D.S.M. WEEKLY REPORT - Main Political and Military Developments - WEEK 11 of 2019

I. RUSSIA. The West establishes new sanctions.

II. UNITED STATES. Washington prepares its response to Russia’s deployment of SSC-8 missiles.

III. HUNGARY. Viktor Orbán apologizes but continues his policy.

IV. UNITED KINGDOM. The Parliament rejects Teresa May’s agreement.

V. Developments to track this Week 12 of 2019.

I. RUSSIA. The West establishes new sanctions.

On March 15^th, the European Union, United States and Canada coordinately established new sanctions against Russia, in response to Moscow’s latest actions in the Kerch Strait.

The new sanctions apply to official Russian nationals and to defense, energy and construction companies, for involvement in capturing the Ukrainian sailors and their ships during the Kerch Strait incident, and for activities in Crimea and Donbass. Among those firms there is Zelenodolsk - a large ship manufacturer, Okeanpribor – hydroacoustic equipment producer, Zvezda – naval engine producer, and Fiolent – electronic equipment manufacturer.

The US Treasury Secretary, Steve Mnuchin, declared that "The United States and our transatlantic partners will not allow Russia's continued aggression against Ukraine to go unchecked". Washington asked Moscow to return the captured Ukrainian vessels as well as the arrested sailors, and to assure free navigation through the Kerch Strait and the Sea of Azov: "We also call on Russia to respect Ukraine's sovereignty and territorial integrity within its internationally recognized borders, including its territorial waters". Russia announced it would respond to these sanctions, and its point of view was summarized by State Duma member Konstantin Kosachev: "The scheme worked: provocation - reaction - sanctions. This means that Kyiv can now easily provoke as many Western sanctions as it wants". In addition, on March 16th, the Russian Foreign Ministry communicated that "The decision of the Council of the European Union shows disrespect for the Russian Federation's right to ensure protection of its state border".  

The remarkable coordinated new sanctions continue the streak of systematic western measures against Russia. It is the sanctions against manufacturers that are the serious blow, not those against individuals. Despite the actions taken by Moscow to by-pass the western sanctions, by using the connections Russia still holds in western countries, the sanctions gradually impact more and more on Russian economy, with considerable effects. The dialogue between Russia and the West on this issue has stopped, given that the fundamental difference in their positions leaves no room for compromise. The Russian narrative that Crimea was not annexed, but it legally joined Russia, and that, in Donbass, it is not the Russians fighting Ukraine, but the local separatists, is hard to become acceptable. This certainly makes the stalemate in dialogue impossible to overcome. However, for the moment, the situation in Donbass remains at a relatively low level of violence.

On March 14th, the European Parliament passed, with a large majority, a resolution deciding that EU should have a legislation similar to the American “Magnitsky Act”, meant to punish those who breach human rights. The resolution asks the European Council "to swiftly establish an autonomous, flexible and reactive EU-wide sanctions regime that would allow for the targeting of any individual, state and nonstate actors, and other entities responsible for or involved in grave human rights violations". The suggested name, Sergei Magnitsky, directly refers to the US law passed in 2012 to punish the Russian officials guilty of Sergei Magnitsky’s death in prison. The victim had discovered large scale frauds committed by Russian officials, who used their authority in government offices. The creation of such legal mechanism is under consideration by the European Commision, but it is estimated that reaching unanimity on such sanctions will be difficult. The main targets are Russian officials, but individuals from African and Asian countries are also eyed.

Although it is in an initial phase, a sanction mechanism would directly impact upon powerful individuals in Russia by addressing the scheme of frauding the public finance and the citizens, money laundering, and sending it to western banks. Those persons are criminals in authority positions, where they crush any attempt to honestly enforce the laws. We can identify there the ultimate expression of a Mafia state, respectively the power structure as a Mafia organisation at state level. While facing the effects of such fenomenon, the EU tries to defend itself, because the black money produced this way is laundered in Western banks. But there is a long way still, because the financial interests, and not only, favor tolerance regarding this organized crime, which is typical in Russia.

