Firmly Anchored Expectations, No Postponement of Purchases?

This article from former European Central Bank board member Jürgen Stark (Doomsayers risk a self-fulfilling prophecy) has been occasioning a lot of commentary over the last week or so. According to Stark, the current deflation debate “lacks three important points: an in-depth analysis of the forces driving inflation down; a clear distinction between “benign disinflation” and “bad deflation”, with a spiral of decreasing prices, wages and output triggered by negative expectations; and a better understanding of the European Central Bank’s approach”. Continue reading

It’s not like this was a surprise

Or, why reading David Remnick is nearly always a good idea:

I spoke with Georgy Kasianov, the head of the Academy of Science’s department of contemporary Ukrainian history and politics, in Kiev. “It’s a war,” he said. “The Russian troops are quite openly out on the streets [in Crimea], capturing public buildings and military outposts. And it’s likely all a part of a larger plan for other places: Odessa, Nikolayev, Kherson. And they’ll use the same technique. Some Russian-speaking citizens will appear, put up a Russian flag, and make appeals that they want help and referendums, and so on.” This is already happening in Donetsk and Kharkov.

“They are doing this like it is a commonplace,” Kasianov went on. “I can’t speak for four million people, but clearly everyone in Kiev is against this. But the Ukrainian leadership is absolutely helpless. The Army is not ready for this. And, after the violence in Kiev, the special forces are disoriented.”

That’s from March 1.

Overtaken by events

The draft blog post said to watch out for funny business in Melitopol and Mariupol, Ukraine. Those are the largest settlements along the coast between Russia and the Crimean peninsula, and sit astride the road that runs from Rostov-on-the-Don and the Crimea. Mariupol is the second-largest city in the Donetsk region, with a population of nearly half a million. Melitopol is also a crossroads: east to Russia, south to the Crimea, north to Zaporizhia and west to Kherson.

Radio Free Europe/Radio Liberty’s daily summary noted:

By early evening there were reports of skirmishes between pro-Russia and pro-Ukraine groups in Kharkiv, a tense standoff in Zaporizhia, and the occupation by pro-Russian activists of local government buildings in Makiyivka and Mariupol. Pro-Russian activists were also reportedly moving on the Security Service building in Odessa.

So let’s go with a quick scoreboard from this weekend and last instead.

Kharkiv: occupation attempt repulsed
Zaporizhia: tense standoff
Kramotorsk: buildings occupied
Druzhkivka: buildings occupied
Yenakijeve: buildings occupied
Makiyivka: buildings occupied
Mariupol: buildings occupied
Luhansk: buildings occupied
Donetsk: buildings occupied
Slovyansk: buildings occupied
Mykolaiv: occupation attempt repulsed
Odessa: occupation attempt repulsed
Krasny Lyman: disturbances

The buildings that are being occupied are local city halls, police stations and administrative buildings. That most definitely includes any local arsenals.

This weekend has also seen the return of the “little green men,” so called during the occupation of the Crimea because their origins are so mysterious that they must be from Mars. Never mind that they wear Russian uniforms sans insignia, have equipment issued to Russian armed services, and use Russian words that are not generally used by Russian-speaking persons who live in Ukraine.

Ukraine’s acting president has not minced words. In a live televised address, Oleksandr Turchynov spoke of

war that is being waged against Ukraine by the Russian Federation. The aggressor has not stopped and continues to organize disorders in eastern Ukraine.

This is not a war between Ukrainians. This is an artificially created situation of confrontation aimed at weakening and destroying Ukraine itself.

He also said that a large-scale counter-operation would begin Monday morning. Stay tuned.

Looking back at last month’s guide to revisiting the 1930s, further east:

Kharkiv, Donetsk: Sudetenland. Some real tension, mostly trumped up and stage-managed confrontations. ((Check.)) Pleas for “protection” from some parts of a particular nationality to the outside power. ((Check.)) Not fooling anyone. ((Check.)) In contrast to then, Kiev would try to defend the frontier region militarily. ((Check, as of April 14.)) (The great powers will not intervene, should it come to that.) ((Check.)) Whether that defense would succeed is rather an important question. There’s not a major defensible barrier until the Dniepr. Speaking of which…

Dnepropetrovsk, Zaporizhia: Poland. The great powers would not be able to overlook the dismemberment of a major European state. They wouldn’t be able to stop it, either.

Zaporizhia hasn’t seen much in the way of disturbances. Yet.

