Saturday 25 October 2014

Garry Kasparov: "Putin’s bargaining power has been greatly overestimated"

Garry Kasparov´s speech at the Oslo Freedom Forum should be compulsory reading for European and American leaders:

After the fall of the Iron Curtain, it made perfect sense to integrate, to “engage”, with the morally and economically impoverished countries emerging from the Communist Dark Ages. But even after the European Union and NATO were expanded to their logical limits, the West continued to engage with authoritarian nations and leaders who wanted nothing to do with human rights and free markets within their own borders. Countries like Putin’s Russia and China received the economic benefits of engagement with the free world, but never ceased their crackdowns on civil society at home.

[SLIDE: ‘ENGAGEMENT’ PHOTOS: PUTIN WITH SCHROEDER, BERLUSCONI, LIPPONEN G8,]

Putin in particular has been very successful using the free world’s open borders, open press, and open political systems to his advantage. Just a note, that if not for Putin’s blatant aggression in Ukraine the so-called G-8 Summit would have taken place in Sochi last summer. Putin and his representatives have put many prominent Western politicians on his payroll, held fundraisers for political parties, brought influential western companies and executives into his network, and flooded western banks and markets with the easy cash they love, paid for with their own oil and gas money. However, Putin’s bargaining power has been greatly overestimated.

[SLIDE OIL & GAS IMPORT-EXPORT CHARTS]

The free world still has many advantages in this fight, and could have all the leverage it needs, if only it had the courage to use it. The EU, for example, gets only a third of its oil and gas from Russia. Substantial, and in many ways shameful, since it has been clear for years that Putin is not a reliable partner. Russia’s annexation of Crimea took place in March and Europe did nothing for seven months to find an alternative to Russian gas. And of course Norway could be one of the options! Today we still hear that “Europe could freeze” if Putin cuts the gas supply. But Russia exports over 80% of its oil and gas to the EU! Over 80%! Who has the leverage here? By boycotting or taxing those exports, or even making a credible threat to do so, Europe could cripple the cash flow that keeps Putin and his gang in power.
There are other powerful measures that could be employed. Russia’s hundreds of billions of dollars in cash reserves kept in Europe and the US could be frozen, as Iran’s were in 1979; Russian state corporations can be stripped of their cash flow; and Putin’s oligarchs’ assets can be seized to create a rift between the Godfather and his lieutenants. Total isolation is not possible today, but the free world must break all forms of dependency on dictatorships. Engagement with dictators has failed.

[SLIDE OF HEADLINES ABOUT PUTIN’S LOBBYING AND PROPAGANDA IN THE WEST]

This failed engagement policy of the West has given Putin something the Soviet leaders never dreamed of: an open frequency for propaganda and lobbying, and open markets for their natural resources and cash. Russia and China have channels on Western cable TV and teams of influential lobbyists in every capital. But sellers need buyers. Pipelines cannot easily be redirected. Russia’s ruling elite and their families have no desire to live in the country they have so effectively looted and ruined.
So the free world holds the winning cards in this game of geopolitical poker, but keeps folding its hand whenever Putin bluffs – and he does so regularly and successfully. A dictator knows what he must do to stay in power: he must look strong; he fights to survive. Democratically elected leaders are more worried about the next poll, the next election, or passing on tough decisions to their successors. Conflict and sacrifice aren’t winning campaign issues. Western leaders complain about jobs that could be lost from a confrontation, but how many jobs will be lost from global instability when dictators go unchallenged?
But we must fight – now, or later. If we have learned anything about dictators it is that they do not go away on their own. Putin is not a nightmare that goes away when you open your eyes! The longer we wait, the harder it will be. The price keeps going up every day. There is never a safe and easy solution. Sanctions can be effective, but they must be strong enough and fast enough to deter.

Read the entire speech here

Friday 24 October 2014

The European Union continues on its path to economic self-destruction: Agrees on "World´s most ambitious climate energy policy"

The grim reality for the European Union:

Now that German growth has stumbled, the euro area is on the verge of tipping into its third recession in six years. Its leaders have squandered two years of respite, granted by the pledge of Mario Draghi, the European Central Bank’s president, to do “whatever it takes” to save the single currency. The French and the Italians have dodged structural reforms, while the Germans have insisted on too much austerity. Prices are falling in eight European countries. The zone’s overall inflation rate has slipped to 0.3% and may well go into outright decline next year. A region that makes up almost a fifth of world output is marching towards stagnation and deflation.

Surely the leaders of the European Union should be more than worried. However, instead of taking the necessary measures to create growth, those leaders have chosen to reinforce the only really "succesful" EU project, the self-destruction of the European economy:

in the early hours of Friday, Mr Van Rompuy, wrote in a tweet: "Deal! At least 40% emissions cut by 2030. World's most ambitious, cost-effective, fair #EU2030 climate energy policy agreed ."

The EU Commissioner for Climate Action, Connie Hedegaard, said she was "very proud" that the leaders "were able to get their act together on this pressing climate challenge".

Meanwhile, German Chancellor Angela Merkel said: "We made a decisive step forward."

The EU is already on target to cut its CO2 emissions by 20% by 2020, compared with 1990 emission levels.

EU officials earlier said they wanted the EU to have an "ambitious position" in the run up to the UN climate change conference in Paris in December 2015.

They must be smiling in the US, China and India ...