Tag Archives: Crimea

#Economy: Russian execs fear lasting damage from plane crash


FILE - In this Monday, July 21, 2014 pool file photo Russian President Vladimir Putin listens during a meeting in Samara, Russia. Having for months dismissed Western sanctions on Russia as toothless, business leaders here are now afraid that the crash of the Malaysian jetliner will bring about an international isolation that will cause serious and lasting economic damage. The U.S. and EU are still playing something similar to “good cop, bad cop” with Russia, said Chris Weafer of the Moscow-based Macro-Advisory, but it remains to be seen whether the Malaysian plane crash will be a game changer for Russia’s economy. (AP Photo/RIA-Novosti, Alexei Nikolsky, Presidential Press Service, File)FILE – In this Monday, July 21, 2014 pool file photo Russian President Vladimir Putin listens during a meeting in Samara, Russia. Having for months dismissed Western sanctions on Russia as toothless, business leaders here are now afraid that the crash of the Malaysian jetliner will bring about an international isolation that will cause serious and lasting economic damage. The U.S. and EU are still playing something similar to “good cop, bad cop” with Russia, said Chris Weafer of the Moscow-based Macro-Advisory, but it remains to be seen whether the Malaysian plane crash will be a game changer for Russia’s economy. (AP Photo/RIA-Novosti, Alexei Nikolsky, Presidential Press Service, File)

MOSCOW (AP) — Having for months dismissed Western sanctions on Russia as toothless, business leaders here are now afraid that the crash of the Malaysian jetliner will bring about an international isolation that will cause serious and lasting economic damage.

Throughout the Ukrainian crisis, U.S. and European sanctions had mainly targeted a handful of individuals, sparing economic ties. Then last week the U.S. imposed penalties on some of Russia’s largest corporations. And when the airliner was shot down just a day later in Ukraine, allegedly by separatists with Moscow’s support, concern grew in Russia that the sanctions would only get worse as President Vladimir Putin showed little sign of cooperation.

“Over the past few months, there was a sense that Mr. Putin acted decisively, forcefully, and correctly, and that everybody else in the world would accommodate themselves to that reality and we’d get back to something like business as usual,” said Bernard Sucher, a Moscow-based entrepreneur and board member of Aton, an independent investment bank. “Now we’re talking about real fear.”

When Russia annexed Crimea in March, triggering a deep freeze in relations with the West, stock markets in Russia dropped but later rebounded as investors understood that the country’s lucrative trade relations would remain largely unscathed. Europe, which is in frail economic health, dared not block energy imports from Russia or the trade in goods such as cars or heavy machinery. Oil companies like BP and ExxonMobil continued their operations in Russia, with some even signing new deals.

The U.S. took a tougher stance, but until last week was also careful to limit sanctions to asset freezes on individuals who were perceived to have had a hand in supporting eastern Ukraine’s insurgency.

On July 16, the night before the Malaysia Airlines jet crash, Russian markets appeared to have fully recovered from the crisis in Ukraine, with the MICEX benchmark index adding roughly 23 percent since March 1.

Then last week, the U.S. announced new sanctions that had investors in Russia fear a turn for the worst. The U.S. shut off its financial markets for a broad swath of defense companies as well as Russia’s largest oil company, Rosneft, gas producer Novatek, which is half-owned by a close Putin ally, and a major bank, VEB. The move offered investors a glimpse of what they had thought would never happen: serious international isolation of Russia’s powerhouse corporations.

According to Alexis Rodzianko, president of the American Chamber of Commerce in Russia, those sanctions were the first to really pack a punch because they were “broader and more specific: they went beyond the symbolic.”

Rodzianko said anecdotal evidence suggests that in some cases investment decisions have been delayed “particularly when people were just considering coming in to the market.”

When the Malaysian airliner went down one day later, investors worried conditions would only get worse.

