The creation of new hotbeds of instability in South-Eastern Europe will play into the hands of the Russian election campaign, and will bring gas dividends and help some Moscow oligarchs
The last months in the process of the next imitation of the Russian presidential elections are always emergency adjustments of budgets, the concentration of new directions of propaganda, as well as the formation of another series of political “figures”, which are destined to save the country this time.
By the very obvious plan of forming an ideological basis for the Russian presidential election campaign-2018, the main “regular direction” of propaganda initially promised to become the Syrian. But it did not work. There was embarrassment with the territorial integrity of this country, and with the promised withdrawal of Russian troops, too.
Therefore, the Syrian priority on the agenda of Russian propaganda is changing rapidly now. It is replaced by the Balkan direction of Russian attention, and the European one coming from it. According to the Kremlin, these new directions were illustrated by the head of Russia’s VTB Kostin and Deputy Prime Minister Dvorkovich at the recently held economic forum in Davos. The first stated that Europe is on the verge of a war with Russia. What is the reason? The answer was simple in style “because more of your warships in the Black Sea, not ours.”
The second Russian official assured representatives of the forum that the Russian Federation is about to replace the international system of bank payments SWIFT with its own system in response to the sanctions. Why did he say that? Because, when in Moscow they will cancel this system, it will be too late for Brussels to think. Europe is better now to think about it, otherwise it will hurt her.
So, the main signal for the electorate of the Russian government for the upcoming elections was formed. Now, this is not Syria and the Caliphate. This is the Balkans and the South-East of Europe again, through which hundreds of thousands of migrants flock to Europe. Now they became a scarecrow for Europeans, as well as at the end of the far 90s, when the career of the current Russian leader was just beginning.
The basis of the current elections
Pre-election theses in the voice of Kostin and Dvorkovich – this is not the single indicator that the Kremlin is changing the propaganda vector. For example, Russian foreign political projects, which were hidden behind the scenes, began unexpectedly to float on the surface in the middle of winter.
In the middle of January, The Guardian turned its attention to the Serbian-Montenegrin paramilitary network “Serbian honor”. It was created during the first Balkan military campaign as a Russian proxy group against NATO forces.
According to the press, there was evidence that this network has connected to incitement of separatism in Bosnia, and to an unsuccessful attempt of pro-Russian coup in Montenegro in 2016. It is noteworthy that this Kremlin project has come up on surface before the upcoming Russian elections.
On the same days in January, in Ukraine, the press suddenly remembered the Orthodox-FSB society Radomir, which became famous in the field of security business in the Ukrainian aluminum capital, Zaporozhye.
Moscow press refers both the paramilitary foreign networks to the sphere of influence of Konstantin Malofeev, who is fairly well known among the ultra-right as Orthodox-extremal ordinary businessman.
On the wave of the division of election budgets, a figure much larger unexpectedly appeared in the Ukrainian and Balkan directions this winter – the Russian aluminum king Oleg Deripaska. The media calls him as the leading investor of the so-called “family group” of Russian capital, which is formed by the family members and proxies of ex-President Boris Yeltsin. Along with Deripaska, this group includes Roman Abramovich and several other smaller businessmen.
Who is active on the “South-Western Front” of Moscow?
Abramovich is present in the economy of Ukraine for a long time. He has the control over the company Evraz Ukraine, which is considered one of the three main players in Ukrainian metallurgy.
In addition, Abramovich was a relative of the very famous in the 90 years of the Ukrainian oil trader Alexander Zhukov, and was his son-in-law until recent time.
Unlike the successful Abramovich with local Odessa relatives in the south-eastern region of Europe, Deripaska is frankly unlucky in these lands.
In recent years, his companies have managed to lose significant industrial assets – first in Bosnia, then in Montenegro, and after that in Ukraine. Guilty in the failures of the aluminum magnate searched for a long time, just a few years.
And suddenly, these guilty people were found just before the elections in Russia. In mid-January, the New York court ordered a meeting in May for a new lawsuit filed by Russian oligarch Oleg Deripaska in the US to Paul Manafort, former leading Western adviser to Viktor Yanukovych. In general, the consultant is accused quite harshly by the aluminum magnate. He took at least $ 40 million for paying for important services, but he did not do these services and did not return the money.
What the tycoon and consultant did for the Kremlin
First, the Republic of Montenegro, and then the Ukrainian Odessa and Zaporozhye became fatal points for both figurants of this court. The canvas of their dispute looks simple – the members of Ukrainian Party of Regions needed Manafort very much in 2004-2014, and Deripaska supported them.
Accordingly, he was ready to pay the part of the cost of the services of an American consultant for them. Support for this Party by the Russian aluminum king was not carried out as a hobby. It was a military-industrial interest.
