President Viktor Yushchenko’s decision to dissolve parliament and set new elections for May 27 now faces a challenge in the constitutional court. Even if the president’s decree is upheld, reformist forces will still face an uphill task in convincing voters to give them a mandate to form a government in light of the farcical manner in which they conducted themselves following the Orange Revolution of 2004.

The consequences for the reformists if the constitutional court does not back the president, however, may be even worse. Supporters of Prime Minister Yanukovich are already talking about impeaching the president whose authority will be drasticaly diminished if the court goes against him.

It is not clear at this stage what the court will do. Cynics, who point to Ukraine’s appalling corruption problems, are already arguing that some constitutional court officials are forcing the two sides into a bidding war. He who pays (literally pays) the highest price will get the verdict. Events are moving very rapidly and it is not possible to say how things will move at this stage. One analyst based in the UK — Andrew Wilson, a senior lecturer in Ukrainian studies at the School of Slavonic and East European Studies, University of London — was quoted in the Guardian as saying his understanding is that the majority of the 18 member court probably backs Yanukovich. This remains to be seen.

But make no mistake about it, this is the biggest crisis in Ukraine since the Orange revolution. Ukraine is the largest and most important”space” up for competition between Russian neo-authoritarianism and pro-western reformism. There has even been talk in some quarters about the country splitting into two distinct entities — a Russian dominated east and south and a Ukrainian speaking centre and west. There is a long way to go before anything like that happens in Ukraine. But the stakes in this crisis are high indeed.

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Newsweek has become the latest international media outlet to raise the prospect of serious economic problems in the pipeline for the European Union’s newest member states. In an article entitled:”Europe’s Fallen Angels”   (http://www.msnbc.msn.com/id/17081618/site/newsweek/) the magazine quotes Simeon Djankov, chief economist at the World Bank as saying:”I think every one of these countries is going to have some sort of fiscal crisis in the next 10 years.”  The article also quotes a forthcoming IMF report suggesting that borrowing costs are  lower than one would expect in  the region given prevailing levels of  financial and political risk. Noting that current account  and budget deficits are becoming increasing problems the article adds:”Over the long run, Eastern Europe’s heavy debts will result in higher interest rates on loans, or even a credit cutoff, which could trigger an economic meltdown à la Italy in the mid-1990s.”

To cite just two examples, Hungary has twin deficits (budget and current account deficits) of around 10 percent of gross domestic product (GDP) each. Latvia’s current account deficit is 24 percent of GDP.

GMF is hosting a conference in Bratislava on March 1/2 to discuss precisely these issues. The conference  is also intended to give rise to a book on the subject.  

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Among a number of interesting developments in Belarus in recent days, the Minsk based news agency BelaPAN reported Wednesday that the authorities were considering granting amnesties to certain categories of prisoners. It was not clear whether this would include political prisoners. But given Lukashenko’s new found enthusiasm for better relations with the West we should be watching to see what transpires here. He may be considering a high profile gesture. On the other hand, of course, he may be considering no such thing. The security forces were up to their old tricks yesterday, detaining at least 10 opposition activists after a 200 strong Valentine’s Day demonstration led by the Young Front grouping.   Separately, Alexander Milinkevich, the leading figure in the Belarusian opposition, told BelaPAN that he had received several positive responses to his open letter (sent on February 7)  to President Lukashenko from government officials, though nothing so far from Lukashenko himself. The fact that Milinkevich has received any response at all from high ranking officials (unnamed in the report)  may be significant because  it could indicate  a lack of confidence  inside the regime about the regime’s long term viability. We must be careful not to raise false hopes. But we also need to be following such developments to see where, if anywhere, they might lead. In a clever, though high risk,  ploy to take advantage of Lukashenko’s current difficulties Milinkevich called in the letter on government and opposition forces to come together at a rally marking Belarusian independence on March 25. His aim was to sew division and uncertainty iniside the regime and to present the opposition as a legitimate part  of Belarusian society.  

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Vladimir Putin’s combatative approach to the United States at the Munich security conference this weekend prompted an ironic response from US Defense Secretary Robert M. Gates. Responding to Putin’s list of accusations over America’s role in the world, Gates said:”As an old cold warrior, one of yesterday’s speeches almost filled me with nostalgia for a less complex time…..Almost.” The West’s current relationship with Russia is indeed full of complexities, none more pressing perhaps than the question of what happens to Putin himself as he enters the last year of his second and, according to the constitution, his final  term of office. So, whither Vladimir Putin?

A number of options present themselves which can be subdivided into two broad categories: Category 1, in which Putin makes good on his pledges to actually step down from the presidency and Category 2, in which he finds a way to remain in the Kremlin.

