Phrase of the day, “Quid pro quo.”
Note that this week the U.S. Treasury rolled out sanctions, finally, on Nord Stream, which disappointingly but how so unexpected, only sanctioned Russians, and avoided any sanction on Europeans. So the Biden administration has in effect green-lighted the completion of the pipeline.
And the quid pro quo, well that is the Europeans coming out and indicating a willingness to sanction “only” four lowly officials on the Alexei Navalny case.
The Biden administration seems to have been willing to go soft on Nord Stream for the “win” of getting Europe to work in cooperation with them in sanctioning just the four officials. That’s a massive giveaway from the Biden team for almost nothing from the European Union – I mean seriously, FOUR officials. To quote John McEnroe, “are you serious”? That’s a total cave-in and will say to the Kremlin what it already knew that the West is weak and unable to counter its malign actions.
Notable I think that the country really paying the price for the Navalny sanctions is Ukraine, as they will suffer from the green light for the completion of the Nord Stream 2 pipeline, hitting the $2 billion annual gas transit business from Russia.
I think the Ukrainians are quickly getting the message now that even for Biden, they are not seen as allies, but bargaining chips in the bigger prize, and really that’s also how Vladimir Putin has viewed Ukraine. The first test for Biden and he has failed.
Interestingly Volodymyr Zelensky, having thrown the Biden team big lumps of raw meat in terms of Motor Sich and Viktor Medvedchuk, and suffering the price from that of a step up in the conflict in the Donbas (another Ukrainian soldier died yesterday), has decided I think to take matters now into his own hands.
Responding to the tough love (if this is love, I would hate to feel the wrath) from Biden, and falling opinion poll ratings, he seems to be set to go on the offensive at home, and I think the first casualty of that might be Ihor Kolomoisky et al, if the detention of the former deputy CEO of PrivatBank, Volodymyr Yatsenko, is anything to go by.
It seems like Zelensky’s frustrations with the West, with the International Monetary Fund, and with his own administration’s efforts to fight corruption are coming to the fore, and we might see pretty seismic and wholesale changes – the worry there is that while Zelensky wins plaudits for doing something, and acting decisively, he might end up clearing the decks and throwing out the baby with the bathwater. We might see pretty wholesale changes across the government and state-owned enterprises. That begs the question as to whether yet another iteration of officials in key state institutions is a good thing or a distraction – experience therein in the changes made at the National Bank of Ukraine.
On the anti-corruption agenda, there is a sense of frustration growing that the West, and the IMF, are all focused on the importance of setting up and having well functioning anti-corruption infrastructure, like the National Anti-Corruption Bureau of Ukraine, the Higher Council of Judges, etc, but the feeling is that these institutional efforts are just too slow-moving, and might take a decade or more to make a difference especially when set against an experienced (in the political economy and legal system), canny (they know all the tricks) and well-funded corrupt oligarchic class. Look at the experience in Romania there.
But if Zelensky is going to make a difference he needs to cut to the chase and use what powers he has to go after some of the worst offenders, and that is what he seems to be doing. But I guess in Ukraine where there is a spectrum of corruption, and it has touched the bad and unfortunately likely also the seemingly good. Hence some pretty big subjective political calculations will need to be made as to which political forces are captured in the net which might be cast pretty wide this time around.
The West may well like the fact that Zelensky is finally starting to take direct action against corruption, but the question then is why he and past leaders never used the existing powers they had/have to do that before, and will the West like some of the collateral damage that may well be done.