The Russian aluminum magnate needed the Ukrainian authorities to turn a blind eye to the way Deripaska’s companies dealt with Ukraine’s own production of one of the main strategic materials of defense – the aluminum. In any country in the world, the rolling of this metal and its alloys is critically needed for rocket and aircraft manufacturers. Because of the Russian military aggression, Ukraine has quite a noticeable deficit with this technology now. The lack of technology was also due to the fact that defense plants need to import metals, since their capacities are cut to scrap. And imported metal is always more expensive than own.
Deripaska supported the inattention of the then Ukrainian authorities in matters of the aluminum industry with particular care. Until 2014, Ukrainian state authorities really did not notice at all how Deripaska’s companies cut the single aluminum plant Zalk in Ukraine for scrap metal.
Most of the former capacity at this plant is now gone. And without that, Ukraine’s almost complete dependence on imports of aluminum from Russia after this. In a word, the growth of Ukrainian import dependence brought Deripaska money and additional positions in business.
How the bricks of Russian influence in Ukraine and the Balkans cracked
The American magazine Atlantic tried to reveal the most intricacies of cooperation between Deripaska and Manafort in the field of relations with American and Ukrainian political circles.
Although the Reuters agency noted that the people of Manafort were sitting in almost every Ukrainian ministry until 2014, the Atlantic does not say anything about bribes for the “aluminum inattention” of the Ukrainian authorities.
Apparently, this publication tried not to disclose specific details of the business interest of the Kremlin, Deripaska and Manafort to Ukraine in the interests of the court. But, the American magazine managed to find out the main thing: when the disputing parties met, and when and why they quarreled.
The controversy looks quite simple. The Russian tycoon took upon itself the lion’s share of the payment by the Party of Regions of the expensive services of the political consultant Paul Manafort, and the payment was carried out in the form of a constituent partnership.
In fact, Deripaska had rewritten cable TV company Black Sea Cable with assets in Odessa and the Crimea in the name of the American adviser Manafort instead of fees. The current court action of Deripaska to Manafort is just about the subtleties in the formation of its capital. Deripaska, for example, wants to take from Manafort at least $ 20 million through the High Court of New York. Deripaska tries to prove to the American court that Manafort had stolen this money from him and embezzled not less than $ 20 million through the PR-company Pericle, which did not provide to Deripaska previously paid services.
In contrast to the controversy, the meeting of the aluminum tycoon and consultant is a much more complicated process. The partners met back in 2005 long before the appearance of Manafort in Ukraine.
Then the American political consultant won a partnership with Deripaska for investment and other operations in the Republic of Montenegro. At that time, Deripaska unsuccessfully intended to displace the aluminum companies of Greece from the market of the Balkan countries.
On the way to such expansion, Russia’s main aluminum company Rusal, headed by Deripaska, unsuccessfully tried to buy an aluminum plant and a distribution power grid in Bosnia at that time. Deripaska’s companies acquired control over a similar plant in Montenegro with much greater success. In 2012, Deripaska lost control of this Bosnian plant when Manafort forgot the Balkan tasks of Deripaska and for a long time got stuck in Kiev.
The meaning of expansion
Aluminum producers, along with ammonium, glass and cement plants – are the main consumers of natural gas in the economy of any country. If more Russian control over such consumers, the more Russian gas exports, it means the less gas supplies from other countries. The most of the potential for external expansion of the Russian Federation is being built on such an ideology of supply of blue fuel.
Unlikely, Deripaska cannot know this circumstance. And that is the main reason why the main Russian aluminum magnate tried to forejudge the plant back in the Balkans for several years. But more recently, international arbitrament finally rejected his personal claim to the Republic of Montenegro in the amount of $ 600 million on January 17.
According these claims of Deripaska to Bosnia and to Manafort, it became clear that the partnership of the tycoon and consultant has a frankly counterproductive outcome, as in Montenegro, and as in Ukraine.
In our country, for example, Deripaska had to return the remains of the aluminum plant to the state. As for the technologically connected with Zaporozhye alumina refinery in Nikolaev, it was hurriedly handed over to the world’s largest Swiss trade conglomerate, Glencore. By the way, the same company operates the mentioned plant in Bosnia, which Deripaska has not managed to take under control. The local press is gossiping that the lost Deripaska plant in neighboring Montenegro is guarded by the Glencore competitor, the Dutch Trafigura.
But hardly such a detail looks to be the main thing in the wave of activity that covered Deripaska. This is certainly important who oppressed the aluminum magnate, but clearly secondary. The main thing is, if Russia loses its position of influence, then it will necessarily seek to bring it back.
