People who wage war are like the weapons that they use, they are a part of the tools of destruction used by politicians. Just as a mechanic's tools do not decide how or when they are to be implemented, the tools of war are at the politicians disposal.

Ike was a great political leader, he was not a warrior, his forte was that he could convince people to organize in a united effort. He clearly knew that warriors should not be left to their own devises, that a steady hand was needed at the controls.

 

[h=1]Black Boxes Show Shrapnel Destroyed Malaysia Airlines Plane, Ukraine Says[/h] [h=2]Older Flight Recorders on Plane Likely to Provide Limited Data[/h]
MOSCOW—Ukrainian authorities said Monday that data retrieved from the black boxes aboard Malaysia Airlines Flight 17 showed the plane was destroyed by "massive explosive decompression" caused by shrapnel from a missile.
The alleged cause of the downing of the civilian passenger jet was revealed by Col. Andriy Lysenko, spokesman for Ukraine's National Security and Defense Council, and hasn't been confirmed by European officials who have been analyzing the data on the plane's flight recorders.
Enlarge Image


Wreckage at the crash site of Malaysia Airlines Flight 17. Reuters




The plane was brought down July 17 as it flew at 33,000 feet over a conflict zone in eastern Ukraine—an altitude that experts say could be reached only by sophisticated surface-to-air missiles. Ukraine and U.S. intelligence agencies have said the missile appeared to have been fired from territory controlled by pro-Russia separatists. The rebels have insisted they have never possessed weapons capable of hitting a plane at that height.
The U.S. has blamed Russia for providing the Buk missile system to the rebels, a claim that Moscow denies.
The black boxes are being analyzed in the United Kingdom after being handed over by the rebels to Malaysian authorities last week.




Air safety experts say the devices aboard the plane are older versions likely to provide only limited information regarding the sequence of events following the presumed missile strike on the plane.
Both the flight-data and cockpit-voice recorder were manufactured in the mid-1990s, before regulators mandated that such devices on new jetliners include larger memories, faster recording speeds and backup battery power in case onboard electrical systems suddenly fail.
This could result in investigators ending up with sketchy data about the seconds immediately after a ground-to-air missile strike, with the cockpit-voice recorder not having much beyond the sounds of the impact.

 

The forgotten victims of the war in Ukraine


DONETSK, Ukraine — In the last three months of covering the war in eastern Ukraine, I've often seen people's tears. Crying children, crying men, crying women of all ages: lost, despairing, torn by fear, absolutely heartbroken. The fight that broke out in the city of Donetsk last week changed many lives; it ended at least five of them. Grad rockets and artillery struck all along Slavatskaya and Kuibysheva streets and around the Zapadnaya railway station. Among the sites that were hit: a city market, a pharmacy, a local factory, high-rise apartment buildings.

Horror seemed to be concentrated in the stuffy and crowded basement of School 51, which was filled with thirsty, sweating adults and children. The dull thuds of rockets landing in the city outside filled everyone with panic. "Misha, what's happening there, can you see?" a middle-aged woman shouted to her husband, who was smoking by the door to the basement. (And yes, there were tears in her eyes, too.) He answered that the two of them could count themselves lucky: Unlike the three dead people whose bodies were lying in the courtyard — the woman's head had been blown away — they had made it to safety. Misha's wife, wracked with emotion, agreed.
Ever since Malaysia Airlines Flight 17 fell from the sky on July 17, TV news channels around the world have been covering the crash and its implications virtually nonstop. You'd think that was the only story happening in eastern Ukraine right now. But there's actually another big, newsworthy event that's going on, virtually unnoticed: the Ukrainian army's military offensive against the separatists holed up in Donetsk and its environs. And if the previous fighting in places like Slavyansk or Krasny Liman is any indication, civilians can expect to bear the brunt of it. (The photo shows a man in Donetsk inspecting a garage destroyed by a rocket.)


One woman, still shaking, scolded my photographer friend for taking pictures: "It's all your fault! Your Russian propaganda is to blame for this war!" My Italian friend didn't understand what the woman was saying, but she stopped taking pictures for a while. An older woman said she wanted him to go on, that it was important for the world to understand where Malaysia Airlines had crashed and how much the population of the area around Donetsk was suffering. "We have deep sympathy for the families of the victims of the Malaysian plane," an older woman told me, a cup in her hand. "But we want the world to hear us, too. We're being killed here. The Ukrainians are bombing us." Two women, still shaking from the shock, yelled at us about Ukrainian murderers and Russian murderers. You could hear the whole range of views in our basement — as one might expect in a city with a population of one million.

July 12: People gather litter following what locals say was shelling from Ukrainian forces. | (REUTERS/Maxim Zmeyev)​

Men listening to the murmur of artillery by the door spoke in words peppered with harsh Russian obscenities. If Kiev had decided to fight the war on the streets of Slavyansk, Luhansk, Donetsk, and the other cities in the region, why not declare a curfew and let people know when they could expect the fighting to start so that they'd have time to hide? A tall, gray-haired man told everyone that it was all easy to understand: "[Ukrainian President] Poroshenko is using the airplane catastrophe and the visits by foreign experts as cover for winning this war and clamping down on the DPR guys" — a reference to the militia of the separatists' Donetsk People's Republic.

The world's attention is understandably focused on the downing of the Malaysian airliner, but in the process everyone seems to have forgotten that the war in eastern Ukraine is still going on. What both sides in the conflict seem to have forgotten is that they're fighting over places filled with civilians: Both the Ukrainian army and the rebels are using heavy weapons in a densely populated city. Sources at Human Rights Watch tell me that they've documented evidence in at least four cases proving that Ukrainian forces were responsible for Grad rocket strikes on residential areas. That's terrible news for people living in the region, since the operators of Grad batteries rarely have precise targeting information. It's a highly indiscriminate weapon.


Later that day, I called Kiev officials, who denied that any Ukrainian commander ever ordered a Grad attack on Donetsk or other cities. They did admit, however, that "a war without mercy" has finally entered its active phase in eastern Ukraine. And that, of course, means that we'll see more tears and broken lives. Donetsk is not the only city in eastern Ukraine today where citizens are sheltering in basements from bullets, shells, and bombs. The Organization for Security and Cooperation in Europe has reported 250 killed in neighboring Luhansk over the past few weeks. The map of hot spots is growing by the day. And one wonders whether the government of Ukraine is really helping its own cause. Its heavy-handed use of weapons like the Grad is radicalizing the population and driving many into the arms of the rebels.
Many people are fleeing the region around Donetsk. But leaving a home that's turned into a war zone is rarely as clear-cut as the superficial images of refugees might suggest. For every person who gets away there are loved ones, friends, and precious belongings left behind.


A few days ago I was trying to comfort a grown woman who was sobbing like a little child. It was a warm July afternoon, and we were standing under the apple and cherry trees outside her place of work. Larisa Zvereva, 49, is a teacher at the orphanage in Torez, the village at the center of the debris from Malaysia Airlines Flight 17.


In the past few days, she told me, she'd witnessed "the most unimaginable horrors" — human bodies falling from the clouds. Eight of them landed on the street outside the orphanage fence, and two more fell right into the garden, as rebels and government troops fought a violent war just a few kilometers away from her doorstep. (As we spoke, the sound of mortar and artillery fire continued to murmur in the outskirts of Torez.) The worst part, she told me, was that the children at the orphanage, ranging in ages from 9 to 16, and already living in constant fear of the war, had also watched the bodies of the passengers falling from the sky. Some of the kids described them to me as "big birds."
How much longer, Zvereva asked me, will the people of the region wake up to the sound of shelling? How many more nightmares will they have to endure? She began to choke up with tears. "I'm so scared to tell anybody the truth about what I really want for my life, for the future of our orphans," she whispered to me. Unheard, misunderstood, the people who live in this part of Ukraine were already struggling to endure the horrors of war before the tragedy of MH17. Now many of them feel that the world is blaming them, on top of everything else, for shooting down a plane filled with men, women, and children. The realization that the rest of humankind has little idea of their daily tribulations merely adds to the pain.

 

[h=1]Russia, Germany up diplomatic battle over Ukraine sanctions[/h]

MOSCOW/BERLIN (Reuters) - As fighting intensified in Ukraine on Monday, a diplomatic battle also raged, with Berlin warning that new European sanctions would send a "strong signal" to Moscow, and Russia saying the measures could only boost its economic independence.


