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Dear friends,

From now on and until further notice will be my only blog.

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The Saker

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Monday, January 26, 2015

Ukraine SITREP 26th January

I have been trying to wait as long as possible to get some facts confirmed, but at this point in time I am confident enough to say that there are numerous and convergent signs that things are going extremely badly for the Kiev junta. Just look at the following recent headlines:
Clearly, things are not going well *at all* for the Junta.

Concerning Debaltsevo and the rumors that the Junta forces were encircled in another "cauldron", they are probably a little premature.  However, even if the Junta forces have not been fully encircled *yet*, there is strong evidence that they are indeed in the process of being encircled and many reports even speak of panic.  However, the Junta has kept numerically large forces north of Donetsk and we should not dismiss them.  By all accounts, the Junta forces are trying hard to break the Novorussian noose around Debaltsevo and they are also trying to recapture the Donetsk airport.

Here are two SITREPS translated by the great Kazzura which I find interesting:

Prime Minister Zakharchenko

Corps commander Eduard Basurin

I am generally weary of triumphalism and I always get nervous when I see somebody underestimating the enemy.  Most importantly, we should remember that while the Junta seems to be suffering major military losses, it still has two options available a false flag operation and declare war with Russia.

Option one: false flag

The worse the Junta's military defeats, the higher the risk of a major false flag.  Keep in mind that the Nazi Junta despises the east Ukrainian which it considers as "bugs", "insects" and "subhumans" which should be barbecued and that it will have no pity for its own forces if they are defeated or, worse, disloyal.  And remember the Nazi slogan about Crimea: "the Crimea will be Ukrainian or empty".  We have to assume that the Nazi freaks in Kiev are capable of anything and, having already shot down a civilian airliner, I would not put it past them to sabotage a nuclear plant or some other very high risk target.

Option two: declare with with Russia

Notice, I did not say war "on Russia" because that would make the Junta the aggressor.  But the Rada is quite capable tomorrow of declaring Russia an "aggressor state".  And if that is not enough, Kiev is absolutely capable of striking (at least a few times) anywhere along the Russian-Ukrainian border (including in Crimea) in order to pull Russia in.  Even if Russia does not take the bait and simply rides out the strikes, or if Russia responds with a very minimal amount of force, Kiev will continue to declare the "thousands" of Russian troops have invaded and that Russian "tactical battalion groups" are operating all along the line of contact.  There is no way that Kiev will ever admit that its forces have been defeated by local Novorussian resistance fighters.  In other words, any defeat of the Junta forces will always be presented as a "Russian aggression against the European choice of the free Ukrainian nation".

Folks like Yatseniuk or Turchinov will never just flee like Yanukovich did - before they do that, they will make darn sure to destroy as much of the Ukraine as possible and that happens to be exactly the US plan to: if Uncle Sam cannot have it, neither will anybody else.

This one is far from over

I therefore caution everybody against any premature triumphalism.  It ain't over and it won't be over anytime soon.  Even if the Novorussians comprehensively defeat the Junta forces (again!), this will not push their attack very far beyond the current frontlines (they just don't have the manpower for that).  So don't expect the Novorussians to free Kiev and overthrown the Junta.  That is something only the Ukrainian people themselves can do, and right now they are nowhere near that kind of outcome.

Things to look very, very bad for Kiev and the current tactical difficulties faced by the Junta might well result in an operational level collapse.  At which point we can expect all sides except the Novorussians to try to revive some kind of stale and futile "peace process" which the Novorussians will have to accept, except that this time around Russia will probably make more demands then the first time around.  Now that Putin has declared that the Junta's army what just "NATO's legion" the mood in Moscow is rather dark and the disgust with Poroshenko and all his lies very wide-spread.  So even if Russia accepts another cease-fire, the Junta will have to pay a price for its failed assault.  I think that the loss of Mariupol might be one of the conditions demanded by Russia (at least I hope so).

What about the imperial "Axis of Kindness"?

The Empire is in full combat mode.  After George Soros, the US Commander of NATO ground forces has visited Kiev and the western credit rating agencies have further downgraded Russia even though every single objective economic indicator says otherwise.  Things are a tad more complicated in Europe were the victory of Syriza in Greece will create a major risk for the future of the EU.  Sure, Merkel is more then willing to do the USA's bidding, but her popularity suffers from it and tensions between the EU plutocrats and the European people are only on the rise.  In France the entire Charlie Hebdo psyop has resulted in a chaotic and most volatile situation, the Polish nonsense about Auschwitz being liberated by Ukrainians has damaged the credibility of the russophobic camp and the awareness that the Kiev Junta and its supporters are bona fide Nazis is slowly but inexorably growing everywhere.

As Lincoln is supposed to have said "you can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time".  Time is running out for the Nazi freaks in Kiev.

The Saker

Europe’s addiction to Russian gas: How long before withdrawal symptoms set in?

by Leonid Krutakov for Odnako

(translated by: Robin)

In mid-January, EU Energy Commissioner Maroš Šefčovič held talks with Gazprom CEO Alexey Miller and Russian Energy Minister Alexander Novak in Moscow. After the talks, Mr. Šefčovič expressed surprise at three circumstances.

First, Gazprom has no intention of building the South Stream pipeline. Second, in the future natural gas will be delivered to Europe via Turkey. And, third, Russia is not prepared to discuss the terms of its gas deliveries to Ukraine.

To quote Mr. Šefčovič, all three circumstances, were “very surprising,” even though Russia’s decision to cancel South Stream and instead build Turkish Stream was announced in December of last year in Ankara at a joint press conference held by the Presidents of Russia and Turkey.

It’s easy to wax ironic about Mr. Šefčovič’s ignorance of South Stream in Turkey. And most commentators did just that. But his attempt to discuss new conditions for gas supplies to Ukraine with his Russian partners deserves much more attention. And confirmation of that was not long in coming.

Last week, Russian Prime Minister Dmitry Medvedev convened a meeting with Messrs. Miller and Novak. He asked them for the details of their talks with Mr. Šefčovič, Ukraine’s gas debt and the repayment period. The meeting was broadcast live almost in its entirety.

Mr. Miller reiterated to Mr. Medvedev that Europe had only a few years to build its own transmission infrastructure to the Greece-Turkey border, where it will have to connect to the Russo-Turkish pipeline system. If Europe fails to do so, the gas will go to other markets.

And Mr. Novak pointed out that, when last year’s agreement on a $100 discount for gas sold to Ukraine expires on April 1, there will be no new discussions or agreements. The contract is valid and no one has cancelled it.

If we compare these statements, the fact that they were reiterated and broadcast live makes it clear that Russia has given Europe a firm ultimatum, outlined the consequences and set a deadline. So what is the nature of the ultimatum?

It’s a long story. But, like any long story, it offers an advantage. It allows you to assess the Ukrainian events not in terms of the abstract and immediate concepts of a struggle for freedom and democracy, but rather in the concrete terms of profit and loss over the long run.

