KIEV — Standard and Poor's cut its outlook on Ukraine's long-term credit rating to negative on Thursday, citing Kiev's lack of progress in talks with the International Monetary Fund and sole gas supplier Russia.
The move followed an announcement by Ukraine's deputy economy minister earlier on Thursday that the cash-strapped country wanted to delay repayment of $3 billion of debt it owes the IMF this year by a decade.
"Talks are being held now on restructuring the debt falling due this year, [which amounts to] $3 billion," First Deputy Economy Minister Vadim Kopylov told reporters Thursday. "We need to discuss delaying repayment of these funds by 10 years."
"Why not, if we have Greece [with a smaller population to Ukraine] and such huge loans [being restructured], while here we have 46 million people and a restructuring of $3 billion?" he said.
The IMF, which has never had a borrower default on its debt, said it had not received a request for restructuring.
S&P currently rates the former Soviet republic's long- and short-term debt B+/B.
"The negative outlook reflects our view of increased risks regarding Ukraine's significant fiscal and external refinancing needs," S&P said in a statement.
Kiev's efforts to restructure its debt, a break with policy, jolted the debt market. Ukrainian five-year credit default swaps were 18 basis points higher on the day at 768 basis points, according to Markit, though S&P's announcement failed to lift them higher still. Ukrainian debt spreads widened by 37 basis points on the day to 770 basis points over U.S. Treasuries on JPMorgan's EMBI+ Index.
"In our view, increased risk aversion toward Ukraine's funding needs has been fueled by the lack of clarity over the ultimate direction of government policy in relation to ongoing negotiations with the IMF and Russian gas company Gazprom," S&P said.
Ukraine's government has tried without success for more than a year to negotiate a lower price on Russian gas that Ukraine depends on heavily for its energy and heating needs.
Hoping to get a substantial discount from Russia, the cabinet has also refused to follow the IMF's advice and raise gas and heating prices for households, prompting the fund to suspend its $15 billion lending program in early 2011.
As a condition for reviewing the gas price for Ukraine, Russia insists on taking a stake in Ukraine's pipeline network, which transports the bulk of Russian gas bound for Europe.
But Ukraine sees the asset as a cornerstone of its economic sovereignty and says it can be managed only by a consortium that should also include large European energy firms.
"It seems unlikely to us that a deal to lower the price of gas imports will be made without Ukraine giving up control of key energy infrastructure assets," S&P said.
Analysts say the issue of raising domestic gas prices, an IMF condition, is unlikely to be resolved until the parliamentary elections in October, as the move is certain to hurt the government's already sagging popularity.
пятница, 16 марта 2012 г.
Putin Asks for May Holiday Extension
Prime Minister Vladimir Putin on Thursday announced a change in the May national holiday schedule that could shatter plans to hold a large opposition rally around the day of his inauguration as president.
He ordered an extended break for the Victory Day holiday, a development that gives malcontents a tempting option to spend that time out of town, catching some fresh air.
A large turnout would encourage anti-Putin sentiment and increase pressure for an earnest crackdown on corruption and greater democracy.
Instead of one day off on Wednesday, May 9, people will have four days that week to celebrate and tend to their dachas.
Time off will start May 6, which as a Sunday would have been off anyway.
But the following two days before Victory Day will provide unexpected downtime for businesses, including the day of Putin's inauguration as president on May 7.
As compensation, people will have to work two Saturdays, May 5 and May 12.
Putin told the Presidium, a subset of the Cabinet, that he moved around the week and weekend days based on requests from citizens.
At the Presidium session, Putin also heard some heart-warming economic numbers.
Russian airlines flew 12.6 percent more passengers last year, or 64 million people, Transportation Minister Igor Levitin said.
Deputy Economic Development Minister Valery Savelyev reported that 54 federal programs — which account for about 10 percent of federal spending and cover investment in areas ranging from satellite navigation to the Bolshoi Theater — had met their targets last year.
"It's gratifying to realize that the negative developments in the Russian economy that were linked to the [global] financial crisis are little by little a thing of the past," he said at a news conference after the session.
