Eric Margolis

WHO'S IN CHARGE IN THE KREMLIN?

Back in the old Soviet days, Kremlin leadership changes used to be marked by a new pecking order of dumpy communist apparatchiks in awful suits glowering from atop Lenin’s tomb as tanks and cheesy floats rolled through Red Square.

No longer. Roll over Brezhnev and Tchaikovsky. Welcome to the cool new Mother Russia.

Last February, Russia’s new leaders, 55-year old Vladimir Putin and 42-year old Dimitri Medvedev, showcased their new diumverate by confidently strolling from the Kremlin across Red Square to attend a Deep Purple rock concert of all things. Forget about boring old `Swan Lake.’ Decked out in hip black leather jackets and tailored jeans, these two men symbolized the new, youthful, self-assured Russia.

Last week, Dimitri Medvedev, a bland bureaucrat who was Putin’s long-time protégé and hand-picked successor, was inaugurated president of Russia. Putin, who heads the United Russia Party, the nation’s largest, became prime minister. Officially, the prime minister reports to the president and serves at his pleasure.

So the whole world immediately asked, `who’s really the boss?’

Good question. Let me put on my Kremlinologist hat. Putin, who famously lamented the collapse of the Soviet Union as the `greatest geopolitical catastrophe of the century,’ may be replicating the old USSR’s power structure.

The Soviet Union had two parallel governments. A civilian one, with a president, legislature, and ministers that was supposedly elected and looked like other parliamentary governments. And a mirror structure run by the Communist Party. Real power was held by the Party’s General Secretary and Politburo who made all important policy decisions. The civilian government was charged with implementing them.

We can envisage a similar dual arrangement in Moscow today wherein Putin fills the role of the old Soviet General Secretary and Medvedev that of more or less figurehead president.

Former apparatchik Medvedev used to head Gazprom, Russia’s giant energy firm. He would seem likely to focus on economic development and raising living standards. Putin, formerly of KGB’s elite First Directorate, will focus on foreign policy and rebuilding Russia’s military and diplomatic power. But such a division of power and interest flies in the face of normal government structure, take France for good example, where the prime minister deals with the economy and key domestic issues while the president handles national security and foreign policy.

Whatever the case, Vladi and Dimi, as they are known, are sitting on a bonanza. Russia has 20% of the world’s natural gas reserves, and at least 7% of proven oil reserves, some 75 billion barrels. However, most of Russia’s huge reserves are in remote regions in Siberia and the Arctic and will require vast investment to further exploit. Even so, as energy prices soar, Russia grows wealthier and more powerful by the day, a sort of Saudi Arabia with snow. Putin’s re-nationalization of the nation’s oil industry under Medvedev played a key role in restoring Moscow’s finances to robust health. This is all part of Putin’s proclaimed 30-year strategy to turn his nation into the world’s leading energy and military power.

Interestingly, Russia today commands far more influence over Western Europe than it did when 100 Red Army divisions threatened the continent to the point where France began re-arming the Maginot forts and American generals talked about having to `go nuclear’ on the fifth day of a Soviet invasion.

Russia’s Gazprom now account for nearly 40% of Germany and Ukraine’s gas consumption, 33% of Italy’s, 26% of France’s heating needs, 70% of Austria’s, and almost all of Eastern Europe’s gas. Moscow no longer needs tanks to intimidate Europe. If Vladi and Dimmi turn off the gas export tap, as they recently did to late-paying Ukraine, Europeans will shiver in the winter cold. Russian gas heats their homes and provides hot water.

Washington is deeply alarmed by Russia’s growing energy clout. Until recently, the US controlled much of world energy through its domination of the Mideast. Now, however, Russia is challenging America’s Oil Raj and Washington is struggling to develop new pipeline routes to circumvent Russia’s fast expanding pipeline network.

Prime Minister Putin can look back on his eight-year presidency with satisfaction. He ruthlessly crushed the life out of the Chechen independence struggle, as he promised Russians he would do. Thanks to high energy prices, in part caused by the US invasion of Iraq, he doubled Russia’s national income, renewed pensions, and restored national pride. He has also been slowly rebuilding Russia’s run-down military forces.

Most important from the viewpoint of Russian nationalists, Putin thwarted the Clinton administration’s attempts to establish political and economic US tutelage of Boris Yeltsin’s post-Soviet Russia, and pulled Russia out of the bankruptcy that had made it dependant on secret cash infusions from Washington.

The Kremlin must now deal with NATO’s steady advance to Russia’s borders. The western power’s `drang nach osten’ is a clear violation of secret agreements between Washington and former General Secretary Mikhail Gorbachev not to advance NATO any further east that it was in 1991 in exchange for Moscow allowing the Baltic and Eastern European states to break away from Soviet domination.

In spite of Putin’s crushing democratic government and suppression of free expression, his approval ratings run well over 60%. If Putin and Medvedev can avoid falling out, and continue fruitful teamwork, they are well placed to restore Russia as a global power and turn this long-suffering nation into tomorrow’s economic success story.


Copyright Eric S. Margolis 2008

SARKOZY UNDER SIEGE

METZ, France - This ancient stronghold in eastern France which guards the traditional invasion route down the Mosel River valley is the world’s most heavily fortified city. Ringed by belts of powerful forts built by the French and Germans, and protected by the mighty Maginot Line fortifications, Metz is the Florence of military architecture and a beautiful city in its own right.

Here, in 1944, outnumbered, outgunned German forces fighting from German forts built around 1900 held up Gen. George Patton’s Third US Army for three months. Hitherto invincible US air power proved completely ineffective against the old German and French forts.