Foreign Minister Sergei Lavrov said Moscow had no intention of imposing tit-for-tat sanctions, the day before the 28-nation European Union was set to finalise a package of measures that may close the bloc's capital markets to Russian state banks.


"I assure you, we will overcome any difficulties that may arise in certain areas of the economy, and maybe we will become more independent and more confident in our own strength," Lavrov said.


"We can't ignore it. But to fall into hysterics and respond to a blow with a blow is not worthy of a major country," he told a news conference, adding that the sanctions against Russia would be unlikely to achieve their goal.


The sanctions, and any retaliatory measures, could affect BP, whose 19.75 percent holding in Russian oil producer Rosneft leaves it exposed to the Russian economy.


Kremlin-controlled Rosneft also has agreements with ExxonMobil, Eni and Statoil to tap Russia's Arctic offshore oil and gas.


Lavrov said he hoped for an objective investigation into the crash of the Malaysia Airlines flight that was downed over territory held by Russian-backed separatists in eastern Ukraine, killing all 298 people on board.


The West says flight MH17 was almost certainly shot down by pro-Russian separatists using a Russian-supplied surface-to-air missile. Russia has denied supplying such a missile.


Germany, Europe's biggest exporter to Russia, had been reluctant to agree to heavier sanctions, but spokeswoman Christiane Wirtz said MH17 case had changed that.


"After the crash of the passenger plane MH17, a completely new situation came about which makes further measures necessary," Wirtz said at a government news conference.


"Only such a substantial package would enable the German government and the EU to send a clear, strong signal to Russia."




PRESUMPTION OF INNOCENCE


EU states are expected to reach a final decision on Tuesday on measures that also may include, in addition to capital markets restrictions, an embargo on arms sales and limits on dual-use and energy technologies.


The EU added new names on Friday to its list of individuals and companies facing travel bans and asset freezes.


Russia warned sanctions could hamper cooperation over security issues. Russian state development bank Vnesheconombank (VEB) has said it is counting on state support after U.S. sanctions closed long-term funding on it and other companies.


The West accuses Russia of allowing fighters and arms to travel freely over its border into rebel-held territory in Ukraine's predominantly Russian-speaking east.

Lavrov said Moscow had tried to contribute to efforts to end the fighting but the West has not sufficiently used its leverage over Ukrainian President Petro Poroshenko.


He repeated calls for an objective investigation into the shooting down of the Boeing 777, which Moscow has suggested was caused by Ukrainian government forces.


"Only the honest, open participation of all those who have access to information about the crash can be regarded as normal. Anything else we will consider as deceitful attempts to influence the investigation, putting presumption of innocence in doubt," he said.


He suggested that Kiev had hampered access to the crash site on Sunday when international monitors abandoned plans to visit due to reports of heavy fighting.


International monitors said the fighting itself could affect the crash site, underlining the growing complexity of trying to establish who shot down the plane.


Lavrov also said Moscow was hopeful that monitors from the Organization for Security and Cooperation in Europe could be deployed along Russia's border with Ukraine.


"We hope that this will dispel suspicions that are regularly being voiced against us, that those (border) checkpoints controlled by the militias from the Ukrainian side are used for massive troops and weaponry deployment from Russia to Ukraine," he said.

 

[h=1]Britain plans major exercises in Poland amid Ukraine crisis[/h]
Warsaw (AFP) - Britain on Monday announced major joint manoeuvres in Poland in October, part of a string of NATO exercises in the region aimed at reassuring eastern Europe members jittery over a resurgent Russia.



"I can announce today exercise Black Eagle, which will be a significant Polish and UK armoured exercise with over 350 British armoured and other vehicles and some 1,350 British personnel," British Defence Secretary Michael Fallon said in Warsaw.
The deployment will be the "largest British contribution to exercises in eastern Europe since 2008," he said at a joint press conference with British Foreign Secretary Philip Hammond and Poland's foreign and defence ministers.
Ex-communist NATO members have asked the alliance for permanent boots on the ground in the region amid the sharp escalation of fighting between Kiev government troops and pro-Russian rebels in eastern Ukraine.
Presidents from nine ex-communist NATO members met in Warsaw last week to hammer out a regional defence strategy to re-enforce its eastern frontier in preparation for a key summit in September.
The NATO summit is expected to focus largely on the fallout from the Ukraine crisis and Russia's annexation of that country's Crimean peninsula.
Senior NATO officials have said decisions on the possible permanent deployment of alliance forces throughout its eastern flank can be expected in September.
"The Russia-Ukraine conflict is Europe's most important security challenge since the end of the Cold War," Poland's President Bronislaw Komorowski has said.
"Strengthening NATO's eastern flank is fundamental."
NATO has already sent additional temporary rotations of air, sea and land forces to Poland and three small former Soviet-ruled Baltic states in response to the Ukraine crisis.
US President Barack Obama in June earmarked a billion dollars (741 million euros) in military funding for US allies on NATO's eastern border.

 

[h=1]EU reaches preliminary deal on new names for Ukraine sanctions[/h]

BRUSSELS (Reuters) - EU diplomats reached a preliminary deal on Monday on a list of people, including associates of Russian President Vladimir Putin, and firms to be subject asset freezes as part of tougher measures over Russia's actions in Ukraine, EU diplomats said.
The new list of names is expected to be published on Tuesday or Wednesday and is in addition to 87 people and 20 organizations already subject to EU sanctions.
The three diplomats speaking on condition of anonymity said they could not give full details, but the persons targeted included people and companies, who are supporting or benefit from destabilisation of Crimea and Russia's annexation of Crimea.
"The list includes individuals, cronies and entities," one diplomat said. Another said the list was "subject to some legal refinement" and would be signed off on Tuesday when EU diplomats continue talks.

 

Those people make me want to puke with all their stupid ass games they play. They think this shit is fun because the government officials don't have anything personal to lose and usually are not targeted, but the hundreds and thousands of people killed doesn't really seem to mean anything to them, they are just worried about playing political games where the people are always the losers

 

And that is why history often repeats itself time and again.

 

[h=1]Russian Officials Continue to Believe All U.S. Intelligence Evidence is 'Fake'[/h]

Russia's Defense Ministry has called the U.S. Office of the Director of National Intelligence a bunch of liars. This comes after the U.S. released images implicating Russia in firing across the Ukrainian border.
This past week, Russia called for the U.S. to provide evidence backing up their claims that were directly attacking Ukrainian forces. Anatoly Antonov, deputy defense minister, argued that U.S. intelligence officers had not properly assessed the situation and "mostly cited social networks." However, now that U.S. responded with actual images, the Kremlin is issuing more complaints attacking the authenticity of the evidence, rather than dealing with the implication of the evidence.
View photo
.

via The Washington Post. Yesterday evening, images became public which show Russian forces firing at Ukrainian forces across the border. As per the caption written by the U.S. Office of the Director of National Intelligence, the images "provide evidence that Russian forces have fired across the border at Ukrainian military forces, and that Russia-backed separatists have used heavy artillery, provided by Russia, in attacks on Ukrainian forces from inside Ukraine."
RELATED: U.N. Joins in the Calls for a Gaza Ceasefire
In response to this, Russia's Defense Ministry called the satellite images "fake." They also claimed the images were created by U.S. officials "with close links to Ukraine’s Security Council" and the Ministry believes it is impossible to confirm their authenticity.
The Defense Ministry went on to attack U.S. ambassador Geoffrey Pyatt, who tweeted the images. Igor Konashenkov from the Russian Defense Ministry issued this statement, as reported by RT:

These materials were posted to Twitter not by accident, as their authenticity is impossible to prove – due to the absence of the attribution to the exact area, and an extremely low resolution. Let alone using them as ‘photographic evidence’.
Pictures [like this] have also been provided by Kiev representatives as an excuse for the usage of heavy artillery and other weaponry by the Ukrainian army – against the country’s civilian population [...]
It’s no secret to anyone that fakes like this are made by a group of US counselors staying in the Kiev building of the Security Council, led by General Randy Kee."
​

In the opinion of Russian defense officials, the images were created by U.S. officials in Ukraine, then given to the Ukrainian media as "disinformation," then the news reports are presented to U.S. officials afterwards as a formal statement. After this process is complete, the Ukrainian media can cite the U.S. officials as the source, in order to show "objectivity."
It is important to remember that RT has been called a mouthpiece for the Russian government in the past. Secretary of State John Kerry called RT a "propaganda bullhorn." Journalist Sara Firth resigned from RT on the day of the MH17 crash, saying her reason for leaving was misinformation she believed RT was spreading about the crash.
RELATED: Parsing Obama's Phone Call With Netanyahu, Call for Immediate Ceasefire
The U.S. Department of Intelligence has not yet replied to these accusations of "fake" evidence.
This article was originally published at http://www.thewire.com/global/2014/...-all-us-intelligence-evidence-is-fake/375144/

 

[h=1]Russian Oligarchs Are Tired of Funding Putin’s Land Grab[/h]

The international community continued to isolate Russian President Vladimir Putin Monday for fanning the flames of war in Ukraine. European nations announced a new round of sanctions against Russia’s financial, defense and energy sectors.