Private co-financing of the projects, which the federal programs seek to attract, rose 6 percent above the plan last year, he said. Business participation in the same programs in 2010 was down 20 percent.
As an example of successes, he said the Glonass satellite navigation system went into operation last year.
Other achievements of last year included construction of 350 kilometers of federal roads and 1,000 kilometers of regional and municipal roads, Savelyev said.
Access to running water in rural areas increased to more than 57 percent.
Russia destroyed 60 percent of its chemical weapons stockpile by the end of last year as part of its obligations under international agreements.
Putin himself spewed some feel-good numbers Thursday.
Average wages rose 9 percent last year, he said at a separate meeting of a commission that brings together officials, businesses and unions. That number is higher than what the Economic Development Ministry forecast for this year.
Putin also said the jobless rate dipped below the pre-crisis level, with 4.9 million people out of work at the start of this year.
He ordered an extended break for the Victory Day holiday, a development that gives malcontents a tempting option to spend that time out of town, catching some fresh air.
A large turnout would encourage anti-Putin sentiment and increase pressure for an earnest crackdown on corruption and greater democracy.
Instead of one day off on Wednesday, May 9, people will have four days that week to celebrate and tend to their dachas.
Time off will start May 6, which as a Sunday would have been off anyway.
But the following two days before Victory Day will provide unexpected downtime for businesses, including the day of Putin's inauguration as president on May 7.
As compensation, people will have to work two Saturdays, May 5 and May 12.
Putin told the Presidium, a subset of the Cabinet, that he moved around the week and weekend days based on requests from citizens.
At the Presidium session, Putin also heard some heart-warming economic numbers.
Russian airlines flew 12.6 percent more passengers last year, or 64 million people, Transportation Minister Igor Levitin said.
Deputy Economic Development Minister Valery Savelyev reported that 54 federal programs — which account for about 10 percent of federal spending and cover investment in areas ranging from satellite navigation to the Bolshoi Theater — had met their targets last year.
"It's gratifying to realize that the negative developments in the Russian economy that were linked to the [global] financial crisis are little by little a thing of the past," he said at a news conference after the session.
Private co-financing of the projects, which the federal programs seek to attract, rose 6 percent above the plan last year, he said. Business participation in the same programs in 2010 was down 20 percent.
As an example of successes, he said the Glonass satellite navigation system went into operation last year.
Other achievements of last year included construction of 350 kilometers of federal roads and 1,000 kilometers of regional and municipal roads, Savelyev said.
Access to running water in rural areas increased to more than 57 percent.
Russia destroyed 60 percent of its chemical weapons stockpile by the end of last year as part of its obligations under international agreements.
Putin himself spewed some feel-good numbers Thursday.
Average wages rose 9 percent last year, he said at a separate meeting of a commission that brings together officials, businesses and unions. That number is higher than what the Economic Development Ministry forecast for this year.
Putin also said the jobless rate dipped below the pre-crisis level, with 4.9 million people out of work at the start of this year.
Senator Sees No 'Slam Dunk' for Trade
WASHINGTON — A senior Republican U.S. senator on Thursday warned the White House that passing legislation to bolster trade relations with Russia won’t be a “slam dunk” because of concerns over that country’s record on human rights and foreign policy actions.
“It’s simply unreasonable to believe that PNTR [permanent normal trade relations] can be extended to Russia without a more thorough examination of the issues,” Senator Jon Kyl, the No. 2 Republican in the Senate, said at a hearing.
With Russia on the verge of joining the World Trade Organization, the United States is under pressure to repeal a largely symbolic Cold War-era provision known as the Jackson-Vanik amendment that is at odds with WTO rules.
The measure tied U.S. trade relations with the former Soviet Union to the rights of Jews and other religious minorities to emigrate freely. The Soviet Union collapsed two decades ago, and Russia has been judged to be in compliance with the Jackson-Vanik provision since the 1990s.
At a Finance Committee hearing to examine the issue, Kyl said he had very strong reservations.
