US President Barack Obama said Thursday he was not about to impose new sanctions on Russia over the Ukraine crisis, but nevertheless signed a law giving him the authority to do so.

"The act gives the administration additional authorities that could be utilized, if circumstances warranted," the president said.

But, he added, "signing this legislation does not signal a change in the administration's sanctions policy, which we have carefully calibrated in accordance with developments on the ground and coordinated with our allies and partners."

Obama said his administration would continue to work closely with US allies to respond to the situation and "will continue to review and calibrate our sanctions to respond to Russia's actions."

http://www.nation.co.ke/news/world/Obama-says-no-new-sanctions-for-Russia-over-Ukraine/-/1068/2563022/-/qg4yj2/-/index.html

4. Provisions for privatization of Ukrainian infrastructure, electricity, oil, gas and renewables, with the help of the World Bank and USAID.

5. Fifty million dollars to assist in a corporate takeover of Ukraine’s oil and gas sectors.

6. Three hundred and fifty million dollars for military assistance to Ukraine, including anti-tank, anti-armor, optical, and guidance and control equipment, as well as drones.

7. Thirty million dollars for an intensive radio, television and Internet propaganda campaign throughout the countries of the former Soviet Union.

8. Twenty million dollars for “democratic organizing” in Ukraine.

9. Sixty million dollars, spent through groups like the National Endowment for Democracy, “to improve democratic governance, and transparency, accountability [and] rule of law” in Russia. What brilliant hyperbole to pass such a provision the same week the Senate’s CIA torture report was released.

10. An unverified declaration that Russia has violated the Intermediate-Range Nuclear Forces Treaty, is a nuclear “threat to the United States” and should be held “accountable.”

11. A path for the U.S. withdrawal from the INF Treaty, which went into force in 1988. The implications of this are immense. An entire series of arms agreements are at risk of unraveling. It may not be long before NATO pushes its newest client state, Ukraine, to abrogate the Non-Proliferation Treaty, which Ukraine signed when it gave up its nuclear weapons, and establish a renewed nuclear missile capability, 300 miles from Moscow.

12. A demand that Russia verifiably dismantle “any ground launched cruise missiles or ballistic missiles with a range of between 500 and 5,500 kilometers ...”—i.e., 300 and 3,300 miles.

Read the legislation, which Congress apparently didn’t.

As reported on GlobalSecurity.org, earlier that same day in Kiev, the Ukrainian parliament approved a security plan that will:

1. Declare that Ukraine should become a “military state.”

2. Reallocate more of its approved 2014 budget for military purposes.

3. Put all military operating units on alert.

4. Mobilize military and national guard units.

5. Increase military spending in Ukraine from 1 percent of GDP to 5 percent, increasing military spending by $3 billion over the next few years.

6. Join NATO and switch to NATO military standards.

http://www.truthdig.com/report/item/three_congressmen_just_reignited_the_cold_war_while_no_one_was_looking_2014

They are bankrupt, disorganized, divided, and corrupt as ever. Nobody in the West shows any sign of wanting to pony up the sort of funding or support that will be required. The unity of the EU is a sham. Their anxiety is entirely about their own comfort. Ukraine is being demolished by war. The Kiev government hasn't shown the slightest bit of competence. They have failed at everything they have attempted, so far. It will require a huge investment, unlikely to be repaid soon, and a long time, to rebuild Ukraine, even with peace and prosperity. I basically lost interest in their plans in Kiev when they started up the ATO, that bit of folly ...

For months, pundits and policymakers in North American and European capitals have put pressure on countries in Central and Eastern Europe to abandon their support for South Stream, a major gas pipeline planned to run from Russia to Europe. From a Russian point of view, South Stream was the final piece in a decade-long tug-of-war with unreliable transit state Ukraine, which repeatedly blackmailed both Russia and its European clientele. In order to reduce these transit risks, Gazprom invested billions to construct the Yamal pipeline through Belarus and Poland, and most recently built the Nord Stream pipeline through the Baltic Sea, straight to Germany.

South Stream would have brought a maximum capacity of 63 billion cubic meters (bcm) of natural gas across the Black Sea, into Bulgaria, and then the pipeline would have split, supplying the Balkans and Austria, with the other branch eventually supplying northern Italy. On December 1, amidst western sanctions and continued anti-Russian rhetoric in Europe, Russian President Vladimir Putin, while on a visit to Turkey, announced that South Stream would not be built. Notwithstanding some back peddling by European politicians, on December 9, Gazprom confirmed that the decision to abandon the project was final. Whether that is actually the case remains to be seen, and in the long-term, a Turkish route to supply southern Europe may well emerge.

Regardless of the final outcome, what does this decision tell us?

