For Peace and Freedom

BERLIN/KIEV | | ukraine

BERLIN/KIEV (Own report) - German foreign policy experts are expressing their approval of Kiev's putsch regime's recent escalation of warfare against the East of Ukraine. It is "evident" that "Kiev … had to again become active," declared the influential diplomat and Chairman of the Munich Security Conference, Wolfgang Ischinger. Prime Minister Arseniy Yatsenyuk, whose regime bears responsibility for the current artillery and aerial attacks on eastern Ukrainian cities, was guest speaker at yesterday's Charlemagne Prize award presentation ceremonies. The German media praised him accordingly. The Ukrainian President-elect, the Oligarch Petro Poroshenko, would like to lead Kiev into a "security alliance" with the West and soon sign the economic segment of the EU's Association Agreement. Ukraine has already begun the necessary preparations: Austerity measures, which will massively increase the unemployment rate and entail a dramatic rise in prices, have been initiated. German business circles are preparing for their economic expansion into that country. If Kiev can take control over eastern Ukraine with military means, new conflicts could arise: The interests of the expanding German industry would collide with those of Ukrainian oligarchs.

By All Means

Kiev's Prime Minister Arseniy Yatsenyuk has attracted public attention with his participation in yesterday's award presentation ceremonies of the Charlemagne Prize to the President of the European Council, Herman van Rompuy. In his short speech, he declared that Kiev will fight "for peace and freedom" against the rebellions in the East of the country - "with all means at our disposal."[1] On the eve of the ceremony, he conferred in Berlin with the German chancellor on the next steps in the struggle for influence with Moscow. President-elect Petro Poroshenko announced that Kiev seeks to strengthen its formal ties with the West. After initial resistance, Kiev now is signaling that the signing of the economic segment of the EU's Association Agreement is imminent - still in June. Only the political segment is currently in force. Poroshenko has also announced that he is counting on a "new security alliance with the USA and Europe to also militarily protect the Ukraine." He intends to "fight for this and immediately open talks."[2] He has had "intensive phone conversations" with Chancellor Merkel and is now hoping "for more solidarity and support."[3]

Saving up for Free Trade and War

Immediately following the putsch in late February, the Ukrainian putsch regime began initiating economic preparations for the country's transition into the western hegemonic sphere. As usual in such cases,[4] this process means the imposition of harsh austerity policies. An agreement has already been reached with the International Monetary Fund (IMF) to apply its clearly defined austerity measures. Therefore Kiev has abandoned the previous government's plans to slightly raise pensions and the minimum wage (approx. 45 cents/hr) and will now freeze both at current levels. The parliament decided already back in March, to reduce the national budget by 17 percent. Altogether, about 24,000 civil service employees will be fired, accounting for ten percent of all civil servants. In a "letter of intent" to the IMF, dated April 22, Kiev also agreed to increase - before the summer - the price of gas for private households by 56 percent as well as the costs for district heating by 40 percent. This will be a heavy blow to a large portion of the Ukrainian population, whose average earnings - when the oligarch's wealth is deducted - are estimated at about 150 Euros monthly. In 2015, gas and heating costs will be raised another 40 percent and again in 2016 and 2017, another 20 percent each year. The war against the insurgents in the east of the country, which is consuming large sums, has not yet even been calculated into these plans. Minister of Finances, Oleksandr Shlapak, announced May 10, that Kiev's military budget will probably have to be increased by 50 percent, for the time being, and this amount is still not enough. Therefore, Ukraine must cut its budget for social issues and healthcare.[5]

Lucrative Modernization

In anticipation of the imminent signing of the economic segment of the EU's Association Agreement, the austerity policy has begun provoking tangible interest in German economic sectors. "The adoption of EU standards and the establishment of a free trade zone with the European Union, will demand ... a multiplicity of immense efforts in modernization for Ukrainian enterprises," according to "Germany Trade and Invest" (gtai). For example, the steel industry, which "is very important to Ukraine," has "much catching up to do, in the use of modern technology."[6] German companies are hoping to land lucrative contracts. This sector also has political significance. As in many other branches, Ukrainian oligarchs, such as Rinat Achmetov, exercise an enormous amount of influence over the steel industry. It is unknown, whether Achmetov - who may have to make expensive modernization investments - can expect concessions for his announcement to regain control over eastern Ukraine.[7] From within the entourage of President-elect Poroshenko, there is talk of a "German aid program for the Donbass," that is supposed to "create jobs."[8] Gtai also sees opportunities for German enterprises in the impending modernization of Ukraine's agriculture, where Ukrainian oligarchs are also influential.