“Leaders agreed that the international community should therefore impose further costs on Russia and specifically that ambassadors from across the EU should agree a strong package of sectorial sanctions as swiftly as possible,” UK Prime Minister David Cameron announced after his country, Germany, Italy and France imposed the new penalties.


Despite Europe’s move, the Kremlin seems unconcerned. Russian Foreign Minister Sergei Lavrov dismissed the penalties even before they arrived, saying earlier on Monday that Russia would “overcome any difficulties that may arise in certain areas of the economy, and maybe we will become more independent and more confident in our own strength.”


After the downing of Malaysian Airlines Flight 17 killed nearly 300 innocent people, many thought Putin would back down and lessen cooperation with Russian separatists fighting with Ukrainian security forces for control of western Ukraine. However, since the plane went down Russian resistance has done the opposite: it’s actually increased.


According to multiple reports, Russia has upped the supply of weapons to the rebels. Putin is also warning Russian business leaders that the economic pinch is about to get tighter.


Yesterday, Putin called defense industry leaders to his home to discuss “risks of a political nature,” according to The Wall Street Journal. He also warned the Russian people, in a nationally televised talk to high-ranking Russian security officials last week, that the West is attempting to harm Russia "in the economic sphere and politically."






Wildly Popular with Russia’s People

If the past is any indication, it’s unlikely the new round of sanctions will be enough for common Russian citizens to turn on Putin. According to a June poll conducted by the Russian Public Opinion Research Center, the percentage of Russians who “believe in the positive political [perspectives] of V. Putin” has increased 1.5 times in the last two years, from 40 percent in 2012 to 69 percent in mid-2014.


The research center found that Putin’s popularity cut across all demographics and was not lagging, despite the crisis in Ukraine.


“This stance is shared by young respondents (67 percent), elderly respondents (71 percent), residents of Moscow, St. Petersburg (76 percent) and rural area (68 percent),” the center found. “Every fifth respondent (20 percent) believes that Putin has reached the peak of his career and he can hardly achieve more than he has now. And only 5 percent think that his influence is declining; the share of such respondents has considerably decreased over a year (…19 percent in 2013).”



Putin is so popular and such a dominating force in Russian politics that few Russians believe there is any one more capable of steering the country, the center found.

“Today three-quarters of Russians (73 percent) are ready to vote for Putin in the presidential elections, if he participates in these elections: over a year the number of such respondents has increased (from 51 percent in 2013),” the center found. “Half of respondents (54 percent) report that they do not know any politician capable of competing with Putin… and such a person will not appear in the short run (48 percent a year ago).”



Losing Support of the Oligarchs?

As the poll shows, support for Putin among the Russian public is not dying down. However, the real source of power in Russia is the oligarchs, and new reports indicates that they’re tiring of Putin’s standoff with the west, which is hitting them the hardest.


According to the German magazine Der Spiegel [the original story is in German, but an English language report can be found here), German intelligence chief Gerhard Schindler has told the Bundestag that a power struggle is underway between the Kremlin and Russian business leaders.


“According to German intelligence it is quite possible that some of the oligarchs who are worried by European Union sanctions will soon start putting economic interests above political concerns and try to put the brakes on Putin,” Der Spiegel reported.


The German report came out before the new round of sanctions were announced. Many in Russia were assuming that Germany and the rest of Europe would not impose new penalties because of the close ties between the two. Yesterday, this assumption turned out to be false.


"The ruble is losing value, Russia's budget deficit is growing and its economic development is bad. Even the Russian president sees this," Germany Finance Minister Wolfgang Schaüble told Der Spiegel. “Nobody is Moscow should start thinking that Russia can win with its approach."


Interesting is it not that Pres Obama's useless, worthless, toothless sanctions are having no effect upon the individuals they were targeted upon?
The failures of Pres Obama continue to abound and the world grows more deadly due to them.

 

[h=1]Germany Inc. Says Time’s Finally Up for Putin After Crash[/h]
Germany’s business and political leaders are lining up to support a tougher stance on Russia, giving Chancellor Angela Merkel critical backing as she pushes her European Union counterparts to expand sanctions.
Industry group chiefs and lawmakers from Merkel’s governing coalition are expressing the need for deeper measures targeting Russia’s economy following the downing of Malaysia Air (MAS) Flight 17. Public opinion has also shifted, with a majority of Germans now favoring wider actions against Russia.
“This shooting down of a plane is really a turning point,” Martin Wansleben, head of the Association of German Chambers of Commerce and Industry, said in an interview. “It’s such an outrageous act that one must give a clear response.”
At stake for Germany is trade with Russia worth almost $88 billion last year and a complicated relationship resulting from their shared history. Nazi Germany attacked Russia in 1941 and as many as 27 million people died in the Soviet Union during World War II. Relations with Russia are tinged with guilt because of this death toll, as well as gratitude toward Soviet leader Mikhail Gorbachev, who allowed the opening of the Berlin Wall in 1989 and the peaceful reunification of Germany.
Photographer: Krisztian Bocsi/Bloomberg Angela Merkel, Germany's chancellor.