At first glance, the link between the recent events in the Ukraine (the Maidan protests, the coup and the civil war) and the supply of Russian gas to Europe and the gas contract that Yulia Tymoshenko concluded in 2009 seems improbable. But any event whose workings are hidden from us is bound to seem improbable and inexplicable.

The European Union’s Third Energy Package (TEP) also came into effect in 2009. The gist of this document is that it establishes uniform rules for the gas supply system within the EU. All gas purchases must take place on an “entry-exit” basis at the European border. In other words, it creates a sort of single virtual gas buyer able to dictate terms to the seller.

The document sets other parameters, but they are all generally based on the idea of unbundling gas suppliers from the EU’s internal infrastructure and retail market, where prices are often more than three times the price of the “entry” price.

The stated reason for TEP was the need to enhance competition and reduce costs at the expense of a free flow of gas within Europe. This statement didn’t fool anyone. It was a new instrument that targeted only Gazprom, which is tightly connected to the European system.

In the event that Europe adopted unacceptable conditions, suppliers of liquefied natural gas (LNG) could at any time redirect their deliveries. In fact, that is what happened after TEP was adopted. The main flows of LNG left for the Asian markets. Gazprom, whose gas deposits are far from ports and have to be shipped by pipeline, could not pull off this trick.

As a result of the adoption of TEP, European gas prices did not fall; in fact they went up. From 2009 to 2013, the price of gas in the EU rose by an average of 29% to 30%. At the same time, the average price of Russian gas fell from US$410 per thousand cubic metres in 2008 to US$385 in 2013. And the volume of gas increased.

The paradox of a rising domestic price along with a falling “entry” price is easily explained by the nature of the increase. The increase was due mainly to the higher cost of gas transmission within the EU, which rose about 16%, and internal taxes, which were up 13%.

In fact, the energy component of the final gas price increased by no more than 2%, and even that was due to LNG. At the same time, the significant increase in the price of LNG was offset by the discounts that the EU obtained from Gazprom, taking advantage of Gazprom’s lack of wiggle room. And this occurred despite long-term contracts linked to the price of oil, which increased four-fold from 2008 to 2011.

In fact, TEP ultimately ended Gazprom’s access to the internal European market and, moreover, obliged it to sell 50% of its gas while still in the pipeline, even before it entered the EU. Under TEP, gas carried by the pipeline system has to come from at least two suppliers.

As for the timing, Gazprom’s long-term contracts with its European customers were renegotiated in 2004, and the following year saw the beginning of the TEP discussions. The peak of the discussions took place in 2008-2009, and precisely at that time the second Ukrainian-Russian gas war broke out.

Kiev, which was behind in its payments for Russian gas deliveries, began to siphon off transit volumes illegally, and in response Russia cut off the flow of gas. The EU had to take urgent action, brokering a gas contract signed by Yulia Tymoshenko almost entirely on Russia’s terms. Six months later, when peace prevailed, TEP was adopted, and so began the systematic effort to squeeze out Gazprom across the board.

South Stream was blocked on the grounds of non-compliance with TEP, even though the contract for its construction was agreed to before TEP was adopted on the government level. In point of fact, TEP was created to prevent individual countries from taking such “initiatives” in the future.

It should be noted that South Stream was blocked immediately after the start of the events in the Ukraine. The structure developed in such a way that the Ukraine retained its status as a major transit country for Russian gas and became a sort of gas reservoir for Europe. With the advent of TEP, under any new contract Gazprom had to halve its gas supplies to the EU or sell half of the volume to the Ukraine on the Russian border.

Simply put, Russia ultimately was expected to pay from its own pocket the cost of the Ukrainian coup and the formation of a Russophobic government in Kiev. That is why the United States initially tried to bail out Naftogaz of Ukraine. The son of U.S. Vice-President Joe Biden even became a member of the Ukrainian gas monopoly’s board.

Vladimir Putin’s visit to Ankara and his agreement with Recep Tayyip Erdoğan on the construction of Turkish Stream has put paid to all that. The role of European transit country has now shifted to Turkey; moreover, in accordance with TEP rules, to fulfill a contract all Gazprom has to do is deliver the gas to the EU border. Moving it any farther is not Gazprom’s responsibility.

It was a calculated, well-aimed blow. Turkey is the only communication corridor offering an alternative route for Russia’s gas. For example, the proposed Nabucco pipeline to supply gas from Central Asia and the Middle East to the EU, bypassing Russia in the process, is based exclusively on Turkey as a transit country. But now there’s no getting around Russia.

The only question without a public response is the deadline attached to Russia’s ultimatum to Europe. Mr. Miller did not specify any period, saying only that Europe has little time left, in fact only a few years. This is understandable because contract terms and conditions are confidential.

But, not being bound by any confidential agreements, we are free to speculate about the deadline. Most of Gazprom’s European contracts, as already stated, were concluded in 2004. Earlier on, in the 1980s, such contracts had a term of 30 years. The term of the last contract was reduced to 15 years. It follows that D-Day – the time for renegotiation of contracts under the terms of TEP – will arrive in 2019, in other words, in only four years.

Four years is a political framework that limits Europe’s decision-making time. The choice is very difficult. In fact, there is no choice. Rejecting Russian gas supplies to Europe is tantamount to suicide. Switching to LNG, which is from one and a half to two times more expensive, would instantly make all European industries uncompetitive.

Europe needs Russian gas. All it can choose is the routes and the means for its delivery. It can negotiate with Russia on clear and transparent conditions, or it can break Russia’s resistance in order to gain access to the gas on its own terms. And the conductor standing behind the EU finds only the second scenario acceptable.

In fact, Europe has even less time (just making a decision is not enough) because it has to build a pipeline to the Turkish border. Otherwise it will have to “surrender” Ukraine. We do not want to play the role of Cassandra, but in four years anything can happen – even attempted assassinations of top politicians, in both Russia and Turkey.

By the way, one curious detail is that the Russian-Ukrainian contract signed in 2009 by Yulia Tymoshenko and Vladimir Putin has a non-standard term of 10 years. And, like most of Gazprom’s European contracts, it ends in 2019. Would that be by coincidence or by design?

26.01.2015 Military Report of Novorossia

Important blog news: we are getting stronger, much stronger

Dear friends,

I have some important issues to bring to your attention:

1) Domain names:

We are trying to fix the domain name problems and also making some major changes in our IT architecture. As of right now, please note that the following Saker Blogs are still functioning normally:

French Saker:
German Saker:
Oceania Saker:
Latin American Saker:

the following Saker Blogs are down due to domain name problems which I hope will be resolved soon:

Italian Saker:
Russian Saker: 

=>Please note that these domain names are temporary and will be changed in the future.

2) Popularity vs Donations:

The number of visitors to this blog is at an all time high - just under 70'000 a day!  See for yourself on this blogger dashboard screenshot made this morning:

But donations have almost stopped.

