Time Runs Out on Operation Ukraine, by Tom Luongo

With the election of a new Ukrainian president, there’s a chance that some sort of peace will be reached between Ukraine and Russia. From Tom Luongo at tomluongo.me:

Change is now possible in Ukraine. The conflict between it and Russia has been frozen for nearly five years thanks to former President Petro Poroshenko.

He’s gone. Volodmyr Zelensky is in power along with Zelensky’s political party which won close to a clear majority in Verkovna Rada elections recently.

Zelensky’s Servent of the People party won 253 seats out of 450, giving him not only the presidency but no need to build a coalition government with smaller parties of known foreign-controlled players, like Yulia Tymoshenko (Fatherland) or from Poroshenko’s party itself, European Solidarity.

Source: Wikipedia

This was the biggest fear coming into these elections. Ukraine’s system is mixed using both proportional allocation (225 seats) and majoritarian allocation (225).

Zelensky has a mandate now to begin the process of tearing down the barriers to sanity Poroshenko left in his wake. The big one being, of course, the war against separatists in the Donbass.

For the first few months of his presidency Zelensky has sent mixed signals as to what he intends to do on the world stage. He’s offered to meet with Putin, who then asked saliently, ‘to what end?’

He’s tried to pull back on the conflict only to see the shelling continue and, at times, intensify.

Zelensky is dealing with the same kind of bureaucratic revolt against change that Donald Trump has dealt with. In fact, it’s the same people running the both shows.

If there was one thing that has become glaringly obvious over the past three years it is that the coup attempt by the bureaucracy against Trump it is that much of it was cooked up in Ukraine under the dutiful eye of former President Poroshenko.

With Poroshenko out of the way, there is still the inertia of those he put in important positions. Ukraine is practically a failed state so don’t expect good news. If anything it’s become a playground for outside forces to start more fires as Zelensky tries to stamp out the ones currently burning.

All of these fires have one goal in mind, keep Ukraine and Russia separated and in conflict. This is being directed by both U.S. and British interests, if the Steele Dossier tells us anything.

That is the way these things go. But, that said, what Zelensky can have control over are the big issues setting Russia and Ukraine at odds. Obviously the Donbass is the big one.

But what’s really pressing is the gas supply contract between Gazprom and Naftogaz. It’s due to expire in December. I’ve written extensively about the machinations surrounding this and it’s worth your review.

The U.S. is trying to run out the clock on these negotiations by slowing down completion of Nordstream 2 and put Gazprom in the position of not supplying its written contracts with Europe. If Nordstream 2 can’t deliver and there is no supply agreement with Naftogaz then Gazprom can’t deliver contracted gas for the first time ever.

So I found it very interesting that Zelensky is now openly asking for talks with Gazprom and Naftogaz about the supply contract. This is not a difficult deal to get done. But, it has some outstanding issues. From TASS:

After securing control over the Verkhovna Rada, the team of Vladimir Zelensky indicated that it is ready for new gas negotiations with Russia. According to Nezavisimaya Gazeta’s experts, Kiev’s decisiveness is explained by the pressure from the European Union and Ukraine’s interest in receiving transit revenues from Russia. Meanwhile, the real chances of a new transit agreement have grown, the newspaper wrote. Ukrtransgas has not paid for services since March and its debts threaten the company’s stability and question the reliability of its supplies, the European Federation of Energy Traders (EFET) said.

But none of these issues will be difficult to resolve. Poroshenko left Ukraine at the mercy of Putin and Gazprom because they need the gas and the transit fees while Russia has Nordstream 2 and Turkstream coming on line next year.

Putin energy embargoed Ukraine earlier in the year making things really dicey for Zelensky. At the end of the day, however, Putin and Gazprom will negotiate a deal quickly that will pay Ukraine based on market demand for that gas to satisfy European regulators allaying worries over Ukraine’s finances.

Europe has made it clear it is no longer interested in paying for its failed Ukrainian project. Europe’s gas demand is rising so quickly that there will be room for everyone in the market. The only thing holding up completion of Nordstream 2 is a final permit from Denmark, which Gazprom expects to finally receive in October.

Gazprom CEO Alexei Miller is not sanguine about the prospects of a deal as there are outstanding court cases involved, but the long-term political dividends of signing some kind of deal, even an extension of the existing one pending a more thorough overhaul, would be immense.

Getting that problem solved would build trust between Putin and Zelensky and could lead to unwinding the problems downstream of 2014’s U.S. sponsored coup against Viktor Yanukovich.

There are so many forces arrayed within the U.S., UK, northern European and Israeli governments against reconciliation between Ukraine and Russia that it will be difficult for Zelensky and Putin to achieve much.

Europe’s new leadership, under Ursula von der Leyen, will be more confrontational with Russia while the jury is out on Boris Johnson’s new UK government and whether he can even remain in power for long.

But it is clear that the people of Europe are tired of these games and want change. The Ukrainian elections are proof of this. And that, by itself, is something worth cheering.

 

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