At the beginning of the conflict between Russia and Ukraine, many in German society struck a more conciliatory tone toward Russia than elsewhere in Europe. Then came the July 17 downing of Flight 17 in eastern Ukraine, which the U.S. says was probably the result of a Russian-supplied surface-to-air missile fired by rebels. All 298 people on board died. Russian President Vladimir Putin denies his government is helping the separatists. Germany will push today at a meeting in Brussels for tougher action on Russia.
[h=2]Fed Up[/h] “You can sum up what the polls are saying quite simply: the Germans are truly fed up with Putin,” said Gero Neugebauer, a political analyst at Berlin’s Free University. “While frustration has grown over months in Germany, it showed little sign of developing into the kind of support we’re now seeing for sanctions. MH17 changed that.”
German business leaders -- who had in recent months publicly expressed skepticism regarding sanctions, including the chief executive officers of Siemens AG, ThyssenKrupp AG and Adidas AG -- have either stayed quiet during the latest talks or come out in support of a harder line. Siemens, Adidas and ThyssenKrupp representatives declined to comment.
“Politics sets the framework, which we have to adhere to,” Daimler AG CEO Dieter Zetsche told Bloomberg at a company event in Berlin. “To speculate about potential changes and impacts wouldn’t be appropriate.”
[h=2]Industry Support[/h] Three of the country’s key industrial groups -- the Federation of German Industries, the Committee on Eastern European Economic Relations and the German Engineering Federation -- now say they’ll support harsher measures against Russia should the EU approve such actions.
“As painful as further economic sanctions will be for European business development, German exports and individual companies, they can’t -- and may not -- be excluded as a way to pressure the Russian government,” Ulrich Grillo, president of the Federation of German Industries, wrote in newspaper Handelsblatt. “The conduct of the Russian government must have noticeable consequences for Moscow.”
Doing so, will have an economic price. Russia ranked 13th among destinations for German exports in 2013, accounting for $37.9 billion in sales, according to data compiled by Bloomberg. Imports from Russia totaled $50 billion, making Russia Germany’s eighth-biggest supplier of goods. Oil and gas accounted for about three-fourths of the imports.
[h=2]Economic Uncertainty[/h] “It may very well be that the entire German economy is affected because the greatest risk, the biggest cost factor, is really the uncertainty,” Marcel Fratzscher, president of the Berlin-based DIW economic institute, said on ZDF television today. “The high degree of uncertainty makes it extremely difficult for companies to make investment decisions and that affects the whole European and the entire German economy.”
The head of the German Engineering Federation said Russia is the fourth-largest export market for the country’s machine building industry and that the sector is preparing for the inevitable direct impact that any stiff embargo will have.
The federation “explicitly recognizes, that Berlin and Brussels have for a long time endeavored to avoid hard and massive sanctions,” Hannes Hesse, the group’s chief, said in a statement to Bloomberg. “In light of the latest escalation, new sanctions were virtually unavoidable.”
[h=2]Public Support[/h] The wider public shares that view. Fifty-two percent of Germans back tougher measures against Russia even if that means the loss of “many” jobs in their country, weekly magazine Der Spiegel reported July 26, citing a TNS-Infratest poll it commissioned. A survey in March put support for sanctions at about 25 percent.
“Sanctions are right, but not enough,” said Harald Hein, a 60-year-old administrative employee at a bank in Frankfurt. “On the other hand, I can see the problem that Russia can stop its gas, its oil. It’s difficult, but nothing is cheap, you always have to pay a price.”
Germany imports more than a third of its oil and gas from Russia and is the European Union’s top exporter to Russia. Germany should consider curbing Russian gas purchases in response to Putin’s actions in Ukraine, Michael Fuchs, a CDU deputy leader, told Deutschlandfunk radio.
“It’s not acceptable that the Russians first annex territories -- Crimea -- and then on top of that have some militia fighting a proxy war in eastern Ukraine, which then leads to civilian planes being shot down,” Fuchs, a former head of the country’s exporters association, said yesterday.
[h=2]Chic Houses[/h] Social Democratic Party Chairman and Vice Chancellor Sigmar Gabriel has also come out in favor of a much tougher stance on Russia, saying that the EU must move against Putin’s oligarchical allies “with their chic houses in European capitals” by freezing their bank accounts.
“We need to have in our sights those on whose shoulders the Russian government stands,” Gabriel said July 27 in an interview with ARD Television.
Still, some in Germany are urging further caution on Russia. The telephone survey of 1,000 voters for Spiegel taken on July 23-24 showed that 39 percent of respondents opposed wider measures. The poll had a margin of error of as much as 3.1 percentage points.
“If the economy is hurt by sanctions then this would not be a good thing, especially if consumers are those paying the price,” said Mariam Rudolfs, a 25-year-old legal clerk in Frankfurt. “It would not be right.”
As the standoff with Russia intensifies, German industry is preparing for the long haul.
“As the crisis began, many had the hope, that in three to six months, one would be able to return to the order of business,” Wansleben said. “But this expectation has not been fulfilled. We don’t currently see a light at the end of the tunnel.”

 

[h=1]Special Report: Where Ukraine's separatists get their weapons[/h]

DONETSK Ukraine (Reuters) - On the last day of May, a surface-to-air rocket was signed out of a military base near Moscow where it had been stored for more than 20 years.


According to the ornate Cyrillic handwriting in the weapon's Russian Defence Ministry logbook, seen by Reuters, the portable rocket, for use with an Igla rocket launcher, was destined for a base in Rostov, some 50 km (31 miles) from the Ukrainian border. In that area, say U.S. officials, lies a camp for training Ukrainian separatist fighters.


Three weeks later the rocket and its logbook turned up in eastern Ukraine, where government troops seized them from pro-Russian separatists.


The logbook, which is more than 20 pages long, records that rocket 03181 entered service on May 21, 1993, and had regular tests as recently as 2005 to make sure it was in fighting form. The seal of the Russian Defence Ministry has been stamped over the signature sending the weapon to Rostov.


A copy of the log was passed to a diplomat in Ukraine’s capital, Kiev. Reuters was unable to verify its authenticity with the Russian military, and Moscow has consistently denied arming the separatists in eastern Ukraine.


The Igla and its logbook are just one indication that weapons are flowing from Russia into Ukraine. Interviews with American officials, diplomats in Kiev, and Russian military analysts paint a picture of a steady and ongoing flow. These people say weapons – from small arms to armored personnel carriers, tanks and sophisticated missile systems – have flooded into the region since May, fueling the violence.


In an interview with Reuters last week, a separatist leader said that Russia may have supplied the separatists with BUK rockets, which were used to shoot down Malaysia Airlines flight MH17. The destruction of the civilian passenger plane over eastern Ukraine on July 17 killed nearly 300 people.


Alexander Khodakovsky, commander of the Vostok Battalion, told Reuters: "I knew that a BUK came from Luhansk (in east Ukraine) ... I heard about it. I think they sent it back. Because I found out about it at exactly the moment that I found out that this tragedy (of MH17) had taken place. They probably sent it back in order to remove proof of its presence."

View gallery

Members of the Ukrainian Emergency Ministry carry a body near the wreckage at the crash site of Mala …



Three U.S. government officials said the weapons flow from Russia increased dramatically several weeks ago in response to successes by Ukrainian government forces, including the recapture of Slaviansk, a separatist stronghold in eastern Ukraine. The new shipments included anti-aircraft systems designed to combat Ukraine’s air power, those officials said.


“If you trace the increase in supplies and materials ... we’ve seen in the last few weeks culminating in this tragic incident, it’s clearly in the face of successes by the Ukrainian forces," said a senior U.S. official, who like the others spoke on condition of anonymity.


Moscow, which has said it is willing to cooperate with an international investigation into the loss of MH17, has denied sending any BUK missiles to the rebels. It has said Washington is attempting to destabilize Russia through events in Ukraine.


Russian Foreign Minister Sergei Lavrov said this week that Moscow was hopeful that monitors from the Organization for Security and Cooperation in Europe could be deployed along Russia's border with Ukraine to dispel suspicions that Russia is aiding the rebels.


"We hope that this will dispel suspicions that are regularly being voiced against us, that those (border) checkpoints controlled by the militias from the Ukrainian side are used for massive troops and weaponry deployment from Russia to Ukraine," he said.


Pro-Russian separatists in Ukraine maintain most of their weapons have come from captured Ukrainian armories or have been seized directly from the Ukrainian military on the battlefield.



BORDER SKIRMISHES




In the weeks following Russia's annexation of Crimea in March, tensions grew on the south and east frontiers of Ukraine. Kiev's border guard agency said it stopped thousands of Russian citizens who tried to enter Ukrainian territory carrying weapons or bags full of camouflage.


Separatists started firing on border guard positions, according to Ukrainian officials. On May 29, the Stanychno-Luhanske border guard division in Ukraine's Luhansk province was attacked by 300 gunmen with small arms and grenade launchers. Rebels seized control of the facility after five days of fighting. Other border guard divisions and checkpoints along Ukraine’s more than 2,000-km border with Russia also fell.


Separatists were able to ferry in people and equipment almost unhindered.


That led to more ambitious attacks on Ukrainian targets. On June 14, for instance, separatists shot down a Ukrainian IL-76 military transport jet coming in to land near the eastern city of Luhansk. All 49 people on board died; charred pieces of the fuselage and engines littered the rolling wheat fields outside the village of Novohannivka.


The weapon used that day, according to separatists who later spoke about the attack, was an Igla rocket launcher, sometimes known generically as a MANPAD, for man-portable air-defence system.


The origin of the weapon remains unclear: There is no evidence this was connected to the Igla rocket seized by Ukrainian forces a week later along with its log book. Iglas were used extensively in Afghanistan, Chechnya and Bosnia in the 1990s and are easy to transport and common in eastern Ukraine. Videos, posted online after Ukrainian troops drove separatists out of Slaviansk on July 7, show boxes marked 9M39 – the model of missile used with an Igla – stacked in the basement of the mayor’s office.


The day after the IL-76 was shot down, Valery Bolotov, top commander of the Luhansk People's Republic, claimed responsibility. “I can't tell you anything more detailed on the IL-76, but I will repeat that the IL-76 was hit by our militia, the air defense forces of the Luhansk People's Republic," Bolotov, who wore a camouflage T-shirt, said in a video posted on YouTube.


The commander said that separatists in Luhansk controlled nearly 80 km of the border from Dolzhanksy to Izvaryna at that time, but denied getting weapons from Moscow, saying they had been pillaged from Ukrainian army and police store rooms.




A separatist officer in Slaviansk who used the nom de guerre Anton also said the Igla in the IL-76 attack was not Russian but a weapon seized from Ukrainians. He declined to say whether the separatists received other weapons from Russia.


