From Volume 4, Issue Number 37 of EIR Online, Published Sept. 13, 2005
Russia and the CIS News Digest

Ukraine's 'Orange Revolution' in Disarray

As could be expected, given that last year's regime-change in Ukraine involved synthetic constructs, packaged and sold to an economically savaged nation, recent weeks' political in-fighting Kiev has exploded into a full-fledged government crisis. On Sept. 8, following the resignation of Security and Defense Council chief Peter Poroshenko, in an ongoing corruption scandal, President Victor Yushchenko fired the entire cabinet of Prime Minister Yulia Tymoshenko. The following day, Tymoshenko denounced the President for betraying the ideals of the "Orange Revolution"—as the fall-winter 2004 movement was packaged—and announced that she would lead a separate slate in next year's parliamentary elections.

Several leaders of the "Orange" movement, which got Yushchenko elected by forcing a re-running of the Presidential election, jumped ship in the first days of September, accusing Yushchenko of failing to crack down on Poroshenko for corruption. Those who quit included Yushchenko's own chief of staff, Alexander Zinchenko, followed on Sept. 7 by Vice Premier Mykola Tomenko, who said, "I don't want to bear common responsibility for people who have created a corrupt system." Behind these lofty sentiments, is a seething battle involving the economic interests of sugar-magnate Poroshenko, fights over the possible de-privatization, and then re-privatization of Ukraine's steel industry, and other economic brawls, many of them involving Russian corporations, as well.

Yushchenko appointed as acting premier Yuri Yekhanurov, an economist who served under former President Leonid Kuchma, then worked closely with Yushchenko on his campaign last year. Serving, most recently, as governor of the Dnipropetrovsk industrial region, Yekhanurov supports Ukraine's remaining in the "Common Economic Space" established by Russia and some other former Soviet countries.

Asked about the Ukraine events during his Sept. 8 press conference in Germany, Russian President Vladimir Putin said he had been in touch with President Yushchenko by phone, and urged against "overdramatization" of the situation.

Putin and Schroeder Sign Gas Pipeline Deal

Meeting Sept. 8 in Berlin, the Russian President and German Chancellor Gerhard Schroeder issued a joint statement, pledging increased cooperation between the two countries in economic relations, especially energy. They watched as representatives of Gazprom, the Russian natural gas giant, and the German companies BASF and E.ON signed the anticipated agreement to go ahead with a new sea-floor pipeline in the Baltic Sea, which will deliver Russian gas directly from Russia to Germany.

Much press coverage of the meeting focussed on its timing, just ten days before the German elections, and on the geopolitical dimensions of the pipeline deal. Radio Free Europe's Paul Goble (a long-time promoter of the destabilization of Central Asia and manipulation of Central Europe, as ways to keep Russia in line), in a recent commentary for RFE/RL Newsline lamented the Vyborg-Greifswald pipeline deal, as showing "Moscow's 'Power' Politics in the Baltics." The pipeline will circumvent Poland and the three Baltic countries (Estonia, Latvia, and Lithuania), whose relations with Moscow are tense, thus decreasing their leverage. In addition, Moscow has made clear that it will raise natural gas prices for customers in Eastern Europe. Negotiations between Gazprom and Ukraine's oil and gas company are stalled right now, because the Russians want to more than triple natural gas prices for Ukrainian purchasers next year.

At a press conference, both Putin and Schroeder spoke with confidence about the economic benefits of the deal, and Putin told jokes and also slipped into speaking German for part of his remarks. The Russian President also spoke emotionally about Germany's aid to Russian pediatric oncologists, as the two leaders announced plans to open a new center in Russia for children with cancer, wholly financed by Russian organizations, but with expertise from Germany. Substantial excerpts of the press conference were aired on Russian state television today.

Putin said that the 1,200-km pipeline will include spurs to Sweden, Finland, and Kaliningrad Oblast (formerly East Prussia, separated from the rest of Russia by the Baltic countries), with options to extend it to the Netherlands and the UK. The first stage of the pipeline is a $2 billion project and will carry 20 billion cubic meters of gas annually; by 2011, it will carry 55 billion cubic meters, with a total construction price tag of $5.7 billion. Putin stressed that the planned volume of Russian natural gas exports to Germany and other major European customers cannot be handled by existing networks. He said, "We are not pushing anybody out of our energy business in Europe; we have the greatest respect for the economic interests of our partners who are transit countries and their geopolitical position, realizing that they should and will play a significant role in Europe's energy dialogue." At the same time, Putin was unapologetic about building the direct pipeline: "We reserve the right to defend our interests." He charged that Ukraine had deep-sixed a planned natural gas consortium of Russia, Ukraine, Germany, France, and Italy. He also made a point that Russia is placing a great priority on extending its pipeline network into the Asia-Pacific region, as well.

Putin also mentioned auto industry cooperation (unfortunately however, in the spirit of globalization: German auto companies will take advantage of Russia's cheap labor by locating assembly plants there); pointed out that Russia's early retirement of its Paris Club state-to-state debt has brought $6 billion to the German treasury; and stressed the importance of youth exchanges. As to whether he were "supporting Mr. Federal Chancellor in the elections," Putin laughed, "You know, I have a meeting planned with Mrs. Merkel. Why don't you think that's support for Mrs. Merkel?" He did meet Merkel at the Russian Embassy, then departed for a visit to Greece.

Putin: Danger of 'Chaotic' Changes in Former Soviet Area

During a two-and-a-half-hour meeting with Western journalists at the Kremlin Sept. 5, President Putin warned against the danger of "chaotic" changes in countries that were part of the Soviet Union, and the Western role in such changes. "We are not against any changes in the former Soviet Union," Putin said, according to British reporters who were present. "We are afraid only that those changes will be chaotic. Otherwise there will be banana republics where he who shouts loudest wins." If Western countries back such processes, he continued, "Our foreign partners may be making a mistake." He said that he didn't think that Western governments, as such, "either European or the United States, are working against the Russian Federation," but that certain non-governmental organizations, financed by foreign governments, had played a detrimental role in Ukraine and elsewhere.

Putin said that "only an idiot" would imagine that Russia was trying to restore its empire.

He insisted that he will not attempt to run for a third term in 2008, which would be against the present Russian Constitution.

Putin: Relations with China Best in 40 Years

In his Sept. 5 discussion with foreign press and analysts, President Putin said that Russia's relations with China are currently better than they have been in 40 years. The previous day, Putin spoke by phone to Chinese President Hu Jintao. In the discussion, the Presidents "praised the success of the first Russian-Chinese joint military exercise in history, which serves as clear evidence of solid partnership between the two countries," a Kremlin press release said.

More Sino-Russian diplomacy took place in Moscow the first week of September (see Asia Digest).

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