“I think I understand the message that this hearing is intended to convey: American businesses want access to Russia’s market. We should repeal Jackson-Vanik, grant Russia permanent trade relations without delay and without conditions. It’s a slam dunk,” Kyl said, reiterating what he understood to be the process proposed by those who want to end trade restrictions on Russia. “But,” he added, “it isn’t a slam dunk.”
“While immigration is no longer an issue, Russia’s blatant disregard for human rights and the rule of law is every bit as relevant as it was decades ago,” Kyl said.
The Arizona Republican also raised concern with Russia’s support for Syrian President Bashar Assad’s bloody crackdown on anti-government protests.
“In recent months, Moscow has not only blocked UN Security Council action on Syria, but has continued to sell arms to Assad’s regime which is responsible for the slaughter of innocent citizens. This is not a government to be trusted to uphold its international commitments or give a fair shake to American businesses,” Kyl said.
In a letter published in The New York Times on Thursday, a former Soviet political prisoner, a former assistant to Nobel Prize winner Andrei Sakharov and a former director of the Andrei Sakharov Program on Human Rights at Harvard lambasted the Obama administration for delinking human rights from trade relations with Russia.
Vladimir Bukovsky, Alex Goldfarb and Tatyana Yankelevich wrote that “the revocation of the Jackson-Vanik amendment, which for almost 40 years has linked the Kremlin’s human rights performance to U.S. trade benefits, would add insult to the injury of President Obama’s congratulating Mr. Putin for his “victory” in last week’s “election.”
“American legislative pressure is as important today as at the time of Soviet repression, the letter said. “Appeasement of Mr. Putin would be a betrayal of this legacy [of Sakharov and Jackson].”
“It’s simply unreasonable to believe that PNTR [permanent normal trade relations] can be extended to Russia without a more thorough examination of the issues,” Senator Jon Kyl, the No. 2 Republican in the Senate, said at a hearing.
With Russia on the verge of joining the World Trade Organization, the United States is under pressure to repeal a largely symbolic Cold War-era provision known as the Jackson-Vanik amendment that is at odds with WTO rules.
The measure tied U.S. trade relations with the former Soviet Union to the rights of Jews and other religious minorities to emigrate freely. The Soviet Union collapsed two decades ago, and Russia has been judged to be in compliance with the Jackson-Vanik provision since the 1990s.
At a Finance Committee hearing to examine the issue, Kyl said he had very strong reservations.
“I think I understand the message that this hearing is intended to convey: American businesses want access to Russia’s market. We should repeal Jackson-Vanik, grant Russia permanent trade relations without delay and without conditions. It’s a slam dunk,” Kyl said, reiterating what he understood to be the process proposed by those who want to end trade restrictions on Russia. “But,” he added, “it isn’t a slam dunk.”
“While immigration is no longer an issue, Russia’s blatant disregard for human rights and the rule of law is every bit as relevant as it was decades ago,” Kyl said.
The Arizona Republican also raised concern with Russia’s support for Syrian President Bashar Assad’s bloody crackdown on anti-government protests.
“In recent months, Moscow has not only blocked UN Security Council action on Syria, but has continued to sell arms to Assad’s regime which is responsible for the slaughter of innocent citizens. This is not a government to be trusted to uphold its international commitments or give a fair shake to American businesses,” Kyl said.
In a letter published in The New York Times on Thursday, a former Soviet political prisoner, a former assistant to Nobel Prize winner Andrei Sakharov and a former director of the Andrei Sakharov Program on Human Rights at Harvard lambasted the Obama administration for delinking human rights from trade relations with Russia.
Vladimir Bukovsky, Alex Goldfarb and Tatyana Yankelevich wrote that “the revocation of the Jackson-Vanik amendment, which for almost 40 years has linked the Kremlin’s human rights performance to U.S. trade benefits, would add insult to the injury of President Obama’s congratulating Mr. Putin for his “victory” in last week’s “election.”
“American legislative pressure is as important today as at the time of Soviet repression, the letter said. “Appeasement of Mr. Putin would be a betrayal of this legacy [of Sakharov and Jackson].”