Alexander Gureyev, a Russia supporter from Luhansk, told Reuters last week that all the separatists’ weapons had been found in local arms warehouses.


"We had to boost our arsenal,” he said. “If you have small-caliber weapons and they're shooting at you with Howitzers - that's not right. But now they're getting it from us with Howitzers, mortars, tanks. It’s given them something to think about.”


He declined to detail the origin of heavy weapons, but said separatists were “thrilled” when the IL-76 was shot down. “It was like a holiday in the city. People thought things would change and that with such a success people would stop dying in this conflict.”


He said the Luhansk rebels had decided to station anti-aircraft sharpshooters at the nearby airfield in retribution for the deaths of at least eight people in what he called a Ukrainian airstrike on the rebels’ headquarters in Luhansk.


"They simply flew above us, we were already fed up with it all and decided that we would start shooting at everything,” he said. “We simply took anything out of the sky that flew above us."




“RUSSIAN BONEYARDS”

Not everyone believes the separatists’ assertions that their weapons had been seized from Ukrainian troops.




A diplomat said that arms had started to come in from Russia regularly around the time of the independence vote in Crimea in May. In the past couple of weeks an increasing amount of materiel had arrived “in reaction to the collapse of Slaviansk,” he said. That included T64 tanks from stocks of old weapons discarded after the collapse of the Soviet Union.


Anton Lavrov, an independent Russian military analyst said: “It would be stupid to deny that Russia supports the separatists. The main question is only the scale of this support.”


He said pro-Russian separatists have been found in possession of a Kamaz Mustang military transport vehicle that is not used in Ukraine and cannot be bought there. Reuters could not independently verify that.


“There was a serious escalation in the middle of June, when heavy weapons began to appear among the separatists, including tanks and artillery in such quantities that it would be hard to attribute it to seizures from Ukrainian stockpiles."


Another independent Russian military analyst, Alexander Golts, also said the rebels had received arms from Russia. He described it as “all old Soviet weaponry.” He said rocket launchers were spotted in April or the beginning of May very early in the conflict.


Washington is in no doubt Russia is the source of many of the weapons. At least 20 tanks and armored personnel carriers have crossed the border from Russia since the downing of Malaysia Airlines MH17, a senior U.S. intelligence official said.


In a media briefing on July 22, U.S. intelligence officials also released satellite photographs of what they said was a training site for Ukrainian separatists near the Russian city of Rostov. The photographs appear to show increased activity at the site between June 19 and July 21.


A Moscovite volunteer called Valery Kolotsei, 37, said he joined the rebels in Ukraine’s Luhansk region for a few weeks in May and June. He said he had connected with other volunteers over Vkontakte, Russia’s version of Facebook. They had gathered, he said, in the Rostov region, where U.S. officials say a camp for training Ukrainian separatist fighters sits.


Kolotsei said the rebel group he joined used a motley array of weapons, including a mortar produced in 1944.



“OUT OF CONTROL”


Before the MH17 incident, U.S. spy agencies issued multiple warnings that Russia was shipping heavy weaponry, including rockets, to Ukrainian separatists, U.S. security officials said.


The officials said that before MH-17 went down, the United States had become aware separatists possessed SA-11 BUK missiles, but believed they were all inoperable. Officials acknowledged, too, that U.S. intelligence agencies do not know who fired the missile or when and how separatists may have obtained it.


Russian President Vladimir Putin has firmly denied his country had any involvement in the fate of MH17. Putin and the separatists blamed Ukraine for the disaster, with some suggesting a Ukrainian missile team brought down the passenger aircraft.


Ukraine rejects such claims. Vladyslav Seleznyov, a spokesman for Ukraine’s military operations in eastern Ukraine, said: “The Ukrainian army has portable missile systems of the Igla and Osa type and the complex BUK. However, they are not used in this campaign because there is no need for them.” The rebels have no aircraft, he said.


Despite the MH17 tragedy, the conflict shows little sign of diminishing. Another U.S. official said: "There are indications that some groups feel betrayed by Moscow not doing enough. Others don’t like the way this is headed.” He said some rebels fear the fighting has "gotten out of control."


Olexander Motsyk, Ukraine’s ambassador to the United States, told Reuters in an interview that his country has evidence Russia is preparing to supply separatist rebels with a powerful new multiple-rocket system known as the Tornado. According to military websites, the system first saw service earlier this decade and is an improvement on Russia’s older Grad missile launcher.


The evidence for this, Motsyk said, includes satellite photographs as well as intercepts of telephone conversations. He declined to be more specific.

Referring to the flow of weapons from Russia into eastern Ukraine, he said: “Nothing has changed after the downing of the civilian airliner.”

 

EU agrees first broad sanctions on Russia; Ukraine fighting kills dozens


BRUSSELS/DONETSK, Ukraine, July 29 (Reuters) - The European Union agreed for the first time on Tuesday to impose broad sanctions against Russian oil companies, banks and defence firms, by far the strongest international action yet over Moscow's support for rebels in eastern Ukraine.
The measures mark the start of a new phase in the biggest confrontation between Moscow and the West since the Cold War, which worsened dramatically after the downing of Malaysian flight MH17 over rebel-held territory on July 17 by what Western countries say was a Russian-supplied missile.

Diplomats said ambassadors from the 28-member European bloc agreed to restrictions on trade of equipment for the oil and defence sectors, and "dual use" technology with both defence and civilian purposes. Russia's state run banks would be barred from raising funds in European capital markets. The measures would be reviewed in three months.

Previously Europe had imposed sanctions only on individuals and organisations accused of direct involvement in threatening Ukraine, and had shied away from wider "sectoral sanctions" designed to inflict economic damage on its biggest energy supplier.

The measures have been coordinated with Washington in the hope that Russian President Vladimir Putin will back down from a months-long campaign to seize territory and disrupt Ukraine, a former Soviet state of 45 million whose pro-Moscow leader was toppled in February.

But Putin, who has called eastern and southern Ukraine "New Russia", has shown no sign of backing down. Indeed, despite the international condemnation following the downing of the airliner, Western countries say the Kremlin has doubled down on its strategy of supporting separatists by sending more heavy weaponry across the frontier.

Moscow denies it is arming the rebels, protestations that are ridiculed in the West.

On the ground on Tuesday, intense fighting between government troops and pro-Russian rebels killed dozens of civilians, soldiers and rebels over the past 24 hours, as Kiev pressed on with an offensive to defeat the Moscow-backed revolt.

Shells hit the centre of Donetsk, a city with a pre-war population of nearly a million people where residents fear they will be trapped on a battlefield between advancing Ukrainian troops and Russian-backed rebels who have vowed to make a stand.

Ukrainian forces have been pushing rebel units back towards their two main urban strongholds of Donetsk and Luhansk and have sought to encircle them in several places.

The government says its forces have retaken several villages in the rolling countryside near where the airliner crashed, killing all 298 passengers, most of them Dutch.



"DEATH ROW"

In Donetsk, the body of a dead man lay in rubble behind a badly damaged 10-storey residential building close to the city centre, hit by shelling. Rebels at the scene placed body parts on a nylon sheet and carried it on a stretcher to a green van.

"There, that's their 'separatists'. That's their 'rebel commander'," said a distressed woman in her 60s, gesturing towards the body. "They are killing neighbours. They are killing people, ordinary people."

Another middle-aged woman, who gave her name as Katarina, charged out of the building next door carrying two bags.

"No more! I cannot live in this death row any more!" she said. "I am leaving! I don't know where!"

Donetsk officials said two people were killed in the shelling of the city.

Municipal officials said up to 17 people, including children, were killed in fighting on Monday evening in the town of Horlivka, a rebel stronghold north of Donetsk that saw fierce battles between the rival forces in the last few days.

In the city of Luhansk, officials said five civilians were killed when shelling hit a retirement home.

"The enemy is throwing everything it has into the battle to complete encirclement of the DNR," Igor Strelkov, a Muscovite rebel commander, told journalists in Donetsk on Monday evening, referring to the self-proclaimed "Donetsk People's Republic".

A rebel source in Donetsk said reinforcements including military equipment and fighters had arrived across the nearby border from Russia into Ukraine. Reuters was not able to confirm that independently.

