Are tiny cracks appearing amongst Putin's kleptocratic clique?

"On Tuesday, the Ukrainian army accused separatists in the east of Ukraine, where there are ongoing disputes over territory, of violating an agreed day-long ceasefire known as the "Day of Silence." A longer peace is still "a long way off," according to Russian Foreign Minister Sergei Lavrov. 
A sigh of relief was breathed when Russia resumed shipments of natural gas to its neighbour – albeit at a much higher cost -- in time to keep households and industry going. Yet it is still unclear how far Russia, where the economy is also in trouble after sanctions imposed by the West, is prepared to go to defend its interests across the Ukrainian border.
- By CNBC's Catherine Boyle."(3 Hours Ago: Dec 10, 2014) (my emphasis)

In my last blog-entry I mentioned that Putin was rather nervous when greeting Hollande last Sunday. And today Putin has decided to resume gas shipments to Ukraine, but at much higher cost. At the same time, that dyed-in-the-wool Soviet foreign minister Lavrov states that," A longer peace is still "a long way off".

The question that we have to ask ourselves is, " Why is Lavrov now the 'hawk' to Putin's 'dove'?" What, exactly, made Putin nervous when greeting Hollande last Sunday? Why, given the parlous state of the Ukrainian economy, has Putin decided to keep the Ukrainians warm during this winter, albeit at a much higher cost?

There are three critical developments that may account for for this sudden mood-swing of both Putin and Lavrov.

Latvian troops preparing for live-fire exercises

• The 'ceasefire' that was supposed to commence on Tuesday 9 Dec, 2014, seems to be faltering. Yesterday 3 people were killed ,"while European nations raised new fears about Russia's "unprecedented" military build-up". ....More than 30 Russian aircraft were intercepted in international airspace "over the Baltic Sea and off the coast of Norway" on Monday, a NATO spokesman said, whilst Sweden [may be] recalling around 7,500 recent veterans to form a reserve voluntary force. "For a few days now, there has been unprecedented Russian activity, from its Baltic fleet to flights over the Baltic sea," Defence Minister Tomasz Siemoniak told Polish broadcaster TVN24. (Oleksander Stachevski and Dmitri Gorschkov : AFP : Dec 12, 2014) (my emphasis)
• Putin's propaganda machine in Russia may be faltering. " ..... [J]ust as with Soviet propaganda, which blamed outside enemies for the country’s failures, resentment is vulnerable to reality. When television pictures contradict people’s personal experience, they stop working. “You can’t really ‘sell’ anything to people, that they don’t wish to buy,” says one television boss. As the ratings show, Russians are tiring of news about Western aggression. (The Economist : Dec 13th 2014 | MOSCOW |)(my emphasis) Thus, "Over the past nine months opinion polls find that support for the presence of Russian troops in Ukraine have fallen from 74% to 23%." (ibid The Economist)
• What most Russians really need is news about the unfolding economic crisis that Mr Putin’s message from above largely ignored. The continuing fall in the rouble, eroding living standards and a sharp rise in food prices are worrying people far more than the fate of separatists in Ukraine. Now that sanctions are starting to bite, enthusiasm for war and isolation is diminishing fast. “Cognitive consonance between propaganda and people’s self-feel does not withstand external shocks,” says Mikhail Dmitriev, head of New Economic Growth, a think-tank. (ibid The Economist) (my emphasis)

Sunday, December 7th 2014  Buckwheat Panic grips Russians

Prices have gone up 30 to 40 percent for basic foods such as eggs, pork, chicken, frozen fish and sausage since the counter sanctions were imposed.  Putin simply cannot hide these facts from the Russian people. (Marina Lapenkova, AFP : Dec. 7, 2014)

Meanwhile Medvedev now enters the scene by on the one hand wishing to take Ukraine to court over alleged non-payment of gas bills, whilst on the other hand stressing that there is always room for compromise. ( RT : December 10, 2014)

Russian Prime Minister Dmitry Medvedev

This seems to 'mirror' the Lavrov - Putin  'carrot and stick' approach. But what, really, does this seeming confusion tell us? Are tiny cracks beginning to appear within Putin's "kleptocratic clan"? Is all that 'military muscle-flexing' of Putin really all for show? 

This whole brouhaha about non-payment of gas bills on the part of Ukraine has to be seen against the backdrop of :

• the billions of dollars that Yanukovich stole from the coffers of Ukraine, and that is now tucked away in Russian banks. This is estimated at $100 billion. U.S. Attorney General Eric Holder said  ..... that Washington was determined to help Kiev find billions of dollars it says were stolen by Yanukovych and his aides. “We are determined to hold accountable those who were responsible for the theft of these Ukrainian assets,” he said. Makhnitsky said that Yanukovych and his people had spirited $32 billion in cash across the border in trucks as his power crumbled early this year (The Japan Times ) Putin's kleptocratic clique knows about this stolen money (and gold!) . So what is Putin doing about this? Absolutely nothing! Stolen Ukrainian money is now propping up Russian banks! AND MEDVEDEV WANTS TO TALK ABOUT $3.1 billion ostensibly owed to Russia for non-payment of gas bills by Ukraine???
• The money that Russia OWES Ukraine for the supply of gas, electricity, and water to Ukrainian Crimea and that is now militarily occupied by Russia

What, therefore, is this 'taking to court of Ukraine' really all about? The money is there, in Russia, propping up Russian banks. Is it any wonder that Putin, in his speech last Thursday, stated that:

"I propose a full amnesty for capital returning to Russia. I stress, full amnesty. Of course, it is essential to explain to the people who will make these decisions what full amnesty means. It means that if a person legalises his holdings and property in Russia, he will receive firm legal guarantees that he will not be summoned to various agencies, including law enforcement agencies, that they will not “put the squeeze” on him, that he will not be asked about the sources of his capital and methods of its acquisition, that he will not be prosecuted or face administrative liability, and that he will not be questioned by the tax service or law enforcement agencies. Let’s do this now, but only once. Everyone who wants to come to Russia should be given this opportunity." (blog : Dec 5, 2014)

Of course, all of this also applies to Yanukovich!

The holiday season is now upon Ukraine and Russia. For Russians, in particular, the hard facts of their rapidly escalating prices in food, and the emptiness of the shelves of those imported foods that they have become used to, cannot be glossed over by Putin. Putin's "fine words will simply butter no parsnips" during this holiday season.

(to be continued)