So please click on that PayPal button on the left and show your support for this blog's effort with your donation.

3) Structural Changes in the Saker Community: the SCEC and SALLC

Following the recent crisis I have decided to make two major changes in the way the Saker community will be organized.

First, I have decided to hand over the responsibility for community-wide decisions to what I call the "Saker Community Executive Committee" or SCEC.  This is a small group of people whom I fully trust who will from now on be in charge of issues such as accepting new blogs into the Saker community, making key decisions about our IT architecture or deal with domain name issues.  After much thinking I have decided that the membership of the SCEC must remain confidential and known to me only.  This is first and foremost to protect the SCEC members but also to make this key component of our community a much harder target to hit then myself.  Besides, if you, the community, have trusted me in the past with the management of the community, then you can logically also trust those whom I have chosen to deal with these issues from now on.  Just to make clear: the SCEC will have no say in the way each individual Saker blog is run (each blog will retain its full editorial and organizational independence) and the SCEC will only deal with community wide issues.  In fact, the only person for whom this will be a major change is me, the Saker, as I will be able to focus on blogging and writing analyses rather then deal with technical/administrative issues.

Second, the corporation "Saker Analytics, LLC" or SALLC has now been formed.  It will have an "in house council", a US based lawyer who has agreed to help SALLC, the SCEC and myself on a pro bono basis. I shall share his name with all of you in the near future, but for the time being let's call him "spoonful".  "spoonful" will help the SCEC with domain name issues and he will advise me on a new copyright policy for the blog.

4) New copyright policy for the blog: CC-BY-SA 4.0

For a number of legal reasons I cannot continue to post everything and anything without thinking about the copyright issues which might be involved.  I wish I could, but I cannot.  During the latest crisis I was threatened with a lawsuit not once, but twice, and even though this threats did not involved copyright issues, I have to assume that the folks out there who hate me and the Saker community (there are a lot of them, believe me!) will resort to all sorts of dirty tricks to try to shut us down, including frivolous copyright lawsuits.  On the advice of "spoonful" I have decided that as soon as the new blog is back up, all my original contents will be published under the Creative Commons CC-BY-SA 4.0 International license (  This is also what I will recommend to guest authors.  As for external materials, they will remain under their original licenses.


The crisis which hit me and the rest of the community was definitely a very bad one much worse then I can say here, believe me.  I have had to deal with betrayals, slander, blackmail, threats, sabotage and an amazing amount of hatred.  Still, I also have to admit that I myself have been naive and way too trusting.  For all my life I have many many mistakes, but at least I never made the same mistake twice.  And this time around, I had to make a painful "lessons learned" exercise, helped by some wonderful friends, and a few crucial things will now change:

1) We will built redundancy on all levels of our community.  From now on, no level will depend on a single individual, not the community, not the individual blogs and not the IT architecture.
2) We will de-personalize the community: it will still be "The Saker Community" but not "The Saker's Community" meaning that my community-wide "footprint" will shrink in size making personal attacks on my much less lucrative for those who hate me.
3) We will harden the community making all forms of attacks (political, technological, legal, etc.) much harder.

With these changes I hope to go back to my primary role as a simple blogger and to trade my "community leader" hat for a far more modest, and better fitting, "community founder" hat.

Various people have tried to bring down myself, this blog and our community.  God willing, their efforts will eventually result in the opposite effect and we will all bounce back much stronger than before.

The Saker

PS: if no major crisis erupts between now and then, I hope to resume the podcast in February (if only to remind you folks to donate - hint hint).

26.01.2015 Ukrainian crisis news. Latest news of Ukraine, DPR, Kiev, Mariupol

What was the real nationality of the "Ukie" soldier?

Since you asked for it,  here is a very informal poll just for entertainment purposes to let you guess the true nationality of the "Ukie" solider recently seen in Mariupol: (FYI, my vote: UK)

What was the real nationality of the "Ukie" soldier? free polls

Glorification of terrorism: a teenager prosecuted in France because of a cartoon on Facebook

by numerama, 17/1/2015
Translated by Jenny Bright for Tlaxcala

A 16 year-old teenager in France was indicted for glorifying terrorism after he published a cartoon representing a character with the Charlie Hebdo journal, hit by bullets, with an accompanying ironic comment.

The current situation is, to say the least, paradoxical. Last weekend, following the terrible attacks that took place right in the middle of Paris, large rallies were held throughout the country to denounce terrorism and to remind the world of France's commitment to the fundamental principles of freedom of expression and freedom of the press.
But since last week, it has become clear that a stiffening is taking place in France with the appearance of dozens of lawsuits based on the “defense or glorification of terrorism” offense, which carries a maximum penalty of 5 years imprisonment and a fine of 75,000 euros (or 7 years in prison and 100,000 euros fine if the Internet is involved, because the latter is now an aggravating circumstance).

For example, midweek, the Associated Press identified 54 legal proceedings running on that ground, sometimes with other grievances held against those arrested. In some cases, the judgment has already been made: fifteen months imprisonment for this Ardennes inhabitant, three months imprisonment for this one living in Toulon or a year imprisonment for this Nanterre inhabitant.

The number of cases has since increased. Le Monde listed 70 in an article published a few hours after that of the AP.


Lately, a young man of 16 was arrested and placed in custody. France 3 indicates that on Thursday, the teenager was presented before a juvenile judge to decide if he should be indicted for glorifying terrorism. For its part, the Public Prosecutor’s Department for minors of the city of Nantes asked the next day for his release on bail until the Court hearing.

His fault? Having published on his Facebook profile "a cartoon representing a character with the Charlie Hebdo journal, hit by bullets, accompanied by an ironic commentary" the TV channel explained.

[Here is the cartoon, as published by Norman Finkelstein, and which was widely pubished on the Net]


The multiplication of procedures for glorification of terrorism poses the question of the limits of freedom of expression, which seems to be getting cracked down on since the attacks. A situation that alarms many non-governmental organisations such as the League of Human Rights, which fears the reflex of drastic security measures, and Amnesty International.

“Freedom of expression does not have favourites. Now is not the time for knee-jerk prosecutions, but measured responses that protect lives and respect the rights of all” explains the NGO, which fears that some arrests made ​​in the heat of emotion and firmness in fact violate freedom of expression.

Because although everyone may agree to defend freedom of expression when it's all plain sailing into the wind, we should not forget that it also applies to messages that may be unpleasant or revolting. “If we do not believe in freedom of expression for people we despise, we do not believe in it at all[1]” explains philosopher Noam Chomsky.
Does this mean that we must stand idly by? No, of course not. Some cases likely deserve legal punishment if there is anything to punish (especially if other grievances are included in the procedure). But the emotion aroused by the attacks raises fears of a general lack of discernment that does not contribute to the administration of justice in good conditions

[1] Interview by John Pilger on BBC's The Late Show, November 25, 1992. See also : “If you believe in freedom of speech, you believe in freedom of speech for views you don't like. Goebbels was in favor of freedom of speech for views he liked. So was Stalin. If you're in favor of freedom of speech, that means you're in favor of freedom of speech precisely for views you despise.” Noam Chomsky, in Manufacturing Consent: Noam Chomsky and the Media, 1992.

