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German Economic Colonization of Ukraine

Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. [1] (The flash dri­ve includes the anti-fas­cist books avail­able on this site.)

[2]COMMENT: With the U.S. and Ger­many respec­tive­ly play­ing Bad Cop (mil­i­tary aid and sanc­tions) and Good Cop (eco­nom­ic aid and resis­tance to fur­ther sanc­tions at the behest of key Ger­man cor­po­ra­tions invest­ed in Rus­sia), the fol­low-up to the covert oper­a­tion result­ing in the coup d’e­tat of ear­ly 2014 is pro­ceed­ing apace. That coup brought to pow­er the OUN/B suc­ces­sor orga­ni­za­tions Swo­bo­da and Pravy Sek­tor as key play­ers in the inter­im gov­ern­ment.

Ger­man industry–surprise, surprise–plans to mod­ern­ize Ukrain­ian indus­tries and estab­lish sub­con­tract­ing arrange­ments to build auto­mo­biles in that cheap labor mar­ket.

This will be cou­pled by the aus­ter­i­ty doc­trine we have termed “Von Clause­witz­ian eco­nom­ics.” It remains to be seen how the Ukrain­ian pop­u­la­tion receives this.

The fact that the Ukrain­ian econ­o­my is dom­i­nat­ed by oli­garchs should facil­i­tate the process, at least on paper. Note that Ukrain­ian pres­i­dent-elect Petro Poroshenko has key hold­ings in the Ukrain­ian auto­mo­bile indus­try, among oth­er invest­ments. It seems rea­son­able to sup­pose that he will receive gen­er­ous­ly prof­itable com­pen­sa­tion for any “adjust­ments” he makes to his port­fo­lio.

[3]

Swo­bo­da leader Oleh Tia­hany­bok

U.S. ener­gy com­pa­nies may get a crack at the nat­ur­al gas reserves in Ukraine, oth­er­wise (as we not­ed in our broad­casts about the sub­ject), Amer­i­ca gets noth­ing out of this but fur­ther debt incurred to incor­po­rate Ukraine into the EU orbit.

While this process is tak­ing shape, the war in East­ern Ukraine has esca­lat­ed, with armor, artillery, heli­copter gun­ships and fixed-wing com­bat air­craft being used against the pop­u­la­tion there. Imag­ine if Yanukovich had resort­ed to such tac­tics with the Maid­an coup gain­ing momen­tum!

The Ger­man For­eign Pol­i­cy arti­cle below cor­rect­ly com­pares the blood­shed in Ukraine with the breakup of the for­mer Yugoslavia, cov­ered in–among oth­er programs–FTR #‘s 48 [4]154 [5], 161 [6]184 [7], 293 [8]766 [9]. Using the Axis suc­ces­sor orga­ni­za­tions in Bosnia, Croa­t­ia and Koso­vo, the U.S. and Ger­many split up the for­mer Yugoslavia, which was then absorbed into the EU orbit. (Note that German-Foreign-Policy.com feeds along the low­er right-hand side of the front page of this web­site.)

We have nine pro­grams to date about the Ukrain­ian cri­sis: FTR ‘s 777 [10]778 [11]779 [12]780 [13]781 [14]782 [15], 783 [16]784 [17]794 [18].

“For Peace and Free­dom;” german-foreign-policy.com; 5/30/2014. [19]

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 [20], Expan­sive Ambi­tions [21], Our Man in Kiev [22], Inte­gra­tion Rival­ry with Moscow [23], On the Offen­sive [24], At all Costs [25], The Crimean Con­flict [26], The Kiev Esca­la­tion Strat­e­gy [27], Cold War Images [28], The Free World [29], A Fatal Taboo Vio­la­tion [30], The Euro­peaniza­tion of Ukraine [31], Offi­cial Gov­ern­ment Voca­tive [32], An Unusu­al Mis­sion [33], “Sci­en­tif­ic Nation­al­ists” [34], Cri­sis of Legit­i­ma­cy [35] and “Fas­cist Free­dom Fight­ers” [36] and The Restora­tion of the Oli­garchs (IV) [37].

[1] Van Rompuy wirft Rus­s­land Desta­bil­isierung vor. www.handelsblatt.com 29.05.2014.
[2] Das erste Inter­view mit Klitschko und Poroschenko. www.bild.de 27.05.2014.
[3] So wollen sie der Ukraine Frieden brin­gen. www.bild.de 29.05.2014.
[4] See Under the EU Flag [38].
[5] Ukraine cuts health, wel­fare spend­ing to boost defence. www.janes.com 12.05.2014.
[6] In der Ukraine ste­hen Mod­ernisierun­gen an. www.gtai.de 24.04.2014.
[7], [8] See The Restora­tion of the Oli­garchs (IV) [37].
[9] In der Ukraine ste­hen Mod­ernisierun­gen an. www.gtai.de 24.04.2014.
[10] See The Restora­tion of the Oli­garchs (IV) [37].
[11] See Our Man in Kiev [22].
[12] So wollen sie der Ukraine Frieden brin­gen. www.bild.de 29.05.2014.
[13] Kon­rad Schuller: Wie aus Par­ti­sa­nen­haufen Stoßtrup­ps wur­den. Frank­furter All­ge­meine Zeitung 28.05.2014.
[14] Ischinger nen­nt Offen­sive gegen Sep­a­ratis­ten notwendig. www.faz.net 28.05.2014.
[15] Gunter Hof­mann: Deutsch­land am Ende des Krieges. Die Zeit 24/1999.