Medvedev Acts on Arrest of Activist
President Dmitry Medvedev on Thursday ordered prosecutors to examine the case of Suren Gazaryan, the environmentalist arrested in the Krasnodar region while trying to take photographs of a dacha allegedly built in a protected area.
Medvedev apparently gave the order after speaking to representatives of Russian environmental groups during a session of the presidential council on human rights dedicated to environmental affairs.
"The council spoke about Gazaryan more than once, and the president said he is ordering prosecutors to examine the case in the utmost detail," council chairman Mikhail Fedotov told reporters after the meeting in Novokuibyshevsk in the Samara region, Interfax reported.
Representatives of green groups including Greenpeace, World Wildlife Fund Russia, or WWF, and Baikal Environmental Wave had drafted a report detailing the problems, including the "de-environmentalization" of Russian legislation over the past 10 years, said Katya Khmylova of WWF Russia, who contributed to the document.
"This report isn't about the 10 most polluted spots in Moscow but about whether citizens are able to defend their environmental rights. This part of the report will be very critical," Greenpeace Russia's Sergei Tsyplenkov told Interfax ahead of the meeting.
Lobbyists went into the meeting promising to raise the case of Gazaryan, an activist from NGO North Caucasus Environmental Watch, who was jailed for 10 days Wednesday for disobeying police orders.
Gazaryan and his lawyer Viktor Dutlov were detained on Tuesday when they tried to take photographs of the fence of a luxurious property rumored to belong to regional governor Alexander Tkachyov.
Gazaryan is accused of destroying part of the fence during a protest in November last year, and faces five years in jail if found guilty. The photographs were reportedly to be used as evidence in his defense.
Medvedev apparently gave the order after speaking to representatives of Russian environmental groups during a session of the presidential council on human rights dedicated to environmental affairs.
"The council spoke about Gazaryan more than once, and the president said he is ordering prosecutors to examine the case in the utmost detail," council chairman Mikhail Fedotov told reporters after the meeting in Novokuibyshevsk in the Samara region, Interfax reported.
Representatives of green groups including Greenpeace, World Wildlife Fund Russia, or WWF, and Baikal Environmental Wave had drafted a report detailing the problems, including the "de-environmentalization" of Russian legislation over the past 10 years, said Katya Khmylova of WWF Russia, who contributed to the document.
"This report isn't about the 10 most polluted spots in Moscow but about whether citizens are able to defend their environmental rights. This part of the report will be very critical," Greenpeace Russia's Sergei Tsyplenkov told Interfax ahead of the meeting.
Lobbyists went into the meeting promising to raise the case of Gazaryan, an activist from NGO North Caucasus Environmental Watch, who was jailed for 10 days Wednesday for disobeying police orders.
Gazaryan and his lawyer Viktor Dutlov were detained on Tuesday when they tried to take photographs of the fence of a luxurious property rumored to belong to regional governor Alexander Tkachyov.
Gazaryan is accused of destroying part of the fence during a protest in November last year, and faces five years in jail if found guilty. The photographs were reportedly to be used as evidence in his defense.
S&P Sees Conflicted Approach to Banking
Credit-rating agency Standard and Poor's said Thursday that the government's approach to banks under its control was "conflicted" as state-owned Sberbank appeared likely to go ahead with a flagship $5.5 billion privatization in April.
The share price of the country's biggest lender has recently broken through the 100 ruble threshold set by bank president German Gref and Central Bank Deputy Chairman Alexei Ulyukayev as a precondition for the sale.
Standard and Poor's, or S&P, said there was a contradiction between the privatization plans for Russia's state-owned financial institutions and pressure for growth. Later this year, the government is likely to sell a stake in VTB, the country's second-largest bank. VTB has openly said it needs to raise capital.
Citing unnamed sources, business daily Vedomosti reported Thursday that Sberbank's privatization was scheduled for April. The Central Bank originally planned to offer a 7.6 percent stake in Sberbank to investors in the fall of 2011, but it was delayed after markets plunged.