Also: Toomas Hendrik Ilves noted on Twitter, “After these several weeks, Europe’s M-F, 9-5 foreign policy establishment might perhaps recognise what’s happening next door weekends too.” Maybe all of the little green men and their associated crowds have day jobs, or maybe the powers-that-be on Mars have noticed that Saturday is not a big day for news, and are timing their operations accordingly. It’s not likely that they read John Scalzi’s blog, but he makes a point concerning publicity and next weekend:

But of all the Saturdays in all of the calendar year, the very worst possible Saturday to announce anything is the Saturday between Good Friday and Easter. Because it’s the Saturday between Good Friday and Easter, that’s why — the Saturday sandwiched between two major religious holidays, which means the “weekend” that week starts on Thursday and Sunday’s news cycle is swamped by the most important Christian holiday of the year — Christmas is noisier for longer, but Easter is concentrated. If you’re the Pope, Easter Sunday is great for you, news wise. If you’re not the Pope, not. …
If I were a crooked politician who had been caught murdering kittens while masturbating to a picture of Joseph Stalin, then the day I would choose to have that news go out into the world would be the Saturday between Good Friday and Easter.

That Western and Orthodox Easter align this year makes the news gap even larger. People in the wider world will not be paying attention next weekend. Don’t be surprised if the little green men are very active indeed.

Old habits die hard

Occasionally, representatives of Germany’s Left party (Die Linke) will complain about being tagged as the successors to East Germany’s communist party. Well.

Yesterday, the Parliamentary Assembly of the Council of Europe voted to strip the Russian delegation to that body of its voting privileges for the rest of 2014, as a reaction to Russia’s annexation of the Crimea. The overall vote was 145 in favor of revoking the Russians parliamentarians’ votes and 21 against, with 22 abstentions.

The German delegation voted 5-1 to revoke, with Yes votes coming from a Green, two Christian Democrats and two Social Democrats. The sole No vote? From a Left parliamentarian. Because Moscow, I suppose.

Continue reading

Ukraine, Snowden, and SIGINT proliferation

OK, so what do EU chief diplomat Catherine Ashton, US assistant secretary of state Victoria Nuland, Estonian foreign minister Urmas Paet, Russian ambassador to Eritrea Sergei Bakharev, and his colleague in Zimbabwe Igor Chubarev all have in common? They’ve all had their mobile phone calls intercepted and leaked onto the web.

The first three, well, Russia, obviously. The bizarrely distant ambassadors are presumably a gesture by the US to demonstrate the reach of the NSA. At least that is what you might have said a few years ago. But we live in an age of intelligence proliferation today.

If you want to intercept GSM calls these days, you need a USRP, a few hundred dollars’ worth, and copies of GNU Radio, OpenBTS, and a few other open-source software packages, all of which are entirely free. Osmocom will be useful too, also free. A couple of £15 Motorola C115 phones. And of course a laptop. (If you just want to listen to voicemail, well, call Glenn Mulcaire.)

The same computational abundance that made it possible for the NSA and friends to overreach so spectacularly has also brought capability that not so long ago was reserved to them within the power of hayseed cops, nonstate groups, and competent individuals with a few hundred bucks. It didn’t have to be the Russians; it could have been Yanuk’s cops, or freelance anti-Maidan activists, or even rebels hoping to force the EU to act. It’s now probably easier to intercept real traffic and edit the recording before leaking it than it is to fake the whole thing.

You’d think people would take more care – someone should point the EU SITCEN at the Blackphone project at least – but then I learned something interesting. The State Department, after all, has all the secure communications it needs, but they have the problem that they are not secure against the boss, and fairly often it is necessary to say things you don’t want to send back to Washington. It’s a fascinating lesson.

In the other direction, here’s a detailed discussion of the Mexican Zetas’ radio network, although sadly lacking in technical content.

In general, we should expect much more of this.

This interacts with the whole Snowden affair in complicated ways. There’s a reassuring story (well, for some people) that says: Look, the silly Europeans and journalists and such have run into the Russians now. It’s like the Cold War. I’m young again!

Of course, it’s actually true that NATO member states near the borders are worried and are asking urgently for the alliance’s forces to be seen more often. But we shouldn’t be fooled that the case is now closed. Those same states are also exposed to information security threats, and the NSA (and friends) interference with major security infrastructure projects has exposed them further. It has also harmed the degree of confidence their allies can offer them. It’s in the nature of the technology that once you create an exploit, you can’t guarantee others won’t find it.

