Russia Reform Monitor: No. 1888

Related Categories: Russia; Ukraine

April 9:

Just how much is Vladimir Putin’s Ukrainian adventure costing Russia? Citing statistics from the Central Bank of Russia, financial website quartz.com reports that “[n]early $51 billion in capital coursed out of Russia” during the first quarter of 2014 in response to Russia’s intervention in Ukraine and subsequent annexation of Crimea. That, the site notes, represents the highest quarterly outflow of capital from the Russian Federation since the fourth quarter of 2008, “when the global financial crisis was getting into full swing.”

[EDITORS’ NOTE: If anything, the figures provided by the Russian Central Bank represent an underestimation of the scope of capital now leaving Russia. Indeed, Russian monetary authorities have since revised their estimates upward. According to Reuters, they now gauge that net capital outflows totaled nearly $64 billion in Q1 of 2014.]

April 10:

The current crisis over Ukraine could have an impact on energy supplies to Europe, Vladimir Putin has warned. BBC reports that the Russian president has sent a letter to European leaders warning that Ukraine’s energy debts to Moscow, if not resolved quickly, could force a dramatic change of business practices by state gas giant Gazprom. Should Ukraine not pay its bills – recently made significantly bigger because of a price hike – then Gazprom will be “compelled” to force European states to provide advance payments or could “completely or partially cease gas deliveries.”

A number of nationalist Russian parliamentarians are taking aim at the last Soviet General Secretary. London’s Guardian reports that a handful of Russian MPs are attempting to launch an investigation onto Mikhail Gorbachev for “treason” presiding over the breakup of the USSR in 1991. “We asked to prosecute him and those who helped him destroy the Soviet Union for treason of national interests,” the paper reports Communist Party Deputy Ivan Nikitchuk as saying. “The consequences of that destruction can be felt today in the conflicts that we have seen.”

April 11:

Russia’s chief prosecutor has ruled out the possibility of extraditing former Ukrainian president Viktor Yanukovych back to Kyiv. According to the Moscow Times, Russian legal authorities have dubbed Yanukovych the “fully fledged, legitimate president” of Ukraine – and rejected demands by the new Ukrainian government for Yanukovych’s extradition in connection with an investigation into the killing of some 80 protesters by snipers during the unrest in February.

Russia represents a threat to Europe’s security and integrity, NATO’s top political official has made clear. In an extensive interview with the Wall Street Journal, outgoing NATO Secretary General Anders Fogh Rasmussen was uncharacteristically blunt about the danger to the ideal of “a Europe whole and free” emanating from the Kremlin. "I see Ukraine and Crimea in a bigger context. I see this as an element in a pattern, and it's driven by President Putin's strong desire to restore Russian greatness by re-establishing a sphere of influence in the former Soviet space," Rasmussen has said. Moreover, according to the Alliance chief, the Russian government’s recent moves in Crimea represented part of a well-thought out strategy. "It's in Russia's interest to see frozen, protracted conflicts in the region, such as in South Ossetia and Abkhazia in Georgia, Transnistria in Moldova, and Crimea."

For Rasmussen, Russia’s recent moves have reinforced the need for a greater European focus on defensive and military capabilities. "We in Europe have disarmed too much, for too long," Mr. Rasmussen says. "We can't continue to cut defense budgets deeply while Russia is increasing her defense budget... It has created a growing gap across the Atlantic between the U.S. and Europe. Today the U.S. spends around 75% of the overall NATO defense investment. I'm concerned that in the long run it will weaken the trans-Atlantic alliance if this trend continues."