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Putin's other Cronies

Posted by Martin Cohen, August 2014

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Or how the law of unintended consequences made a virtuous campaign to reduce coal consumption led instead to a new Cold War

How did the new Cold War start? Like so many wars before it, energy seems to be have been the real cause of the conflict. And until we recognise the real causes, we certainly can't expect to find the right solutions.

August 29 2014, and just hours after Barack Obama (not a Putin crony but certainly someone who used to see the Russian leader as 'one of the folks') accused Russia of openly sending troops into Ukraine, Putin's response included a pointed reference to the Arctic. The link in his mind is straightforward and logical - the potential energy reserves of a thawing Arctic. "Our interests are concentrated in the Arctic. And of course we should pay more attention to issues of development of the Arctic and the strengthening of our position", the Russian leader told a gathering of his 'Nashi youth*' outside Moscow.

Back in Europe though, with thousands of civilians dead, an airline shot down and tens of thousands of Russian troops apparently poised to march into Ukraine, the search has unsurprisingly been on for 'Putin's cronies'. According to the recent European Union and State Department lists, these are an unappealing collection of Russian oligarchs, whose naming will likely cause few ripples - but if the Ukrainian conflict becomes a full-scale war, then when history is written the names that feature on the list will be much more familiar. At the top will surely be the former German Chancellor, Gerhard Schroeder.

It is Mr Schroeder who almost single-handedly upset the delicate balance of power in Eastern Europe though his upturning of the energy markets. As one well-placed analyst has put it, it is possible to say ironically that if Gerhard Schroeder did not need a plum job, Nord Stream would not perhaps have come into existence. Nord Stream is the outrageously, indeed pharaonic project of the Germans to obtain gas supplies direct from Russia at the expense of their neighbours. The Polish minister, who described Nord Stream as a ‘new Molotov-Ribbentrop pact’, was only stating the literal truth. The emerging European energy map reveals two empires: German and Russian.

A second name on the list should surely be Madame Merkel herself, said to be concerned that Vladimir has lost touch with reality, but who (at least up until the shooting down of the Malaysian airways plane) has seemed surprisingly content to see a new Iron Curtain fall across the East.

Mind you, it is not just the Germans who will have some explaining to do to history. What about Bulgaria, whose Prime Minister Sergey Stanishev, was so happy to be invited to Moscow to discuss the construction of the Burgas-Alexandroupolis pipeline, designed to increase Russia's oil supplies to Europe by an annual 30 million tons - and to be another nail in the coffin of European energy independence.

But it is tiny Slovakia, with a population about the same as Manchester, that holds the keys to setting Eastern Europe free of the Russian Bear. As the main transportation hub for Russian energy headed to Europe, Slovakia's management of the pipelines provides the key to Russian energy dominance of Europe. Remember those EU pledges to pipe back gas to Ukraine if the need arose, earlier this year? Yet barely a trickle arrived? Slovakia certainly was responsible for that.

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In recent months the New York Times (which means the CIA) has pointed the finger at Slovakia's left-wing leader, Robert Fico, suggesting that he (like Schroeder) is a Putin crony caught with greedy fingers in the energy pie. Slovakia, who was signing up for new Russian nuclear reactors, and locking itself ever tighter into Russian gas. But here, I don't agree.

Instead, I think the truth is more nuanced. Fico angrily denounced unspecified Western European players for leaving him, and Slovakia, isolated and exposed for having had the effrontery to annoy Gazprom. The truth is that with energy, the links are often tortuous and the connections complex. Who killed off the European project to obtain non-Russian gas? Who blocked the extraction of shale gas? Which investors were selling off which bits of which network? And why was BP boss, Bob Dudley so keen to keep investing in Russia, even after its stake in Rosneft, run by Putin associate Igor Sechin, (its biggest single foreign investment in Russia’s oil industry) fell by $849 million overnight in March this year? Even now, Total boss Christophe De Margerie seems quietly confident of business as usual with Russia and a huge natural gas project in Siberia...

The list of Putin's cronies, if it ever became known, would certainly be a long one.

*Although 'Nashi' sounds like Nazi, and the movement is violently opposed to all the old Nazi targets, from Jews and homosexuals to gypsies and 'weird artists' the name merely means 'Ours' in Russian. But then the sense of other regions rightly being 'Ours' is part of the Russian problem.


1. As SPIEGEL ONLINE reported December 12, 2005. In his 'Letter from Berlin: Schröder to Build Putin's Pipeline' Marc Young wrote: "Former German chancellor Gerhard Schröder has caused an uproar by accepting a job with Russian-German consortium building a gas pipeline under the Baltic Sea. The deal was only signed in September — two weeks before the elections that led to Schröder's retirement from politics — giving the whole affair an aura of unsavory favouritism."

2. See the EU news site, Euractiv.com, [WWW]http://www.euractiv.com/sections/energy/bulgarias-government-collapse-over-south-stream-302702 for more on the political controversies within Bulgaria over Russian gas

3. See 'Kiev Struggles to Break Russia’s Grip on Gas Flow' By Andrew Higgins, MAY 4, 2014
[WWW]http://www.nytimes.com/2014/05/05/world/europe/gazprom-seen-stanching-flow-of-gas-to-ukraine.html

4. As Bloomberg's Brian Swint asked Mar 3, 2014, see 'BP’s $849 Million Loss in Russia Overnight Highlights Risk', [WWW]http://www.bloomberg.com/news/2014-03-03/bp-s-1-billion-loss-in-russia-overnight-highlights-rosneft-risk.html


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2014-08-14 21:15:54   Actually, I should update this already to stress that a recent survey found that the great majority of Germans are very unhappy with what they see as a betrayal of post-war Europe by Russia, and are prepared to make considerable (economic) sacrifices in support of their principles too. It's the cronies not the people! —docmartin


2014-08-23 12:46:20   Op-Ed news watchers will be interested to see that this content was banned from the site even as it 'headlined' a ridiculous story about the Ukrainian airforce having shot down the Malaysian jet. The site seems to be basically the plaything of Rob Kall, who calls himself "editor-in-chief, publisher and site architect" not to forget, President of Futurehealth, Inc, "and an inventor". An inventor of stories, perhaps? —docmartin


2014-09-19 10:49:09   Yes, we've heard a lot about France's warships for Putin, reluctantly put on hold ("but not cancelled") - but isn't it curious that Total are so confident of their ability to keep dealing with Russian firms already on the US sanctions list? Reassuring contact and cozy links within the French establishment... —docmartin

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