to deploy troops in eastern Ukraine if diplomatic efforts fail to resolve the escalating crisis there.

The threat came as foreign ministers from Russia, Ukraine, the US and EU were meeting in Geneva to find ways to ease the tension.

Speaking in a live television phone-in hours after the first deadly clash between pro-Russia protesters in the eastern region and Kiev’s security forces, Mr Putin said he hoped for a political resolution to the crisis but warned that the campaign for Ukraine’s May 25 presidential election was “being run in an absolutely unacceptable way”.
“The Federation Council granted the president the right to use military force in Ukraine,” he said in response to one of 2m questions submitted to him. “I really hope that I do not have to exercise this right and that we are able to solve all of today’s pressing issues with political and diplomatic means.”

But he added: “If everything continues like this, then of course we cannot recognise as legitimate what is happening and what will happen after May 25.”

Mr Putin called on Kiev to withdraw its forces from southeastern Ukraine and engage in dialogue on the country’s future with pro-Russia protesters in the region.

Mr Putin signalled that he might be ready for a pragmatic solution. Despite repeating Moscow’s scathing rejection of Ukraine’s interim government as illegitimate, he said: “We need to come to agreement with those who view themselves as the authorities in Ukraine. But they need to behave reasonably.”

US President Barack Obama said in an interview on Wednesday that Mr Putin was supporting “at minimum, non-state militias” in Ukraine.

Obama's Hypocrisy  

Two wrongs don't make a right but it's certainly fair to point out the "US is supporting, at minimum, non-state militias in Syria". How many other places?

We only like intervention when we do it. 

Assuming one believes that Russia is indeed directly supporting militias in Ukraine (something that is arguably debatable), at least Russia has a vested interest given that it borders Ukraine.

Russia fears US missiles and military buildups in Eastern Europe, as well it should. After all, the US did renege on promises not to expand NATO into Eastern Europe.

Mike "Mish" Shedlock


Decision on prepayment for Naftogaz to come after EU responds to Putin’s letter

 April 17, 14:03 UTC+4 

© ITAR-TASS/Vitaly Grabar
MOSCOW, April 17. /ITAR-TASS/. The decision to transfer Naftogaz to prepayment mode will be made when the European Union responds to Russian President Vladimir Putin’s letter sent to 18 European leaders, Russian natural gas giant Gazprom Board Chairman Viktor Zubkov said Thursday.
“Let’s see what reaction and position the EU and other countries where Vladimir Vladimirovich [Putin] sent his letter will have. It’s one of the aspects that we should take into account. So we will see what kind of answer they will give,” Zubkov said.
In line with the contract with Naftogaz, Gazprom is entitled, in case of violations of contractual obligations, to transfer its partner to the prepayment scheme from the 16th day of the month preceding the month of gas delivery.
“If the payment has not been made by the 7th day of the month following the month of delivery, the seller has the right to transfer the deliveries to prepayment. Not later than the 16th day of the month preceding the month of delivery, Gazprom issues a provisional bill that the buyer should pay until the beginning of the month of delivery in full,” the contract between Gazprom and Naftogaz dated January 19, 2009 says.
“If the buyer has not fulfilled or improperly fulfilled its obligations in full, the seller is entitled to stop fulfilling his obligations partially or in full,” the document says.
Naftogaz failed to pay for the March delivery of Russian natural gas worth over $500 million. Ukraine’s overall gas debt grew as of early April to $2.2 billion.
On April 10, Putin sent a letter on the situation around Ukraine to the leaders of 18 European countries who buy Russian natural gas. In the letter, he explained in detail the current critical situation with Ukraine’s debt for Russian gas supplies, which could affect gas transit to European consumers.