As is my custom every year, I greet spring in Lorraine, one of France’s least known but most beautiful provinces, and visit the Maginot Line which, contrary to what many mistakenly believe, worked well at defending Lorraine’s exposed steel and coal industry from German attack. France’s field army failed, not the Maginot Line. Sadly, having come to symbolize France’s defeat in the spring of 1940, this modern Great Wall of France lies forgotten and abandoned under a shroud of national amnesia.

France’s embattled president, Nicholas Sarkozy, might do well to take shelter behind Metz’s bastions or the Maginot forts. At the end of his first year in office, Sarkozy finds himself in deep trouble with French voters and opinion-makers who are accusing him of everything from bad manners to responsibility for the huge increase in the price of butter and cheese.

Sarkozy’s approval rating has dropped below 30%, rivaling the abysmal standing of his new best friend and apparent ideological ally, US president George Bush. No French president in modern history has dropped so fast or so far in public ratings.

French food prices are up a staggering 20-30%. Inflation is running at 3.2%. The deficit has risen sharply and the treasury is bare. Other European consumers are also up in arms over the soaring costs of everyday life. A third of Germans say they want to ditch the euro and return to their beloved old Deutschmark. Even more Italians want to go back to their shaky lire. President Sarkozy and other politicians across Europe are being blamed for inflation and soaring prices.

Sarkozy’s dispatch of 1,000 more French troops to Afghanistan, his decision to fully reintegrate France into NATO, and his warlike threats against Iran have proven highly unpopular here. Many French still see themselves as equals to the US, not its junior partner. Sarkozy is being accused by critics of undermining France’s traditional balanced policies in the Mideast by supporting George Bush’s oil wars and becoming too emotionally close to Israel right-wing parties. His foreign minister, the flamboyant Bernard Kuchner, does not command much respect, even in his own ministry.

A big uproar awaits when the Defense Ministry shortly reveals much of France’s military equipment is outdated and must be replaced at a time when more French troops are headed to Asia, the Gulf, and Africa. No one has yet dared break this bad news to Sarkozy, who has demanded further spending cuts from his cash-strapped government while sharply increasing France’s foreign military undertakings.

But what has annoyed French the most about their new president is his aggressive personality, frequent lack of finesse, petulance, and tendency to show off. `We wanted a president, and got a playboy, instead’ is the often heard complaint.

French keep their favorite restaurants and love lives secret. But Sarkozy splashed his embarrassing divorce from his former wife all over the media. His attempts to groom her as a second Jacky Kennedy backfired badly when she dumped him for another man. The French media now calls Barak Obama `the black Kennedy,’ while it complains of `Sarkoverdosing.’

Sarkozy’s very public whirlwind romance with the beautiful model/songwriter Carla Bruni dismayed many French as much as it fascinated them. French like their presidents regal, detached, and above gossip, like the great Charles de Gaulle and the ever dutiful Madame de Gaulle.

`We are living in a cheap romance novel,’ growls the press after Sarkozy’s marital shenanigans, his Hollywood exhibitionism, and foreign luxury vacations. Sarkozy and Carla Bruni wowed Londerners on a recent visit, but the snobby Brits made savage fun of the short French president and his painful eagerness to be accepted among the high and mighty.

The multi-lingual Carla Bruni is an important asset to Sarkozy, who does not speak English and requires social polish. Friends of hers tell me she is extremely intelligent, refined and level-headed – just what Sarkozy needs to soften and refine his battered image.

Last week, he went on national TV to answer soft questions from fawning journalists and to apologize to France for his public behavior and failure to implement promised reforms. Few French were impressed by their `American president’s’ contrition.

It’s a pity the 52-year old Sarko’s love life has gotten in the way of reforms France desperately needs. Sarkozy and his able PM, Francois Fillon, are challenging belligerent unions and trying to modernize France and make it more globally competitive. They have vowed to reform the lush pensions and short working hours that France can no longer afford and still meet EU budget rules and Asian competitors. Too many people work for the government, which gobbles up 55% of GDP.

Sarkozy has rightly made modernizing France, cutting taxes, and uprooting Socialist-inspired anti-business regulations his priorities. French voters gave his conservative party a big win, and sent the Socialists into the wilderness, in a clear mandate for reform.

Unions and all sorts of pampered special interest groups are now gearing up for a major fight, threatening strikes to again paralyze France and make everyone miserable. Behind their threats lurks the specter of France’s 1968 riots that brought the nation dangerously close to civil war or anarchy. France is currently observing the 40th anniversary of these riots, disorders and strikes.

Sarkozy’s goals are admirable. But however brilliant and energetic he is, the president keeps tripping over his personality and displaying bad temper and unseemly impatience that undermine the positive actions he is taking. Even his sensible plan to delay mandatory retirement by a single year has run into a wall of opposition from the left and special interests.

Sarkozy’s worst idea to date: a daft proposal to increase competition in the overly concentrated mass food trade by lifting restrictions on the size and number of supermarkets. This would allow France’s retail giants to crush the remaining small food merchants who are guardians of the justly-renowned quality of French food and lifestyle that make this nation among the world’s most agreeable and civilized countries.

Promoting giant supermarkets in France where fresh, high quality food is still held sacred by many, could prove a disaster for Sarkozy and make his next four years in office particularly difficult. Young people in France have already adopted North American junk food. Every time French eat rubber chicken, previously-frozen bread or plastic cheese they will blame `Sarko’ for Americanizing their dinner tables.

All in all, this has not been an auspicious start to year I of the Sarkozy Revolution.

copyright Eric S. Margolis 2008