Inside the first category,  several  scenarios have been touted. One such scenario sees Putin taking a role such as the head of Gazprom, biding his time for four years and running again in 2012. The are dozens of variations  on this theme. It is clear, however, that this would be a  high risk strategy. So much power is concentrated in the Kremlin that Putin’s successor would be very difficult to dislodge once he had established himself. Another set of scenarios sees Putin shifting the bulk of the power in Russia to the premiership and finding a way to install himself as prime minister.  There may not be enough time to do that though. Still another set of scenarios sees Putin simply walking off into the sunset and pulling out of politics completely. Of all the possible outcomes, this strikes me as the least likely. Putin is known to love his job. He is also young (especially for a Russian leader) and popular. He just doesn’t look like a man who is tired of power.    

Inside the second category, there is also a wide range of possible scenarios. The simplist scenario sees Putin changing the constitution, probably in response to a manufactured crisis. A  well informed contact of mine in Moscow has even suggested that a faked attack by Chechen separatists on a nuclear power station is one possibility. That may be far fetched, but it gives an indication of  what Putin’s opponents think he is capable of.  Another long touted scenario  is that  Russia will force Belarus into some kind of a union state (offering to  bring back full gas and oil subsidies as an incentive). This would allow Putin to become the  president of the Union of Russia and Belarus while handing the Russian presidency (under this scenario an empty shell of a position) to someone else. A variation on that theme sees Putin as the head of the CIS, also allowing him to remain in power.

No-one knows what will happen.  There is one thing, however, I am pretty sure of. We will not have heard the last of Vladimir Putin come the end of March, 2008.    

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According to an article in the February 9 edition of Izvestia, the Belarusian economy appears to have lost $5 billion in de-facto subsidies from  energy price hikes by Russia this January. This estimate, sourced to Belarusian president Alexander Lukashenko himself, is greater than previous estimates which had ranged from $3.5 billion to $4 billion. The latest figure of $5 billion is equivalent to just over 14 percent of gross domestic product. The article also quoted Russian president Vladimir Putin  as saying that even after the January round of price hikes, Russia would be subsidising the Belarusian economy this year to the tune of $5.8 billion or, he  said, 41 percent of state budget revenues.

Bearing all this in mind,  the extent of the crisis in Belarus should be obvious. Lukashenko has made economic stability a cornerstone of regime propoganda. Given that he is now going to find it very difficult to sustain his credibility as a leader who provides for his people, Lukashenko is now entering a new and dangerous period of rule.

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Russian president Vladimir Putin said Thursday  he was considering forming a gas”OPEC” along the lines of the oil cartel of the same name. Putin was speaking at a marathon, three and a half hour long, press conference in the Kremlin with more than 1,000 foreign and local journalists.  The suggestion, which bounces off a proposal put forward by Iran,  will further alarm  the United States as well as governments in Europe concerned about  Moscow’s use of its vast energy  resources as a political weapon. It underlines the need for the West in general and the European Union in particular to forge a coherent response.  

Other points made by Putin  at the press conference include:

** Transneft, Russia’s oil pipeline company, has been ordered to increase loading capacity on the Baltic Pipeline System by one million barrels a day.

**  Russia supports the right of Iran to develop peaceful nuclear technology.  

** Russia will respond to US anti-missile systems deployed in central Europe with a new generation of missiles.

** The idea of a”union state” with Belarus is not lost and the two countries will continue to talk about adopting a common currency.

** Putin said he would not rig his succession at the March 2008 presidential elections, repeating once again that he would not try to stay on for a third term.

** Asked about his attitude to the Mayor of Moscow’s decision to ban a gay pride parade, Putin said:”My approach toward gay parades and sexual minorities is very simple and is directly linked to my responsibilities… One of the key problems of our country is the demographic problem…”

Make of that what you will.

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Two interesting articles out recently on Belarus highlight the difficulties experienced by Belarusian President Alexander Lukashenko following the recent spat over energy prices with Russia and the new round of introspection inside Russia itself on how things went wrong with Belarus and what Moscow should do now.

The first, by Jan Maksymiuk at RFE, argues that Lukashenko now “seems to be utterly confused and at a loss to decide what course he should take now.”

The second article, from RIA Novosti, is by Sergei Karaganov, head of Moscow’s Council on Foreign and Defence Policy. He argues that Russia dropped the ball on Belarus and suggests that Moscow must now formulate a new policy so that if changes do come in Belarus the new elite’s priorities are aligned with Moscow.

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More evidence of a worrying trend across Europe emerged Saturday as Muslim and leftist groups joined forces yet again to snub Holocaust Memorial Day. Britain’s Guardian newspaper reported in its January 27 edition that some senior figures inside the Muslim Council of Britain (MCB) had attempted to get the MCB (the country’s main Muslim umbrella group) to reverse recent practice and attend ceremonies to mark the systematic murder of approximately six million Jews in World War II. The  attempt failed.

