Issue 31

THE BRETON/GEROL NEWSLETTER

EUROPE'S NEW FACE:-REFLECTION OF A GLOBAL TREND

Viktor Orban

Elections in the European parliament in May brought expected yet impressive results. Almost 170 of the elected members (25% of the highest European political body) will belong to the so-called "Euro-skeptics", predominately right wingers, populists and various nationalists. The more stunning success belongs to Nigel Farage and his party which summarizes all of his agenda in one word: Brexit. He got 30 seats in the Euro parliament, more than the traditional pillars of the British politicum, Labour and the Conservatives.

Matteo Salvini

It is widely agreed that two political leaders have become the founding fathers of the growing movement of Euro skeptics: Viktor Orban, Prime Minister of Hungary and Matteo Salvini, Vice Premier of Italy. They were the most active in resisting the so-called progressive ideology of the EU with its unlimited immigration, mandatory immigrant and refugee quotas imposed by Brussels on each member state. Coincidentally or not, both Salvini, Orban, Austrian Chancellor Kurtz and some others who belong to this 25% of the new make up in the EU Parliament also would like to put an end to anti-Russian sanctions imposed on Moscow since 2014. Rather the reflection of any special affinity, this seems more a case of rejecting failing traditional policies.

From Australia to Europe and on to the US and maybe even to Canada (the October 2019 election will tell if this is so) this trend is taking over. Not exclusively but in many ways we are witnessing popular rejection and fatigue with Justin Trudeau-like yoga mat policies and overly politicized dogmas.

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PRESIDENT ZELENSKY

President Zelensky at the front line positions of the Armed Forces of Ukraine in Luhansk region, May 27th
©President of Ukraine Website

Volodimir Zelensky’s inaugural speech as President of Ukraine contained a rather punchy line about his willingness to sacrifice his popular rating in order to do the right thing. The short clip that was shown on some television channels did not always establish clearly that it was in connection with the conflict with the rebels in Eastern Ukraine that he was making the statement. Zelensky has made it one of his priorities to put an end to the armed conflict in that region, thus shifting the emphasis from the conduct of what Poroshenko called at some point an Anti-Terrorist Operation to a conflict resolution process. Zelensky also went further by arguing that it is not so much the rebel-occupied territory that Kyiv must regain but also the minds of the people living in that territory. How Zelensky proposes to go about this peace-making and reconciliation is not yet clear. Politically, there can no real or perceived concession in favour of Moscow and Vladimir Putin. Some form of accommodation with the rebel regions had also been considered as a non-starter under the Poroshenko presidency and perhaps even more with the Parliament that was just dissolved by Zelensky. Although the main motives invoked to call early elections were the parliamentarians’ focus on self-enrichment and the population’s loss of confidence towards them, having a parliament that is more in line with the new president on the key issue of how to deal with the Donbass problem is of vital importance. At this stage, Zelensky does not necessarily need a parliament that fully shares his views on this issue, but at least one that is not on the record as rejecting virtually any kind of arrangement with the rebel regions.

President Zelensky with the Foreign Minister of Germany Heiko Maas
and the Foreign Minister of France Jean-Yves Le Drian, May 30th, Kyiv
©President of Ukraine Website

Although Zelensky has been described as a political novice, this should not be taken to mean that he cannot play a good political game. His quick decision to reinstate Mikheil Saakashvili’s Ukrainian citizenship is not only the fulfillment of an electoral promise. It is also a rather clever way of broadening the support he would enjoy in the new parliament. Saakshvili is already back in Ukraine. He will most likely take an active part in the upcoming parliamentary election campaign and use the opportunity to exact some form of revenge against former President Poroshenko who ran him out of the country. The prospects for Poroshenko’s party were not too bright already. With Saakashvili going after him, they are not getting any better. Saakashvili is also useful to Zelensky in that as the perceived arch-enemy of Vladimir Putin, his return to Ukraine strengthens Zelensky’s credentials as standing in opposition to Putin.

In the first weeks of his presidency, Zelensky is moving quickly to deliver on his electoral platform including the anti-corruption measures, as well as to establish himself as a credible interlocutor. To use the theater analogy, he is creating the décor and doing a well thought-out initial mise en scène. He has already made some significant personnel changes, but does not have the legal authority to remove key players such as the Minister of Foreign Affairs, the Minister of Defence or the Head of the Security Service. He has to ask Parliament to do that. Until he has a Parliament that supports his policies and allows him to select his cast, his effectiveness remains limited.

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EURASIAN ECONOMIC UNION IS ALIVE AND KICKING

The fifth anniversary of the Eurasian Economic Union was marked by a summit of its members in the Kazakhstan capital of Nur-sultan (recently renamed to honour Nursultan Nazarbayev, long time president and also only one of three surviving members of the last Soviet politburo. The other two are Mikhail Gorbachev and Yegor Ligatchev).

The presidents of Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan and the First President of Kazakhstan
May 29th, Nur-sultan, Kazakhstan
©President of Russia Website

The presidents of Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan gathered to discuss the next phase of their countries' integration and further economic development. The Union will probably joined by Tajikistan, Uzbekistan and some associated members as Mongolia and Vietnam. In general the economic growth of the Eurasian Economic Union was at 2.8% annually which is almost in sync with the global growth.  