A spokesman for Ukraine's Security Council, Andriy Lysenko, blamed Russia for shelling a Ukrainian border crossing point and military positions from across the border to help the rebels. Moscow has also accused Ukraine of firing across the frontier.

Washington says the airliner was almost certainly shot down accidentally by rebels using an advanced Russian-made surface-to-air missile. Rebels have shot down numerous Ukrainian aircraft in the weeks before and since.



BANKING, TECHNOLOGY, ARMS

Leaders of the United States and major European powers agreed in a teleconference on Monday to impose sanctions on Russia's banking, technology and arms sectors.

Winning support from the EU for sanctions was the trickier task, because the European bloc does more than 10 times as much trade with Russia as the United States does and its 28 member states must agree unanimously on any measures.

To mitigate the impact on Europe's own economy, the new sanctions will not affect previous contracts, which means France will be allowed to go ahead with delivery of a naval helicopter carrier it has already sold to Russia. Russia's oil industry has been targeted but its natural gas, which powers European industry and lights its cities, has been spared.


Russia is the world's biggest exporter of natural gas and second biggest exporter of oil.


Still, some European countries and companies will face real pain. British energy giant BP, the biggest foreign investor in Russia with a near 20 percent stake in Russia's biggest oil company Rosneft, complained its business could be hurt.


London's financial services hub could face disproportionate harm from measures against Russian banks. German manufacturing firms could lose customers. European banks and other creditors that are owed money by Russians may face a greater risk that clients will have trouble refinancing or repaying their loans.


"These sanctions are harder than anything we have ever had before," said James Nixey of British think tank Chatham House. "It will hurt a little bit but it's a down payment on the future security of Europe. It's a question of Western credibility."


Meanwhile on the ground, fighting has only intensified since the air crash, with Ukrainian government forces trying to press on with an offensive that saw them push rebels out of their bastion of Slaviansk at the start of the month.


Rebels who retreated from Slaviansk to Donetsk say they will make a stand inside the city. Fighting has also intensified in towns and villages near the border, where the government aims to block rebel reinforcements and arms shipments from Russia.


Ukraine military spokesman Lysenko said 10 Ukrainian soldiers were killed over the last 24 hours. Rebel commander Strelkov said his side had lost 30 fighters killed and wounded.


Plans to open a humanitarian corridor in Luhansk to allow residents to flee the fighting failed. The United Nations says more than 100,000 people have already fled the east so far.


Violence in the region also frustrated international experts' efforts to access the plane crash site for a third day. A Dutch police mission said it abandoned plans to travel there on Tuesday because of fighting along the route.


Fighting has impeded recovery of some of the remains from flight MH17 and made it impossible to reach the site to investigate the cause of the crash. Kiev and the rebels accuse each other of fighting in the area to keep inspectors away.


Once again we see the continued failure after failure after failure of the Obama-administration: they refuse to take the initiative or the lead on any effective solution or resolution to the Ukraine. They continue to be as useless and worthless in this mess as Kerry has been by his absolutely biased effort to support Hamas in the Hamas Israel conflict.

 

[h=1]U.S. Adds Russian Banks to Sanctions List in Move With EU[/h]
The U.S. today sanctioned three Russian banks and a state-owned shipbuilder that supplies the Russian navy and its oil and gas industry, joining with the European Union in escalating the penalties for Russia over its actions in Ukraine.


The European Union earlier today agreed to bar Russia's state-owned banks from selling shares or bonds in Europe and restricted the export of equipment to modernize the oil industry, a key prop for Russia's economy. New contracts to sell arms and machinery, electronics and other civilian products with military uses also will be banned.



President Barack Obama was set to give remarks on the latest sanctions this afternoon.


The moves by the U.S. and EU were the latest U.S. response to Russian President Vladimir Putin's refusal to end support for Ukrainian rebels. The confrontation escalated with the downing of a Malaysian airliner by a surface-to-air missile over territory held by pro-Russian separatists in Eastern Ukraine.



The U.S. says Russia continues to provide arms to the rebels and has fired artillery into Ukraine from Russian territory.


"The Russians and their so-called volunteers are continuing to ship arms and funds and personnel across the border," Secretary of State John Kerry said in Washington after meeting Ukrainian Foreign Minister Pavlo Klimkin. "While the Russians have said they want to de-escalate the conflict, their actions have not shown a shred of evidence that they really have the legitimate desire to end the violence."




Earlier Sanctions
The U.S. two weeks ago hit Russian banks, energy companies and defense firms with sanctions preventing them from accessing U.S. equity or debt markets for new financing with a maturity beyond 90 days.


The new sanctions target VTB Bank (VTBR), Bank of Moscow and the Russian Agricultural Bank. United Shipbuilding Corp., which has contracts with the Russian military, also was sanctioned.


The European sanctions will initially last for 12 months, though they'll be reviewed by the end of October, according to an EU official speaking on condition of anonymity. It would need unanimity from all 28 members of the bloc to scrap the measures before the 12 months are up.


Due to the reliance of many European countries on Russian oil and natural gas, the EU stopped short of the full-scale commercial warfare that could damage its own economy, which is still shaking off the euro debt crisis. The calibrated blockade buried the notion of Russia, which sends almost half of its exports to the EU, as a "strategic partner" for the bloc and risked retaliation by Putin against European and U.S. companies active in the $2 trillion economy.


So once again we see the absolute failure of Pres Obama and his administration:

Instead of again taking up the opportunity for decisive action, he has only tacked on small measures of dubious and worthless value against Russia. Only the EU so far has dared to gamble on more massive sanctions which put their own economies at risk.

When will the left finally admit: their god-king Pres Obama has utterly failed at each and every opportunity?

 

[h=1]After shaky start, Ukraine turns eastern offensive around[/h]
Kiev (AFP) - When Ukraine's military offensive to oust pro-Russian rebels from the restive east began in mid-April with humiliated soldiers meekly surrendering their armoured vehicles it looked doomed to failure.





But after more than three months of brutal fighting that has claimed some 1,100 lives, a sudden advance by battle-hardened government forces in recent weeks has seen them snatch back a string of key towns and left the once confident insurgents scrambling.


Analysts say the dramatic turnaround is down to a combination of growing professionalism and ruthlessness from Kiev's forces on the one hand and the shifting nature of the support that Russia is giving the rebels.


"The Ukrainian army is finding out how to fight as it goes along and has shown how capable it is of learning," said Valentyn Badrak, director of the Research Centre for the Army, Demilitarisation and Disarmament in Kiev.


Poorly coordinated, riddled by corruption and low on morale after the humbling loss of Crimea to Russia in March, Ukraine's military has undergone a radical shakeup after drafting highly motivated volunteers and improving its leadership.


"The Ukrainian army understood that this a real war and that the survival of the country is in the balance," said Konstantin Kalachev the head of the Moscow-based Political Expert Group.

View gallery

A member of the pro-Ukraine Donbass Battalion holds an automatic rifle with Ukraine's national f …



"Lessons were learnt from the defeats, personnel was changed and morale was bolstered."


That has been aided in no small part by greater political direction in Kiev since the election of billionaire tycoon Petro Poroshenko as president in May filled the vacuum left by the ouster of Kremlin-back leader Viktor Yanukovych in February, Kalachev said.


On the ground, despite denials from Kiev, Ukraine's forces also seem to have ditched an earlier reluctance to fight in built-up areas with the United Nations and rights groups accusing them of increasingly using heavy weapons against populated areas, adding to the spiralling civilian casualties.




- Russian support -



But major questions exist over the extent of Russian support for the separatists and what the Kremlin will do if its alleged proxies seriously look like they are losing.





As they retreated from key towns rebel commanders have increasingly lashed out at Moscow for not sending enough support and some analysts said Russian President Vladimir Putin might be looking for a way out in the wake of tougher international sanctions and the downing of Malaysia Airlines flight MH17.


But far from backing down, the US says Moscow is now "doubling down" on its support for the rebels, ramping up the flow of weapons and firing directly at Ukrainian troops from its territory.


"The key question now is when will Russia say 'stop' and how it will react to gains made by Ukrainian armed forces in recent days," said Konrad Muzyka, Europe and CIS Armed Forces analyst at IHS Jane's in London. "Make no mistake, Russia will respond."


With international ire on MH17 giving Ukrainian forces a "carte blanche" to deal with the separatists Muzyka said Kiev's next step will be to try to cut off supply lines to the main rebel stronghold of Donetsk before looking to tighten control along the frontier with Russia.