The stock market has fallen 5 percent since Thursday last week. That is expected to see investors keep pulling money out of the country. They withdrew $74.6 billion in the first six months of the year, a figure forecast to reach $100 billion for the whole of 2014 — almost twice the $60 billion in withdrawals seen last year. Continue reading

Russia may ask rich to help foot bill for Crimea with ‘solidarity tax’


People enjoy the sun by the seaside on a beach some 40 km of the Crimean capital Simferopol, on June 29, 2014.  © AFPPeople enjoy the sun by the seaside on a beach some 40 km of the Crimean capital Simferopol, on June 29, 2014. © AFP

(Reuters) – Russia could ask its richest citizens to help foot the bill for the annexation of Crimea by paying a “solidarity tax” proposed by a group of lawmakers.

Deputies from the State Duma lower house of parliament, which is dominated by backers of President Vladimir Putin, have drawn up a draft law that would increase income tax for people earning more than more than 1 million roubles ($28,700) a month.

It would affect less than 2 percent of the working population but the amounts could be huge for some individuals because the draft proposes they pay up to 30 percent of their earnings compared to the current flat rate of 13 percent.

“The main goal is to support regional budgets and that means also the budget of Russia’s new territories,” Andrei Krutov, the deputy leading the planned legislation, told Reuters.

His reference to the “new territories” made clear that a key intention was to help the government pay for Crimea’s absorption into Russia.

The Black Sea peninsula was annexed in March, an action seen by most Russians as righting what they considered a historical wrong by late Soviet leader Nikita Khrushchev who gifted Crimea to Ukraine in 1954, long before the Soviet Union collapsed.

The need to help support Crimea’s economy and its 2.3 million population has put a new strain on Russia’s federal budget at a time when the country is sliding towards recession.

Some state employees say they have already been asked to donate a day’s pay to help Crimea – a demand some have balked at.

The Finance Ministry has also suggested personal income tax may have to be increased by 1-2 percent to help cover the costs and the government had already heard calls for Russia to introduce a progressive taxation mechanism.

Krutov said the draft law could be a step in that direction and played down the impact on society.

“The social burden would be minimal and the influx of cash to the budget would be significant,” Krutov said. “The economic reality and international experience increasingly show that progressive taxation is a step that Russia needs to make in the near future.”

He said the draft could go to a vote in the autumn and, if approved, could bring in 300 billion to 500 billion roubles ($8.6 billion to $14.30 billion) a year.

The small group of Russia’s rich accounts for more than a third of total personal income in the country, according to data from Federal Tax Service.

Criticism of the proposal has so far been muted – critics would risk sounding unpatriotic and uncharitable as the annexation of Crimea is widely supported and has boosted Putin’s ratings.

But an instant online poll by Snob magazine, which is aimed at the wealthy, showed 66 percent of respondents did not support the idea of a solidarity tax.

Reuters.

NY Daily News: The games Putin plays #MH17


“The country that denied invading Crimea now says it had nothing to do with the downing of the Malaysian jet” – Michael Weiss

Russian President Vladimir Putin

Evidence that Kremlin-backed separatists in east Ukraine downed Malaysia Airlines Flight MH17 is now so overwhelming as to rule out any other culprit, at least outside the imaginations of conspiracy theorists or professional Kremlin propagandists.

For months, Russian President Vladimir Putin has waged maskirovka warfare in east Ukraine – an old, Soviet-perfected model of destabilizing foreign countries which is characterized by dissimulation, misdirection and plausible deniability, all done with the use of arms-length proxies.

Putin, a former KGB lieutenant colonel, continues to maintain that he has nothing to do with the separatists even as their political leadership has lately visited Moscow begging for more materiel and even opened a satellite office there to coordinate their activities more closely with their master and patron. It also pays to remember that Putin denied invading and annexing Crimea – until he didn’t.

U.S. officials, including one from the Defense Department, have confirmed to the Wall Street Journal that the separatists – many of whom are in fact Russian nationals – downed the commercial airliner over the skies of the separatist-controlled region of Donetsk on July 17 using the Buk anti-aircraft missile system. This is a Soviet-era, vehicle-mounted munition with a range of 46,000 feet. The MH17 was blown apart at an altitude of 33,000 feet.

The separatists, who have previously claimed credit for shooting down Ukrainian military planes and helicopters, said they haven’t got the capability to hit an aircraft at the MH17′s altitude. Except that they admitted, albeit privately and inadvertently, that they’d done just that.