Sunday, January 25, 2015

Putin's counter-intuitive 8 point peace plan for the Ukraine

There is a lot of speculation about Putin's end goal.  They range from "Putin wants ton conquer the Ukraine and then Moldova, the Baltic States and (who knows?) even Poland" to "Putin's wants to back-stab Novorussia and sell it in exchange for Crimea".  And these are not just empty speculations, because your assessment of what is happening today will largely depend on what you believe Putin's end goal is.  For example, if you believe that "Putin is about to sell-out" theory, then the Minsk agreement is just the first phase in a general surrender of Novorussia to the Nazis.  But if you believe that Putin's end-goal is to regain control all (or most) of the Ukraine, then the Minsk agreements are just a way to keep the junta at bay while giving it the time to commit economic suicide before striking.  So what is Putin's end goal?

Putin's 8 point peace plan:

The Ukrainian newspaper Zerkalo Nedeli, UA, has recently published a fascinating article entitled "Blood Topography" which made a detailed analysis of the line of separation agreed upon in Minsk and whether it should have included the Donetsk Airport or not (it placed the airport on the Novorussian side).  But at the end of the article, the author, Tatiana Silina, writes that according to her sources, Putin's real peace plan for the Ukraine is composed of all of the following elements:
  1. The federalization of the Ukraine (even if under another label such as "de-centralization").
  2. A special status for the LNR and DNR which would include the creation of a purely local political authority not subordinated to Kiev.
  3. A full budgetary autonomy.
  4. Full freedom to chose the official language
  5. Full cultural freedom
  6. The right to "chose the vector of economic integration"
  7. The Ukraine must be declared a neutral state
  8. All of the above must be explicitly stated in the Ukrainian Constitution.  
Tatiana Silina added "Putin's methods may have changed, but not his goal: to attach the Ukraine to Russia".

Now here is where it gets really interesting.  Consider this: how is it that Silina begins by listing 8 goals which (apparently) are designed to separate the Donbass as much as possible from the Ukraine and then concludes that these goals are designed to attach the Ukraine to Russia?  This is a crucial question, so let me repeat it again:

Why does separating the Donbass from the rest of the Ukraine attach the Ukraine to Russia?

The second question is not less important, and it flows from the first one

Why does Putin not simply demand the full secession of the Donbass or even its reunification with Russia?

To understand, let's us make a simple but crucial thought experiment.  First, let's consider if the Donbass fully secedes from the Ukraine and joins Russia and then compare it with Putin's solution.

Novorussian secession:

We assume that Kiev agrees with this (out of political, economic or even military necessity).  The Donbass follows Crimea's example and pretty soon becomes the southwestern region of the Russian Federation.  The first obvious consequence is that he war stops and that the rump-Ukraine becomes much more unitary.  Having lost the potential support of Crimea (gone!) and the Donbass (gone!), other "trouble" regions (Odessa, Nikolaev, Dnepropetrovsk, Zaporozhie, Chernigov, Kharkov) soon basically give up any notion of resisting Kiev and those who cannot accept a Nazi junta are forced to either shut up or relocate ("encouraged" by the Ukie-Nazi slogan "suitcase - train station - Moscow").  Furthermore, the regime at this point will say that Russia betrayed the Ukraine whose sovereignty she had promised to guarantee when the Ukraine gave up nuclear weapons and that joining NATO is the only way to preserve the rest of the country.  The population will mostly agree.  There is no Russian language constituency left, so Ukrainian becomes the only language, the Russian language media disappears.  The multi-billion effort to rebuilt the Donbass becomes "Russia's internal problem" while the US and EU "aid" is directed only at the comprador elites of the rump Ukraine (aka "privatization" and "opening up of the economy").  This new Ukraine completes the NATO encirclement of Russia from the Baltic to the Black Sea.

Novorussian autonomy inside the Ukraine:

Formally, de jure, the Donbass remains part of the Ukraine and thus it remains represented at the state level: the Rada.  Because the LNR and DNR are free to chose their vector of economic development (i.e. join the trade union with Russia, Kazakhstan, Belarus and Armenia), they begin to have a "gravitational pull" on the entire Ukrainian economy.  There us *much* more money made in lucrative contracts with Russia then there is by trying to sell something to the EU.  The Russian language and culture remain vibrant in Novorussia and the effects of that are felt throughout the Ukraine.  In contrast, the Ukrainian language becomes the "dialect of the loser", the sign of the pauper.  And because the Ukraine remains constitutionally neutral, NATO simply cannot get in.  The economies of all the regions listed above (Odessa, Nikolaev, Dnepropetrovsk, Zaporozhie, Chernigov, Kharkov) become more and more dependent on the "Novorussian special economic zone".  Since the West has nothing to offer economically, it can only rely on the west-Ukrainian minority to promote the Empire's interests, which is wholly inadequate to counter the effect of the political and economic power of the eastern Ukraine.

Which of these two scenarios make more sense to you?

The first one basically hands over the Ukraine to the Empire and while the second one uses Novorussia as an unbreakable tether tying the rest of the Ukraine to Novorussia and Russia.  In other words, Tatiana Silina is absolutely correct "Putin's methods may have changed, but not his goal: to attach the Ukraine to Russia".  

The fact is that to truly (de jure) cut-off Novorussia from the rest of the Ukraine is tantamount to hand over the rest of the Ukraine to Uncle Sam and his EU puppets.  Keeping a nominally unitary Ukraine with the Donbass de facto independent makes it possible for Russia to "reel in" the entire Ukraine.  And since there can be no safety or security for either the Donbass or Russia with a NATO run Nazi regime in power in Kiev, regime change and the full de-nazification of the entire Ukraine is the only viable long term solution to this conflict.  That goal can only be achieved if Novorussia remains nominally part of the Ukraine.

The Saker

[eng subs] 1st Slavyansk militia brigade recon by fire combat footage

Short news items

  • Poroshenko claims that a Novorussian artillery spotter was arrested in Mariupol and that soon he will give evidence to the world.  Why such a spotter would be needed for fixed targets in unclear.
  • In the meantime, Russia TV said that the initial information about a single strike was wrong, there were three strikes, one at 0900, then one at 1300 and the last one around 1330.
  • FortRuss has published a translation of an interesting article describing what a Russian military attack on the Ukrainian forces would look like.  I am not so sure that Russia would go to the bother of using such advanced technologies against the Ukrainian military, but she could.
  • For the latest map (high res and in English) of combat operations as of yesterday, see here.

Hungary: Next Stop on the Putsch Express

Submitted by Andrew Kahn for Voice of América
(Twitter @akahnnyc)

Once is a conspiracy theory. Twice is a coincidence. Thrice gets people wondering. Four times and the polished denials begin as conspiracy theory has become neoliberal reality.