"In the long term, the success of the offensive will depend on sealing the border," he said.


But despite the recent advances by a newly emboldened Kiev, other analysts warned that the conflict in eastern Ukraine was a "partisan" insurgency, meaning it would be hard for Kiev to score an outright victory.


"It is not right to overestimate the successes of the Ukrainian army," said independent Russian military analyst Alexander Golts.


"Ukraine has got involved in a war which is impossible to win."

 

[h=1]Putin may have passed point of no-return over Ukraine[/h]
MOSCOW (Reuters) - Vladimir Putin risks becoming an international pariah over the Ukraine crisis but the Russian president is battening down the hatches for the gathering economic and political storm.


The United States and the European Union saw the downing of Malaysian Airlines flight MH17 as a chance for Putin to distance himself from pro-Russian separatists in east Ukraine and seal the border across which they say arms are reaching the rebels.


Instead Putin has stood firm, blamed the crash on his pro-Western antagonists in Kiev and signaled no change in his stance, leaving Russia facing the threat of much tougher international sanctions and economic and political isolation.


With an about-turn all but impossible for Putin after a fierce media campaign that has demonized the West, painted Ukraine's leaders as fascists and backed the rebels to the hilt, he appears to have passed the point of no-return.


"I think our state leadership is very experienced but I don't think it assessed the West's mentality properly," veteran political commentator Nikolai Svanidze told Ekho Moskvy radio.


"We know the character of the people we are talking about, President Putin's character," he said. "There will be no apologies."


The deaths of 298 people on flight MH17 on July 17 have hardened the West's stance, narrowing differences between the EU and Washington over sanctions and,
importantly, reducing the resistance of the powerful German business lobby.


Despite this, Putin looks unwilling or unable to change a strategy that has sent his popularity to record highs in Russia, particularly since the annexation of the Crimea peninsula from Ukraine in February fueled a wave of patriotic fervor.



BLAME GAME


The president showed one, rare moment of uncertainty after the airliner went down, looking tired, pale and unusually unsure of himself in a television appearance in the early hours of July 21.

View gallery


Children walk past a piece of wreckage from the Malaysia Airlines jet downed over Ukraine, in Petrop …


But he came out fighting at a meeting with security chiefs the following day, saying he would use Russia's influence with the rebels but also launching a diatribe against the West. He said Kiev was to blame because it had resumed military operations after a ceasefire. He neglected to say the rebels had defied the truce.


Since then Putin has said little on the crisis in public beyond suggesting Russia's defense industry must become self-reliant and stop using Western parts.


Western leaders would like to believe he is rethinking his strategy and looking for a way out of the crisis after boxing himself into a corner, but opinion polls suggest Russians want Putin to do exactly the opposite.


He is more likely to hold out against what he and state media have depicted as a Western-inspired coup d'etat that toppled a Ukrainian president sympathetic to Moscow and, using a phrase from the Cold War, was intended to "contain" Russia.


Political analyst Alexander Morozov said Putin could have headed off the West by distancing himself from the separatists but he saw no political dividends from doing so and it may already be too late for this. He has missed the moment, Morozov said.


New research by the independent Levada Centre polling group shows 64 percent of Russians blame the West for the Ukrainian conflict, 61 percent are not worried by sanctions and 63 percent think Russian media coverage of the crisis is objective.


"Everything so far points to a further hardening in Russia's stance. Mr Putin has too much invested - both from a geopolitical and, just as importantly, domestic political standpoint - in his standoff with the west to be swayed by sanctions alone," said Nicholas Spiro, Managing Director of Spiro Sovereign Strategy, a London-based consultancy.


"The MH17 crash... is forcing him to harden his anti-Western stance much sooner than he would have liked. Mr Putin doesn't want to burn his bridges with Europe's main economies - but he may now be forced to do just that."



THREAT TO RUSSIA'S ECONOMY


Putin's dilemma is that if he adopts a Plan B on Ukraine now he risks looking weak in Russia and could suffer a fall in public support that could damage his chances of re-election for a further six years in 2018.

View gallery

A Malaysian air crash investigator takes pictures of wreckage at the crash site of Malaysia Airlines …



But failing to change tack could have a detrimental impact on Russia's economy if the United States and EU push ahead with tougher, sectoral sanctions against Moscow.


This could put at risk the improvement in living standards and the financial well-being of many urban Russians, one of the pillars on which Putin built his support during his first spell as president from 2000 until 2008.


It could underline his opponents' concerns that Putin's third term as president, which began in 2012, is undoing some of the progress made toward financial stability and Western-style democracy since the Soviet Union collapsed in 1991.


It is, however, a gamble he seems prepared to take.


Russia's $2 trillion economy is already teetering on the brink of recession and recorded zero growth in the second quarter of this year. The rouble is shaky and capital flight has accelerated to $75 billion this year.


But, for now at least, Russian business leaders are not speaking out against Putin because alienating the president could cause more damage to their firms than the sanctions themselves. Many back him anyway.


There was, for example, a defiant reaction on Tuesday to a ruling by an international arbitration court in The Hague that Russia must pay $50 billion for expropriating the assets of oil company Yukos, whose former owner Mikhail Khodorkovsky fell out with Putin.


On his radio show "Fifth Argument", host Vladimir Averin asked whether it was time for Russia to pull out of such international courts in The Hague, Stockholm, London and Vienna. In a spot poll, more than 78 percent of listeners said "yes".



LONE VOICES


One respected figure has, however, spoken out about the growing threat of isolation.


"I have serious concerns that the escalation of the conflict around Ukraine will be followed by conclusions ... that we do not need the world's best practices," former Finance Minister Alexei Kudrin said last week. "Such an attitude, of course, inhibits seriously the modernization of Russia."


As a friend of Putin, Kudrin is almost alone in being able to issue such criticism without paying a political price. But there are also other, clear signs of companies and institutions planning for tough times ahead.


Russia's central bank raised its key interest rate on Friday in a sign of concern that new sanctions could speed up capital flight from Moscow's already struggling financial markets.


Russia's biggest oil producer, Rosneft, said the same day that it had been working on a plan to offset the negative effect of sanctions - something other firms are sure to have been doing as well.


Kremlin officials last week poured scorn on Kudrin's warning, saying growth was intact and suggesting his comments were overly dramatic.


But in a new sign of the looming problems, oil and gas producer BP - by far the largest investor in Russia with its 19.75 percent stake in Rosneft - said on Tuesday further Western sanctions could affect its business in Russia, where it makes about a third of its crude oil output.


Foreign equity and bond investors, who had tentatively ventured back into Russia after a huge early-2014 selloff, are also again cutting their holdings.


"The expansion of personal sanctions ... is the most painful answer so far to the actions of the Putin regime," Boris Vishnevsky, a St Petersburg regional politician, said of the latest list of individuals close to Putin who face asset bans and visa freezes under sanctions.


"Economic sanctions ... will inevitably affect not so much 'Putin's friends' but all other Russian citizens. Because it will lead to the collapse of the Russian economy and living standards."

 

[h=1]Russia-Ukraine tensions pose credit default risks: IMF[/h]

Washington (AFP) - The International Monetary Fund warned Tuesday that an escalation of tensions between Russia and Ukraine would raise the risks for banks exposed to those countries.





Hit by US and European Union economic sanctions against Moscow, Russian businesses in particular could see financing and revenue dry up, pushing them to fall behind in servicing debts.


"As Russian and Ukrainian credit quality deteriorates, banks with credit exposures will be faced with increased risks of default," the IMF said in a report on financial spillovers in the global economy.


Austrian banks are the most exposed relative to their bank asset size. And any problems affecting them could spread through credit channels in the rest of emerging Europe, the report said.


In addition, French, Italian and Swedish banks have relatively larger exposures compared with banks in other advanced economies, said the report, which did not identify any bank by name.


While the conflict between Kiev and pro-Russian separatists has remained confined to eastern Ukraine, escalation could have global repercussions, the report warned.


"An escalation of tensions through intensification of sanctions and retaliations may lead to larger spillovers across Europe, central Asia, and beyond."


Last Thursday the IMF lowered its 2014 growth forecast for the global economy, to 3.4 percent from 3.7 percent, citing geopolitical risks in Ukraine and the Middle East. It slashed Russia's growth forecast by 1.1 percentage points to a mere 0.2 percent.