The Ukrainian Security Service, or SBU, has leaked a series of what it alleges are intercepted phone conversations from the separatist camp. In one, recorded in the aftermath of the tragedy, a separatist commander named Igor Bezler (or “Bes,” meaning “Demon”) tells Colonel Vasyl Geranin, a man whom the SBU says is an officer of Russia’s military intelligence agency, or GRU: “Just now a plane was hit and destroyed by the Minera Group,” referring to a rebel unit.

A week ago, Bezler admitted in a recorded “press conference” held in Donetsk that separatists had received tanks and armored vehicles from Russia for the purpose of defending Slavyansk, a city that recently was retaken by Ukraine’s military.

Western intelligence officials have told the Financial Times that they have judged the SBU intercepts to be genuine.

Defense experts say that there is no way ragtag insurgents could operate a surface-to-air missile as sophisticated as the Buk. But the rebels are not quite ragtag insurgents.

Their self-proclaimed military commander is a man named Col. Igor Strelkov (also known as Girkin). According to the European Union, which sanctioned him in April, Strelkov is also an officer of the GRU. This means that the entire anti-Kiev insurgency is not just pro-Russian in orientation but overseen and led by an outed Russian spy.

This is a crucial fact that has been obscured in much of the recent media coverage of the war for east Ukraine and just who’s involved in waging it. Samantha Power, the U.S. ambassador to the United Nations, said yesterday: “Russia can end this war.” What she meant was, the separatists are a wholly owned, if not quite wholly operated, subsidiary of the Russian government.  Continue reading

Anne Applebaum: The Malaysia Airlines crash is the end of Russia’s fairy tale


Pavel Gubarev, the Russian-backed leader of the separatist Donetsk People's Republic, walks amid the wreckage of Malaysia Airlines Flight 17 on July 18. © Anastasia VlasovaPavel Gubarev, the Russian-backed leader of the separatist Donetsk People’s Republic, walks amid the wreckage of Malaysia Airlines Flight 17 on July 18. © Anastasia Vlasova

Before there is any further discussion of Malaysia Airlines Flight 17, it’s important that one point be made absolutely clear: This plane crash is a result of the Russian invasion of eastern Ukraine, an operation deliberately designed to create legal, political and military chaos. Without this chaos, a surface-to-air missile would not have been fired at a passenger plane.

From the beginning, the Russian government did not send regular soldiers to Ukraine. Instead, it sent Russian mercenaries and security service operatives such as Igor Strelkov — the commander in chief in Donetsk and a Russian secret police colonel who fought in both Chechen wars — and Vladimir Antyufeyev, the Donetsk “deputy prime minister” who led the Latvian KGB’s attempt to overthrow the independent Latvian government in 1991.

With the help of local thugs, these Russian security men besieged police stations, government offices and other symbols of political authority to delegitimize the Ukrainian state. In this task, they were assisted by the Russian government and by Russia’s state-controlled mass media, both of which still constantly denigrate Ukraine and its “Nazi” government. Just in the past week, Russian reporting on Ukraine reached a new pitch of hysteria, with fake stories about the supposed crucifixion of a child and an extraordinary documentary comparing the Ukrainian army’s defense of its own country with the Rwandan genocide.

Read the story here

Lavrov threatens Ukraine with nuclear weapons in case of war over Crimea


Russian Foreign Minister, Sergey Lavrov

Russian Foreign Minister, Sergey Lavrov promised that Russia will use all forces and means against Ukraine if the latter decides to go to war for Crimea. RIA NOVOSTI reports that Lavrov made this statement on Wednesday after a meeting with his Italian counterpart, Federica Mogherini.

“I would not advise anyone to do that (attack Crimea – Ed.). We have a doctrine of national security; it very clearly prescribes actions that our country must take in such cases.” said Lavrov.

In 2009, the National Security Concept was revised in Putin’s Russia.

According to this concept, Russia has the right to “use all forces and means at its disposal, including nuclear weapons, to repel any armed aggression.”

In March 2014, Russia illegally occupied Ukrainian Crimea, and “included” it in the Russian Federation.

All international organizations, including the UN General Assembly, PACE, OSCE, the U.S., the EU and Ukraine itself have deemed the occupation illegal and recognize Crimea as Ukrainian territory.

Translated by Christine Chraibi | Source.

EUROMAIDAN PRESS