Harvard economist and former Obama adviser says Russia is ‘basically a big gas station’ and is otherwise ‘incredibly unimportant’ in the global economy
Matthew Loh – February 21, 2022
Russia’s President Vladimir Putin signed decrees to recognize independence of the Donetsk and Luhansk. Moscow ordered troops into these areas on Monday, escalating the prospect of outright war between Russia and Ukraine.Alexei Nikolsky/TASS via Getty Images
Harvard economist Jason Furman said Russia’s economy is ‘unimportant’ except for its gas resources, The New York Times reported.
His comments come as the US and Europe prepare heavy sanctions on Russia if it invades Ukraine.
But there are concerns that their plans to punish Moscow will penalize the rest of the world too.
Russia’s economy is “incredibly unimportant in the global economy except for oil and gas,” Jason Furman, Harvard economist and ex-adviser to former President Barack Obama, told The New York Times.
“It’s basically a big gas station,” he said.
His comments come as the West prepares heavy sanctions on Russia if it invades Ukraine. While they have the potential to throw the entire Russian economy into chaos, these measures could also reverberate to further damage the US, Europe, and the rest of the world as they battle inflation and rising energy prices — a ripple effect that the West hopes to mitigate.
Despite Russia’s size and wealth in raw materials, its economy is more on-par with Brazil than with nations like Germany, France, and the UK, according to the latest nominal GDP data from the World Bank. According to the World Bank, its economy is weaker than Italy’s and South Korea’s, two nations with less than half of Russia’s population.
But as Furman notes, Russia’s oil and gas exports are significant to the world.
The European Union imports around 80% of the natural gases it uses, according to the US Energy Information Administration, and Russia accounts for 41% of the natural gas imports and 27% of the oil imports in the continent, per Eurostat.
On the other hand, Ukraine has also been a major supplier of grain to other regions, sending 40% of its wheat and corn exports to the Middle East and Africa, The Times reported.
In response to a potential food crisis in those regions, US Secretary of Agriculture Tom Vilsack said on Saturday that American farmers would increase production and “step in and help our partners,” the Associated Press reported.
Ukraine accounts for 12% of the entire world’s grain exports, and is estimated to provide 16% of global corn exports this year, the AP reported. Vilsack told the outlet he believed that American consumers would largely be unaffected, but Europeans would face “a different story.”
“You have to look at the backdrop against which this is coming,” Gregory Daco, chief economist for consulting firm EY-Parthenon, told The Times. “There is high inflation, strained supply chains and uncertainty about what central banks are going to do and how insistent price rises are.”
Russia’s Richest Lose $32 Billion as Ukraine Crisis Deepens
Ben Stupples – February 22, 2022
(Bloomberg) — The fortunes of Russia’s super-rich have tumbled $32 billion this year, with the escalating conflict in Ukraine poised to make that wealth destruction much larger.
U.S. President Joe Biden on Tuesday unleashed sanctions targeting Russia’s sale of sovereign debt abroad and the country’s elites, and said he’s sending an unspecified number of additional U.S. troops to the Baltics in a defensive move to defend NATO countries.
Gennady Timchenko heads the list of Russian billionaires who have seen their fortunes drop, with almost a third of his wealth disappearing since Jan. 1, according to the Bloomberg Billionaires Index, a listing of the world’s 500 richest people.
Timchenko, 69, the son of a Soviet military officer who met and befriended Russian Federation President Vladimir Putin during the early 1990s, now has a fortune of about $16 billion, with the bulk of his wealth derived from a stake in Russia gas producer Novatek, according to Bloomberg’s wealth index.
Fellow Novatek shareholder Leonid Mikhelson’s fortune has tumbled $6.2 billion this year, while Lukoil Chairman Vagit Alekperov’s net worth has declined about $3.5 billion in the same period as the energy company’s stock has slid almost 17%.
The country’s 23 billionaires currently have a net worth of $343 billion, according to the wealth list, down from $375 billion at year-end.
Markets slumped further this week after Putin recognized two separatist republics in Ukraine, leading to Germany halting an energy project with Russia and the U.K. imposing sanctions on five of the country’s banks and three of its wealthy individuals, including Timchenko.
Also on the U.K.’s sanctions list are Boris Rotenberg, 65, and his nephew, Igor, 48, whose families made their fortune through gas-pipeline construction firm Stroygazmontazh.
