The West and Russia impose a new order on the world

Pavlo Klimkin, Ukrainian Minister for Foreign Affairs, Vladimir Chizhov, Head of the Mission of Russia to the EU, and Alexey Ulyukaev, Russian Minister for Economic Development (from left to right), gathered in Brussels to discuss Russia’s objections over the implementation of the EU/Ukraine Association Agreement. The results of the conference were very poor. (EC Audiovisual Services, 11/07/2014).

Pavlo Klimkin, Ukrainian Minister for Foreign Affairs, Vladimir Chizhov, Head of the Mission of Russia to the EU, and Alexey Ulyukaev, Russian Minister for Economic Development (from left to right), gathered in Brussels to discuss Russia’s objections over the implementation of the EU/Ukraine Association Agreement. The results of the conference were very poor. (EC Audiovisual Services, 11/07/2014).

The US led confrontation of the West with Russia has just generated the first tangible and sizeable losses for Europe. German equity values and EU agricultural exports to Russia registered heavy costs last week, while the New York Stock Exchange recorded only minor harms. Those developments came after the EU activated its last package of sanctions against Moscow, with Putin retaliating by banning agro-food imports from the West. Once again, the German government bonds emerged as a safe haven for European investors sending their yields to the negative part of the chart (for the two-year titles). The tit for tat exchange of sanctions and counter measures between Brussels and Moscow has already caused irreparable damages to millions of EU farmers, at the same time rendering unpopular the EU aggressive strategy against Russia.

In view of that, the EU now says the impairments to the agricultural sector will be assessed but there is no a straight forward reassurance for compensations. EU Commissioner for Agriculture and Rural Development Dacian Cioloș concerning the ban on EU agricultural exports to the Russian Federation issued a statement containing the following passage: “I understand the concern expressed in the EU farming sector. I want to underline that the Common Agricultural Policy has new and modernised tools to stand by them, as soon as it is needed, including our crisis reserve, which is already available now… I have already instructed my Services to establish a Task Force to analyse the potential impacts sector by sector, and to assess how we can effectively provide meaningful support if and where this is needed. Second, my Services will today call a meeting of senior agricultural experts from all EU Member States, to take place next Thursday.“

‘Analysing’ damages

Unfortunately for the Polish animal product exporters to Russia, Cioloș appeared certain that the farm sector will have the ability to swiftly find new outlets for its products. He said “I am confident that our resilient farm sector will reorient rapidly towards new markets and opportunities”. The plain truth is that the west European agricultural exports for many centuries have been supplying the Russian market with fruits and vegetables from the Mediterranean and delivering animal products from the central European plains. Understandably, a reorientation of exports to such an important extent is easier said than done.

The Russian ban of agro-food imports from the EU has also created internal political storms in many European countries. Extremist and Eurosceptic politicians on both ends of the political spectrum blame the governments in Athens, Rome, Paris and elsewhere for the aggressive stance against Russia. As if all that was not enough, the Kiev government spares no efforts to set Europe on fire by creating a polemic atmosphere.

Kiev’s warmongers

The Ukrainian government announced its own list of sanctions against Russia above and beyond the EU’s restrains. Kiev has catalogued 172 persons and 65 mainly Russian companies who are to face freeze of assets in Ukraine and a ban of entry in the country. The Ukrainian PM when asked if this may affect the delivery, through pipelines on his country’s soil, of Russian natural to EU member states, he answered that “it may affect every kind of through movement including air flights and transport of natural resources”. He added that Ukraine can “suffer losses of up to $ 7 billion in the first year, as a result of Russian aggressiveness”.

Obviously, the target of those clearly provocative comments is twofold. The Kiev rulers are notorious for their incendiary attitude. For one thing, the Ukrainian government in this way raises the belligerent bets in order to engage in its own planning the entire European Union and thus squeeze more money out of Brussels. On top of that, those winners of the Maidan civil war who govern Kiev today want to train their internal audience of Ukrainian population for the forthcoming economic disasters. Food and energy will very soon become so expensive in this country, leading to widespread social unrest. The fact remains that so far Ukraine has been living on Russian injections of cheap natural gas, while the industrialized part of the country in the east, exported its produce to Russia. With the anti-Russian political forces of Kiev winning the civil war, all that will disappear living the Ukrainian economy completely dependent on Western aid.

Poor Ukrainian millions

Unfortunately for the millions of poor Ukrainians, this aid will be absorbed mainly by the new political order of Kiev. Already, a number of impossible political formations opposing the government and the President Petro Poroshenko are gaining ground, and understandably the Kiev nomenclature is alarmed. That’s why the Kiev Prime Minister is trying to create an atmosphere of pan-European conflict in order to pacify social unrest internally and extort more money from west Europeans. The Americans must have helped the Kiev rulers to put together such a strategy.

Of course, all this planning wouldn’t prove functional if Brussels had found a way to come to terms with Moscow over Ukraine. From the moment that Berlin decided to side with the US, the rules of the game were set for a new cold war in Europe. Already Britain and France had made their choice backing Washington’s belligerent strategy. The decision of the European Council to lock out Russia from the west European financial markets was the ‘Rubicon crossing’ in this offensive direction.

As a matter of fact on 29 July, European Council President Herman Van Rompuy and the President of the European Commission Manuel Barroso announced in the name of the European Union a package of significant additional restrictive measures targeting sectoral cooperation and exchanges with the Russian Federation. According to the relevant Press release the restrictive measures will:
“*limit access to EU primary and secondary capital markets for Russian state-owned financial institutions
*impose an embargo on trade in arms
*establish an export ban for dual use goods for military end users
*curtail Russian access to certain sensitive technologies that can be used for oil production and exploration
These restrictions, adopted by written procedure on 31 July, will be published in the EU Official Journal on the same day and will apply from 1 August”.

Certainly, the details of the applications of those far-reaching measures will be a matter of under the table negotiations by the powerful EU countries. For example, France may insist for some time in selling armaments to Moscow and Britain can continue supply financial services to Russian oligarchs. Yet, the Polish farmers won’t be able to continue selling their products to Russia.

All in all, the new order in Europe is now crystalising, with Russia becoming again the ‘other side’. Consultations between EU, Ukraine and Russia on the implementation of the EU/Ukraine Association Agreement didn’t help to defuse the tensions between the two sides.

the sting Milestone

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