Steinmeier and the Oligarchs

KIEW/DNEPROPETROVSK/BERLIN (Own report) – Berlin is increasing pressure on Kiev that it enforces the cease-fire in eastern Ukraine. Observers consider the continuation of the civil war to be perilous. On the one hand, they see the risk of loosing even more territory to eastern Ukrainian insurgents, while on the other, it is unclear how the country’s total economic collapse can be avoided without ending the hostilities. Therefore, on the weekend, German Foreign Minister Steinmeier traveled not only to Kiev, but also to Dnepropetrovsk, the town of oligarch Ihor Kolomoyskyi. Even though Kolomoyskyi has recently stepped down as governor, he still wields significant influence over the – in some cases – fascist militias, which refuse a cease-fire. To put pressure on the fascists, who had helped execute the February 2014 Kiev coup, but are uncontrollable in the civil war, Berlin must make a deal with Ukrainian oligarchs. These same oligarchs had been the focus of the protests at the Maidan. Several times last year, Foreign Minister Steinmeier held personal consultations with powerful oligarchs – including President Poroshenko – or politicians directly dependent on them. The Ukrainian oligarchy has emerged unscathed from last year’s upheavals.

Facing Collapse

In his talks with Ukrainian heads of state last weekend, Foreign Minister Frank-Walter Steinmeier has again pressed for compliance with the Minsk cease-fire agreements. Kiev’s armed forces are currently unable to win this civil war in the east of the country. If the civil war continues, Kiev risks loosing Mariupol, which is of considerable importance to Ukraine both because of its industry and particularly because of its port. It is also not clear how the urgently needed stabilization of Ukraine’s economy can be achieved under conditions of a civil war. For months, Kiev has been teetering on the brink of national bankruptcy. The economic output had dropped by 14.8 percent in the fourth quarter of 2014 and by another 17.6 percent in the first quarter of 2015. Predictions that the economic decline could be halted at 8.5 percent in the course of this year appear almost optimistic. Protests have also been growing against price increases for water and energy, which were imposed by the International Monetary Fund (IMF) on behalf of western creditors. Following last year’s partial double-digit increase in prices, they have recently again been increased – natural gas by 40 percent, water by 55 percent and electricity by 67 percent, while real wages are falling.[1] Berlin considers “Minsk II” to possibly be the last opportunity to somewhat stabilize a pro-western Ukraine and prevent its collapse.

Maidan’s Main Beneficiary

Kolomoyskyi still wields an enormous amount of political influence in Dnepropetrovsk. Of the Ukrainian oligarchs, it was he, who has benefitted most from the February 2014 putsch, according to a study published by Warsaw’s “Centre for Eastern Studies” (OSW), early this year.[5] In fact, precisely because of his decisive influence on various voluntary battalions, Kolomoyskyi had become so powerful that, by the end of March, President Petro Poroshenko felt compelled to remove him from office in an unprecedented power struggle. ( reported.[6]) Although Kolomoyskyi no longer holds political office, he has lost none of his influence. Alongside his business dynasty, he controls numerous parliamentarians in various caucuses of the national parliament. Whoever wants to impose a cease-fire on the East Ukrainian militias, can achieve this quicker by going through Dnepropetrovsk than through Kiev. This is why Foreign Minister Steinmeier arrived there last Saturday. The Foreign Ministry stresses the fact that the minister did not meet personally with Kolomoyskyi, while politely mentioning that his successor in office, Valentyn Reznichenko, certainly “cannot oppose” the oligarch.[7] Saturday, Steinmeier had negotiations with Reznichenko.

The Oligarch System

Since the putsch, Berlin has repeatedly directly and indirectly cooperated with Ukrainian Oligarchs, against whose arbitrary rule the Maidan protests had been directed. “The Maidan revolution has left the Ukrainian oligarchic system unshaken,” concludes Warsaw’s OSW study, even though a sort of reshuffle has occurred. The oligarchs affiliated with former President Viktor Yanukovych have been weakened or entirely neutralized, while others, such as Kolomoyskyi, have become more influencial. In general, the oligarchs have possibly become even more powerful. The civil war in Donbass and the escalating economic crisis have weakened the state further and possibly assured the billionaires even more political clout. It could be expected that they will fortify this position of power, in the near future.[8]

“Organized Crime Boss”

At the occasion of his visits in Ukraine, the German Foreign Minister has either repeatedly met with oligarchs or, at least, travelled to their hometowns for talks with politicians under their control. In March and Mai 2014, Steinmeier personally met Rinat Akhmetov, “the boss of the country’s organized crime,” as the German media had referred to him two years earlier.[9] Steinmeier sought to bring Akhmetov’s influence to bear in Donbass to weaken local anti-Maidan opposition.[10] The plan failed. In Mai 2014, Steinmeier also met Ihor Palitsa, the new governor of the Odessa Oblast. Their talks had focused on possibilities for avoiding upheavals. Following the massacre of regime opponents by fascists on May 2, 2014, Palitsa successfully prevented an upheaval in Odessa. President Petro Poroshenko, candy and arms producer and known oligarch, is Berlin’s most important contact person.[11] With Steinmeier’s recent talks in Dnepropetrovsk, Berlin is continuing its cooperation with Ukrainian oligarchs and the entourage under their control.

Full article: Steinmeier and the Oligarchs (German Foreign Policy)

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