Read more: Here Are the Russian Billionaires Facing Sanctions Over Ukraine
Igor’s father, Arkady, one of Putin’s former judo sparring partners, sold the pipeline firm in 2019 for about $1.3 billion. He purchased a minority stake from his younger brother Boris five years earlier when both siblings and Timchenko were hit with U.S. sanctions over Russia’s annexation of Crimea.
What Ukraine-Russia Tensions Mean for Stocks and Investor Portfolios
Central bank tightening and slowing growth loom as larger long-term threats for equities, according to strategists on both sides of the Atlantic.
ByCharlie Wells – February 22, 2022
Ukrainian troops patrol outside the town of Novoluhanske, eastern Ukraine, on Feb. 19.Photographer: Aris Messinis/AFP/Getty Images
Tensions in Ukraine have markets on edge. Stocks are swinging, oil is closing in on $100 a barrel and uncertainty looms over investors big and small.
But it’s more of a short-term headache than a long-term drag. That’s the view of analysts on both sides of the Atlantic trying to discern what the geopolitical crisis means for investor portfolios in the wake of Russia recognizing two self-proclaimed republics in eastern Ukraine.
Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter, sees the conflict dominating near-term headlines. But he doesn’t expect it to dictate market moves in the long or even medium term. Instead, the most important factors “remain Fed tightening and economic growth,” he wrote.
JPMorgan strategists led by Dubravko Lakos-Bujas were of a similar mind in their recent note to clients, citing the larger risk of tightening monetary policy for equities and noting that Russia-Ukraine tensions are a low earnings risk for U.S. corporates.
“But an energy price shock amidst an aggressive central bank pivot focused on inflation could further dampen investor sentiment and growth outlook,” they wrote.
In the U.K., Bloomberg Intelligence equities strategist Tim Craighead wrote that European stocks face limited risk, “unless Russian energy supplies are cut.” The crisis might “shuffle the leader board temporarily” in terms of European equities, but Craighead noted that the market seems to be more focused on rising inflation, elevated margins and central bank tightening.
Still, Steve Clayton, who manages HL Select Funds at Hargreaves Lansdown in the U.K., noted that the crisis won’t be over in a blip.
“Russian troops have not massed along the Ukrainian border in order to hold a cake sale,” he wrote in a note on Tuesday. “However this unfolds, tensions and uncertainties are likely to run hot for some time to come. The market will not like any escalation, nor will it trust any settlement between the parties unless accompanied by a rapid demobilization of Russian forces around Ukraine.”
Clayton sees U.S. Treasuries and Japanese government bonds as potential beneficiaries as investors seek safe havens. Given the nature of the conflict, he also points to defense stocks such as Bae Systems Plc as possible destinations, given that “European politicians are unlikely to urge for lower defense spending while the Russian bear is growling angrily.”
Banking stocks — which have been outperforming in Europe so far this year — could be losers. The U.K. just announced sanctions on five Russian banks. The EU proposed a package of sanctions on banks that finance Russian operations in the region.
“Effective sanctions will impact on economic activity and banks will be where it is felt in the West,” Clayton wrote. “Lending volumes would be hit too, if tensions really rocket, because cautious consumers and businesses will refrain from borrowing until they feel more confident.”
Travel and leisure could also lose some steam, as they tend to when international tensions rise, wrote Clayton. Among several stocks, he pointed to Wizz Air, which has a significant network across Central and Eastern Europe.
“Times of tension are when defensiveness can pay off,” he wrote. “People still have to eat, take medicines and get operated upon. Food retailers and drug companies like Sainsbury and AstraZeneca could be interesting, but Tesco’s exposure to Central Europe will not help.”
Putin recognizes independence of separatist Ukraine regions in possible prelude to invasion
February 21, 2022
Move could trigger harsh sanctions from West; Russian military says it killed five suspected ‘saboteurs’ who crossed from Ukraine
Russian President Vladimir Putin speaks during a Security Council meeting in the Kremlin in Moscow on Monday, Feb. 21, 2022. SPUTNIK, KREMLIN POOL PHOTO VIA AP
MOSCOW — Russian President Vladimir Putin on Monday recognized the independence of separatist regions in eastern Ukraine and paved the way to provide them military support — a direct challenge to the West that will fuel fears that Russia could imminently invade Ukraine.
