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DISENTANGLING THE MOSCOW-BERLIN AXIS: FOLLOW THE MONEY
Jamestown Foundation ^ | August 1, 2005 | Pavel K. Baev

Posted on 08/01/2005 3:47:12 PM PDT by Tailgunner Joe

Russian foreign policy under Vladimir Putin’s presidency has been generally undetermined and often opportunistic with only one constant: strategic partnership with Germany. This country definitely occupies the central place in Putin’s worldview: those several years he spent in the KGB’s Dresden office in the mid-1980s provided formative experience for the young officer. But that “dream job” ended in disaster: the unforeseen uprising of the “disciplined” East Germans culminated in the breach of the Berlin Wall. In his nightmares, Putin still probably hears that powerful voice: “Wir sind ein volk!” (We are one people) and his fears of “color” revolutions are obviously rooted in the helplessness before those angry crowds. He hoped to exorcise that ghost by embracing Chancellor Gerhard Schroeder with all the warmth of a judo master, but now these personal efforts are close to outliving their usefulness.

Putin inherited well-developed ties: Boris Yeltsin and Helmut Kohl were good friends and still enjoy each other’s company, spending time together this summer on the shores of Lake Baikal (Newsru.com, July 28). The second Russian president, however, has managed to upgrade these ties using every bit of his special training, from fluency in German to the art of winning confidence. Schroeder has become his closest ally and indeed the major asset for presidential foreign policy. Germany has been the main driving force behind the EU efforts at engaging Russia, structured according to the new agreement signed in Moscow in May. In contrast, Berlin was rather reluctant to support the “Orange Revolution” in Kyiv last November and now gives no encouragement to Ukraine in its aspirations to join the EU. Schroeder has refused to see any signs that democratic institutions were under threat in Russia and warned his Western counterparts against offending Putin with excessive criticism. For that matter, when Poland and Lithuania expressed their disappointment at not being invited to the ceremonies marking the 750th anniversary of Koenigsberg/Kaliningrad -- the Russian exclave sandwiched between their territories -- Schroeder calmly confirmed that it was just fine with him (Kommersant, Le Figaro, July 4).

Following this “see-no-evil” line, Schroeder clearly moves against German public opinion, which has grown increasingly critical of Putin’s behavior in high-profile cases from senseless brutality in Chechnya to petty vindictiveness in persecuting businessman Mikhail Khodorkovsky. Seeking to silence pesky critics, the Chancellor often emphasizes the tangible benefits that his friendship with Putin secures for Germany, but the opposition now argues that the only real benefit was Moscow’s support in confronting the United States at the start of the Iraq war, a stance that helped Schroeder to win the elections in 2002 against heavy odds. The Chancellor counters by pointing to the colossal and stable export of Russian oil and natural gas to Germany, but it is rather hard to prove that the top-level friendship has in any way helped to secure these deliveries. In fact, Russia has been putting considerable political effort into expanding its share of every possible European energy market, from Turkey to Italy, so if anybody has benefited from the personal involvement of the two leaders it is probably Gazprom rather than Germany.

There are, however, other rather questionable and mostly hidden benefits that time and again cause sensationalist revelations in the German media. The latest scandal involves Kommerzbank, which is accused of laundering money and fronting the illegal operations of Telekominvest, a Russian company formed back in 1994 in St. Petersburg (Financial Times, July 26; Die Welt, July 27). Leonid Reiman, the founder of the company, is currently Russian Minister for Information Technologies and Communications, and the official who supervised its deals with foreign partners was Vladimir Putin, then deputy mayor of St. Petersburg. The revelations, quite possibly linked to Mikhail Fridman, the owner of Alfa-Group, which is involved in a protracted conflict with Telekominvest, have caused several resignations in Kommerzbank but, most probably, would have no impact whatsoever on Reiman’s position since he maintains close ties with Putin (Vedomosti, July 28).

Following how this little money connects big names may be an exciting exercise, but it could give only a hint about the movement of big German money to Russia. The dismemberment of Yukos and the appropriation of its assets by Rosneft was a very messy affair until this state-owned company received a $7.3 billion-Western credit (Polit.ru, July 28). Gazprom is said to arrange a $12 billion credit for purchasing Sibneft, so that the total accumulated external debt of Rosneft and Gazprom may reach a staggering $44 billion (Nezavisimaya gazeta, July 28). Various creditors are providing this flow of money but at the center of the “teams” Deutsche Bank, Kommerzbank, Dresdner Kleinwort Wasserstein are invariably present. With tacit encouragement of the government, these German giants are financing the concentration of major assets in the Russian economy under the control of Putin’s “team,” which is estimated to preside over a conglomerate of companies valued at $222 billion (Frankfurter Allgemeine, July 27).