Sanctions pile up, and their aggregate efects impact upon an economy in dire straits, although the price of crude increased a bit, due to the Venezuela crisis and the embargo against Iran. The social effects are visible, and the power in Moscow responds by measures limiting access to Internet and by punishing so-called offenses to state symbols, in fact forms of protest against those in power. The military brass voice as during the Soviet era, by talking about about the opposition as being “the fifth column” and “the Trojan horse” used by the West.

Russia’s leaders claim to be besieged by an enemy it baseless created itself: that is the West, spearheaded by the US. They also fear the social reaction, with political implications, from a disenfranchised population. Therefore, there are little hopes of finding a solution to the military problems Moscow has with the West, specifically in the INF issue, where the US response already appears.

In the Black Sea area, Russia commenced a large scale military exercise. Russia’s Strategic Command South began a 10,000 soldier exercise in the Crimean Peninsula. This does not come as a surprise, as the Defense Minister Sergei Shoigu himself had confirmed the massive militarization of Crimea. Same serious is that two Tu 22M3 strategic bombers have flown over the Black Sea.

Russia is testing not only Ukraine, but also Romania. We can remember here that GEN (Ret) Ben Hodges recently mentioned the scenario where Russia attacks Odessa, which may further extend against Romania. Considering his former position (USAREUR), GEN B. Hodges’s warning should be carefully considered.

II. UNITED STATES. Washington prepares its response to Russia’s deployment of SSC-8 missiles.

Unofficial American sources stated that the US is to test intermediate range missiles in August, as soon as it completes its withdrawal from INF.  

The plan includes the development and testing of two intermediate range conventional warhead missiles. One of these is a cruise missile with a 1000 km range to be tested in August 2019, and then deployed within 18 months. The second is a ballistic missile to be tested in November 2019, and deployed in the next five years. The cruise missile continues, probably, the project of cruise missile Gryphon, deployed in the ’80s, but the range is shorter, and the warhead is not nuclear but conventional, which is valid for the new ballistic missile too.

It is mentioned that the European and Asian allies have not been consulted yet regarding the deployment of such weapons on their territories. NATO is in the process of assessing the INF cancellation consequences and the necessary response measures.

The US reacts adequately after the INF ceased to exist, due to Russia’s deployment of the SSC-8 missiles. The announced response includes two conventional warhead missiles, more palatable to the European allies. Although the warhead would not be nuclear, the lesser target damage would be comparable, due to the missile precision. But the lesser range means that the countries to host such missiles would be the eastern frontline nations, as NATO has the geographic advantage of recent extension with former communist countries. In addition, Ukraine becomes politically eligible, and it now has the technical capacity to host intermediate range missiles, although not yet the financial muscles to do it.  

Added to other measures of countering the SSC-8 missiles and their launching platforms, future deployment of precise strike conventional warhead missiles, and, maybe, intermediate range ballistic missiles, will make a credible, although limited response to the Russian threat with SSC-8.

However, reaching an agreement with the Europeans regarding the deployment of such missiles in Europe remains the big problem Washington will have to solve. Moscow will attempt to create rifts among the Europeans, but an agreement within NATO will likely be achieved, the same way a common position regarding Russia’s breach of the INF was obtained.

Perhaps Russia will accelerate the development and operationalization of new weapons, specifically the hypersonic ones. However, Russia’s technological capacity to operationalize such weapons is questionable, as also is its economic capacity to face an arms race that Moscow itself has triggered.

Both the intermediate range missiles, and especially the hypersonic devices (although these pertain to distant future) reduce the missile defense reaction time and generate difficult interception problems. This will certainly lead the Russia – NATO confrontation to an increased level of strategic instability.

III. HUNGARY. Viktor Orbán apologizes but continues his policy.

On March 13^th, President Viktor Orbán sent a letter apologizing to the European political leaders who requested the expulsion of his party, the FIDESZ, from the European Popular Parties group (EPP). His gesture did not end the predicament, as at least one European leader stated that excuses are not enough. Previously, not less than 13 EPP parties had requested FIDESZ to be excluded from this political group as result of the FIDESZ brutal anti-migration policy. However, more than that, the request responds to Viktor Orbán’s anti-European campaign, peaking with attacks against the European Commission President, Jean-Claude Juncker.