The carefully staged move announced in the Kremlin could lead to new sanctions on Russia and flies in the face of European efforts for a diplomatic solution to the escalating crisis, which has brought East-West relations to a new low and jeopardized trade. Britain’s prime minister called it a “breach of international law.”
The European Union immediately said it will slap sanctions on those involved in recognizing Ukraine’s breakaway regions as independent.
It came amid a spike in skirmishes in the eastern regions that Western powers believe Russia could use as a pretext for an attack on the western-looking democracy that has defied Moscow’s attempts to pull it back into its orbit.
Putin justified his decision in a far-reaching, pre-recorded speech blaming NATO for the current crisis and calling the U.S.-led alliance an existential threat to Russia. Sweeping through more than a century of history, he painted today’s Ukraine as a modern construct that is inextricably linked to Russia. He charged that Ukraine had inherited Russia’s historic lands and after the Soviet collapse was used by the West to contain Russia.
Ukrainians shrugged off the move as meaningless, but it remains a fundamental blow to their country eight years after fighting erupted the Donetsk and Luhansk regions between Russia-backed separatists and Ukrainian forces.
After his speech, Putin signed decrees in the Kremlin recognizing those regions’ independence and called on lawmakers to approve measures paving the way for military support.
Until now, Ukraine and the West have accused Russia of supporting the separatists, but Moscow has denied that, saying that Russians who fought there were volunteers.
European leaders had urged Putin to not to recognized the regions’ independence, and the EU foreign policy chief threatened possible sanctions if he did. Ukraine’s president convened an emergency meeting of top security officials.
According to the Kremlin, German Chancellor Olaf Scholz and French President Emmanuel Macron voiced “disappointment with such a development” but also “readiness to continue contacts.”
At an earlier meeting of Putin’s Security Council, a stream of top Russian officials argued for recognizing the separatist regions’ independence. At one point, one slipped up and said he favored including them as part of Russian territory — but Putin quickly corrected him.
With an estimated 150,000 Russian troops massed on three sides of Ukraine, the U.S. has warned that Moscow has already decided to invade. Still, the American and Russian presidents tentatively agreed to a possible meeting in a last-ditch effort to avoid war.
If Russia moves in, the meeting will be off, but the prospect of a face-to-face summit resuscitated hopes that diplomacy could prevent a devastating conflict, which would result in massive casualties and huge economic damage across Europe, which is heavily dependent on Russian energy.
European Union foreign policy chief Josep Borrell said at an EU foreign ministers meeting in Brussels that, “If there is a recognition, I will put sanctions on the table and the (EU) ministers will decide” whether to agree to impose them.
Even as the diplomatic efforts inched forward, potential flashpoints multiplied. Sustained shelling continued Monday in Ukraine’s east. Unusually, Russia said it had fended off an “incursion” from Ukraine — which Ukrainian officials denied. And Russia decided to prolong military drills in Belarus, which could offer a staging ground for an attack on the Ukrainian capital, Kyiv.
Earlier Monday, leaders of the separatist regions released televised statements pleading with Putin to recognize them and sign treaties that would allow for military aid to protect them from what they described as an ongoing Ukrainian military offensive. Russia’s lower house of parliament made the same plea last week.
Ukrainian authorities deny launching an offensive and accuse Russia of provocation.
Putin’s announcement shatters a 2015 peace deal signed in Minsk requiring Ukrainian authorities to offer a broad self-rule to the rebel regions, which marked a major diplomatic coup for Moscow.
The deal was resented by many in Ukraine who saw it as a capitulation, a blow to the country’s integrity and a betrayal of national interests. Putin and other officials argued Monday that Ukrainian authorities have shown no appetite for implementing it.
With the prospect of war looming, French President Emmanuel Macron scrambled to broker a meeting between U.S. President Joe Biden and Putin, who denies he plans to attack Ukraine.
Russia says it wants Western guarantees that NATO won’t allow Ukraine and other former Soviet countries to join as members — and Putin said Monday that a simple moratorium on Ukraine’s accession wouldn’t be enough. Moscow has also demanded the alliance halt weapons deployments to Ukraine and roll back its forces from Eastern Europe — demands flatly rejected by the West.
Macron’s office said both leaders had “accepted the principle of such a summit,” to be followed by a broader meeting that would include other “relevant stakeholders to discuss security and strategic stability in Europe.”
The language from Moscow and Washington was more cautious, but neither side denied a meeting is under discussion.