The Eurasian Economic Union is studiously avoiding getting engaged in a political integration process. Its economic integration initiatives, although not as spectacular, are nevertheless also used as vehicle for modernisation of economic and trade practices, such as for instance customs clearance practices. In this respect, their impact is real and long-lasting.

Former president of Kazakhstan Nursultan Nazarbayev who was bestowed upon the title of "Yelbasy" (father of the nation) by grateful subjects was made also an honorary chairman of the Eurasian Economic Union.

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PERSON OF THE MONTH: THERESA MAY

PM Theresa May announcing her retirement, May 24th
©UK PM Website

Theresa May will be the Prime Minister of the United Kingdom until June 7^th when she will step down. May has been in office since July 2016. The country’s second female Prime Minister after fellow Conservative Leader Margaret Thatcher, May is a highly experienced politician who took over as Prime Minister from David Cameron during a period of political uncertainty following Britain’s referendum approving withdrawal from the European Union. The daughter of a Church of England clergyman, May was ambitious from the very beginning. She went to a local grammar school before going to Oxford University to study geography at St Hugh's College. She embarked on a banking career and a few years hence she joined the Association for Payment Clearing Services. She entered the political arena in the 1980s and served as a councillor for the London Borough of Merton for around eight years. With her political aspirations on the rise, she made attempts to be elected to the House of Commons in 1992 and 1994, albeit unsuccessfully. After her successful election as the MP for Maidenhead in the 1997 general election, her career has been on the upswing. As a politician she favours strict migration laws and is a supporter of same sex marriages.

May's political career was eventually destroyed by all the mess around Brexit as she struggled to find a compromise in the current political climate which is evidently is not very conducive to compromise. This seems to be the sign of our times on both sides of the Atlantic. With our own reputation for stubbornness and secrecy , she struggled not only against stubborn attitudes of parliamentarians towards everything related to it, but also against the multitude of personal political agendas of competing politicians from the opposition and even her own party. It is doubtful that anyone in her place would have fared better. A much clearer analysis of her effort will be possible some time later when those who criticized May would be given a chance to prove that they have better solutions and remedies and that they possess more elastic set of political skills. One can safely bet that they do not, but until they fail as well, it looks like Theresa May will be the obvious scapegoat.

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TROUBLE IN THE BALKANS (AGAIN)

Serbia's president Aleksandar Vučić declared a state of emergency in the border areas with Kosovo, the independent state carved out of Serbia proper in 2008. The formal pretext for the state of emergency was Kosovo's security forces raid not only into part of Kosovo populated by Serbs but, according to Belgrade, also into Serbia territory as well. Kosovo denied entering Serbia, but said its raid was necessitated by the search for criminals on the run. 

There are deeper underlying reasons for the escalation of tensions. President Vučić faces a dilemma: he wants to bring Serbia into the EU in order to speed up its economic development and at the same time for the sake of internal politics he has to exhibit some show of strength towards Albanians in Kosovo. That is why during his militant speech to the nation he hinted that Serbia will be ready to recognize Kosovo independence in exchange for a safe and peaceful border.

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RUSSIA IN THE ARCTIC

Russia has launched a new nuclear-powered icebreaker as it looks to strengthen its position in the Arctic Ocean to capitalize on the region's growing commercial potential. At a launch ceremony in St. Petersburg on May 25, officials toasted the Ural, the third vessel in a plan to reinforce its fleet with some of the largest and most powerful icebreakers ever built.

“They are the ships from new generation icebreakers of that class that we pin our hopes on in exploration of the Northern Sea Route. It is a principally new ship," Russian Deputy Prime Minister Yuri Borisov said at the ceremony.

Ural nuclear ice-breaker
©Rosatomflot

Thawing ice in the Arctic is beginning to give increased access to much of the planet's remaining undiscovered reserves of oil and natural gas and large deposits of zinc, iron, and rare-earth metals, prompting nearby states as well as world powers such as China to rush and claim territory or boost their presence in the region.

Moscow's is locked in a race with rivals Canada, the United States, Norway and China to dominate the Arctic through a corridor running from Murmansk to the Bering Strait near Alaska, a faster route for sea cargo traveling from Asia to Europe.

The two other icebreakers in Russia's Project 22220 series are the Arktika (Arctic) and Sibir (Siberia). Russian President Vladimir Putin has said that Russia's Arctic icebreaker fleet could total 13 or more by 2035.

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LITHUANIA

On May 26^th Lithuanians elected a new president in a runoff vote between two center-right candidates.

The election, which was held alongside the vote for the European Parliament, was won by banker-turned-politician Gitanas Nauseda who defeated Ingrida Simonyte, a lawmaker and former finance minister.

Gitanas Nauseda

Nauseda will succeed Dalia Grybauskaite, who has served the maximum two 5-year terms as Lithuania's head of state since 2009, a Baltic country bordering Russia that is a member of the European Union and NATO.