So it is in the Balkans, Central and Eastern Europe and former Soviet regions. Yugoslavia, Croatia, Chechnya, Georgia, Ukraine. And where next? The number has gone way beyond four - the time of polished denials. To deny the conspiracy is meaningless at this point for it is not merely a conspiracy shrouded in the minds of tin-hat quacks but it is in the open for all to see; that is, whoever wishes to open their eyes to what is happening.

Were the choice words of Victoria Nuland not enough? Was the feting of John McCain by Ukrainian fascists not enough? Or the continuous duplicity in the words of any official tasked with parroting the lines of democracy devised by the most undemocratic geopolitical Machiavellis? When duplicity and hypocrisy mix in the cauldron of Washington's witches' brew being stirred in Brussels' kitchen and served at tables in Tbilisi, Kiev, Grozny, and now Budapest.

And why Budapest? Why now? Why Hungary? Perhaps George Soros sees his days being numbered and he has saved his country for last. A collusion with the elites to rule his own country. Rather ironic that the NATO operations for liberty are now knocking on the door of Mr. Soros' country. Or, perhaps, less conspiratorial - for who wants to peddle in conspiracies? - it is simply the latest salvo in the war to prolong the life of a dying United States-NATO hegemon.

One wonders whether the denizens of think tanks in Europe and the United States lay their heads down at night and count Russians and Chinese and any member of the Global South jumping over rapidly shrinking stacks of US dollars and Euros. One Russian Nationalist, Two Chinese Communists, Three Iranian Scientists. Like a drumbeat they see the alliance of Russia and China, Russia and its former allies, China and Africa, Iran and South America - the world with itself, devoid of a cowering pandering to the dictates of the post-WW2 leaders of freedom. Perhaps they see this as their eyes close on feather down pillows. They see this and they know the nightmare is nigh. A pill they need. A pill called Putsch that is branded and copyrighted with its own bold imprint on the pill - "Civil Society Democracy".

But I digress...why Hungary? Just a few years ago, Prime Minister Viktor Orban was going to become the darling of Washington. He was a right-leaning centrist of sorts whose views on immigrants would make Republican xenophobes proud but was sufficiently in agreement with the European Union and global capitalism when it came to economics and foreign policy. He was our buddy who could be counted on to serve as a bulwark against a possibly rising Russia under Vladimir Putin. But time passed and we find ourselves in the mid-20teens with the European Union in free-fall, wracked by a collapsed economy and Western European nations caught between liberal nebbishes and xenophobic rightists. And as time passed, Prime Minister Orban cleverly decided to see which way the winds were blowing and they were blowing towards the Kremlin. Center-right governments in Europe are being outflanked on their Right yet still slavishly remain within the EU paradigm - a suicide wish when farther-right populism is rightfully (if from the wrong ideological rationale) calling them out as puppets of Brussels. Public support for austerity is not that fashionable among blue-collar workers in Europe it should be noted and Orban was attuned to this.

So whether from a desire to stay in power or an actual interest in helping his right-leaning Christian-minded constituency that had been left to rot by Europe in the new post-Soviet world of liberalism, Orban decided to shift from ally of the West alone to hedging his bets between the West and Russia. Yet 2012 may have been the turning point when he left puppet status and he spurned IMF demands (more on this later) and began growing closer to President Putin who by this time had become the ultimate thorn in the side of NATO. A resurgent Russia was always being countered by the West - whether in Chechnya or Georgia - but the game had suddenly intensified with President Putin deciding that Syria would not be lost, Crimea would be re-unified with Russia and Russia would stand up once again to the West.

This move by Orban to become part of the Russian orbit - defined as any country that does not swallow any fact-free attacks on Russia - marked him for targeting. Not only was Orban talking to Russia and attempting to navigate a non-aligned course but he was supportive of the boogeyman South Stream pipeline that Russia was planning - a pipeline that would navigate territory not controlled outright by the West. For a former Communist country to put this red flag in front of the West was, of course, verboten. Nevermind that Hungary had every economic reason to be non-aligned and find economic benefit from wherever it could in the face of EU collapse. In realpolitik, non-aligned means sleeping with the enemy - the Russian Bear.

Some may see Hungary's moves - both its warming relations with Russia and support for the South Stream pipeline - as meaningless but for the United States every little country, every little leader, every little rebel group that opposes hegemony is a threat to be dealt with whether they are true rebels or are former allies like Orban who are now merely asking for some economic wiggle-room outside of IMF and Brussels dictates. And if there is really an honest questioning as to whether one country looking to have Russia as an economic partner is considered a threat one needs only to see the fate of the other Viktor - Viktor Yanukovych of Ukraine.

Indeed, even before Orban's moves towards Russia, it was his steps in regards to the banking industry that first set the international world - or at least the "world" as defined by the borders of Europe and the United States - on its head.

At the end of 2011, the Hungarian Parliament voted in favor of banking changes which would place the national bank under closer control of the elected government with the vice presidents of the bank to be selected by the prime minister as opposed to appointment by the Bank's president. It should be noted clearly that this was a 293-4 vote and not merely a party-line vote dominated by Orban's Fidesz Party. When complaints are made by Hungarian opposition that Orban was taking dictatorial control remember this 293-4 number. Additionally approved at that time was a merger between the national bank and its financial regulator - essentially, Hungary had decided that the Bank would be under civilian control as opposed to an "impartial" leader which, as we recognize, is often determined not by impartiality but rather by subservience to international Capital's wishes.

It was at this time the European Central Bank (ECB) began voicing concerns about the "independence" of the Hungarian National Bank and in the previous year of 2010, Orban did not renew a previous standby loan from the IMF, "opting instead for market financing and to keep the IMF out of government economic policies"i.

For Western Capital, this was clearly a slap in the face and a troubling sign that Hungary under Viktor Orban would use the IMF as it suited them as opposed to other way around. Orban had decided that taxes on the banking sector as well the nationalization of private pension funds was more important than renewing IMF standby loans.

The usual key words are being bandied about by the guardians of democracy. Orban is destroying civil society, cracking down on NGOs, opposing liberal democracy and he is becoming a dictator. Of course, no small reason for this Western claptrap is Orban’s decision to spurn IMF suggestions to cut pensions and remove a tax on banks. Again, one must recall that Orban is not anti-IMF by nature – having been negotiating with the IMF – but realizes that at a certain point, manure is simply manure. As he noted in 2012 in regards to IMF loan conditions he spurned: the deal “contains everything that is not in Hungary's interests.”ii This was followed in 2013 by the head of Hungary’s Central Bank, Gyorgy Matolcsy, writing a letter to IMF head Christine Lagarde and telling her to shutter the IMF’s Budapest office as its services were no longer needed.iii Hungary would fully repay its IMF loan with a bold “Adios” on the final check.