During the Kremlin meeting, several top officials spoke skeptically about a possible summit, saying it was unlikely to yield any results.
U.S. national security adviser Jake Sullivan, meanwhile, said the administration has always been ready to talk to avert a war — but was also prepared to respond to any attack.
“So when President Macron asked President Biden yesterday if he was prepared in principle to meet with President Putin, if Russia did not invade, of course President Biden said yes,” he told NBC’s “Today” show on Monday. “But every indication we see on the ground right now in terms of the disposition of Russian forces is that they are, in fact, getting prepared for a major attack on Ukraine.”
Since Thursday, shelling has spiked along the tense line of contact that separates Ukrainian forces and Russian-backed rebels in Ukraine’s eastern industrial heartland of Donbas. Over 14,000 people have been killed since conflict erupted there in 2014, shortly after Moscow annexed Ukraine’s Crimean Peninsula.
Ukraine and the separatist rebels have traded blame for massive cease-fire violations with hundreds of explosions recorded daily.
While Russia-backed separatists have charged that Ukrainian forces were firing on residential areas, Associated Press journalists reporting from several towns and villages in Ukrainian-held territory along the line of contact have not witnessed any notable escalation from the Ukrainian side and have documented signs of intensified shelling by the separatists that destroyed homes and ripped up roads.
Some residents of the main rebel-held city of Donetsk described sporadic shelling by Ukrainian forces, but they added that it wasn’t on the same scale as earlier in the conflict.
The separatist authorities said Monday that at least four civilians were killed by Ukrainian shelling over the past 24 hours and several others were wounded. Ukraine’s military said two Ukrainian soldiers were killed over the weekend, and another serviceman was wounded Monday.
Ukrainian military spokesman Pavlo Kovalchyuk insisted that Ukrainian forces weren’t returning fire.
In the village of Novognativka on the Ukraine government-controlled side, 60-year-old Ekaterina Evseeva, said the shelling was worse than at the height of fighting early in the conflict.
“We are on the edge of nervous breakdowns. And there is nowhere to run,” she said, her voice trembling.
In another worrying sign, the Russian military said it killed five suspected “saboteurs” who crossed from Ukraine into Russia’s Rostov region and also destroyed two armored vehicles and took a Ukrainian serviceman prisoner. Ukrainian Border Guard spokesman Andriy Demchenko dismissed the claim as “disinformation.”
Amid the heightened invasion fears, the U.S. administration sent a letter to the United Nations human rights chief claiming that Moscow has compiled a list of Ukrainians to be killed or sent to detention camps after the invasion. The letter, first reported by the New York Times, was obtained by the AP.
Kremlin spokesman Dmitry Peskov said the claim was a lie and no such list exists.
Russia’s Richest Lose $32 Billion as Ukraine Crisis Deepens
Ben Stupples – February 22, 2022
(Bloomberg) — The fortunes of Russia’s super-rich have tumbled $32 billion this year, with the escalating conflict in Ukraine poised to make that wealth destruction much larger.
U.S. President Joe Biden on Tuesday unleashed sanctions targeting Russia’s sale of sovereign debt abroad and the country’s elites, and said he’s sending an unspecified number of additional U.S. troops to the Baltics in a defensive move to defend NATO countries.
Gennady Timchenko heads the list of Russian billionaires who have seen their fortunes drop, with almost a third of his wealth disappearing this year, according to the Bloomberg Billionaires Index, a listing of the world’s 500 richest people.
Timchenko, 69, the son of a Soviet military officer who met and befriended Russian Federation President Vladimir Putin during the early 1990s, now has a fortune of about $16 billion, with the bulk of his wealth derived from a stake in Russia gas producer Novatek, according to Bloomberg’s wealth index.
Fellow Novatek shareholder Leonid Mikhelson’s fortune has tumbled $6.2 billion this year, while Lukoil Chairman Vagit Alekperov’s net worth has declined about $3.5 billion in the same period as the energy company’s stock has slid almost 17%.
The country’s 23 billionaires currently have a net worth of $343 billion, according to the wealth list, down from $375 billion at year-end.
Markets slumped further this week after Putin recognized two separatist republics in Ukraine, leading to Germany halting an energy project with Russia and the U.K. imposing sanctions on five of the country’s banks and three of its wealthy individuals, including Timchenko.