This also matters for less macro-scale politics. Back in 2007, I played a minor role in Dan Hardie’s campaign to get the British Army’s Iraqi employees landed in the UK. This involved communicating with people in places like Syria who were under varying degrees of threat, and Dan asked me for advice. At the time, you could be reasonably confident in Skype’s encryption and its distributed architecture, and that’s what we used. It had the huge advantage that it was utterly uncontroversial software that anyone might have, and that didn’t require us to distribute code or key material securely. I gave quite a bit of thought to this, in case it became necessary, and never arrived at any solution I found even close to convincing myself, let alone anyone else.

Today, thanks to the subversion of Skype, I would have to come up with some sort of scheme to deploy one of the hardened messaging apps, probably circumventing censorship en route, generate keys, and get them deployed and configured. Granted, most of the users would have a smartphone or netbook or tablet with them rather than using untrusted public machines, but on the other hand, potential interceptors are so much more aware of the possibilities now I think I might not try. In the current case, this activist in Belarus appears to have had his Skype calls intercepted.

This is a pity. Eli Lake reckons the US won’t share satellite imagery with Ukraine, but I’m not sure of the sourcing and I keep seeing US diplomats tweeting overhead photos. Do they need to, though? Proliferation cuts both ways. As I was saying with Dr Strauss, advice on working with the new tool set might be as good or better. Like this. Or this:

There’s a better photo here – the ones with the bubble under the nose are the Mi-24 attack helicopters.

No-one who reads this has any voice in the decision, but whether Insider Guy, Intelligence/Administrative Guy, or [name redacted, yes, seriously] gets the GCHQ top job is far less important than whether we decide to free the CESG security wing of the organisation and bring it back to London.

Quick debate point

An EU debate point. Martin Schulz just pointed to the German government’s scrappage bonus as an example of “protecting the hard core of German industry, automotive production, by keeping the people there” that justified an increase in sovereign debt. The reference to “keeping the people there” also implies he was thinking of kurzarbeit.

A coalition for Schulz?

Jean-Claude Juncker and Martin Schulz are debating, live on France24. Glued, of course. As someone has already said on Twitter, Schulz speaks better French than Juncker. JCJ has also said that Gerhard Schröder “introduced budget discipline in Germany”. Schröder got let off for breaking the stability pact!

Anyway, we were blogging about the European Parliament getting more partisan and at the same time, more powerful. Under a deal between the political parties, they’ve agreed to veto any candidate put forward by the governments that they don’t like. This move means, paradoxically, that the side who wins the elections might be able to name the commission president.

Last week, the parliament passed a version of the latest lot of telecoms regulations that requires intra-European roaming charges to disappear by the end of 2015, makes various changes regarding how telecoms services can be marketed, and introduces quite strong net neutrality language. This included a definition of “specialised services” that basically rules out the idea of reclassifying, say, Netflix or YouTube as a specialised service carrying a fee for preferential delivery. (There’s also some dull technical stuff about spectrum management that only people like me care about.) ETNO, the European telco lobby, had been relying on the specialised services clause to kill the net neutrality element, so this bit is crucial to the whole thing.

My point, though, is that the amendments in question, numbers 234 to 236, were introduced jointly by the Socialists, the Liberals, the Greens, and the extreme-left group. It looks like the Right chose to fold when they realised they couldn’t get rid of the amendments, as the package passed by 534 votes to 25.

This starts to look like a transition from the permacoalition between the conservatives and the socialists to an alliance between the parties of the broadest possible Left. Something similar is going on in Germany, where Der Tagesspiegel has a good discussion of how a group of SPD, Green, and Left Party politicians are putting connections in place for a potential future coalition.

Right on schedule

Last night, I noted that staged takeovers of local government buildings in eastern Ukraine are

one of the shoes that everyone keeping track of the crisis has been expecting to drop (Odessa and the region that was known in the 19th century as “New Russia” is another).

This morning, Radio Liberty/Radio Free Europe reports:

RFE/RL’s Ukrainian Service quotes local media as saying around 100 pro-Russians attempting to surround a government administration building in the southern city of Mykolaiv were thwarted after police moved in late last night. There were several injuries in the ensuing clashes, which also pitted the pro-Moscow ranks against members of a pro-Ukrainian group. (From their liveblog 0923, 8 April 2014. Here’s the original report in Ukrainian.)

Mykolaiv is a city of about a half million people, a major shipbuilding center about halfway between the Crimea and Odessa, along the main road between the two.