In a secret ballot, the MCB voted to stay away from the ceremonies, as is now usual, by 23 votes to 14. The cover story used by the MCB and others is that  they have nothing against  commemorating the Holocaust as such but that it is wrong to hold a single event for Jewish suffering while ignoring the plight of the Palestinians, for example, or other examples of genocide.  To quote just one other instance of this sort of thing from Britain, it was also reported Saturday that  the  municipal council in the northern English city of Bolton had scrapped its own Holocaust memorial events  under the same kind of justification as mentioned above. Jewish leaders in the nearby  city of Manchester, which has one of Britain’s biggest Jewish communities,  expressed outrage.  Louis Rapaport, president of the Jewish Representative Council of Greater Manchester, said:”I can’t help feeling the decision was influenced by Bolton’s large Muslim community.”

The English language  version of the Spanish newspaper El Pais reported similar goings on in  the Socialist-controlled municipal council for the Madrid suburb of Ciempozuelos. The paper quoted a town hall spokesman as saying:”The previous two years we remembered the Holocaust, but this year we decided to commemorate the Palestinian genocide in events on or around Holocaust Memorial Day.” Israeli Ambassador Victor Harel called the decision”insensitive and vile” and”shameful and obscene”. It is hard to disagree.

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This weekend’s edition of the Wall Street Journal features an interesting profile of Gary Kasparov, former world chess champion and nemesis of Vladimir Putin’s Kremlin. I recommend reading it. The article, by the paper’s deputy editorial page editor Melanie Kirkpatrick, provides a useful reminder that it is time to really start getting to grips with the Putin succession, if indeed there is going to be one after the presidential elections in March 2008.  Kasparov, it will be recalled, helped set up an umbrella grouping last year called”The Other Russia”.

To quote from the article:”It [The Other Russia] is composed of groups that would normally be at political odds — democrats like Mr. Kasparov, nationalists, socialists, even Bolsheviks. Mr. Kasparov predicts that the Communist Party will join up before the end of the year.”There’s still a lot of distrust,” he says, with more than a modicum of understatement.”It’s a problem, but I don’t think it’s insurmountable. The big advantage of the Other Russia, and I think it’s our biggest accomplishment, is that we’ve established the principle of compromise, which was not yet seen in Russian politics. It was always confrontation. It was a mentality of a civil war. We eliminated it.”

The author continues:”A declaration at the time of the Other Russia’s organizing conference last summer reads,”We are gathering together because we are united in our disagreement with the current political course of the Kremlin and united in our alarm for the present and future of our country.” The group’s sole objective is to find a candidate to run — and win — in the March 2008 presidential elections. Or as Mr. Kasparov puts it with characteristic bluntness:”When a liberal democracy is re-established, everybody goes his or her way.”

Their chances are obviously slim. But we need to be careful about falling into the trap of missing some of the democratic undercurrents that still exist in Russian society. Vladimir Putin’s Russia is certainly becoming highly authoritarian but it is not totalitarian. While we should clearly be watching for  Putin’s anointed successor (if, I repeat, there is going to be one) we should also be aware that the battle for democracy is not entirely over in modern Russia. No cause here for naive optimism. But plenty to look out for all the same.  

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UN envoy Martti Ahtisaari formally delivered details Friday of a plan for the  Serbian breakaway province of  Kosovo to the  so called Contact Group consisting of Britain, France, Germany, Italy, Russia and the United States. The plans have not yet been made public but  the general drift is likely to be towards increasing independence with Kosovo having the right to apply for membership in international institutions such as the IMF, the World Bank and even the United Nations itself. (Expected details of the plan are posted below)

Friday’s developments come at the end of a week in which Serbia’s parliamentary elections opened up the prospect for a pro-Western coalition government despite a strong showing from hardline nationalists.

Early reports from the Contact Group meeting, which took place in Vienna, suggest that the five western powers are anxious to press for quick implementation of the plan while Russia is asking for more time to consider it. This was predictable since Russia is deeply concerned that an independent Kosovo would serve as a dangerous precedent for break away regions inside the Russian Federation such as Chechnya.

The UN Security Council must approve the plan which will be presented to both sides — Serbia and Kosovo —  on February 2. If Russia’s concerns are not met, Moscow could veto the plan leaving Kosovo in a state of limbo.

Some key elements of the plan for Kosovo, according to Reuters:  

* It gives Kosovo the right to enter into international agreements and apply for membership of international organisations and institutions, potentially including the United Nations, the International Monetary Fund and the World Bank.

* It provides for a right to”dual-citizenship” and urges Pristina to establish good relations with Serbia and other neighbours.

* Kosovo will take on its share of economic assets, and debts, that once belonged to the former Yugoslavia and Serbia.

* To give Kosovo’s 100,000 remaining Serbs broad self-government, considerable control over the running of local police, and the right to certain direct links with Belgrade.

* Serbia will be able to finance Serb areas, provided the money goes through Pristina.

* Protection zones will be thrown around the most valuable of scores of centuries-old Serb Orthodox religious sites.

* NATO will keep troop levels unchanged at 16,500 into 2008.

* The plan, fruit of more than a year of shuttle diplomacy and direct Serb-Albanian talks, needs a new U.N. resolution to take effect. Ahtisaari needed to secure the approval of the Contact Group — the United States, Britain, France, Italy, Germany and Russia, before making his plan public.  

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