Also on the U.K.’s sanctions list are Boris Rotenberg, 65, and his nephew, Igor, 48, whose families made their fortune through gas-pipeline construction firm Stroygazmontazh.
Read more: Here Are the Russian Billionaires Facing Sanctions Over Ukraine
Igor’s father, Arkady, one of Putin’s former judo sparring partners, sold the pipeline firm in 2019 for about $1.3 billion. He purchased a minority stake from his younger brother Boris five years earlier when both siblings and Timchenko were hit with U.S. sanctions over Russia’s annexation of Crimea.
Additionally, U.S. Secretary of State Antony Blinken said Tuesday he wouldn’t meet with Russian Foreign Minister Sergei Lavrov this week because it “does not make sense” given Russia’s moves in Ukraine.
Why did Moscow decide to send troops and tanks into the country and risk potentially severe punishment from the international community?
Ukraine was not looking to fight its far more powerful neighbor and had already been struggling to deal with Russian-backed separatist rebellions in its southeastern Donbas region. So why did Moscow decide to risk potentially severe punishment from the international community?
Experts do not share a consensus about what motivated Russia to make its move, but there are a number of non-mutually exclusive factors that likely fueled this action. Much of it has to do with long-held concerns that Russia has about security in the region and its fear of Ukraine becoming increasingly independent from its influence. Then there’s the element of timing: It appears Putin calculated that he had the strategic upper hand and decided this was a particularly good time to strike to advance his interests.
In December, Russia sent a list of security demands to the U.S. calling for, among other things, a halt to NATO’s eastward expansion right up to its borders, ending Western military assistance to Ukraine, removing NATO troops and bases from former Soviet Union territory and a ban on intermediate-range missiles in Europe — and it threatened to use military force if its demands were not met diplomatically.
Ukraine’s Zelensky Calls on allies to impose sanctions on Russia
The major item Russia is particularly concerned about is the looming prospect of Ukraine entering NATO, a possibility that’s been floated by the U.S. for many years but for which there is no clear timeline. Anatol Lieven, the senior research fellow on Russia and Europe at the Quincy Institute for Responsible Statecraft and the author of “Ukraine and Russia: A Fraternal Rivalry,” has likened that possibility to Mexico entering military alliances with China — a development that would be, of course, deeply alarming for the U.S.
This is a concern that predates Putin. As Lieven told me in a recent interview, Russia has long expressed warnings that NATO’s expansionism could trigger war:
Since the beginning of NATO expansion in the mid-’90s, when Russia had a very different government under Boris Yeltsin, the Russian government, and Russian commentators and officials, opposed NATO enlargement but also warned that if this went as far as taking in Georgia and Ukraine, then there would be confrontation and strong likelihood of war. They said that explicitly over and over again. So this is not about Putin.
The Russian foreign policy establishment as a whole has long considered Ukraine joining NATO to be a major threat, and militarily dominating Ukraine is a potential way to forestall that possibility.
Regional analysts have also pointed out that Russia fears how Ukraine’s status as a democracy — which has allowed it to develop an increasingly anti-Russian orientation in recent years — poses a threat to Russia’s influence over its neighbors, as well as Russia’s own internal stability.
Putin was a KGB officer in East Germany when the Soviet Union collapsed. That experience has shaped his perception of the threats that emerge from street movements, protests and anti-authoritarian rhetoric, according to Anne Applebaum, historian and staff writer at The Atlantic.
When Putin considers Ukraine — which has seen two major pro-democracy uprisings, the last of which led to the ouster of the pro-Russian president of Ukraine in 2014 — he sees a country with which Russia has rich historical and cultural ties moving irreversibly out of its sphere of influence. In fact, he also fears Ukraine’s influence on Russia, as Peter Dickinson of the Atlantic Council’s UkraineAlert wrote in December:
The emergence of a genuinely independent and democratic Ukraine is viewed by many in the Kremlin as a direct attack on Russia’s imperial identity and an existential threat to the country’s authoritarian system of government. For a generation of Russian leaders still haunted by the pro-democracy uprisings that sparked the collapse of the USSR, the rise of a European Ukraine looks ominously like the next stage in a nightmare scenario stretching all the way back to the fall of the Berlin Wall. …
… He recognizes that as Ukrainian democracy matures and consolidates, it will inevitably inspire demands for similar change within Russia itself and serve as a growing threat to his own authoritarian regime.
