The Wrongologist

What’s
Wrong Today:-

Yesterday
we reviewed the “prize” that is Crimea. Today we turn to the “prize” that is
Ukraine.

Foreign Policy Magazine reports that Ukraine has
deep internal divisions. Among the leaders of the three opposition parties with
whom European diplomats negotiated the February 21st Agreement was Oleh Tyahnybok. He is the leader of
the extreme right-wing Svoboda (Freedom), an
anti-Russian, anti-Semitic party that wants Ukraine for ethnic Ukrainians who
speak Ukrainian (which would exclude about half of the population). Svoboda
obtained 12% of the vote in the 2012 parliamentary elections.

Until
2005, Svoboda bore the name “National-Social” and had as its symbol
the “wolfsangel,” emblem of
certain Nazi SS units. In 2012, the European Parliament appealed to the democratic
parties of Ukraine to not associate or form alliances with Svoboda. But Svoboda
also has competition on its right from a smaller but more violent group: the Right Sector, led by Dmytro Yarosh, a long-time
fascist activist.  

Despite
all of this, the EU and the US conferred legitimacy on Svoboda and the Right
Sector. This March, the US State Department published a debunking of Putin’s
“False
Claims About Ukraine,”
assuring Americans that Ukraine’s far-right “are not represented” in
parliament.

Svoboda’s members
now hold several ministerial positions, including Vice-Prime Minister, Minister
of Defense, and Prosecutor General (responsible for upholding the constitution
and other laws). The Right Sector’s Yarosh has become Assistant Secretary of
the Council for
National Security and Defense. The Secretary of that Council is Andriy Parubiy, a longtime
far-right activist. Recently, Prime Minister Yatsenyuk dismissed three
Assistant Ministers of Defense for their refusal to integrate the Right
Sector’s militias into Ukraine’s regular armed forces.

For the first time since World War
II, neo-fascists hold posts in the national government of a European state. And they do this
with the blessing of the Western democracies.

Ukraine’s
economic situation:

The
West’s plan has been to sever the Ukraine economy from Russia. The plan began
in 2004 with the Orange Revolution, but was not fully realized. The February 22nd
coup represents the completion phase of that separation, a plan to sever
the Ukrainian economy from Russia. The
Orange Revolution in 2004 and the overthrow of Yanukovich in 2014 are not discontinuous
events; they are linked and part of a continuum.

According
to Counterpunch,
the next step is an IMF package for Ukraine, and additional funding from the
European Union and the US. The IMF deal is still in development, but it will be
the third deal between the IMF and Ukraine:

• In
  2005: $16.6 billion in loans

• In
  2010: $15.1 billion in loans

The
2010 IMF deal slowed Ukraine’s economy, as it required a 50% increase in retail gas prices and corresponding cuts in gas subsidies. That
significantly reduced aggregate consumption by Ukrainian households and slowed
the economy. So did IMF demands for reductions in government spending, another precondition
for the $15.1 billion 2010 IMF package.

The
IMF deal in December 2013 was reported to require that household subsidies for
gas be reduced by 50% once again. Other IMF requirements included cuts to
pensions, government employment, and a commitment to privatization of (that is,
letting Western corporations purchase) government assets and property. 

The
new $15 billion IMF deal represents less than the $20 billion the Ukraine said
it needed last December, before its currency fell 20% and its foreign exchange
reserves fell to less than $10 billion. It is substantially less than the $35
billion the new interim prime minister, Yatsenyuk, asked for.

The
latest Ukrainian GDP (2012) figures show its GDP was equivalent to $335 billion
if adjusted to PPP, (purchasing power parity) terms. Household gas subsidies
reportedly amounted to 7.5% of GDP in 2012. That’s about $13 billion in
nominal terms. If the pending IMF deal reportedly requires a cut of gas subsidies
of 50%, that’s about $6.5 billion taken
out of the Ukrainian economy. 

So
the $15 billion IMF funding will result in only a net $8.5 billion to the
Ukranian economy. Importantly, a significant share of the $15 billion IMF loan will go to western banks, especially
in Austria and Italy who have problem loans in Ukraine.

It
gets worse: Severing Ukraine from Russia may be a pipe dream since, according
to Trading
Economics, more than 60% of Ukraine’s exports go to Russia and other
former Soviet Republic countries, including Kazakhstan and Belarus.

Military Support for Ukraine:

This
brings up the question of the 1994 Budapest
Memorandum, between Russia, the UK, the US and Ukraine. It obligates
signatory states to:

• Respect
  the independence and sovereignty and the existing borders of Ukraine

• Refrain
  from the threat or use of force against the territorial integrity or political
  independence of Ukraine

• Pledge
  that none of their weapons will ever be used against Ukraine.

The
signatories are required to “seek immediate United Nations Security Council
action to provide assistance to Ukraine” only in the event of an act of
aggression “in which nuclear weapons are used.” As one international law
scholar puts it:

Now that
Russia has violated the Budapest Memorandum, is there any possibility that the
other signatories will make any military move beyond exercises?

In
fact, according to Reuters,
Ukraine’s new leadership is not seeking membership in
NATO, said Prime Minister Arseny Yatsenyuk in comments intended to reassure Russia and Ukraine’s
large number of Russian-speakers.

Despite Yatsenyuk’s statement, there is an emerging
view in Europe that NATO has to be
active in Ukraine. The NYT
reports that Anders
Fogh Rasmussen, secretary general of NATO, said on Wednesday that the alliance
was considering providing assistance to Ukraine to help deter Russia from another
military intervention there:

He
noted that the foreign ministers of the NATO alliance will decide what to
provide at a meeting on April 1-2. Drumbeats came from Adm. James G. Stavridis,
who led NATO’s military command until he retired last year. He said:

NATO
will hold military exercises in Ukraine this summer. They were announced before
the current dust-up with Russia, RT reports, and US
military will call the shots in the exercise that will bring together some
1,300 Western forces in Ukraine.

According
to the US forces in Europe website, Rapid Trident 2014 is designed to:

Here we
are, once again hip-deep in a crisis of our own making. A crisis that has
driven serious domestic issues, like jobs and inequality right off the front
page of our news outlets. Crimea and the bad Russkis are a better topic for our
corporate and political overlords.

We say they started it, while they say we started it.

It’s more of the “keep the
rubes confused while we keep on stealing”.

Once again,
America has used “democracy” and 60 year old anti-Russian memes in a clumsy and
wrong-headed effort to beat Putin to the draw.