THE NEXT WAR IN EUROPE

Andrei Illarionov resigned just in time. As an admirer of the capitalist philosophy of Ayn Rand and the laissez faire economics of Ludwig Von Mises, his resignation this week as Vladimir Putin’s chief economic advisor is a disaster for Russia.

But his announcing that “Russia is no longer a democracy,” serves to keep intact the record of there never being a war between two democracies should war break out between Russia and Ukraine.

As punishment for Ukraine successfully breaking free of Russian colonial control in its “Orange Revolution” a year ago, Russia’s state –controlled gas monopoly Gazprom has announced that as of January 1, it will more than quadruple the price Ukraine must pay for natural gas (from $50 per 35,000 cubic feet to $230).

That this is straightforward punishment is made clear by Gazprom’s not doing the same to neighboring Belarus, controlled by pro-Russian dictator Aleksander Lukashenko, which will continue to pay less than $50 per 35,000 cf.

Gazprom provides fully one-third of Ukraine’s natural gas, and is threatening to turn off the tap this Sunday, December 31, in the dead of winter causing homes and businesses throughout the country to freeze, if Ukraine doesn’t capitulate.

There’s just this little problem in doing so. 80% of Gazprom’s natural gas exports to Europe go through Ukraine. That’s a full half of all natural gas used by the entire European Union. So what if Ukrainian President Viktor Yushchenko tells Russia: If Gazprom shuts down its pipeline of gas to Ukraine, Ukraine will shut down all Gazprom pipelines to Europe?

To add to this sure-fire recipe for war, the Russian Navy’s Black Sea Fleet (the only navy it has during the winter as other ports are frozen) is based in Sevastopol on the Crimean Peninsula – which is a part of Ukraine, not Russia.

Yushchenko has responded to the Russia-Gazprom threat by not only claiming Ukraine has an “unquestionable legal right” to siphon off 15% of all Russian gas that goes through Ukrainian pipelines as a transit fee, but that he will also drastically increase the annual rent (currently $98 million) Russia pays for the Sevastopol naval base.

Russian Defense Minister Sergei Ivanov, reportedly being groomed as Putin’s successor, shot back that any attempt to revise the basing arrangement would have “fatal” consequences, and that any attempt to siphon off gas for Europe would be regarded as “theft.” The “fatal” consequences, Ivanov bellowed, would be Russia’s no longer recognizing Ukraine’s post-Soviet border with Russia.

In other words, the Russian Defense Minister was threatening the military invasion of Ukraine.

The timing of the gas increase and Russian Bear threats have a political purpose: forcing Yushchenko to capitulate will result in a massive rejection of his party in the March parliamentary elections, returning pro-Russia politicians to power.

The hope is that Yushchenko will not capitulate but rejoice at Russia’s giving him such a marvelous political gift on a platinum platter. Anti-Russian demonstrations in front of the Russian Embassy in Kiev have already started. The rage can build and be directed at Yushchenko’s pro-Russian opponents. All Viktor has to do is stand up to Russia – and make sure that NATO stands behind him.

The crisis is a perfect opportunity to accelerate the discussions for Ukraine joining NATO. There is no way to reroute Russian gas into the EU bypassing Ukraine. A threat to the gas supply of Europe cannot be tolerated – especially during the horrific winter weather Europe is now experiencing. Yushchenko has to make all this clear to NATO and demand that it make an official warning to Russia that Ukraine’s borders will be defended.

Besides, Viktor knows that the Russian military is a joke, its officers drunkards, its draftees brutalized and demoralized, its weaponry rusted. He needs to call Ivanov’s bluff. If he gets NATO’s backing to do so, Ukraine’s freedom may be preserved and war averted.

Events are moving fast, and there is a good chance now this thing could go sideways quick. It all depends on the skill of the Orange Revolution’s hero to turn a grave crisis from a lethal danger into a liberating opportunity.