Putin sees intervention as an opportunity to bring Ukraine back into the fold and undermine its potentially infectious democratic energy.
Energy prices are rising around the world, and the surge is particularly big in Europe — where many countries are dependent on Russian natural gas for things like heating their homes. Analysts say sanctions against Russia could cause an energy crisis in Europe on the scale of the 1970s oil crisis. That’s why we’ve seen hesitation from the Germans on joining threats to sanction Russia into oblivion if it entered Ukraine. Moscow knows Europe’s hands are tied to some extent, making the incursion less costly now than it might be at another moment.
Another factor with timing might be that Russia has decided that the Biden administration’s renewed focus on confrontation with China leaves it with less room to maneuver on Russia
Whether Putin will succeed in achieving his goals remains to be seen; it’s still unclear how big and how ambitious his incursion will be. And the possibility that this will backfire in some ways by engendering more hostility from Ukrainians over the longer term looms large.
In any case, as with all war, civilians will bear the brunt of cold geopolitical maneuvering. Let’s hope for the best for Ukrainians and their right to self-determination as the country faces off against a formidable foe and the international community scrambles to decide what it will do to deter Russia from going further.
Here are key things to understand about the pipeline:
WHAT IS NORD STREAM 2?
It’s a 1,230-kilometer-long (764-mile-long) natural gas pipeline under the Baltic Sea, running from Russia to Germany’s Baltic coast.
It runs parallel to an earlier Nord Stream pipeline and would double its capacity, to 110 billion cubic meters of gas a year. It means Gazprom can send gas to Europe’s pipeline system without using existing pipelines running through Ukraine and Poland.
The pipeline has been filled with gas but had been awaiting approval by Germany and the European Commission.
HOW IS SCHOLZ BLOCKING THE PIPELINE?
Germany’s utility regulator was reviewing the pipeline for compliance with European regulations on fair competition. It’s that approval process that Scholz said Tuesday that he was suspending.
Germany was required to submit a report on how the pipeline would affect energy security, and Scholz said that report was being withdrawn.
WHY IS SCHOLZ TAKING ACTION NOW?
Scholz, who took power in December, backed the project as finance minister for his predecessor, Angela Merkel, and his Social Democratic Party supported it. As Russia massed troops near Ukraine’s border, Scholz avoided referring to Nord Stream 2 specifically even as U.S. officials said it would not move forward if Russia invaded.
But Scholz warned that Russia would face “severe consequences” and that sanctions must be ready ahead of time. Germany had agreed with the U.S. to act against Nord Stream 2 if Russia used gas as a weapon or attacked Ukraine.
The chancellor said Tuesday that Russia recognizing the independence of rebel-held areas in Ukraine marked a “serious break of international law” and that it was necessary to “send a clear signal to Moscow that such actions won’t remain without consequences.”
Nord Stream 2 would offer an alternative to Ukraine’s aging system that Gazprom says needs refurbishment, lower costs by saving transit fees paid to Ukraine, and avoid episodes like brief 2006 and 2009 gas cutoffs over price and payment disputes between Russia and Ukraine.
Europe is a key market for Gazprom, whose sales support the Russian government budget. Europe needs gas because it’s replacing decommissioned coal and nuclear plants before renewable energy sources such as wind and solar are sufficiently built up.
WHY IS THE U.S. AGAINST NORD STREAM 2?
The White House was in “close consultations with Germany” and welcomed their announcement, press secretary Jen Psaki tweeted Tuesday.
The U.S., European NATO allies such as Poland, and Ukraine have opposed the project going back before the Biden administration, saying it increases Europe’s dependence on Russian gas and gives Russia the possibility of using gas as a geopolitical weapon. Europe imports most of its gas and gets roughly 40% of its supply from Russia.
The pipeline, which went forward under Merkel, has been an irritant in U.S.-German relations. Biden waived sanctions against the pipeline’s operator when it was almost complete in return for an agreement from Germany to take action against Russia if it used gas as a weapon or attacks Ukraine.
In Congress, Republicans and Democrats — in a rare bit of agreement — have long objected to Nord Stream 2.
WILL SUSPENDING NORD STREAM 2 MAKE EUROPEANS FREEZE THIS WINTER?
No. Even before Scholz’s move, regulators made clear the approval process could not be completed in the first half of the year. That means the pipeline was not going to help meet heating and electricity needs this winter as the continent faces a gas shortage.