In his letter, V. Orbán maintains his position, but apologizes for naming those who criticized him “useful idiots” and asking that his party remain in the EPP: “It is no secret that there are serious disagreements... on the issue of migration, the protection of Christian culture and the future of Europe... It is also no secret that we do not wish to change our position on these issues... Yet I do not consider it reasonable to solve such disagreements by expelling a party from our political family. I would therefore respectfully like to ask you to reconsider your proposal for expulsion, if possible”. The answer came from the Belgian politician Wouter Beke: “I accept apologies, but this wasn’t about offence given to Wouter Beke..., it was about respect for European values and better cooperation on guarding the EU’s external frontiers. I see no change there. The CD&V [the Flemish Cristian-Democrat Party] sticks to its position: no place for FIDESZ in the EPP”.

The request for apologies to EPP coleagues was one of the conditions voiced by the EPP parliamentary group leader and lead-candidate to succeed Juncker, Manfred Weber (Germany). Nevertheless, some of the European Populars consider that M. Weber conceeded too much in the attempt to keep FIDESZ in the EPP, especially after he announced a plan to save George Soros’s Central European University (CEU), which V. Orbán chased away from Hungary. Preserving this university in Budapest is one of the conditions set by the EPP. Manfred Weber is the one who crafted a plan to link CEU to the Munich University and to... BMW, both of them Bavarian entities where V. Orbán finds a strong support. Many EPP members consider that it is less and less likely to have FIDESZ ousted from EPP: “It seemed initially Weber’s demands were genuine and there was no way Orbán would meet them. But now you see Weber is plotting a way out of this for Orbán, including engaging Bavarian resources to help the CEU”.

Although M. Weber has declared that all options remain open regarding V. Orbán, it is obvious that, very likely, the expulsion will not occur, as himself Weber paved the way for Orbán’s exoneration, by helping him to feign complying with unattaninable conditions... unless Orbán changed his policy and attitude. Which he didn’t. We have here another case of unprincipled approach (to dodge the word hypocrisy), where V. Orbán is bailed out by the German Populars, especially by the Bavarian political and financial circles. But let’s see the full half of the glass! Finally, the EPP, as well as Manfred Weber need FIDESZ’s votes, and having V. Orbán within EPP means also controlling him, more or less... Maybe, in time, Orbán will choose to temper his nationalist policy and the attacks on the rule of law. In fact this the goal, not the expulsion per se. The other way around, should V. Orbán continue his present policy, FIDESZ will lose his place in the EPP, no matter how many friends he has in Bavaria.  

IV. UNITED KINGDOM. The Parliament rejects Teresa May’s agreement.

On March 12th, the House of Commons rejected the agreement proposed by Prime-Minister Teresa May in its new shape, with clarifying elements from the European Commission, and this rejection has the power of law. The voting margin was large – 149 ballots. Other accepted amendments do not have the same weight, but they cannot be ignored by Teresa May. The latest rejection was based on the assessment made by Attorney General Geoffrey Cox, the highest legal authority in the Cabinet: he had previusly argued that the legal risk of Britain’s remaining linked to the EU after the Brexit, by this agreement, with amendments and all, remained unchanged. Thus, again, Teresa May’s agreement failed, and the UK still has no Brexit agreement with the European Union.

On March 13th, the Teresa May Cabinet filed a proposal for rejecting the March 29th scheduled Brexit in absence of an agreement. This stipulation was meant to put pressure on the reluctant members of Parliament (MPs). But it did not work. On March 14th, by an amendment passed with an only four votes majority, Cabinet’s proposal was modified to a rejection of leaving the EU in absence of an agreement, regardless the date. The government tried to persuade its own MPs to oppose the new form of the bill, but it failed, and the final language reads that UK cannot leave the EU without an agreement, regardless circumstances, i.e. regardless the date of withdrawal from EU.

Then in the same day, the Parliament voted on the request addressed to the EU to put off Brexit. The vote was positive, with a large majority. Consequently, Great Britain may leave EU later, not on March 29th, as planned. But the request to EU must be written by the Cabinet and... accepted by the Europeans.

