The complete degeneration of Ukraine’s system

September 29th, 2015

Lug-info – translated for Fort Russ by Paul Siebert

Political analyst Aleksei Blyuminov: “Complete degeneration of the Ukrainian management structure”

* Fort Russ translates for you an eye opening and compelling interview with Blyuminov on the actual and critical situation in Ukraine – highly recommended *

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Lug-Info – Aleksei, what is happening in the Ukrainian politics today?

– The country is steadily sinking into a systemic governmental and parliamentary crisis. Formally, the coalition in the parliament has not disintegrated yet, but everyone understands that there are forces that lead the parliament to early re-elections. Poroshenko is resisting in every way he can, eager to formally preserve the coalition. But the party of Lyashko has already abandoned it.  Now the faction of Timoshenko is next in line.

Lug-Info – In your opinion, who benefits from this?

– Oligarch Igor Kolomoisky is behind all this, if we consider domestic beneficiaries who want to grab their piece. Regarding foreign beneficiaries – this is more complicated, because Ukraine is under external control. If the parliament is dissolved, it means that this decision was agreed to in Washington. If Washington does not want early perturbations and it is satisfied with Poroshenko, then the dissolution of the parliament will not take place. It will be maintained half alive for some time: a month, two, three, four – for as long as it is needed.

Lug-Info – Can we assert that the leader of the far-right “Freedom” party Tyagnibok has been “sent packing”?

– It is difficult to say at the moment. We remember that after Mukachevo Poroshenko was shouting angrily threatening to punish those involved, but no one was arrested, everyone escaped in the woods. In the conflict near the Parliament in Kiev on August 31 it is the same story: the Pechersk court in Kiev will decide whether to arrest Shwaika (former Minister of Agrarian Policy of Ukraine, member of the “Freedom” party). In the coming days we will see how serious are the Prosecutor General, the police, etc. in relation to the “Freedom” party.

Lug-Info – In general, how do you assess the political situation in Ukraine?

– The political situation is absolutely unstable. There are no “fodder reserves” that could maintain stability. Roughly speaking, earlier, for example, under Yanukovych, this stability could be maintained by two things: the first – the legitimate state apparatus, and the second – the availability of some money. Now, both are missing. There are a lot of people who can toss grenades at the prosecutor’s office, and there is no money to cajole them.

Going back to the main problem – the regime is under external control, so all flames of instability are to be artificially extinguished. For example, there was a source of instability in the form Kolomoisky – he was removed after the mediation of the US Ambassador. There was a similar source of instability in the form of Nalyvaychenko: he was also removed. Therefore, external overseers are helping Poroshenko to keep the situation under control and consolidate his regime. Obviously, it cannot last forever, but as long as the Americans are interested in some kind of stability, they will not allow the spread of destabilizing tendencies.

Lug-Info – How important is the factor “of people returning from the front?”

– According to the association of owners of firearms (they are lobbying for legalization of the process), Ukraine is the largest supplier of illegal weapons to the EU. There have been some known attempts to smuggle multiple-launch rocket systems “Grad” across the country to Chernovtsi in order to sell them in Romania. We see that in all conflicts in Ukraine, including Mukachevo, heavy weapons are used. In Kiev, grenade explosions are heard and soon, in all probability, howitzers will be available. In spite of this, a more or less “glossy cover” of Ukraine is maintained yet.

Lug-Info – What about the situation in the Ukrainian economy?

– The economy is dead. According to the official data, the GDP has contracted by 12.5%. This demonstrates that the main branches of industry, which produced income: metallurgy, machine-building, chemistry, etc. – are in deep crisis. What more or less is still functioning to some degree is tied to the agricultural sector and exports through the port of Odessa. That is why, by the way, it is such a contested asset. Even lenders admit it.

Standard& Poor’s rating agency predicts that a default is inevitable. Not such a long time ago a technical default was admitted. But at the same time, due to political considerations, the same lenders say that they will continue to lend to Ukraine despite the fact that its economy is dead. Clearly, this is a purely political decision – to keep the bankrupt regime afloat. It cannot go on for a long time, but for some period they will be able to drag on.

Lug-Info – How will it look like?

– Without external credit borrowings Kiev is unable to form the budget for 2016. For this reason, Natalia Yaresko (Finance Minister) urges the Parliament to vote for all the conditions attached by the lenders as a package, blackmailing the deputies that otherwise default is inevitable. These conditions demand more severe cuts in all social programs, forcing the population to tighten their belts even more. Without this even the agreement about forgiving Ukraine 20% of its debt will not come into effect. But this debt write-off is not a victory. This means credit bondage, only delayed in time. Only the payment of the principal will be stretched for four years while the interest will be charged anyway. But this money will have to be returned by other people. Neither Yatsenyuk nor Yaresko will remain in their positions by then. However, it will be impossible to avoid a technical default. The government will have to impose a moratorium on debt payments in September and October. It is also necessary to return three billion dollars to Russia while Moscow made it clear that it is not going to forgive Ukraine’s debt.