View Larger Map

Let’s hope the police and local authorities in Kherson are equally loyal to Ukraine, and equally alert.

Odessa, of course, is the real prize of the southwest, and not just for the nightlife or the film nostalgia. Odessa is also just a good day’s bicycle ride from breakaway Transnistria. These lands were conquered by the Russian Empire in the late 18th century, somewhat after the American Revolution broke but before the French. The Crimean Khanate had left them sparsely settled, and homesteading in “New Russia,” as the region was known, was a major development of the 19th century. Before World War II, it was a significant area of Jewish settlement. In short, the pretexts are there, if Russian forces want to meddle.

The second act of Ukraine’s test has only just begun.

Stress test

Reports from eastern Ukraine that pro-Russia (perhaps one should write pro-Putin or pro-annexation) protesters have seized local government buildings in Donetsk, Kharkiv and Luhansk. The protesters in Kharkiv seem to have been driven back. In Luhansk, they seized weapons from a local arsenal and set up barriers in the main streets; Ukrainian police have sealed off access to the town. (As well they might. Parts of Luhansk are less than 10km from the Russian border.)

In Donetsk, they have seized an administration building, proclaimed a “People’s Republic of Donetsk,” called for a referendum on sovereignty on May 11, and asked for Russian troops to come as “temporary peacekeepers.” Temporary until another annexation treaty could be printed out, one presumes.

Here is how the Russian Foreign Ministry reacted to these developments:

“If the irresponsible attitude toward the fate of the country, the fate of their own people, on behalf of the political forces that call themselves the Ukrainian government were to continue, Ukraine would inevitably face ever new difficulties and crises,” ministry spokesman Aleksandr Lukashevich said today. “Enough finger-pointing at Russia — blaming it for all the troubles of today’s Ukraine. The Ukrainian people need to hear from Kyiv clear answers to all questions. It is time to listen to these legitimate demands.” (As reported by the Radio Free Europe live blog at 1911 today, Kyiv time.)

Key phrases to note: “the political forces that call themselves the Ukrainian government” and “legitimate demands.” With these words, Moscow is again signalling that it does not recognize the interim Ukrainian government as legitimate. The Kremlin still regards Viktor Yanukovych as president of Ukraine, never mind that he now has about as much chance of holding that office as I do. As for “legitimate demands,” if you — as a government — consider someone who last won 4% of the vote the legitimate spokesperson of a region (as Russia did with Crimea), that is a very elastic reading of the word “legitimate.”

(As I write, the channel “Kharkov antimaidan” on is broadcasting live from the square in front of the administrative building in Kharkiv. It’s about 30 minutes past midnight, local time, and a great many people are milling about on the square. My Russian is not good enough to follow the narration of the POV broadcaster. Sometimes living in the future, as we do now, seems surreal.)

This is one of the shoes that everyone keeping track of the crisis has been expecting to drop (Odessa and the region that was known in the 19th century as “New Russia” is another). Not quite a month ago, I wrote that if Crimea was the Anschluss, the Kharkiv, Donetsk and eastern Ukraine are the Sudetenland.

Here’s my checklist from last month:

Some real tension, ((check)) mostly trumped up and stage-managed confrontations ((check)). Pleas for “protection” from some parts of a particular nationality to the outside power ((check)). Not fooling anyone ((check)). In contrast to then, Kiev would try to defend the frontier region militarily.

So that’s where we are now.

Ukraine’s acting president canceled a visit to Lithuania and described the eastern Ukraine occupations and unrests as “the second wave in Russia’s special operation against Ukraine.” US Secretary of State John Kerry told Russian Foreign Minister Sergei Lavrov that the actions did not appear “spontaneous.” The White House has suggested there is “strong evidence” that some of the pro-Moscow protesters “were paid and not local residents.” The Moscow Times reminds readers that ethnic Ukrainians account for 56.9% of the population in the Donetsk region, 70.7% in the Kharkiv region and 58% in the Luhansk region. (Caveats about ethnic identification in that part of the world duly noted.)

This is a very serious stress test both for Ukraine’s interim government — and don’t forget, they are preparing for a presidential election in less than two months — and for the European state system as it is presently constituted.

How much of a revisionist power has Putin’s Russia become? That’s the most important question hanging over Europe right now, and precious few people know the answer. If indeed anyone at all knows.

The pretexts are all there. Will the Russian government and armed forces take them up and further dismantle a European state?