Economic points of revenge
Having hastily rewritten the alumina plant, Deripaska defended his positions in Ukraine. But he obviously lost in the Balkans and in our part of Europe. Together with this tycoon, the whole of Russia’s expansion lost positions in the region. But it should be remembered that one of the rich representatives of the so-called “family grouping” of Russian capital is not only one Russian economic lever of pressure on South-Eastern Europe.
Russian capital lost aluminum plants in Bosnia and Montenegro. It also lost the struggle to the companies of India and Israel for the most important industrial giant of the Balkan region, the Kosovo iron and steel plant Trepca.
At the same time, other Russian investors are trying to preserve some influence on the oil and gas industry of this region. For example, the leader of the ferrous metallurgy of Romania remains the Russian “Mechel”. The Russian amber king Vitaly Mashchitsky owns Aluminum plant Alro in the Carpathian Slatina through companies in China, whom the press reckons to Podolsk Moscow financial group. Transylvanian nitrogen fertilizer plant Azomures in the Romanian Tirgu Mures is owned by the Swiss Andreas Tsivi and BritIsh sitizen Sergey Makhlai.
All these and other Russian assets are in varying degrees of subordination to the political interests of the Kremlin. The positioning of Russian state interests on the Russian private capital settled in this EU region is unequivocally.
The top of these interests is formed by the Russian “Gazprom” and “Lukoil”, which build a fuel infrastructure for Russian investments in other spheres of the economy. For example, after the Russian aggression in the Ukrainian Crimea, Lukoil decided to leave the markets of Ukraine, Poland, and the Baltic states, which became too risky for it. This Russian oil giant decided to stay in Southeast Europe where there are 2 refineries of the company and a large network of gas stations in Turkey.
When will the Balkans fall into the field of influence of “business and Orthodoxy” again?
The reasons for this stubbornness lie on the surface. As in Gazprom, Lukoil expects that the transit of Russian oil and gas will grow through this part of Europe.
And these hopes feed by the Kremlin’s main electoral ambition in the region – the Turkish Stream-2 gas pipeline (TS2). An agreement on the construction of its underwater segment between Russia and Turkey was concluded in mid-January, immediately after when the war in Syria entered the phase of dividing the country into zones of de-escalation.
The Kremlin failed to maintain the territorial integrity of Syria during this war. Along with this failure, Moscow was not able to launch most of its scenarios in Ukraine. As a result, official Kyiv never returned to the channel of the gas policy of the Russian Federation at the start of the gas project TS2 planned by Moscow in 2018.
Such weakness of the results of Russian policy in Ukraine and Syria led to the fact that the Russian Federation lost several economic battles in 2015-17, which seem extremely important for the expansion of the Russian Federation in South-Eastern Europe.
Firstly, the privatization of the oil and gas industry in Greece, which was claimed by Gazprom and Lukoil, but Azerbaijan won the process. Secondly, the refusal of Brussels to support the Russian-Turkish project TS2, which is destined to become a highlight of the Russian elections in 2018, proving the viability of the Russian government.
Unlike other gas pipelines that go to this EU region from Turkey, the EU Commission does not want to grant an official status for the Russian-Turkish pipeline. But Moscow has a solution for this problem. It could be the outgoing branch of the gas pipeline TS2, the Tesla gas pipeline. Its construction is a frank reincarnation of the ideas of the “Great Serbian Yugoslavia”. The route of this pipeline is designed through Greece, Macedonia, Kosovo, Serbia, and further to Austria.
If to describe the current situation with this outgoing segment of the Turkish Stream, it can be said that a single initiative of the countries of the former Yugoslavia on the construction of Tesla can solve almost all the problems that are currently observed in relations between Russia and Turkey.
It could be the fear of the Balkan countries facing some new threats that give rise to collective support for the Russian gas pipeline Tesla, fueled by the Turkish Stream. It is possible that the unsuccessful disorders in 2016 in Macedonia and the attempted coup d’état in Montenegro are just the mechanisms for the formation of such a fright in the region.
If such a multilateral appeal of the Balkan states to Brussels will have official status, then Turkey is unlikely to resist the great temptation to use the new Russian gas pipeline to strengthen itself in this region. But this is Turkey, and what about Russia?
Prior to the dashing jump into the trap of Ukraine and then to Syria, the indivisible and unified belt of Russian influence looked very solid. A few years ago, this “gray zone” of a specific Russian business and an extreme “Orthodox-FSB” policy was intended to pass from Russia through the Orthodox Ukraine to Europe, to Orthodox Moldova, Romania, Bulgaria and Serbia.
But it was possible to gird the region. As in the case of Deripaska’s factories, the failures of creating such a gray belt are visible throughout the chain, and Ukraine is far from the last place in this Russian fiasco.