Lug-Info – What is happening in the “social sphere”?

– In the social sphere there is a systematic reduction, squeezing, tightening of all social programs starting from the Chernobyl victims, pensioners, benefit recipients, and children of war. For example, in Kiev the categories of people who use public transportation for free have been significantly reduced. Only those people who have the so called “Kievite’s cards” have such a privilege. But this is a very small group. All other persons, including a huge number of migrants living in the capital of Ukraine illegally, do not have these preferential rights.

– And what about the prices?

– The prices are rising. On the one hand, the authorities caused the collapse of imports, on the other hand, exports crumbled as well. As a result, on paper the budget has reached equilibrium that is called deflation. In addition, without any sanctions and blockades, the assortment of goods in shops has been significantly reduced. For example, in the past there used to be 15 types of yogurt or mayonnaise, but now there are only three. What remains is the cheapest goods. There is no sense to sell expensive ones in mass retail stores.

Lug-Info – You mentioned the migrants. What is life like for refugees?

– Refugees from Donbas have no rights. There is a regime of internal segregation. Formally – you’re a citizen of Ukraine, you have a passport. But you need to be registered as a temporary migrant and receive a huge number of certificates. There are many problems when children go to a kindergarten or school. People also face domestic segregation when housing is not rented to people from Donetsk or Lugansk. I talk to many people, and I have a lot of examples. Plus, there are problems with employment records. In fact, people find themselves outside the legal environment. They periodically organize meetings in order to be legalized, to be given accommodation. If you have some financial reserves – you can rent an apartment, but if not …

– How do you assess the situation with the frozen conflict?

– With frozen conflicts there are no prospects to speak of, because the freezing does not provide a solution but postpones it indefinitely. In the hope that something will change under the influence of some external factors. We realize that the war may end only with a victory of one of the sides, it cannot end with a compromise. It is not possible. Compromise is a truce; it is not the end of the war. The simplest example: Some elements in Ukraine are enraged over the buying of coal from the enemy territory, from Donbas. In fact, these supplies should be legalized. Without this coal power plants will be stopped. The supplies of coal at the Ukrainian thermal power stations are left for only two weeks. That is, energetic collapse can occur at any moment. And the situation is becoming more precarious.

– Can you make any forecasts?

– Actually, it is difficult to make predictions. I personally see only one option – the end of the war. There are two examples of ending wars: the Vietnamese one, when a society is tired of the war and urges authorities to make peace and end the hostilities. And the second one is a military defeat of the enemy. Regardless of the scenario of solving the conflict, it will have different beneficiaries. It should be understood that the current regime in Kiev will never allow federalization of Ukraine. And there is no leverage to force it into it – Minsk agreements are brazenly flaunted by the Kiev regime.

– It seems that everything depends on the resources, including those resources received from the outside?

– From the perspective of an ordinary person who cannot rely on anything, yes. In Ukraine, the situation is worse than in Donbas. Donbas receives convoys with humanitarian aid, volunteers are collecting money. No one will deliver humanitarian aid to an ordinary poor Ukrainian. He has been left alone; there is nothing he can count upon.  He is lucky if he has relatives who can feed him or make money transfers. We also understand that in Donbas, for obvious reasons, in many cases utilities are not paid for, but no one has been evicted.

Lug-Info – Let’s go back to the refugees. Will they come back?

Those ones who are not able to settle somewhere, will look for possibilities to return. People, who are able to integrate in the Ukraine with some success, are unlikely to return. In general, the situation in the country is depressing. We are witnessing a complete degradation of the Ukrainian management structure.

In Ukraine, the Emergency Situations Ministry has been broken up. We have seen three waves of lustration. Thousands of people have been fired. They have been replaced by people from the street. And the results are obvious for anyone: peat bogs are burning, they cannot extinguish them. The system has been destroyed: lack of people, lack of professional skills, and lack of equipment. In normal times any environmental disaster would be overcome within two – three days. Now fires are raging in the Chernobyl forest. It is impossible to breathe with smoke billowing in the streets.