The cordial ties between the leaders is thus not the summit of a complex structure of mature political relations, which are basically absent, but the cork in a bottle of stinky subsidies and dirty deals. This brew is going to be released in just a few months with Schroeder’s all but inevitable departure after a well-deserved electoral defeat. Angela Merkel, who leads the coalition of opposition parties, has shown no interest in starting her own “love affair” with Putin but has acknowledged that Russia would remain an important partner (Gazeta.ru, May 27; Lenta.ru, July 22). Some German experts warn that the Moscow-Berlin dialog could be “frozen” for several months (Nezavisimaya gazeta, July 28). During this pause such ambitious projects as the “strategic” gas pipeline under the Baltic Sea could be re-evaluated (Berliner Zeitung, July 26). The truth of the matter is that a reasonable estrangement at the top might be healthy for the relationship by removing the hidden agendas of politicized mini- and macro-funding.


TOPICS: Editorial; Foreign Affairs; Germany; News/Current Events; Russia
KEYWORDS:
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1 posted on 08/01/2005 3:47:12 PM PDT by Tailgunner Joe
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To: Tailgunner Joe

The wall coming down was a two way street. It also meant that Western Germany got Easternized. Interesting to note that Putin's ops in Dresden were instrumental in building connections and getting (via espionage) info that would eventually prove to be of great value only a few years later as Western corporate people fell over each other to "get into the USSR" during and after Perestroika. Some of the companies who were specifically targetted for overtures (generally at international trade shows - then the VIPs would be flown to Moscow) were the very same ones Putin and Co had been spying on via Robotron with help from the Stasi. There was never a complete accounting of Stasi archives and operatives - many questions are still unanswered. I've got lots more on this but would not want to share on a public forum - contact me off line. But time is pretty crunched these days - later this summer I want to put something together on all this.


2 posted on 08/01/2005 4:00:37 PM PDT by GOP_1900AD (Stomping on "PC," destroying the"and Left, and smoking out faux "conservatives" - Take Back The GOP!)
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To: Tailgunner Joe
" In contrast, Berlin was rather reluctant to support the “Orange Revolution” in Kyiv last November and now gives no encouragement to Ukraine in its aspirations to join the EU."

Utter nonsense.

The Ukraine now (was Russia) is Germany's largest supplier of energy. By breaking Ukraine away from Russia, Germany was able to cancel Putin's leverage on Germany.

France and Germany have made further overtures to the Ukraine to join both NATO and the EU-only defense pact.

The author is either blind to world events, or deceptive about them.

3 posted on 08/01/2005 4:02:49 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack
Maybe you missed Schroeder is one of Putin's biggest toadies. They are buddies from Putin's KGB days working with the Stasi.


4 posted on 08/01/2005 4:09:03 PM PDT by Tailgunner Joe
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To: Southack

"The Ukraine now (was Russia) is Germany's largest supplier of energy"

Are you sure? Ukraine (you can drop the "the" now) is dependant on Moscow for natural gas and oil and is itself trying to line up new sources.

It might assist in the breakup of the Russian Monopoly if plans for pipelines for south asian products are built in Ukraine to bypass Russia.


5 posted on 08/01/2005 4:35:53 PM PDT by spanalot
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To: Tailgunner Joe; spanalot
Ukraine-European Union
German Federal Government backs Ukraine aspiring to become EU associate member.
Germany is also ready to support, in every way, Ukraine's initiatives ...
www.ukraine-eu.mfa.gov.ua/cgi-bin/ valnews_miss.sh?lpos1200304100.shtml - 21k -
 
NATO Fuels Ukrainian Hopes for Entry | Europe | Deutsche Welle |
Deutsche Welle: - News, Analysis and Service from Germany and Europe - in 30
Languages. ... Meet Focuses on NATO-EU Defense Efforts ...
www.dw-world.de/dw/article/0,1564,1560710,00.html -
 
Show News
UKRAINIAN SIGNALS PARTICIPATING IN JOINT EFFORT 2005 IN GERMANY ... Negotiations
between Ukraine and the EU on the visa regime may launch before October ...
www.ukraine-embassy.co.il/ english/news/index.php?text=10253 - 14k -
 
Ukraine: International Assistance Programs
GERMANY In August 1996, Ukrainian Deputy Defense Minister and Commander of the
43rd Missile ... 7/23/99: UKRAINE AND EU SIGN AGREEMENT ON NUCLEAR SAFETY ...
www.nti.org/db/nisprofs/ukraine/forasst/intrnatl.htm - 47k -
 
Foreign Dispatches: The EU Reaches Out to Ukraine
foreigndispatches.typepad.com/ dispatches/2005/01/the_eu_reaches_.html -
 
European Defence - European security news round-up
Yushchenko sworn in as president
Viktor Yushchenko, the winner of Ukraine's re-run presidential elections of 26 December 2004, was officially sworn in as the country's new president on 23 January. President Yushchenko said during an address to the Council of Europe on 25 January that his main goal during his presidency is to achieve Ukrainian membership of the EU.

6 posted on 08/01/2005 5:35:28 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack

Russia is also integrating with the EU and Putin himself supports Ukraine's entry into the EU. So what?


