Thus Putin can't do what he would rather do which is simply to take back Ukraine, the Trans-Caucasus states and the former Soviet states in the south.
Like Ukraine there was also some sentiment in Belarus of joining the European Union but that wasn't going to happen. The control that Putin has keeps this from happening which is to put Kremlin-friendly governments in power, and this is what was done in Ukraine.
Because of Ukrainian and Russian bank exposure, Russia will have to act as the ultimate guarantor since it now has the financial resources to do so, having substantially rebuilt its own foreign reserves, which is the third largest on the planet after China and Japan.
The problem with Ukraine is that the Ukrainian people are split down the middle in terms of those who want a closer association with Russia and effectively being reabsorbed by Russia which is what it comes down to.
During the Bolshevik colonial times, one of the things that Stalin did was to transport a lot of ethnic Russians to the eastern part of Ukraine. The effects of that are still being felt today as the Russian language is used as much if not more than Ukrainian. That's the reason why Russia is still able to largely dominate the Baltic states and Ukraine because ultimately Ukraine depends on Russia for its oil and gas, which it can't get anywhere else.
Iran won’t sell oil and gas to Ukraine. They would need access to the Russian pipeline to do so which the Russians aren't going to give access to anybody else, since they haven't yet. The Europeans pretend to support the Trans-Caucasus states, the Baltic states, Belarus and Ukraine but it's just lip service because Europe particularly western Europe also has to depend on Russian oil and gas.
The economic reality of Ukraine is that there’s nothing much that the EU could do for them anyway. Ukraine can’t meet any of the EU mandates. If they did become members of the EU, in order to receive any bailout money or tranches of support money that the EU has given out to failing nation-states, they would have to institute a whole new round of “austerity” which nobody in Ukraine is going to want, which would further destabilize the country.
Ukraine should take a lesson from the rest of the eastern European nation-states all of whom either have or want to join the EU -- and they all need to be is bailed out. The Ukrainians think they can use their strategic position to become members of NATO and bring NATO resources into Ukraine in exchange for EU’s softening of any potential loans or guarantees. Meanwhile the only thing that Putin is concerned about is that they wouldn’t allow any NATO military access in Ukraine under any circumstances.
The last time two years ago when the Europeans tried to stand up to Russia, Putin simply shut off the oil spigot. It threw the German and French economies for a loop. The Scandinavian countries also depend on Russian oil and gas. Russia is in the catbird’s seat and it knows it...
For the rest of this column by Independent Political, Economic & Market Analyst Al Martin, please click here -- Al Martin Raw
* AL MARTIN, author of "The Conspirators: Secrets of an Iran Contra Insider," is an Independent Political-Economic Analyst with 25 years of experience as a trader on NYMEX, CME, CBOT and CFTC. He is also currently trading the commodity futures market day and night and has a teleconferencing service to facilitate transactions in the markets. This is a service for independent experienced traders.
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