In a 2013 article in the New York Times, it notes, regarding the then-newly appointed National Bank Director Gyorgy Matolcsy:

There is also concern among economists that Mr. Matolcsy will seek to emulate the economic stimulus

known as quantitative easing used by the U.S. Federal Reserve or Bank of England - essentially, a way

of pumping money in the economy. That, economists warn, could prove perilous in a small country

like Hungary that cannot finance itself without foreign capital.iv

In essence, in the name of banking freedom and independence, the European Union, IMF and ECB were looking to keep their own monopolistic control over Hungary and perpetuate a master-servant dynamic that they promulgate and enforce with an iron fist in most of the developing and post-Soviet world. Hungary's decision to break from this was seen by the West (a grouping that should not be seen as including its stepchildren in Eastern and Central Europe) as tantamount to revolt. As the New York Times article hinted at, Hungary was looking for self-reliance and had begun to chart a course that would not lead to IMF loans or independent loans from Western European countries that it was in the process of politely spurning.

Not only was Hungary moving to economic independence - despite protestations that it was losing independence - but Hungary had made a conscious decision, as noted before, to be non-aligned in the rapidly deteriorating relations between the West and Russia. Strategically placed near Russia and within the region of an expanding NATO, this too was not to be accepted. The NATO encirclement of Russia could not be allowed to hit a roadblock with a pesky right-populist government in Hungary.

So it is that Viktor Orban has gone from reportedly praising U.S. Senator John McCain in 2008 as a "national hero in the most original sense of this expression" to John McCain now speaking of Hungary under Orban as "a nation that’s on the verge of ceding its sovereignty to a neo-Fascist dictator”.v

Warming relations with Russia, taxes on banks, nationalizing pension funds, spurning the IMF, traditionalist morality…all left for Orban to do to antagonize his former allies would be to send troops to support Hezbollah or some such effrontery.

Now there is never a country or leader who tries to break free of neoliberal policies and align with the enemies of Western freedom that is not marked for regime change for lack of a more diplomatic term. So it is that the question arises as to who in Hungary would take up the mantle as the reformer who will save Hungary from running headfirst – and intentionally - down the path to an illiberal democracy. In the words of Orban himself:

“…the new state that we are building is an illiberal state, a non-liberal state. It does not deny foundational values of liberalism, as freedom, etc.. But it does not make this ideology a central element of state organization, but applies a specific, national, particular approach in its stead.”vi

This is the point where it gets difficult for the United States and Brussels. Finding a neoliberal apparatchik in Hungary will be a wee bit harder than it was in Ukraine. While Ukraine had neoliberals who had no qualms about using fascist muscle and US State Department funds to gain power, Hungary is not so simple. Hungary has fascists in the form of the surging Jobbik Party that is pushing Orban from the right, a Fidesz Party of which Orban is a member that is charting a self-proclaimed illiberal path, a Socialist Party that barely registers 10% support and several minor parties with minimal support.

The likely attempt at this point will be a cobbled-together coalition of Fidesz officials who will bought back to support right-leaning liberal policies that Orban once supported, “reformed for the camera” Jobbik blue collar voters, apolitical but corruption-opposing college students, random members of the nebulously-defined civil society and most valuably capitalist technocrats to round out the bit. Blue collar workers as the goon squads fighting for a dystopic utopia where civil society’s technocrats will rule with a punch to the buttocks of the workers in the name of fiscal responsibility. Welcome back IMF.

Enter the Two Vs – Zsolt Varady and Gabor Vago – one the entrepreneur and the other the technocrat-politician.

To begin with, we have Mr. Varady, the capitalist tech entrepreneur and founder of the now-defunct Hungarian social media website If his name means nothing to you, etch it in your mind as his name was quietly making the rounds in reports on Hungarian protests in early 2015.

Politically, Mr. Varady came to (im)maturity this past October in his novel lawsuit against every Hungarian political party for the crime of “creating and maintaining a tax system that compels enterprises to commit tax fraud and tax evasion”. No real complaints with the dismantling of social welfare programs following the collapse of the socialist bloc. No. Simply a lawsuit blaming political parties for forcing corporations into tax fraud and evasion. Of all the complaints that could be laid before the feet of successive Hungarian governments, Mr. Varady decided on this.

Mr. Varady noted that his purpose in filing the legal proceedings - which he notes are merely “of secondary importance {to}…the related PR” was to improve “tax-paying morale”vii “To achieve an optimum tax system the state should be radically reformed. I cannot do that alone,” he says. “We need the support of considerable sections of society. The activities of civil society can serve the much needed umbrella for these messages.viii To paraphrase: Business doesn’t like Orban’s taxes so the working class which we will call “civil society” will serve our interests by being the democratic face for our plans to change the tax code in support of a minority.

Strike one in favor of Mr. Varady in the eyes of the West and IMF. Reform the tax code. Yet what of his political plans? Is he an idealist who wants to push a political agenda that may eventually conflict with foreign support for an Orban putsch? Well not at all. Indeed, he promotes as his next step in politicking the creation of “a website that helps people in civil society organization” which will be funded by “crowd-funding” and, here’s the kicker: “Perhaps we can also receive assistance from foreign foundations and probably émigré Hungarians will also chip in.”ix

One can see the wheels turning in Mr. Varady’s eyes. He of the recent “civil society” protests in Hungary. He of the white knight status who can step into the void as the bridge between all the necessary groups to bring democracy to Hungary and freedom from fascism to civil society. The strategy of street protest led by “civil society” is classic for who can oppose the desires of civil people? But keep his above comment in mind. “We” - meaning his class of neoliberal entrepreneurs seeking help from “foreign foundations” – “need the support of considerable sections of society” who will be the “umbrella for these messages”. Yes my friends, the pictures of civil society will be broadcast while the true agenda will be hidden. The goal, as Mr. Varady notes will be “new foundations” led by “teams of experts that are competent in their respective fields and are committed”x otherwise known as malleable technocrats.

Mr. Varady will be the counterpoint to Orban. An unelected Western-friendly gentleman simply looking to aid civil society against an elected modern-day “Mussolini” as Newsweek so appellated him.xi Mr. Varady will reverse the so-called “Putinisation of Hungary” and return ill-defined liberal democracy to the nation.

Lest anyone question Mr. Varady’s bona fides in being ready for the struggle, he has set the stage for force to be used by noting, despite lack of concrete examples, that “the Establishment” (read: the Orban government) “only understands the language of force”.

Not to be outdone by Mr. Varady is Gabor Vago, the fresh-faced but apparently politics-weary technocrat who bolted from the Politics Can Be Different (LMP) Party in early 2014 after alleged intra-party power struggles. Similar to Mr. Varady, his is a belief that politics is apparently déclassé and that a non-partisan movement is required. Anti-politics is the modus operandi of such civil society figures and one that plays perfectly into the hands of outside influences which will use the feint of anti-politics to push what ultimately becomes a purely economic-political putsch.