Ukraine crisis

Ukraine is in political and economic turmoil following a coup that occurred in the country in February after months of anti-government protests triggered by Kiev’s decision to suspend an association agreement with the European Union in November 2013 in favor of closer ties with Russia.
New people were brought to power in Kiev amid riots that involved radicals after President Viktor Yanukovych had to leave Ukraine citing security concerns in February 2014. Russia does not recognize the new Ukrainian authorities.
Ukraine’s crisis soured further when the Republic of Crimea, where most residents are Russians, refused to recognize the legitimacy of the new self-proclaimed Ukrainian leadership. Crimea held a referendum March 16 in which an overwhelming majority of Crimeans voted to secede from Ukraineand reunify with the Russian Federation. The accession deal with Moscow was signed two days later.
After Crimea’s accession to Russia, protests against the new Ukrainian authorities erupted in Ukraine’s Russian-speaking southeastern territories, with demonstrators demanding referendums on the country’s federalization.

Russian gas price change for Kiev

Moscow recently substantially raised the price for gas supplied to Ukraine from the figure of $268.5 per 1,000 cubic meters agreed last year when the association agreement with the EU was shelved in November 2013.
In the second quarter of 2014, the price for Russian gas for Ukraine was set at $385.5 per 1,000 cu m. Gazprom said earlier that the price rose from $268.5 due to the return to earlier contract agreements, as Ukraine failed to fulfill its commitments under an additional agreement concluded in December 2013, which obliged the country to pay for supplied volumes of Russian gas in time.
On April 2, Putin signed a law on denunciation of the Kharkiv Accords with Ukraine, which were struck in 2010 and stipulated that Russia’s lease of naval facilities in Crimea [then part of Ukraine] would be extended by 25 years beyond 2017 — until 2042.
The Kharkiv deals envisioned a discount of $100 per 1,000 cubic meters on Russian gas for Kiev. Now that the accords have been denounced due to Crimea’s accession to the Russian Federation, the discount will no longer be applied, raising the gas price by another $100 to $485.5 per 1,000 cubic meters, which is expected to make the economic situation in Ukraine even more complicated.

Ukrainian politics......

Party of Regions refuses to vote at Rada until its demands met

 April 17, 14:19 UTC+4
The stabilization of the situation is possible only if the central administration of Ukraine heeds the voice of the people, says head of the Donetsk regional organization of the Party of Regions Mykola Levchenko

KIEV, April 17. /ITAR-TASS/. Deputies of the Party of Regions at the Ukrainian Rada have refused to take part in voting at Rada unless their demands, voiced at yesterday's party congress in Donetsk, were met.
"People, rather than 'criminals', as Mr. Turchynov (Rada Speaker) put it, have been perishing in the east of Ukraine. People, citizens of Ukraine," said head of the Donetsk regional organization of the Party of Regions Mykola Levchenko. "The current administration of Ukraine came into power by force to act as 'gauleiters', but in return, they got a mutiny in the east of Ukraine," Levchenko said.
"The stabilization of the situation is possible only if the central administration of Ukraine heeds the voice of the people. We have raised a question of amending the Constitution so as to delimitate powers between the center and regions once and for all and give the Russian language a status of the second state language spoken in Ukraine," Levchenko said.
"The Party of Regions will not vote in parliament until our demands are met," Levchenko said. "The people are demanding a referendum," he emphasized.

Pro-Russian Separatists in Donetsk Begin Organizing May 11 Referendum

Pro-Russian separatists in Donetsk have started forming an electoral commission for a planned May 11 referendum on the secession of their eastern Ukrainian region and the possibility of joining Russia, a lawmaker said.
A deputy from the Donetsk regional legislature, Iryna Popova, said that the separatists who had occupied local government buildings plan to advance two questions at the referendum, Interfax reported.
"The first will supposedly ask: 'Do you agree with creating an independent Donetsk republic?' And the second will ask: 'Which state should the Donetsk republic be part of – Ukraine or Russia?'" Popova said.
Donetsk's official administration said in a statement that its representatives met on Wednesday with envoys from the separatist "People's Republic of Donetsk" to try and negotiate an end to the violence between pro-Russian and pro-Ukrainian protesters, which has left at least one person dead and two dozen injured.
Separatists have presented their primary demand to the regional administration — that the referendum should go ahead, the statement said.