Russia Proposes Plan to Counter NATO as EU Considers Sanctions

Published on 28-08-2008

http://www.blacklistednews.com/news-1288-0-22-22--.html


Source: Bloomberg

Russian President Dmitry Medvedev proposed expanding a security alliance with China and Central Asia to counter NATO, as the European Union considered sanctions for its recognition of breakaway Georgian regions.


The alliance, known as the Shanghai Cooperation Organization, ....has grown much stronger recently,'' Medvedev said today at a meeting in the Tajik capital Dushanbe. ....It's an authoritative organization that commands respect.'' The group has attracted interest from a number of countries and will consider adding new members, he said.


Relations between Russia, the world's largest energy supplier, and the West reached a post-Cold War low this month over the military conflict in Georgia. Russia ignored calls by the U.S. and its allies and recognized the Georgian regions of Abkhazia and South Ossetia as independent states two days ago.


Speaking today in Paris, French Foreign Minister Bernard Kouchner said European Union leaders will discuss sanctions against Russia at a Sept. 1 summit called to consider a response.


....Some will propose sanctions, others will be against,'' said Kouchner, whose country holds the EU's rotating presidency. ....Sanctions will certainly be brought up'' at the meeting, which will be held in Brussels.


U.K. Foreign Secretary David Miliband yesterday accused Russia of trying ....redraw the map'' of Europe. Russia's five-day war with Georgia and its recognition of Abkhazia and South Ossetia ....ended the post-Cold War period of growing geopolitical calm in and around Europe,'' Miliband said in the Ukrainian capital Kiev.


Ukraine Call

Ukraine today called on the EU to recognize it as a potential future member, seeking closer ties with the West as a bulwark against a reassertive Russia after the war in Georgia.


....What we would like to obtain is a political signal that the future of Ukraine lies with the European Union,'' Deputy Foreign Minister Kostyantyn Yelisyeyev told reporters in Brussels.


Russia's invasion shattered Europe's security arrangements and should force the EU to rethink its opposition toward expanding further into former Soviet territory, he said.


For his part, Medvedev is looking toward China and the Shanghai-based group to strengthen its geopolitical influence.


In addition to Russia and China, the seven-year-old SCO includes the former Soviet republics of Tajikistan, Uzbekistan, Kyrgyzstan and Kazakhstan. The group may decide today to admit either India, Iran, Pakistan or Mongolia, which have ....observer'' status, Medvedev said.


Countering NATO

....Expanding the group would realize Russia's goal of turning the SCO into an anti-American, anti-NATO counterweight,'' said Yevgeny Volk, an analyst in Moscow for the Washington-based Heritage Foundation research group. ....It comes as a result of western criticism of Russia for its military action in Georgia and for recognizing the breakaway regions.
''

Russian Foreign Minister Sergei Lavrov said the eastward expansion of the North Atlantic Treaty Organization is to blame. ....The completely unfounded and unjustified expansion of NATO is leading to this kind of division'' of Europe, he told reporters in Dushanbe.


To contact the reporters on this story: Lyubov Pronina in Dushanbe via the Moscow newsroom at lpronina@bloomberg.net; Alex Nicholson in Moscow at anicholson6@bloomberg.net.

Russia may cut off oil flow to the West


By Ambrose Evans-Pritchard
Last Updated: 10:39am BST 29/08/2008
Telegraph. UK


Fears are mounting that Russia may restrict oil deliveries to Western Europe over coming days, in response to the threat of EU sanctions and Nato naval actions in the Black Sea

Any such move would be a dramatic escalation of the Georgia crisis and play havoc with the oil markets

Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for a supply cut to Germany and Poland through the Druzhba (Friendship) pipeline.
It is believed that executives from lead-producer LUKoil have been put on weekend alert

"They have been told to be ready to cut off supplies as soon as Monday," claimed a high-level business source, speaking to The Daily Telegraph.
Any move would be timed to coincide with an emergency EU summit in Brussels, where possible sanctions against Russia are on the agenda


Russian President Dmitry Medvedev may use the oil weapon

The latest from Georgia
Should we fear a new Cold War?
Any evidence that the Kremlin is planning to use the oil weapon to intimidate the West could inflame global energy markets.
US crude prices jumped to $119 a barrel yesterday on reports of hurricane warnings in the Gulf of Mexico, before falling back slightly