Many of the same talking points used by Mr. Varady were echoed by Gabor Vago in an interview with the business weekly Figyelo. Speaking of a December protest that he organized, Mr. Vago noted that the protest which included a punk concert - which he referred to as a “meta message” – was held for the purpose of promoting “a shift in the attitude of the tax authority”xii while using the protestors free-floating discontent as the muscle/street voice of the protest.

Mr. Vago, when asked about the next step replied: “Emphasis should gradually shift onto building communities…With time those micro communities can form a network.”xiii Perhaps based on his former political background, Mr. Vago was less circumspect than Mr. Varady in terms of speaking of the need for “power”. When queried regarding this issue he answered: “True, a change would require power. But that will only become a relevant question later.” When asked “When” he replied: “Perhaps within a year, perhaps in three or seven years’ time. One has to wait until the opportune moment.”xiv

As noted before, the amalgam protest movement requires technocrats and as Mr. Vago noted, without using the word “technocrat”:

Any change of elites would require the participation of experts. We need the support of people who took part in the transition [from Communism to the multi-party system] but not necessarily as politicians. People who have proved their talent in whatever field and think that the present regime is not viable. People who think their integrity puts them at a disadvantage and wish to turn Hungary into a country where you can be honest and competitive at the same time. Building from grass roots does not mean that we only organize ourselves in student clubs and romkocsma (alternative art pubs). We wish to approach people in all walks of life, ranging from top managers to unskilled rural workers.xv

In the same interview he was questioned as to how these groups will be coordinated:

Q: During the demonstrations against the Internet tax you were pleased to have involved young people who had been unaffected by politics until then. But only a few weeks on, only a fraction of those young people took to the streets. How can you involve people in long-term processes that hardly have any affinity to politics?

A: We need to identify the opinion leaders in existing groups and train them how to run such communities. Once we have won those opinion leaders, they will bring along their friends and the friends of friends. Demonstrations as such are not our ultimate goal, instead, to shape a democratic political community throughout Hungary.xvi

In essence, there will be a politico-technocrat elite overseeing the organization and release into society of nebulously-defined “opinion leaders” who will train people to run civil society “communities”. In theory it sounds wonderful – civil society having its rights. Yet rhetoric aside, the track record of Western-backed democratic upheavals needs to be viewed. The picture, as we know, is not too pretty of a sight whether in Georgia, Ukraine or elsewhere in the region.

Hungary is next in line for “democratic change” brought by the winds of the United States’ National Endowment for Democracy mixed with a touch of destabilization tactics from the CANVAS playbook of Srda Popovic.xvii

The question as to whether Hungary will meet the wrath of Washington and Brussels is not so much “if”, but “when”.

Once is conspiracy theory. Twice is coincidence. And now it has become reality.

viii Ibid.
ix Ibid.
x Ibid.
xiii Ibid.
xiv Ibid.
xv Ibid.
xvi Ibid.

Check out this "Ukrainian" fighter

Check out this video shot today in Mariupol following the artillery strike which killed and wounded scores of people.  A Ukrainian journalist approaches what she believe is a Ukrainian solider (he is in Ukrainian uniform and has an AK on this back) and asks him "tell me, what happened here?".

You can listen to his reply by yourself.  No translation needed.

The Saker

Assault on the New Terminal combat footage 16-18 January "Donbas under fire" documentary [eng sub]

This documentary has some amazing footage of the combats at the airport, including night combat.  Absolutely amazing & highly recommended.

The Saker

Saturday, January 24, 2015

Words of wisdom from "Matros"

A most unpleasant thing to post

Dear friends,

While I often post stuff I don't agree with, this time around I am going to post something which I find most disturbing, but which I strongly believe has to be aired.

As you might have heard, the mayor of Pervomaisk, Evgeny Ischenko, has been shot.  Some (many?) are accusing Plotnitsky, just as in the case of Batman. I am not taking sides here, but I find the following video very disturbing because it does show something weird: Plotnitsky seemingly praising Ischenko and the footage of the latter absolutely infuriated by Plotnitsky and Zakharchenko.  Notice that Ischenko also speaks some nonsense, for example when he praises Cossack units and their commanders when, in reality, Cossack forces are, by and large, 2nd rate and are not trusted with any critical sectors.  The folks who made the video, FallenUSSoliders, clearly have a fixation on Jews, they also buy into the "Russian oligarchs" betraying Novorussia narrative, but you don't have to agree with that to notice that two fierce opponents of Plotnitsky have been recently killed and that regardless of whether this is true of not there are plenty of folks in Novorussia who feel not only betrayed by Russia, but even attacked by the Kremlin or Russian oligarchs.  Here is the video:

Okay, just to make things clear: I am not endorsing this version, nor am I blaming Plotnitsky, Zakharchenko or anybody else.  I am just saying that this version is gradually acquiring more and more traction and that his is very bad for Novorussia.  Personally, I think that Plotnitsky should resign until he can clear his name because regardless of whether is is to blame for what is going on, he is clearly not a consensus figure and many key figures do not trust him.  As for Zakharchenko, who apparently is far more popular, he needs to sit down with the "opposition" and try to achieve a broad consensus in specific key issues.  For example, Zakharchenko has now declared a) that the ceasefire is over and b) the the Minks agreements are de-facto dead.  Okay - he said it. Nobody made him.  Now stick to it even if the Kremlin is unhappy about it.  One of Zakharchenko's key roles is to be an effective representative of the Novorussian interests before Putin (who has first and foremost Russian, not Novorussian, interest to defend, as it should be) but for that he also needs to convince his people, the Novorussians, that he is not Putin's puppet but their leader.

There is a prefect precedent for this: contrary to what the doubleplusgoodthinking AngloZionist propaganda says, Hezbollah is not Iran's puppet at all.  The relationship between Iran and Hezbollah is one of partners and allies, even if clearly one partner is bigger and more powerful then the other.  And, yes, Hassan Nasrallah and Hezbollah are followers of Ali Khamenei, but the Iranians are wise enough to always treat Hezbollah as a respected friend, not a puppet.  Putin and Zakharchenko need to follow that mode as at the end of the day, it yields a far stronger alliance then the subservient "puppet - puppeteer" model (normally used by the USA and West Europeans).

One more thing: I don't know where the authors of this video got the idea that Plotnitskii is a Jew, but I found no evidence of that. 

Anyway, I am posting all this just to make a simple point: there are problems inside Novorussia and in the relationship between Russia and Novorussia which greatly weaken the good side and which can be exposited by the Nazis.  Perceptions matter and if these issues are not addressed, things will just get worse.