In the new spillover report, the IMF highlighted the "significant risk" of sharp disruptions in the supply of Russian natural gas to Europe, with Russia providing about one-third of Europe's gas needs and half of that transiting Ukraine.


Most central, eastern, and southeastern European countries are heavily reliant on Russian gas, which represents between 40 and 100 percent of total gas consumption, the report said.


In the 18-nation eurozone, Austria, Finland and Germany also are largely dependent on Russian gas imports.


Germany, Europe's economic powerhouse, depends on Russian gas for 40 percent of its gas consumption, of which almost three-quarters comes through Ukraine.


The IMF noted that the Ukraine crisis has not had much effect on gas prices, but that metals prices jumped soon after it began.


Russia produces about 40 percent of the world's palladium and between 12 and 14 percent of nickel, both of which are "central" to certain industries, it said. After Russia seized Crimea in early March, prices for both jumped around 10 percent by the end of April.


In the oil market, where Russia produces more than 10 percent of the world's crude oil, prices have been relatively stable in spite of heightened tensions.


"However, crude oil prices could suddenly spike amid rising geopolitical tensions, depending on market conditions such as the size of oil inventories," the IMF cautioned.



So we see yet another series of unexpected outcomes that can happen due to the massive and uttermost failures of Pres Obama and his administration: again, if they had taken a firm stance at the beginning of the Ukraine Crisis, this entire mess would have been avoided.

 

[h=1]Ukraine official: Rebels lay mines near crash site[/h]
DONETSK, Ukraine (AP) — International observers turned back Wednesday after making another attempt to reach the site where Malaysia Airlines Flight 17 went down in eastern Ukraine, and a government official said the area near the zone had been mined by pro-Russian separatists who control it.
Observers from the Organization for Security and Cooperation in Europe set out Wednesday in two vehicles — without frustrated crash investigators from the Netherlands who have been trying to reach the site for four days.
But the OSCE observers turned back to the city of Donetsk after discussions with rebels.
Safety concerns and hindrance from the separatists who control the area have kept the investigation team away. Foreign governments whose citizens died have complained the site is not secured and some human remains have not been recovered.
Government security spokesman Andriy Lysenko added to those concerns Wednesday by saying separatists "have mined the approaches to this area. This makes the work of the international experts impossible."
Lysenko was asked at a briefing about concerns that Ukrainian efforts to win back territory were increasing fighting in the area and slowing access. He said that Ukrainian troops weren't conducting operations against the separatist near the site, but were trying to cut off their supply lines to force them to leave the area.
Elsewhere, Ukrainian forces took control of the town of Avdeevka, just to the north of the rebel stronghold of Donetsk.
Local officials said fighting over the past 24 hours killed 19 people in the region.

 

[h=1]Russia counts cost of new economic sanctions[/h]
MOSCOW (AP) — Russia blasted the West's new economic sanctions on Wednesday, accusing the U.S. of being "prosecutorial" in its drive to impose penalties on the country's key energy and finance sectors.



The U.S. and European Union on Tuesday announced a raft of new sanctions that would limit the trade of arms and technology that can be used in the oil industry and for military purposes. The EU also put its capital markets off limits for Russian state-owned banks.
The U.S. and EU say Russia is helping the separatist rebels in eastern Ukraine who are accused of downing the Malaysian Airlines jet this month.
Russia's foreign ministry said Washington was "advancing baseless claims." In a statement, it accused the U.S. of conducting itself in a "pretentious, prosecutorial manner."
Experts say the penalties, which had until recently mainly targeted individuals, will have more bite to them this time, rippling through the economy and causing deeper damage.
The biggest immediate impact is likely to come from the financial sanctions. In a first sign of concern, Russia's central bank said Wednesday it would support banks targeted by the penalties.




"State-owned banks are the core of the Russian banking system. Together they count for half of assets, half of credits — they perform a very significant role," said Vladimir Tikhomirov, chief economist at BCS. "Given their current difficulties in raising new debts... that would mean their ability to lend to other banks, smaller banks, is going to be more restricted also."

U.S. officials said Tuesday that roughly 30 percent of Russia's banking sector assets would now be constrained by sanctions. EU officials said Russia's majority state-owned banks last year issued long-term debt worth 7.5 billion euros ($10 billion) on the EU market, as well as 15.8 billion euros in debt on the Russian market.
The measures against Russian banks are meant to inflict just enough pain without causing them to collapse. Only debts with a maturity of over 90 days will be targeted by the measures.
"The aim is not to destroy these banks," said a senior EU official, who was briefing reporters on condition of anonymity prior to the sanctions' official announcement. "We do not want them to get into a liquidity crisis."
But analysts say the sanctions will inflict economic pain, not least because the resulting uncertainty will ensure investors stay clear from the dealings with those banks for fear of running afoul of sanctions.




The EU also moved to prohibit key technology exports that could be used for oil exploration and development in Russia, which relies heavily on Western expertise. EU officials noted that the prohibition would target just one tenth of overall energy tech exports to Russia, and some analysts say that such projects would only be impacted in the next year.
"It's more of a long-term development and to some extent that's symbolic," Chris Weafer, an analyst at the investment firm Macro Advisory, told the AP by phone.
The reaction in the stock markets in Moscow was mixed, as investors had sold off shares in Russian companies for the past two weeks after Malaysia Airlines Flight 17 was downed. Reports last week that the new, tougher sanctions were due had also caused markets to tumble for days ahead of their formal announcement Tuesday.
On Wednesday, the MICEX benchmark index was up 2 percent, mainly thanks to a rise in shares in companies that were spared sanctions. Shares in VTB Bank, Russia's second largest and one of the sanctions targets, were down 0.9 percent.
The latest sanctions could accelerate an economic downturn that was already hitting Russia. The International Monetary Fund slashed its growth forecast for this year to nearly zero, from 1.3 percent last year. Meanwhile, the U.S. says investors are expected to pull more than $100 billion out of the country this year.



"Russia's actions in Ukraine and the sanctions that we've already imposed have made a weak Russian economy even weaker," President Barack Obama said Tuesday.
Europe has a far stronger economic relationship with Russia than the U.S. does, and until this week European Union leaders had been reluctant to impose harsh penalties — in part out of fear of harming their own economies.
EU President Herman Van Rompuy and the president of the European Commission, Jose Manuel Barroso, said the sanctions sent a "strong warning" that Russia's destabilization of Ukraine could not be tolerated.
"When the violence created spirals out of control and leads to the killing of almost 300 innocent civilians in their flight from the Netherlands to Malaysia, the situation requires urgent and determined response," the two top EU officials said in a statement.
The new EU sanctions put the 28-nation bloc on par with earlier sector sanctions announced by the U.S. and in some cases may even exceed the American penalties.




Despite the West's escalation of its actions against Russia, Obama said the U.S. and Europe were not entering a Soviet-era standoff with Russia.
"It's not a new Cold War," he said.
How long the sanctions stay in place is a key factor for how much impact they will have on Russia. EU officials emphasized that while the latest measures have a duration of one year, they could be annulled at any time. That offers an incentive to cancel or scale them back.
Russia has the money to shore up its banks in the short term, meaning the sanctions would have to remain in place for more than just a few months to have a big impact on the economy.
"Banks have accumulated a cushion of hard currency reserves," said Yaroslav Lissovik, head of company research in Russia at Deustche Bank. "Russia also has very low levels of public debt and large fiscal reserves. In our view, this could be employed in the case of difficulties with refinancing.
It remains uncertain whether the tougher penalties will have any impact on Russia's actions in Ukraine — nor was it clear what further actions the U.S. and Europe were willing to take if the situation remains unchanged. In the nearly two weeks since the Malaysia Airlines plane was downed in eastern Ukraine, Russia appears to have deepened its engagement in the conflict, with the U.S. and its allies saying Russia was building up troops and weaponry along its border with Ukraine.
German Foreign Minister Frank-Walter Steinmeier pressed for a diplomatic effort to calm the situation in Ukraine, saying Wednesday that "sanctions alone are not a policy, so we must continue to seek opportunities to defuse the conflict politically."

 

We live in a global world economy. Economic sanctions will not work in the long run. The economic problems this will cause Russia will be short term.

Sanctions never really did anything to North Korea. Russia is a lot bigger country and can just wait it out....