Global supplies remain tight despite the economic downturn engulfing North America, Europe and Japan.
A supply cut at this delicate juncture could drive crude prices much higher, possibly to record levels of $150 or even $200 a barrel

With US and European credit spreads already trading at levels of extreme stress, a fresh oil spike would rock financial markets.
The Kremlin is undoubtedly aware that it exercises extraordinary leverage, if it strikes right now

advertisementSuch action would be seen as economic warfare but Russia has been infuriated by Nato meddling in its "backyard" and threats of punitive measures by the EU.
Foreign minister Sergei Lavrov yesterday accused EU diplomats of a "sick imagination"

Armed with $580bn of foreign reserves (the world's third largest), Russia appears willing to risk its reputation as a reliable actor on the international stage in order to pursue geo-strategic ambitions

"We are not afraid of anything, including the prospect of a Cold War," said President Dmitry Medvedev

The Polish government said yesterday that Russian deliveries were still arriving smoothly. It was not aware of any move to limit supplies.
The European Commission's energy directorate said it had received no warnings of retaliatory cuts

Russia has repeatedly restricted oil and gas deliveries over recent years as a means of diplomatic pressure, though Moscow usually explains away the reduction by referring to technical upsets or pipeline maintenance

Last month, deliveries to the Czech Republic through the Druzhba pipeline were cut after Prague signed an agreement with the US to install an anti-missile shield. Czech officials say supplies fell 40pc for July.
The pipeline managers Transneft said the shortfall was due to "technical and commercial reasons"

Supplies were cut to Estonia in May 2007 following a dispute with Russia over the removal of Red Army memorials. It was blamed on a "repair operation". Latvia was cut off in 2005 and 2006 in a battle for control over the Ventspils terminals.
"There are ways to camouflage it," said Vincent Sabathier, a senior fellow at the Centre for Strategic and International Studies in Washington

"They never say, 'we're going to cut off your oil because we don't like your foreign policy'"

A senior LUKoil official in Moscow said he was unaware of any plans to curtail deliveries.
The Kremlin declined to comment

More from Ambrose Evans-Pritchard
More oil news
London-listed LUKoil is run by Russian billionaire Vagit Alekperov, who holds 20pc of the shares. LUKoil produces 2m barrels per day (b/d), or 2.5pc of world supply.
It exports one fifth of its output to Germany and Poland

Although Russia would lose much-needed revenue if it cut deliveries, the Kremlin might hope to recoup some of the money from higher prices. Indeed, it could enhance income for a while if the weapon was calibrated skilfully. Russia exports roughly 6.
5m b/d, supplying the EU with 26pc of its total oil needs and 29pc of its gas

A cut of just 1m b/d in global supply – and a veiled threat of more to come – would cause a major price spike

It is unclear whether Saudi Arabia, Kuwait or other Opec producers have enough spare capacity to plug the shortfall. "Russia is behaving in a very erratic way," said James Woolsey, the former director of the CIA.
"There is a risk that they might do something like cutting oil to hurt the world's democracies, if they get angry enough"

Mr Woolsey said the rapid move towards electric cars and other sources of power in the US and Europe means Russia's ability to use the oil weapon will soon be a diminishing asset.
"Within a decade it will be very hard for Russia to push us around," he told The Daily Telegraph

It is widely assumed that Russia would cut gas supplies rather than oil as a means of pressuring Europe. It is very hard to find alternative sources of gas. But gas cuts would not hurt the United States.
Oil is a better weapon for striking at the broader Western world

The price is global.
The US economy could suffer serious damage from the immediate knock-on effects

While the Russian state is rich, the corporate sector is heavily reliant on foreign investors.
The internal bond market is tiny, with just $60bn worth of ruble issues

Russian companies raise their funds on the world capital markets. Foreigners own half of the $1 trillion debt. Michael Ganske, Russia expert at Commerzbank, said the country was now facing a liquidity crunch. "Local investors are scared. They can see the foreigners leaving, so now they won't touch anything either.
The impact on the capital markets is severe," he said

Och reaktionen från europeiska media dröjde inte länge.... vilket var väntat, frågan är om vår Calle Bildt också skruvar ner volymen beträffande ansvaret för Georgienpastejen.


OSCE report points finger at Georgia for S. Ossetia crisis

Mature
30/ 08/ 2008


BERLIN, August 30 (RIA Novosti) - The Organization for Security and Cooperation in Europe has accumulated evidence pointing to "numerous wrong decisions" made by Georgian leaders that led to a military crisis with Russia, Der Spiegel said on Saturday.