Another example. The police is being disbanded. Seasoned veterans are gone. They are replaced with 22-24 year old boys, with no experience at all, but with huge ambitions. At the same time we see an explosion of street crime: robberies, stabbings, hooliganism. Nobody is dealing with street crime. In front of a camera traffic violation fines are ostentatiously written to a high-ranking bishop or some politician. But this is a facade, and behind the facade …. Some foreigner comes to Ukraine, makes some photographs and goes back to write a book about the success of Ukraine’s reforms. He will not delve into crime statistics. He will make a selfie with a policeman dressed in the second hand American uniform – second hand from Texas Rangers, with American chevrons replaced by Ukrainian – that is all. The usual Saakashvili-style. Total window-dressing in everything …

http://fortruss.blogspot.com/2015/09/ukraine-complete-degeneration-of-system.html

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Ex-MP: Ukraine’s default is a culmination of a plan

Horrifying asset seizure which is legally sanctioned. Which countries are next? Privatization or bankruptcy — either way, the forces of the “free market” and “democracy” get the assets of the people. Truly, the end of freedom.

From Fort Russ

May 21, 2015
Ruposters.ru
Translated by Kristina Rus
 
A deal on the blood: ex-Rada deputy forecasts a tragic finale of the conflict

The decision of the Verkhovna Rada not to pay debts means the default is close, thinks the ex-MP, the former head of the the State Commission of Financial Services [of Ukraine], Vasily Volga, reports “PolitNavigator”.

Vasily Volga

“First of all, it is necessary to distinguish two types of defaults. Technical default and total default. In case of a technical default the country declares that it cannot pay its obligations, and asks the creditors to change the terms of contracts of those liabilities. Perfect technical default is a partial write off of debt, a deferral of payments on principal for something like ten years and a receipt of a new credit to pay interest on loans. A couple of years ago just such a default was experienced by Greece”, – he said.

Volga called the situation in Ukraine up to now – a “gift from heaven”, when “they forgive everything and even give more money”.

He explained what would a total default mean for the country. “This is a situation when lenders refuse to write off and restructure debts. In this case, the creditors have the right to demand the arrest of all foreign property and accounts of a bankrupt state. Also, the creditors, to satisfy their requirements, have the right to foreclose on the assets of the debtor state within the state. And, of course, you can forget about any loans from any international financial institutions. The national currency is instantly devalued. The value of state assets will plunge towards zero. Social programs are destroyed“, – said Volga.

In this case the one who owns the debt of a bankrupt state, becomes the owner of everything for nothing. “I think we should not forget about the information spread in the press a couple of months ago about the Rothschilds buying the sovereign debt of Ukraine”, – said the politician.

He noted that if the default of the country will be total, then “we will witness a grand buyout, which was prepared by war and the murder of tens of thousands of my fellow citizens“. “The culmination is near. We will see everything. All the cards will be revealed,” –  assured Volga.

Game with no rules: “Legal Imperialism” against Russia

By Valentin Katasonov
Posted on Strategic Culture Foundation

The term legal imperialism was coined in relation to the Argentina’s public debt. A New York court admitted a number of private claims to hand down a verdict. By a stroke of hand a judge increased the country’s debt up to $120 billion, according to experts’ estimates. The essence of legal imperialism is the support rendered by Anglo-Saxon legal system to financial vultures. 

Financial vultures vs. Argentina under the cover of American Themis

It all started in 2001. Argentina had to declare a sovereign default on around $130 billion. It was the biggest default on sovereign debt in history. The talks on restructuring started. As a result, the lenders agreed to write off the bulk of it (75%) and alter the conditions for paying off the rest. Some bondholders in possession of around $4 billion of Argentinian bonds refused to comply with the agreements’ terms. This included a small group of hedge funds holding over $1, 3 billion bonds headed by Elliott Management Corp. of billionaire Paul Singer. The hedge funds had already obtained the reputation of financial vultures. They acquired the bonds of the states that were on the verge of sovereign default or the ones already in default and then demanded 100% payments refusing to accept any compromises.

The audacity is supported by the fact that they normally win the trials demanding 100% payments on the bonds. The vultures went to the New York court to sue Argentina for the whole amount without restructuring. In October 2012 the United States Court of Appeals for the Second Circuit (New York) ruled on the pari passu clause that required they receive full payment. Moreover it forbade Argentina to pay off its restructured debts till it complies with the court’s decision. It was an uphill struggle for Argentina as it realized that other lenders would demand full payments too. The country was a hostage because its bonds were issued in compliance with the laws of the state of New York. According to the court’s decision, Argentina faced the June 31, 2014 deadline when it was supposed to pay the next installment of interest to all bondholders. No settlement had been reached so the leading rating agencies greatly lowered the country’s investment rating. The regular payments by Argentina to comply with the conditions of restructured debt were blocked by the court’s ruling. Argentina refuses to comply while the fines keep on growing each passing day…

Yukos case – first large-scale operation conducted by legal imperialism against Russia