Low-Wage Site

According to the gtai analysis, the imminent signing of the economic segment of the EU's Association Agreement will make large-scale transplantation of industrial sites also feasible. For example, "a foreign automobile producer could proliferate its locations in Ukraine and establish a cluster of subcontractors," writes the foreign trade agency. The country could even, "step by step, become a second Czech Republic," thanks to its exceptionally low wage level ("labor cost advantages"), particularly due to the fact that Ukraine has a "relatively well trained labor force." Gtai points out that various German automotive components suppliers - such as Leoni - are already producing inside the country. However, Ukrainian auto manufacturers must "then convert to the production of component parts or niche products such as customized autos or infrastructures."[9] It is not clear what form the confrontation will take between the giants of the West European auto industry, on the one hand, and the Ukrainian oligarchs, on the other. For example, one of the largest car manufacturers in Ukraine is privately owned by the billionaire Petro Poroshenko.[10] Poroshenko has announced his intentions to sell his companies - with the exception of his "Channel 5" broadcasting company - but it is not clear, who will take over his "Bohdan Corporation" car factories.

"Finally Retaliate"

Whereas the protégée of the CDU-affiliated Konrad Adenauer Foundation [11], Kiev's future mayor, Vitali Klitschko, has announced that he will now "seek German investments very intensively,"[12] his political ally, Petro Poroshenko, is applying the final measures for the absorption of all of Ukraine into the Western hegemonic sphere - by repressing revolts in the east of the country. This week, using its newly formed "national guard," irregular militias and the air force, Kiev's regime massively expanded attacks on the cities of Donbass. Before elections, "they had shied away from fighting, to not endanger voting," an "insider" was quoted saying, "now we can finally retaliate."[13] German foreign policy experts are expressing their comprehension. "It was evident that Kiev had to again become active, once the elections were over," declared, the Chair of the Munich Security Conference, Wolfgang Ischinger.[14] From Donezk, the first strikes in opposition to Kiev's onslaught have been announced, and violence is also escalating from the side of the insurgents. No end to the fighting is in sight.

War of European Unification

The war beginning in eastern Ukraine will not be the first war to accompany the German-European eastward expansion of their hegemonic sphere. Already in the 1990s, Germany supported the destruction of Yugoslavia, to prevent possible resistance to its predominance. In the summer of 1999, shortly after the war over Kosovo, German media had referred to a "war of European unification." However, at the time, it was reported that "leaders," were referring to this "only in confidential conversations" - otherwise one would have to answer the objection that "war is again being called the mother of all - even Europe."[15]

More reports and background information on the current German policy toward Ukraine can be found here: A Broad-Based Anti-Russian Alliance, Expansive Ambitions, Our Man in Kiev, Integration Rivalry with Moscow, On the Offensive, At all Costs, The Crimean Conflict, The Kiev Escalation Strategy, Cold War Images, The Free World, A Fatal Taboo Violation, The Europeanization of Ukraine, Official Government Vocative, An Unusual Mission, "Scientific Nationalists", Crisis of Legitimacy and "Fascist Freedom Fighters" and The Restoration of the Oligarchs (IV).

[1] Van Rompuy wirft Russland Destabilisierung vor. 29.05.2014.
[2] Das erste Interview mit Klitschko und Poroschenko. 27.05.2014.
[3] So wollen sie der Ukraine Frieden bringen. 29.05.2014.
[4] See Under the EU Flag.
[5] Ukraine cuts health, welfare spending to boost defence. 12.05.2014.
[6] In der Ukraine stehen Modernisierungen an. 24.04.2014.
[7], [8] See The Restoration of the Oligarchs (IV).
[9] In der Ukraine stehen Modernisierungen an. 24.04.2014.
[10] See The Restoration of the Oligarchs (IV).
[11] See Our Man in Kiev.
[12] So wollen sie der Ukraine Frieden bringen. 29.05.2014.
[13] Konrad Schuller: Wie aus Partisanenhaufen Stoßtrupps wurden. Frankfurter Allgemeine Zeitung 28.05.2014.
[14] Ischinger nennt Offensive gegen Separatisten notwendig. 28.05.2014.
[15] Gunter Hofmann: Deutschland am Ende des Krieges. Die Zeit 24/1999.