In a report to be published in its Monday edition, OSCE military observers in the Caucasus described detailed planning by Ge More..orgia to move into South Ossetia which contributed to the crisis, the German magazine said.


The report also backed up Russian claims that the Georgian offensive was already in full swing by the time Russian troops and armored vehicles entered the Roksky Tunnel, on the border with Russia and South Ossetia, to protect its peacekeepers and the civilian population.


The OSCE report also contains suspected war crimes committed by Georgians, who ordered attacks on sleeping South Ossetian civilians.


Georgia attacked South Ossetia on August 8 in an attempt to regain control over the separatist republic, which split from Tbilisi in the early 1990s.


Most people living in South Ossetia have Russian citizenship and Moscow subsequently launched an operation to "force Georgia to accept peace." The operation was concluded on August 12.


Russian President Dmitry Medvedev signed decrees Tuesday recognizing South Ossetia and Abkhazia as independent states and called on other countries to follow suit.


Russia has accused Georgia of committing "genocide" by launching the offensive in South Ossetia. Russia is calling for an international war crimes trial for the Georgian leadership, which Moscow says is responsible for massive loss of life in South Ossetia.



Link:
http://en.rian.ru/world/20080830/116412855.html

Russia: Europe will have severe problems with fuel


Brödtext: http://english.pravda.ru/russia/econo ... 08/106243-russia_europe-0

If EU introduces sanctions against Russia, Europe will have severe problems with fuel

French Foreign Minister Bernard Kouchner stated that the European Union would be discussing two variants of sanctions against Russia at a forthcoming summit. The Polish variant stipulates the introduction of rather tough measures, whereas the Italian variant contains only abstract criticism of Russia’s actions.


The tough variant of the document stipulates the introduction of financial and economic sanctions against Russia. According to this draft resolution, the EU may recommend large business to cut its financial investments in Russia and recognize the Russian market as highly unstable and risky. To make matters worse, the European Union may recommend European banks not to loan up Russian banks and companies.


Moscow hopes to conduct negotiations with several of its European partners in an attempt to push them to abstract formulations and abstain from sanctions.


The talks will most likely be conducted with Moscow’s potential allies – Germany, Italy, Spain, France and Finland. Russia may offer these countries a change of the Russian stance on the Iranian problem and economic preferences in return to their support.


Europe may suspend the talks on the partnership and cooperation agreement and activate efforts aimed to diversify fuel shipments to Europe.


The first measure does not seem to be of much importance to Moscow, although the second one can be quite dangerous. Russia may have severe problems with its gas pipeline projects known as the Northern Stream and the Southern Stream. In addition, Europe will most likely decide to accelerate the implementation of the Nabucco project that will deliver Caspian hydrocarbons to Europe bypassing Russia.


If Europe eventually decides to introduce sanctions against Russia, at least one Russian oil company may reduce crude shipments to Europe at Russian government’s request.


Russia may cut its oil shipments particularly to Poland and Germany. A reduction may occur already on September 1, Reuters reported with reference to British media. It is worthy of note that Prime Minister Putin stated in his recent interview with CNN that Moscow would not reduce its oil and gas shipments to Europe because Russia depends on its customers, just like the customers depend on Russia’s resources.


Russia’s Foreign Minister Sergei Lavrov described the idea of European sanctions against Russia as “a product of ill imagination.” Russia’s ambassador to the European Union, Vladimir Chizhov, urged the EU to abstain from the sanctions against Moscow.


It has just been reported that the European Union leaders will not decide on sanctions against Russia at a summit Monday in Brussels.


A high-ranking official in President Nicolas Sarkozy's office says that for now "we don't foresee any sanctions decided on by the European Council,” the AP reports.


The official acknowledges that some countries are pushing for sanctions against Russia over its crisis with Georgia. But Sarkozy's office believes Europe must concentrate now on pressuring Russia to apply a cease-fire agreement. France currently holds the EU presidency. The official spoke Friday on condition of anonymity because of office policy. He elaborated on remarks by France's foreign minister, who has said sanctions were being considered.

I thought about the OIL card being played when I heard Germany needed oil from Russia.

Ah ha! So later on we can create the new cold war, the big Russian Bad guys...