In this issue:

The 'Axis of Peace' as the Beginning of a Great Europe

Emergency Russo-German Consultations on Iraq

Other Russian Diplomacy Aims To Avert Iraq War

Igor Ivanov in Beijing

Duma Calls for World Parliamentarians To Meet in Baghdad in March

Dollar Panic on Russian Currency Markets

Russian Central Bank Reserves at All-Time High

German-Russian Talks on Energy Cooperation Will Be Regular

From Volume 2, Issue Number 9 of Electronic Intelligence Weekly, Published Mar. 3, 2003
Russia and Central Asia News Digest

The 'Axis of Peace' as the Beginning of a Great Europe

"The 'Axis of Peace' as the Beginning of a Great Europe—Russia, France and Germany demonstrate that their positions are not directed against America," is the title of a signal article published in Nezavisimaya Gazeta Feb. 28 by Igor Maksimychev, a leading researcher at the Russian Academy of Sciences' Institute of Europe. The article should be read in the context of earlier signs of the principled character of the emerging strategic partnerships in Eurasia. The latter include a mid-February source report, to the effect that President Vladimir Putin and his circles have been studying the work of 19th-century thinker Sergei Witte, in the context of formulating a new Eurasian policy pivoting on cooperation with France and Germany (see RUSSIA/EURASIA DIGEST in EIW of Feb. 24.) Here are excerpts from the Nezavisimaya article:

"The lightning visit of German Chancellor Schroeder to Moscow triggered much speculation around the world. Almost nobody realized the most natural answer to the question, why a simple telephone call could not have been sufficient: namely, that it was necessary, at such a dramatic moment of the crisis around Iraq, to be completely convinced, that one's partner would not waver. Because very big stakes have been placed above all on the reliability and credibility of the leadership of Europe's most important countries.

"The point is, all three participants in the European Axis of Peace—Russia, France, and Germany—are under the most extreme pressure.... The biggest attack has been against France, for whose position Jacques Chirac is responsible. But it is also being alleged of Vladimir Putin that he, when push comes to shove, would chose to 'be on the side of the winner,' which Washington considers to be its own side.

"From reliable sources it has become known that Schroeder left Moscow extremely happy: Neither he, nor Putin, nor Chirac is considering changing their rejection of the military plans of Washington. And China is supporting them. The possibilities for a peaceful disarmament of Iraq have not been exhausted, and until then, Russia, Germany, and France, and also China, are not ready to share with the USA the responsibility for the possibly catastrophic consequences of an invasion of Iraq....

"(But) this time, the Security Council is not just considering this or that formulation of an American-British proposal, but will be able to choose between two conceptions of the future development of the world....

"The extremely close coordination in the positions of the three countries, on questions of international affairs, has still another aspect, no less important than the effort to find a way out of the mess that the U.S. has gotten itself and the whole world into. It is the beginning of formation of a universal European identity, without which our continent would have no future. A Great Europe from Reykjavik to Vladivostok was declared and promised in writing, at the moment that the Cold War was ended, by common efforts, without the use of force....

"Today France, Germany, and Russia have taken the step toward becoming the initiating group for creating a Great Europe. The composition of the group is optimal—it is composed of the strongest and most influential nations of the continent, who, in the last analysis, will determine its future. If France were not to participate, then the cooperation between Russia and Germany could easily be portrayed as a 'rebirth of Rapallo.' (Although the original Rapallo Agreement of 1922 contained nothing but a rejection of territorial claims connected with the First World War and the Russian Revolution, the French politicians at the time succeeding in frightening Europe with the image of a 'German-Soviet threat.') If Germany were not to participate, then it would suffer the fears of being surrounded, as did German policy from the time of Bismarck's 'nightmare coalition.' Without Russia, this group would not have an all-embracing European character, which, indeed, defines its essence.

"The notion of a beneficent triangular cooperation for the continent, is nothing new in European politics. Attempts to create a 'triangle' Paris-Berlin-Moscow, that could determine the fate of Europe, were also made in the 1990s. It didn't work then, because the Russian leadership was not able to elaborate a suitable policy toward Europe (or in any other direction). Today the situation has changed. At the moment there is no guarantee of success, but the chances of success have increased."

Emergency Russo-German Consultations on Iraq

German Chancellor Gerhard Schroeder flew to Moscow on Feb. 26 for several hours of talks with Russian President Vladimir Putin, with Iraq being at the top of the agenda. The surprise meeting is said to have prepared for concerted special diplomatic efforts of Germany and Russia at the United Nations, to counter the "Gang of 3" (U.S., UK, Spain) and its push for a pro-war resolution.

In this context, it is worth noting that diplomats in Berlin as well as in Moscow have given great importance to reports from the Non-Aligned Meeting in Kuala Lumpur, as indicating a vast majority of the members of the United Nations are against war.

After almost four hours of talks (without translator, as both spoke German), Schroeder and Putin told the press in Moscow the evening of Feb. 26, that they would not support any UN Security Council resolution that granted an automatic resort to military measures. Instead, both governments are sticking to their joint position, with the French, that inspections should be enhanced and continued.

On that, Putin specified that what is envisioned, is "making the inspections more intensified, giving them a more systematic character," and that they should be given a more precise agenda to which Iraq has to respond and with which inspectors should proceed. The German Chancellor added that it is only logical that both Germany and Russia are opposed to war, as both have experienced the horrors of war in the past century. Because of that, he said, it is an immensely positive historical achievement that Germans and Russians have very friendly relations with each other, and cooperate closely in many fields, like the United Nations, today.