The election campaign has been dominated by voters' anger over economic inequality and corruption. Nauseda has pledged  to maintain a strict tone toward Russia, saying he would not travel to Moscow to meet with Russian President Vladimir Putin until Russia ends its aggression against Ukraine. He may, however, not be such a vocal critic of Russia as Grybauskaite.

Vilnius faces tense relations with Moscow. The Baltic country has arrested and charged several people in recent months accused of spying for Russia.

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KAZAKHSTAN

Tyson Foods, the largest U.S. meat producer, says it is planning expansion into Kazakhstan as it seeks growth overseas.

"We've visited Kazakhstan and have interest in the nation's future food-production efforts. However, we have not formalized plans for a project there," company spokeswoman Liz Croston said in a statement on May 23.

The Arkansas-based company produces beef, pork, chicken, and processed foods, including goods for export. Its poultry subsidiary, Cobb-Vantress, has a presence in Russia."One of our growth strategies is to expand our global business, so it's not unusual for us to consider various international opportunities," she said in a statement e-mailed to RFE/RL.

The Financial Times reported on May 23 that Tyson was negotiating a multibillion-dollar investment in beef production in Kazakhstan for potential export to China. The two countries share a nearly 1,800-kilometer border.

Kazakhstan is one of the world's largest wheat producers, and has millions of hectares of arable lands suitable for livestock grazing. However for years the country's agriculture sector lacked  major investments.

In July 2018, Beijing imposed an additional 25 percent tariff on U.S. beef imports in retaliation for U.S. levies on Chinese goods. As a result, U.S. beef exports to China "have dropped off precipitously," the U.S. Department of Agriculture said in an August 2018 report.

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TURKMENISTAN

Russia's state-owned energy giant Gazprom says it has resumed imports of natural gas from Turkmenistan that it stopped three years ago. Turkmengaz confirmed the move. No details were given about the amount of gas that Russia would buy or at what price.

Russia was once the leading importer of Turkmen gas until it was displaced by China in 2010.

Relatively cheap imports of gas from Turkmenistan and other Central Asian countries enabled Russia to boost its exports to Europe.

In 2015, Gazprom announced its intention to cut imports of Turkmen gas to 4 billion cubic meters per year, down from the 10 billion level that it had been importing since 2010.

The move was followed by a complete halt in 2016, putting significant pressure on Turkmenistan's economy, which is highly dependent on hydrocarbons as a source of hard currency. Russia's purchase halt came after the collapse of hydrocarbon prices in 2014.

The move also came as relations between Moscow and the former Soviet republic became increasingly strained by a competition to supply the large Chinese gas market.

Turkmenistan owns the world's fourth-largest known reserves of natural gas, but has limited infrastructure to export its energy resources.

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ARMENIA

Armenian Prime Minister Nikol Pashinian has called for a radical reform of the country's judiciary, contending that many courts have lost their legitimacy and too many judges are beholden to the country's former authorities.

Pashinian said in a speech at a conference attended by Armenia's military, judicial, and political leaders on May 20th that while the country had formed legitimate executive and legislative branches of power in the last year, the judicial system remained under the influence of the former "corrupt government." He described his plan for judicial reform as the "second phase" of the bloodless revolution that swept him to power a year ago. Pashinian said that all judges whose rulings were found unlawful by the European Court of Human Rights must be dismissed and that he was willing to consider constitutional amendments to bring about the necessary reforms.

Pashinian, who came to power after leading a wave of nationwide protests last spring against longtime leader Serzh Sarkisian, said that all judges must now be subjected to a “vetting process” that will reveal whether they can serve as impartial arbiters.

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LATVIA

Egils Levits

Egils Levits descendant of Holocaust victims was elected as president of Latvian Republic. It has to be noted that Latvia has a sad distinction of having second largest per capita number of Jews murdered during the WW II (out of  116.00 Jews in Latvia in 1939 only 18.000 survived). Latvian society lived for a long time in the shadow of this horrific history and often failed to come to terms with it. Election of Levits in many ways is an important symbolic step towards forgiveness and reconciliation.

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THE AUTHORS

Ilya Gerol, former foreign editor of the Citizen in Ottawa, syndicated columnist in Canadian, US and European media specializing in international affairs. His particular area of expertise includes Russia, Eurasian Economic Union, Eastern and Central Europe.  Ilya Gerol has written several books, one of them, The Manipulators, had become a textbook on relations of media and society.

During his career in the Canadian Foreign Service, Gilles Breton had three assignments at the Canadian Embassy in Moscow. His first posting there began during the Soviet period, in 1983. His last was from 2008 to 2012 as Minister-Counsellor and Deputy Head of Mission. He also served as Deputy Director responsible for Canada’s relations with Russia from 2000 to 2008. As an international civil servant, he was Deputy Director of the OSCE Office for Democratic Institutions and Human Rights in Warsaw from 1994 to 1997.

Gilles Breton also currently serves as Chairman of the National Board of the Canada-Eurasia-Russia Business Association. The views expressed in this newsletter exclusively reflect the opinion of the authors.