The decision handed down by the Hague-based International Arbitration Court in the Russian oil giant Yukos case upon the claim of foreign shareholders is the example of how the legal imperialism works. Yukos ceased to exist as a legal entity in November 2007. For many years it avoided paying taxes. The taxes debts were to be paid in accordance with the court’s decision taken ten years ago. The company failed to comply. The bigger part of Yukos assets went to Russian oil producer Rosneft. Yukos foreign shareholders were disgruntled and went to courts abroad. Finally the claims were consolidated and sent to the Hague International Court. Initially the claimed sum was $114 billion (much more than the Yukos assets at the time of company’s liquidation). The Court let the claims be suspended, it was waiting for something. Finally it got what it was expecting. The West imposed sanctions against Russia in the spring of 2014. The court went back to the Yukos case and made public its verdict: Russia was to pay investors of the now non-existent company $50 billion – the largest compensation ever paid to shareholders upon an international arbitrary tribunal. According to the Court’s decision, Russia allegedly violated the Energy Charter Treaty and expropriated the company taking it from legal owners. A peculiar ruling in view that Russia never ratified the Charter. It is even more peculiar that the acquisition of the Yukos assets by another company is called «expropriation». In fact the verdict was an informal way of imposing sanctions by the West against Russia or the legal imperialism in force. As they say Russia was «put on the counter». After the ruling was announced Russia was given 180 days to comply. It did not. From January 15, the deadline set by the Court in the Hague for Russia to pay its fine, the fine will attract interest equal to the yield on a 10-year US Treasury bond. On January 15 the rate measured 1.91 percent. It means that the first year the sum of the debt will increase to $956, 6 million. That’s why over one billion dollars will surely be added to the $50 billion in 2015.

The Hague Court ruling: what does it mean for Russia?

The appeals made by Russian lawyers brought about no result. The Hague Court’s decision was not taken into account in the 2015 budget. The opposite side is very active. Right after the Court’s decision the former Yukos shareholders were involved in interesting activities – they started to look for Russian assets to be used to pay the debt. Russia’s state foreign assets could be confiscated. The Rosneft assets are to be arrested first, other companies with state participation (VTB, Gasprom, Aeroflot, VAB etc.) second and state agencies third. Embassies have immunity unlike ships visiting foreign ports.

Nobody cares about the fact that there are few companies with 100% state participation. There are non-state minority shareholders and the expropriation of companies’ assets would constitute a violation of their property rights. This is a classic game without rules. Actually there is one – punish Russia at any cost.

Legal imperialism as effective informal sanction against Russia

There have been three packages of sanctions introduced against Russia. Experts believe that the fourth will also come into effect. I don’t think so. The matter is – informal sanctions are more effective. There will be new claims to Russia, its companies and banks. Russian individuals and legal entities will be blacklisted; Western courts will hand down decisions on expropriating their foreign assets. The «case of Rotenberg» will be repeated. In the spring of 2014 Russian entrepreneur Arkady Rotenberg was blacklisted during the first wave of sanctions. In September Italian courts handed down a decision to arrest and confiscate his €30m assets. The March sanctions envisioned a ban on entering the territories of the countries that imposed sanctions and seizing the bank accounts of blacklisted persons. In the case of Rotenberg they took away his real estate that had no relation to business. I emphasize it to show that legal imperialism is a war without rules waged to satisfy the desire to plunder. In general, that’s how the algorithm of legal marauding works:

1) A Western vulture chooses an asset that belongs to a Russian legal entity of individual;

2) The vulture makes the Russian owner blacklisted;

3) A Western court hands down a decision to seize the asset;

4) The court’s decision is carried out; the asset becomes the property of the vulture.

Black lists as an instrument of legal imperialism

There are different grounds for being included into black lists: «suspicion of corruption involvement», «complicity in the annexation of Crimea and aggression against Ukraine», «the violation of human rights», «ties with terrorists» etc. The US has already introduced special laws, for instance, «the Magnitsky Act» allowing making lists of those who had connection to the death of lawyer Sergey Magnitsky. The lawyer represented the investment advisory firm Hermitage Capital Management. In 2008 he was arrested accused of few billion roubles tax evasion. He died in a prison cell. The West made him a martyr and responded with black lists.

Not the United States is mulling a possibility to turn the Magnitsky Act into a universal instrument of fighting Russia under the banner of defending human rights. It is planned to include into the list not only those who did anything wrong to Magnitsky, but also Alexey Navalny and his associates in «the struggle against totalitarianism». Washington wants to kill two birds with one stone: a) to exert political pressure on Russia; b) to reap benefit by seizing the assets of the persons included into the black lists (the Magnitsky Act envisions a ban on entry into the country and arrest of bank accounts). They want to get more out of it. It is considered to go beyond seizing the bank accounts but also spread the sanctions on bonds and equity.

(To be continued)

http://www.strategic-culture.org/news/2015/02/17/game-with-no-rules-legal-imperialism-against-russia-i.html

http://www.globalresearch.ca/game-with-no-rules-legal-imperialism-against-russia/5432153