Other Russian Diplomacy Aims To Avert Iraq War

Chief of the Russian Chamber of Commerce and Industry Yevgeni Primakov, the Mideast intelligence officer who became Foreign Minister and then Prime Minister of Russia (1998-99), visited Iraq for several hours on Feb. 22. By the next day, he was back in Moscow, according to Russian reports. The visit was strictly confidential, with no official announcement from the Russian Foreign Ministry, the Russian embassy in Baghdad, or the Iraqi side. Diplomatic sources cited by Strana.ru "did not exclude"—but there was no official confirmation—that Primakov carried a message from Russian President Vladimir Putin to President Saddam Hussein. From sources at the Russian embassy in Baghdad, Strana.ru reported that Primakov was meeting with "his old acquaintances in the Iraqi leadership, with whom he has been in contact since the 1960s and 1970s." The Baghdad correspondent of TVS television said on the air Sunday evening that Primakov met with Saddam Hussein, a report that was subsequently officially confirmed.

Russian Presidential Chief of Staff Alexander Voloshin visited Washington the week of Feb. 24, meeting with Secretary of State Colin Powell, White House chief of staff Andrew Card, Vice President Dick Cheney, and National Security Adviser Condi Rice, at least. President George Bush "stopped by" during the Voloshin-Rice meeting. Associated Press suggested Voloshin's "unannounced" visit was a diplomatic package with Primakov's "equally secretive" trip to Baghdad, and Foreign Minister Igor Ivanov's consultations with Beijing.

Igor Ivanov in Beijing

Chinese President Jiang Zemin and CCP Secretary General Hu Jintao both met with Russian Foreign Minister Igor Ivanov in Beijing Feb. 27 (see ASIA NEWS DIGEST).

War against Iraq "can and should be avoided," states the joint Chinese-Russian communiqué issued in Beijing Feb. 27. The communiqué states that "The two sides advocate [that] the Iraq crisis be resolved within the framework of the United Nations and through political and diplomatic means." It says that the UN inspections "are playing an important role and have already made some progress, so the inspections should continue.... Iraq should fully comprehend the importance and urgency of the inspections ... to create the necessary conditions for politically resolving the Iraq issue." The communiqué says the two sides will "try their utmost to promote a political solution to the Iraq issue and believe war can and should be avoided. The international community has widely urged all steps be taken to avoid war. Such aspirations should be respected..., and all the UN member states should respect and safeguard the authority of the UN Security Council."

Speaking from Beijing, Ivanov said that "Russia has the right to veto in the UN Security Council and will use it if it is necessary in the interests of international stability." Ivanov said after the issuance of the Russo-Chinese statement that: "Of course, if you use the veto power you should fully understand the responsibilities of it before using it, it can only be used for international peace and stability.... At the same time, Russia will not be in favor of any new resolution which allows the use of military force directly or indirectly to solve the Iraq issue."

A second joint communiqué committed the two nations to push for a dialogue between the Democratic Peoples Republic of Korea (North Korea) and the United States (see ASIA NEWS DIGEST).

Duma Calls for World Parliamentarians To Meet in Baghdad in March

The Russian State Duma passed a resolution on Feb. 21, by a 377-1 vote, calling for an international meeting of parliamentarians to discuss the result of weapons inspections in Iraq. The resolution calls for legislators from around the world to convene for three days in Baghdad beginning March 4, to help prevent the U.S. from launching a war without United Nations approval.

Dollar Panic on Russian Currency Markets

In a Feb. 22 article entitled "A Dollar on the Brink of Collapse," Vremya VN reports that there has been a minor panic on the Russian currency markets for a number of days, over fears of a collapse of dollar quotations. The Bank of Russia has been forced to resort to "serious intervention," and the markets are in a state of agitation, with much talk of an inevitable collapse of the dollar exchange rate in the next few weeks.

Russian Central Bank Reserves at All-Time High

In the first part of February, Russia's gold and foreign currency reserves reached the historic high of $50.2 billion. According to First Deputy Chairman of the Bank of Russia Tatyana Paramonova, the Russian Federation's reserves rank in the top 15 worldwide. She called the reserves "insurance against the fluctuations, which might affect world markets under certain conditions." Inflation is now declining in Russia and the ruble's exchange rate is steady, which allows the buildup of reserves, she said.

The chief source of new reserves in the recent period has been foreign investment in the Russian economy. It grew by $3 billion in January, of which $1.1 billion was in the form of loans to various Russian companies. The larger part of the increase, $1.9 billion, came from the proceeds of the privatization of the Slavneft oil company.

Also of interest is the statement by First Deputy Chairman of the Central Bank Oleg Vyugin, who announced that the recent increase in reserves was due not to any Central Bank decisions, but to the growth of the economy. Vyugin remarked that this inspired optimism and that Russia would be able to make its large foreign debt payments without difficulty. The first of them will be made by the Ministry of Finance at the end of February, taking money out of the gold and foreign currency reserves. Vyugin forecasts that Russia's reserves will rise to $55 billion by the end of this year, based on world oil prices of $21-22/barrel.

German-Russian Talks on Energy Cooperation Will Be Regular

As the German Chancellor said after talks with the Russian President in Moscow Feb. 26, the two also discussed a Russian proposal to establish a German-Russian forum which would meet regularly and make discussions about mutual cooperation on energy issues more official than before.

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