The Saker

Just an "honest" mistake this time? Maybe

By now most of you would have heard about the artillery strike on the civilian outskirts of Mariupol.  The Nazis blamed the Novorussians, who denied it.  Turns out the locals saw it all and even filmed it.  Bottom line is this: this appears to be an "honest" mistakes, meaning that the Ukrainians were probably trying to hit the advancing Novorussians but that their salvo came in short (Ukie artillerists do not exactly have a reputation of being snipers...).  Here is a map sent to me this morning by a friend:

On the ground, it looked like this:

Ugly and scary, for sure.  And horrible for those who were hit, but what is forgotten in this story is that this is what Donetsk has been suffering every day and what Gorlovka is getting hit by daily, but in truly massive amounts.  And, unlike in Mariupol, Donetsk and Gorlovka are getting hit like that deliberately.

What the events in Mariupol do show, however, is that regardless of the expertise and caution taken by Novorussian artillery (it is considered very skilled as it always aims at precision strikes at Ukrainian positions in order to prevent the latter from hitting the Novorussian civilians), there are major risks in an operation to take a city like Mariupol.  If this time around it was probably just an "honest" mistake (to the degree that the word "honest" can be used for junta forces), the next time around it could be a deliberate SBU false flag.  For example, imagine this:

You are Poroshenko or Nalivaichenko and you asked the USA and the EU to declare the Novorussians "terrorists".  And then, for some reason, both the USA and the EU declined to do so (they did decline).  How would you go about proving them wrong?  The MH-17 and the recent civilian bus false flags failed, those pesky westerners still don't want to declare 7 million people as terrorists, so what would you do about it?


So the risk is real and huge.  So far, the Novorussians have played their hand very well, but their offensive on Mariupol has me nervous all for the same reasons as the first time around.  At least now they are moving in slowly and making darn sure that their lines of supply remain open and secure.  Still, this is a very dangerous situation and the events this morning show that even an "honest" Ukie mistake can be immediately turned into political ammunition to flame anti-Russian hysterics in the West.

The Saker

A short course in Ukrainian history

Check out this three-part short "History of the Ukraine" video series by Jimmie Moglia, an Italian author living in the USA (check out his website too: Your Daily Shakespeare and the section on Historical Videos).  Very good series, enjoy!

The Saker

Igor Strelkov commentary on strategic situation in Novorossia 23/01/15

A key day in the Ukrainian Conflict?

by Alexander Mercouris

This may turn out to be a critical day in the evolution of the Ukrainian conflict.

1. The Russian Security Council met today. We do not (obviously) have a full account but Putin's website has provided some details.

Strikingly, Putin referred to the junta as "official Kiev" and not "the Ukrainian government" or "the Ukrainian side". He also referred to the two east Ukrainian republics as "the Donetsk People's Republic" and "the Lugansk People's Republic".

This is the closest Putin has yet come to since Poroshenko's election in implying that the junta is not the legitimate authority in the Donbass and that the two NAF republics are.

2. Putin also pointedly referred to "criminal orders" coming from "official Kiev".

3. Putin has also had a telephone conversation with Lukashenko, who is a key partner in relation to the Ukrainian conflict. Again we have scarcely any information about what was discussed but Putin will have wanted to ensure that Lukashenko remains on board. I expect a phone call to Nazarbayev shortly.

4. We now know from comments made by Shuvalov at Davos that Beijing is being consulted all the time. The key point about what happened at Davos is that Shuvalov made it absolutely clear that Russia will not submit to sanctions and Kostin of VTB gave a very clear warning against any attempts to exclude Russian banks from the SWIFT payments system. The Financial Times has a good summary of the comments Shuvalov and Kostin made and I attach it below.

5. The Russian Justice Ministry meanwhile has formally banned a number of Ukrainian organisations including Right Sector. Some of us are surprised that they had not been banned already.

6. Zakharchenko has said that the Minsk Memorandum no longer applies. This is not the same document as the Minsk Protocol, which was the original ceasefire agreement that was agreed on 5th September 2014. Rather, it is the technical follow-up document that purported to set out the ceasefire line and which provided for the withdrawal of heavy weapons, which was agreed on 19th September 2014. Neither the Minsk Protocol nor the Minsk Memorandum have ever been implemented. By saying the Minsk Memorandum no longer applies Zakharchenko has freed the NAF to pursue offensive operations, which is currently what it is doing.

7. Lastly, Zakharchenko has also again been saying that the DPR's/LPR's decision to secede from the Ukraine is final.

Now it may be that all these discussions and conversations and comments are uncoordinated and do not in total amount to anything. Perhaps there has been no change in Russian policy. However they do look like a hardening of position and perhaps give clues that the Russians have at least for the moment given up hope of the diplomatic approach. They also suggest a preparation for a battening down of the hatches in case another round of sanctions is on the way.

From the Financial Times:

One of Russia’s top bankers on Friday warned that excluding the country from the Swift banking payment system would be tantamount to “war”.

The suggestion that Russia could be shut out of Swift triggered widespread alarm in Moscow’s financial community when it was floated by western politicians last summer. Russia’s banks rely heavily on the Belgium-based payments system for both domestic and international payments. However, the move was at the time considered too punitive a sanction, being described by one adviser as “the nuclear option”.

Speaking at a panel in Davos on Friday Andrei Kostin, chief executive of VTB, Russia’s second-largest bank, said: “If there is no Swift, there is no banking . . . relationship, it means that the countries are on the verge of war, or they are definitely in a cold war.”

“The next day, the Russian and American ambassadors would have to leave the capitals,” he added.

Mr Kostin’s comments highlight how the west’s sanctions regime is creating a sense of anger and defiance among the Russian political and business elite.

“The more you press Russia, I do not think the situation will change,” he said, pointing out that the country was moving to reduce its reliance on western payment systems such as Swift.

“We have already created a domestic alternative to the Swift system . . . and we need to create alternatives internationally.”

He drew attention to efforts under way between Russia and China to create a separate platform of their own, outside western control.

Igor Shuvalov, Russia’s deputy prime minister, echoed this theme. “We are developing our eastern vector,” Mr Shuvalov declared, pointing out that although efforts to build links with China had been under way before the crisis, they had dramatically intensified since sanctions started, as Russia looked for alternatives to the west.

Mr Shuvalov said that the so-called Bric countries (Brazil, Russia, India and China) were ready to help each other in a financial crisis too. “Large Chinese investors are coming to us,” he said.

The “pivot to Asia” has become a key part of Vladimir Putin’s foreign policy since the breakdown in relations with the west over Ukraine. While several flagship deals have been signed, such as the $400bn contract to supply Russian gas to China for 30 years last May, few Russian policy makers or businesspeople believe China can save the Russian economy from a painful recession.

“The present situation looks like it is softer than [the 2008-09 financial crisis] but we are going into a long crisis situation and it may be protracted,” Mr Shuvalov said.

But he added that foreign pressure would not succeed in changing the political leadership of the country.

“We will survive any hardship in the country — eat less food, use less electricity,” he said.

Alexei Kudrin, the respected former finance minister, predicted Russia could see capital outflows of $90bn this year after a record $151bn in 2014. “We should clearly understand the price we are paying for sanctions,” he said.