7 posted on 08/01/2005 5:36:43 PM PDT by Tailgunner Joe
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To: spanalot
EnergyBulletin.net | Gazprom's Dream Pipeline to Europe | Energy ...
Eighty percent of Gazprom's current energy exports to Europe use Ukraine as the
... Germany's biggest energy companies all of which have close ties with ...
www.energybulletin.net/4767.html - 24k -

8 posted on 08/01/2005 5:39:03 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: spanalot
Ukraine ready to boost electric power exports to Moldova 30 Jul 2005 07:19 GMT
... Ukraine ready to boost electric power exports to Moldova Ukraine is ready to ... electric power shortage, for it produced enough energy to satisfy only 70 percent of its ...
 

9 posted on 08/01/2005 5:43:47 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Tailgunner Joe
"Russia is also integrating with the EU and Putin himself supports Ukraine's entry into the EU."

Nonsense. There would have been no tension with Russia over an election in Ukraine, in fact, no one would have even bothered with such an election (as it would have been meaningless) if what you say was accurate.

It's not.

10 posted on 08/01/2005 5:45:44 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack
"Indeed, Russia and Ukraine have close relations in economy and cooperate in the industrial sphere. So, incorporation of the Ukrainian economy into the EU economy is likely to have a positive result for Russia as well" - Vladimir Putin

Russia glad if Ukraine joins EU: Putin

RUSSIA-EU PARTNERSHIP STANDS THE UKRAINE TEST

EU and Russia forge closer ties

Germany: EU Wants Closer Ties With Russia

Schroeder cool on EU membership for Ukraine

Schroeder refuses to set date for Ukraine EU membership

Rivals demand probe into Putin-German spy link

Germany doesn't want to add a giant nation of poor people to its socialist EU welfare state. They are already broke enough.

11 posted on 08/01/2005 7:18:39 PM PDT by Tailgunner Joe
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To: Tailgunner Joe

The Ukraine just had an election. There were two serious candidates. One was pro-France, the other was pro-Russia.

An *international* uproar occured when the pro-Russian candidate "won" the election. Ukraine's high court invalidated that election, and the pro-France candidate then won the re-vote.

Yet you act as though that election didn't matter. Why, Russia herself wants Ukraine to join the EU, you breathlessly claim, just as the pro-France candidate wants Ukraine to join the EU.

Why, the candidates were really identical! Why, both candidates wanted to leave Russia for the EU, and Russia wants it, too!

Rolls Eyes

12 posted on 08/01/2005 7:48:03 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack
True one candidate was pro-Russian, but the other was pro-American, not pro-France. Chirac sided with Putin just like Schroder. Together they make an anti-American Iran-appeasing Axis of Weasels.

Putin hails relations with France - 2005-01-22 - "Our views on global developments are mostly identical"

Putin, Chirac discuss bilateral, Russia-EU ties after French vote

The election was about whether the criminal Kuchma regime would be replaced by his chosen successor, financed by oligarch gangsters, and whether or not the scandals he was involved in would be covered up, such as missile sales to Iran, and millions in UN Oil-for-food vouchers from Iraq.

13 posted on 08/01/2005 7:59:17 PM PDT by Tailgunner Joe
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To: Tailgunner Joe
"True one candidate was pro-Russian, but the other was pro-American, not pro-France."

Incorrect. Yushchenko annouced the withdrawal of Ukraine's troops from Iraq the moment has was elected.

That he was pro-Western or pro-American instead of pro-french/pro-German was good propaganda, but far-removed from Yushchenko's actual actions and the obvious truth.

14 posted on 08/01/2005 8:12:42 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack

Oh, and Ukraine did not "leave Russia for the EU." Ukraine is a free nation. It does not belong to Russia.


15 posted on 08/01/2005 8:13:51 PM PDT by Tailgunner Joe
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To: Southack

Yanukovych was also in favor of pulling out troops. How does being pro-Putin make you supportive of the US in Iraq? It doesn't. The Italians are pulling out, does that make Berlusconi a weasel? Everyone is starting to pull out, even us. We achieved our objective.


16 posted on 08/01/2005 8:16:42 PM PDT by Tailgunner Joe
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To: Southack

It wasn't the leaders of France and Germany who supported Yushchenko, it was Lech Walesa, Vaclav Havel, Margaret Thatcher, and the Pope.


17 posted on 08/01/2005 8:18:52 PM PDT by Tailgunner Joe
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To: Southack

Oh, and don't forget President Bush!


18 posted on 08/01/2005 8:20:07 PM PDT by Tailgunner Joe
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To: Tailgunner Joe
The other big election | Watch Ukraine | Economist.com
One thing Ukraine's election will do is to define the size of that sphere. ...
Ukraine, however, now balances on the cusp between Russia and Europe. ...
www.economist.com/opinion/ displayStory.cfm?story_id=3329868 -

19 posted on 08/01/2005 8:21:01 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: Southack

Comrade Putin may lament the collapse of the Soviet Union, but I for one do not!


20 posted on 08/01/2005 8:22:11 PM PDT by Tailgunner Joe
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