First, we have to establish that this move is unlikely to have direct repercussions in terms of available gas supplies in Europe. South Stream was only going to become operational in late 2015, and that was probably an optimistic date. Moreover, it has long, and rightly, been debated as to what extent Gazprom truly needed this pipeline to supply its European customers. The Russian argument has always been that by bypassing Ukraine, the company could honor its existing contracts in European markets. Similarly, Gazprom has invested in gas storage facilities in Italy, so that in the event of a supply disruption it could still honor its contractual agreements. In fact, Gazprom currently owns the largest share of gas storage facilities in the EU. However, there were also concerns that by constructing South Stream, Gazprom would lock-in some of its customers, particularly in Central and Eastern Europe, and that after completion these customers would be easy victims to market power abuse and arbitrary pricing.

http://www.naturalgaseurope.com/cancellation-south-stream-tim-boersma

WASHINGTON (AP) -- President Barack Obama has banned new investments in Crimea, slapping sanctions on the peninsula that Russia annexed from Ukraine earlier this year.

Obama signed an executive order Friday that imposes economic restrictions similar to sanctions imposed by the European Union on Thursday.

The order prohibits U.S. companies or individuals from exporting or importing any goods, services or technology to or from Crimea. Likewise, U.S. individuals or companies cannot buy real estate or businesses in Crimea or finance Crimean companies.

Obama on Thursday signed separate legislation that authorized new sanctions on Russia but said he does not plan to impose those penalties because they were not in tandem with European Union sanctions. The Crimea sanctions, however, will be imposed because they were coordinated with the European Union.

http://hosted.ap.org/dynamic/stories/U/US_OBAMA_CRIMEA_?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-19-16-46-35

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K&R

With Germany and the Treaty of Versailles.

Too much punitive action is bad policy, especially with a country that can actually fight back.

Polish aid convoy for refugees from the pro-Russian separatist enclave of Donbas reached its destination in the eastern Ukrainian city of Kharkiv on Friday.

The humanitarian convoy consists of 33 tracks carrying over 150 tonnes of aid, according to a Polish Radio report.

The value of donations exceeds PLN 1.5 million (EUR 351,000), Wojciech Wilk, the head of the Polish Centre for International Aid said. Speaking in Kharkiv, Wilk said the donations included mainly food, but also sleeping bags, winter clothes and articles of personal hygiene.

The numbers of refugees from the separatist-controlled areas of eastern Ukraine is estimated at 170,000 in the Kharkiv region alone.

http://www.thenews.pl/1/10/Artykul/191263,Polish-aid-convoy-reaches-eastern-Ukraine

BERLIN, Dec 19 (Reuters) - German Foreign Minister Frank-Walter Steinmeier expressed concern on Friday that EU sanctions against Moscow for its actions in Ukraine could destabilise Russia and warned against "turning the screw" any further.

The comments to German weekly Der Spiegel suggest a possible softening in the stance of Steinmeier, a member of the traditionally Russia-friendly Social Democrats (SPD) who has stuck closely to Chancellor Angela Merkel's tough line with Moscow until now.

Steinmeier said the dramatic fall in the rouble currency and falling energy prices had created an economic and financial crisis in Russia, which would affect the political landscape there.

"It cannot be in our interests that this runs out of control," he said. "We need to keep this in mind in our sanctions policy."

http://www.trust.org/item/20141219160947-nl1ip/

KIEV, Ukraine, Dec. 19 (UPI) -- Five Ukrainian soldiers were killed this week after a relatively quiet period of ceasefire, bring pessimism to plans for another round of peace talks with pro-Russian separatists.

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Plans to begin discussions to revive the peace discussions have stalled, with Ukrainian, separatist, Russian and Organization for Security and Cooperation in Europe (OSCE) representatives unable to arrange a meeting, scheduled tentatively for Sunday, in Minsk, Belarus. The opposing sides are eager to exchange prisoners and reduce the collateral consequences of the combat.

The OSCE announced Thursday it would extend its mandate to monitor checkpoints at Donetsk and Gukovo for three more months, observing transit over the Ukraine-Russia border.

http://www.upi.com/Top_News/World-News/2014/12/19/Five-killed-in-Ukraine-fighting-as-peace-talks-falter/8851419005932/?spt=sec&or=tn

Ukrainian defence industrial group Ukroboronprom has reported that substituting imported Russian products following the collapse of relations between Kiev and Moscow will involve finding alternative sources for 30,000 products.

The company said in a statement on 18 December that it was "urgently" seeking to execute a programme of import substitution of goods "from small and simple parts to whole complex systems".

Specific details were not provided, and Ukraine did not disclose the cost of the programme.

http://www.janes.com/article/47175/ukraine-outlines-scale-of-import-substitution-programme-following-collapse-of-relations-with-russia

In the first two weeks of December, Russian President Vladimir Putin made two quick trips to Turkey (December 1) and India (December 10 to 11) to sign a number of trade deals. As Clifford Gaddy and I underscore in the new expanded version of our 2013 book, Mr. Putin: Operative in the Kremlin (Brookings, February 2015), this is all part of a carefully crafted foreign policy agenda. Putin’s agenda also happens to mesh neatly with those of his counterparts in Turkey and India.