The winter shortage has continued to feed concerns about relying on Russian gas. Russia held back from short-term gas sales — even though it fulfilled long-term contracts with European customers — and failed to fill its underground storage in Europe.
Russian President Vladimir Putin has said the shortage underlines the need to quickly approve Nord Stream 2, increasing concerns about Russia using gas to gain leverage over Europe.
COULD RUSSIA CUT OFF GAS TO EUROPE IN RETALIATION?
While Europe needs Russian gas, Gazprom also needs the European market. That interdependence is why many think Russia won’t cut off supplies to Europe, and Russian officials have underlined they have no intention to do that.
Meanwhile, the Ukraine crisis, on top of the winter shortage, is has already given European governments more reason to find their gas somewhere else, such as through liquefied natural gas, or LNG, brought by ship from the U.S., Algeria and other places.
Former Russian President Dmitry Medvedev, who is now deputy chair of Russia’s Security Council, tweeted his displeasure after Germany suspended Nord Stream 2: “Welcome to the brave new world where Europeans are very soon going to pay 2,000 euros for 1.000 cubic meters of natural gas!”
The spot market gas price in Europe was 829 euros ($940) per thousand cubic meters Tuesday. It was 1,743 euros (nearly $2,000) in late December amid jitters over the Ukraine crisis, and prices have since fallen as Europe has secured more LNG.
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Associated Press writers Vladimir Isachenkov in Moscow, Geir Moulson and Frank Jordans in Berlin, and Lisa Mascaro and Ellen Knickmeyer in Washington contributed.
Putin moves troops, Biden levies sanctions and Europe prepares for war
Alexander Nazaryan, Senior W. H. Correspondent – February 21, 2022
WASHINGTON — Europe edged closer to war on Monday as Russian President Vladimir Putin ordered troops into Donetsk and Luhansk, two territories in Ukraine on which Russia has laid claim for years. He did so under the guise of “peacekeeping,” even as he made clear that he did not accept the basic premise of Ukrainian sovereignty.
“Ukraine is not just a neighboring country, they are a part of our culture,” the Russian leader said in a Monday night speech. Many Russians, especially those with fond memories of the Soviet Union, feel much the same way. But it is not clear that they are willing to risk a costly conflict to achieve Putin’s vision of reconstructing the Soviet-era empire. Having concluded that a Russian invasion is all but assured, the United States and allied Western powers have committed to defending Ukraine with economic sanctions and shipments of military hardware — but have steered clear of committing troops.
“This was a speech to the Russian people to justify a war,” a senior Biden administration said on Monday of Putin’s remarks. The Russian strongman justified sending troops to Donetsk and Luhansk by first claiming that the two regions, which border Russia, were “independent” of Ukraine. International observers widely consider that to be a dubious claim.
President Vladimir Putin at the Kremlin in Moscow on Monday. (Kremlin Press Office/Handout/Anadolu Agency via Getty Images)
Biden spoke on Monday with Ukrainian leader Volodymyr Zelensky “to reaffirm the commitment of the United States to Ukraine’s sovereignty and territorial integrity,” according to a White House description of the call. Ukraine, however, is not a member of NATO, meaning that the U.S.-led alliance would not send troops under its Article 5, which provides for a collective military defense of member states.
A seasoned diplomat from his time in the U.S. Senate and the vice president to Barack Obama, Biden has vowed to restore the U.S. to the role of international leadership he claims his predecessor, Donald Trump, squandered. But the disastrous Afghanistan withdrawal of U.S. forces — which took place almost exactly six months ago — appears to have tarnished Biden’s claims of foreign policy mastery.
Putin seems intent on challenging Biden’s leadership; late on Monday, columns of Russian troops were spotted entering Donetsk.
In recent days, some of the most consequential shuttle diplomacy meant to avert a war in Ukraine has been undertaken by French president Emmanuel Macron, who on Sunday appeared to broker a meeting between Putin and Biden scheduled for later in the week. Biden spoke with Macron and chancellor Olaf Scholz of Germany on Monday. “They discussed how they will continue to coordinate their response on next steps,” a White House summary of the call said.
U.S. President Joe Biden signs an executive order to prohibit trade and investment between U.S. individuals and the two breakaway regions of eastern Ukraine recognized as independent by Russia on Feb. 21, 2022. The White House/Handout via REUTERS
Late Monday, at the request of Zelensky, the United Nations Security Council was set to meet regarding the situation in Ukraine.