What is going to happen next? First, Teresa May will atttempt again to pass its plan in the Parliament. Then, she will request a short-term postponement, until June, had her plan been voted (little probable), or a long-term postponement, had her plan not passed. T. May will continue her strategy to force a vote in the Parliament for her proposed agreement, most likely resulting in a longer-term postponement of Brexit.

However, there are many uncertainties, the first being that all EU member nations must agree with any postponement. New information is that EU might demand a new referendum in exchange for a long-term postponement, although the British Parliament already ruled out a new refererndum, at least in the near future. Anyway, we are waiting for the new voting and possible postponement, and only later discuss options, if any.

V. Developments to track this Week 12 of 2019.

• REPUBLIC OF MOLDOVA. The quest for a new government continues.  Phase One, with Vlad Plahotniuc attempting to lure the democratic opposition ACUM is rather over. The efforts were mammoth, with the Democrat Party of Moldova (PDM) going as far as offering the position of prime-minister to the ACUM alliance. But such ruse was rejected by Maia Sandu, whose governmental experience advised that the position of prime-minister does not mean power in a state totally controlled by Vlad Plahotniuc.   

In their turn, the Socialists (PSRM) forgot about the ideological purity and their geopolitical orientation towards Moscow and made their own offer to ACUM. Of course, that was rejected too, the blanket argument that “we do not make alliances with oligarchic and non-democratic parties” being valid for the Socialists as well.

With ACUM out of the game, the only option left is having a PSRM – PDM alliance, plus the Shor Party and the independents. Such agreement cannot be ruled out, but there are serious obstacles against it. These difficulties range from the little probability that Russia granted the PSRM the blessing for that, to the little possibility of cohabitation, because both groups / characters - Igor Dodon and Vlad Plahotniuc, crave the whole power, the whole control over the entire state. The only argument in favor of such alliance is the previous accomplice cohabitation of Dodon and Plahotniuc.

Considering V. Plahotniuc’s record, the most likely course of action remains that PDM continues to work on attracting PSRM and ACUM members of the Parliament, by various means, to form a majority. On the other hand, PDM is already preparing for snap elections, and the populist measures it already took stand to prove that. We will see how Vlad Plahotniuc moves now, and the time is working against him.

• UKRAINE. The presidential elections countdown is ticking fast, and President Petro Poroshenko finds himself in a difficult situation: he is not sure at all he can make the second place and get into the second round of the elections. The corruption problems surrounding P. Poroshenko were supplemented by the nationalist reaction, spearheaded by the far-right groups, whose actions were tolerated too long by the power in Kyiv. It is not sure that far-right group violent actions will impact against P. Poroshenko, who can present himself as the stability factor guaranteeing that Ukraine will not fall in the hands of radical elements (which would facilitate a new Russian aggression). This week, the last aces will likely be pulled out of the sleeve, and the mutual blows among the three main candidates will reach their peak.

Ukraine is more vulnerable than ever, and the political solutions are just a few, ranging from unknown to radicalism and stagnation. After the first round of the elections, we will see if the strongest of the three possible solutions, radicalism, will fall off the boat.  

• ITALY. Getting closer to China. At the end of this month, the Chinese communist leader Xi Jinping will pay a visit to Rome, where a series of Memoranda of Understanding are to be signed between Italy and China regarding Chinese investments in infrastructure under the “Belt and Road” Chinese plan. Italy’s signature on such commitments was regarded with concern by other European powers and the US, who directly warned Italy about that.

The Italian government defends itself by stating that such agreements would increase bilateral economic exchanges, so much necessary to the Italian economy,  which does not perform well especially now, when Italian populists are implementing a generous financial policy. Italian officials offered all sorts of explanations and arguments, but they did not convince the United States.

The next weeks will show pressures applied to Italy in order to make Rome quit the envisaged steps, but it is hard to believe that Rome would back off. There is already an example of pressure and reactions regarding the participation of the Huawei Chinese company to 5G mobile telephone networks in Europe, more precisely in Germany: both the US and NATO sent warnings to Berlin.