The agenda stems from Putin’s long-standing concerns about the Russian economy that pre-date Western sanctions on Moscow after Russia’s March 2014 annexation of Crimea. When Putin announced he would return to the Russian presidency in September 2011, Russia’s economy was already at risk. In the summer of 2011, his economic experts were full of bad news about spillover from the ongoing eurozone crisis. Putin concluded he would need to shift his economic policy to put less emphasis on growth and more on survival. Once he was back in the Kremlin, he moved to ensure that Russia (and his regime) could withstand economic shocks.

Putin encouraged the development of domestically-produced goods to replace imports, promoted large state-financed infrastructure and defense projects, and pushed for the creation of the Eurasian Economic Union to create a protectionist regional buffer around the Russian economy. He also set out to make sure he had plenty of economic alternatives outside Europe, in case his European trading partners continued on their downward spiral––or just in case Moscow’s relations with any of them soured. He perhaps did not anticipate, back in 2011-2012, that his push for the Eurasian Union would lead to a clash with the EU, a proxy war in Ukraine’s eastern regions, and an open rift with Russia’s most important European partner, Germany, but Vladimir Putin always plans for contingencies and keeps his options open.

http://www.brookings.edu/research/opinions/2014/12/12-putin-turkey-india-gambit-hill

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The outlook

Russia had been expecting a resounding defence of the South Stream project and tensions within the EU. However, the countries of the region responded to the decision to abandon the investment by presenting alternative projects aimed at ensuring the security of gas supplies. Furthermore, they have begun to challenge the benefits of the Russian project which has recently dominated the discussion on energy security in this part of Europe. There has also been an additional economic impulse to consider alternative projects for Ukraine demand for gas supplies from the western direction. Withdrawing from the South Stream project provides an opportunity to develop a new strategy to build the infrastructure which will take into account the EU’s priorities to integrate gas markets and diversify sources of supplies. Nevertheless, the countries from the region are above all counting on larger (in both financial and technical terms) EU involvement in ensuring the security of gas supplies and they have high hopes for the proposal submitted by the President of the European Commission Jean-Claude Juncker regarding the establishment of the European Fund for Strategic Investments.

The European Commission has already taken its first steps towards this. On 9 December regional infrastructure priorities were discussed with representatives of the EU countries involved in the South Stream project and a high-level working group has been set up in order to facilitate putting these priorities into practice. On the other hand, the European Commission is not ruling out the implementation of the project as long as it is implemented in line with the EU acquis. Germany holds a similar position on this, which could be seen in the speech made by the German Chancellor during her visit to Bulgaria on 15 December. In the present situation it should be expected that if Russia presents new gas co-operation projects, it will be indisputably required to adjust them to EU legislation and the proposal put forward by the European Commission will be stronger.

Support for the implementation of infrastructure projects could become the foundation for a more durable involvement of the countries in South-Eastern Europe in EU energy policy and could thus facilitate the establishment of an Energy Union. However, urgent measures are needed, including the implementation of selected interconnectors, LNG terminals, the North-South Corridor and the use of west Ukraine’s infrastructure (gas pipelines and gas storage facilities).

http://www.naturalgaseurope.com/central-south-eastern-europe-cancellation-south-stream

Ukraine’s president, speaking a day after the nation’s junk credit rating was cut further, said next year’s budget mustn’t cut corners on military spending and should account for the possibility of an invasion.

Addressing Ukraine’s National Security Council, Petro Poroshenko urged expenditure on the army of 5 percent of gross domestic product in 2015. The government should target NATO guidelines on military spending and seek to meet the alliance’s entry criteria, he said in Kiev, the capital.

“The war made us stronger, but has crushed the economy,” Poroshenko said. “There’s one article of spending that we won’t save on and that’s security. Our financial plan should cover force majeure. Our enemy can start a full-scale offensive any minute.”

Ukraine is finalizing next year’s fiscal plan amid a new cease-fire in the conflict that’s ravaged its industrial heartland near Russia’s border. As its economy shrinks and reserves languish at a more than 10-year low, it’s also racing to secure more international aid to top up a $17 billion rescue. Standard & Poor’s said yesterday that a default may become inevitable, downgrading Ukraine’s credit score one step to CCC-.

http://www.bloomberg.com/news/2014-12-20/poroshenko-says-ukraine-can-t-scrimp-on-army-as-s-p-cuts-rating.html

- Poroshenko broke it and we bought it anyhow.......

Here's my favorite Ukrainian. Something they got right:

Valentina Lisitsa, playing Beethoven's Sonata No. 8 in C minor Op. 13 Pathétique (Live)

As in, they both disappear into the abyss.