For the moment, the U.S. foreign policy establishment is operating on the assumption that an invasion will take place. On Monday, Biden ordered U.S. diplomats who had remained in Ukraine out of the country, into neighboring Poland.
GOP Senate candidate JD Vance said he doesn’t ‘really care what happens to Ukraine’
Kelsey Vlamis – February 20, 2022
Vance is a venture capitalist and author of the bestselling memoir “Hillbilly Elegy.”Jeffrey Dean/AP Photo
JD Vance said he wants Biden to focus on the US border instead of Ukraine and Russia.
Vance, who is running for Senate in Ohio, said he doesn’t care about what happens to Ukraine.
His comments come as the US warns Russia could attack Ukraine at any time.
JD Vance, a Republican running for US Senate in Ohio, said he’s not particularly interested in the Ukraine-Russia conflict.
“I gotta be honest with you, I don’t really care what happens to Ukraine one way or another,” Vance said on an episode of Steve Bannon’s War Room. “I do care about the fact that in my community right now the leading cause of death among 18-45-year-olds is Mexican fentanyl that’s coming across the southern border.”
“I’m sick of Joe Biden focusing on the border of a country I don’t care about while he lets the border of his own country become a total war zone,” Vance said.
Vance, a venture capitalist and author of the bestselling memoir “Hillbilly Elegy,” is running in the high-profile Ohio race to replace retiring GOP Sen. Rob Portman. Vance posted a clip of his comments about Ukraine to Twitter on Saturday.
Vance, who served in the Marines, added that he didn’t enlist “to go and fight Vladmir Putin because he didn’t believe in transgender rights,” suggesting that as the reason the US does not want Russia to invade Ukraine.
Letters to the Editor: If you think NATO is the real threat, you’re falling for Russian propaganda
February 21, 2022
Russian President Vladimir Putin speaks during a news conference with German Chancellor Olaf Scholz in Moscow on Feb. 15. (Sergey Guneev / Associated Press)
To the editor: A letter writer repeats the preposterous Russian lie that North Atlantic Treaty Organization expansion to Eastern Europe after the Cold War is a manifestation of Western imperialism and a threat to Russia’s security.
NATO expanded eastward for one reason only: After the fall of the Soviet Union, the countries that were freed from being Soviet republics or satellite states were eager to be protected from the possibility that Russia would one day change its mind and seek to use military force to reinstate Russian control.
NATO is purely a defensive alliance; the member states do not seek one square inch of Russian territory, and they represent no threat to the integrity of Russia.
On the other hand, NATO is an obstacle to Russian President Vladimir Putin’s goal of regaining dominance of Eastern Europe, and that is why he vilifies it.
Cyril Barnert, Los Angeles
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To the editor: The letter writer who takes a Russian view of NATO needs to read Putin’s essay on Ukraine from last July (available online). It reads like Adolf Hitler’s distortions regarding the Sudetenland before World War II.
Putin’s history is highly selective; it omits Josef Stalin’s practice of ethnic boxcars to populate all the “nations” of the Soviet Union.
Putin now decries the unfair treatment of “friends” in Ukraine and justifies “reuniting” with them. Paranoid Russia has done that for hundreds of years to maintain buffer states. NATO is preventing some expansion. Countries like Lithuania are integrating their ethnic Russian populations to effect a similar result.
Do not be fooled. I studied Russian language and history at West Point last century. Their technology has changed, not their goals.
George N. Giacoppe, Riverside
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To the editor: Mass graves of Russians? Chopped up body parts? Babies in tiny coffins?
Russian disinformation says all this is happening in Ukraine. Have you ever met a Ukrainian? Not gonna happen. Putin is a comedian for crying out loud.
But seriously, you can’t really blame the Russian president. He did, after all, learn from the best. I’m sure he was taking notes 20 years ago as another super power justified an invasion based on a bucket of lies.
Mike Reynolds, San Diego
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To the editor: The Gibraltar strategy seems to be in play in the situation involving Russia and Ukraine.
During the Franco dictatorship in Spain, whenever trouble was brewing internally, there was a sudden interest in some controversy related to the conflict over Gibraltar, which sits on the Iberian peninsula but is a British territory.
Redirecting the public’s focus from internal affairs to external events seems to be a common ploy of many governments.