The roadshow for the sale will begin on April 26, Reuters reported. Sberbank declined to comment on the time frame Thursday.
"There is a conflict between wanting to privatize and wanting things to grow and needing capital," Scott Bugie, managing director of financial ratings at S&P, told a news conference Thursday.
"The state is conflicted because it says it wants to privatize banks, but it is also pretty aggressive in pushing banks to expand," he said. "Sometimes it capitalizes and sometimes it doesn't."
Government-owned banks controlled 53.3 percent of the market in 2011, according to statistics from S&P. In 2007, the figure was 43.4 percent. The top three banks in the country — Sberbank, VTB and Gazprombank — controlled 41.6 percent of the market in 2011.
The dominance of state-owned banks and their expansion in recent years has squeezed privately owned institutions, including foreign banks. "There are more risks for the private-sector banks," Bugie said.
In a report released Wednesday, S&P outlined traditional reasons for their current assessment of Russia's banking sector, which has a lower rating than that of other emerging markets including India and China.
The economy's dependency on commodity prices, the poor credit standing of nonexport industries, regulatory failings and shallow domestic capital markets were weaknesses for the banking industry, the report said. Reduced economic balances, a current account surplus and funding expansion with retail deposits were among the strengths.
"The privatization of 7.6 percent of Sberbank will not have a significant effect on the bank's credit profile," Bugie said. The state will retain 50 percent plus one share of the lender after the sale.
Bugie said capitalization and any funds raised in privatization were more of an issue for Russia's second-biggest lender
"The capital is more in play for VTB than for Sberbank," Bugie said.
The share price of the country's biggest lender has recently broken through the 100 ruble threshold set by bank president German Gref and Central Bank Deputy Chairman Alexei Ulyukayev as a precondition for the sale.
Standard and Poor's, or S&P, said there was a contradiction between the privatization plans for Russia's state-owned financial institutions and pressure for growth. Later this year, the government is likely to sell a stake in VTB, the country's second-largest bank. VTB has openly said it needs to raise capital.
Citing unnamed sources, business daily Vedomosti reported Thursday that Sberbank's privatization was scheduled for April. The Central Bank originally planned to offer a 7.6 percent stake in Sberbank to investors in the fall of 2011, but it was delayed after markets plunged.
The roadshow for the sale will begin on April 26, Reuters reported. Sberbank declined to comment on the time frame Thursday.
"There is a conflict between wanting to privatize and wanting things to grow and needing capital," Scott Bugie, managing director of financial ratings at S&P, told a news conference Thursday.
"The state is conflicted because it says it wants to privatize banks, but it is also pretty aggressive in pushing banks to expand," he said. "Sometimes it capitalizes and sometimes it doesn't."
Government-owned banks controlled 53.3 percent of the market in 2011, according to statistics from S&P. In 2007, the figure was 43.4 percent. The top three banks in the country — Sberbank, VTB and Gazprombank — controlled 41.6 percent of the market in 2011.
The dominance of state-owned banks and their expansion in recent years has squeezed privately owned institutions, including foreign banks. "There are more risks for the private-sector banks," Bugie said.
In a report released Wednesday, S&P outlined traditional reasons for their current assessment of Russia's banking sector, which has a lower rating than that of other emerging markets including India and China.
The economy's dependency on commodity prices, the poor credit standing of nonexport industries, regulatory failings and shallow domestic capital markets were weaknesses for the banking industry, the report said. Reduced economic balances, a current account surplus and funding expansion with retail deposits were among the strengths.
"The privatization of 7.6 percent of Sberbank will not have a significant effect on the bank's credit profile," Bugie said. The state will retain 50 percent plus one share of the lender after the sale.
Bugie said capitalization and any funds raised in privatization were more of an issue for Russia's second-biggest lender
"The capital is more in play for VTB than for Sberbank," Bugie said.
Newsmaker: Vekselberg's Career Is Filled With Energy
As a young engineer in the late 1980s, Viktor Vekselberg showed initiative and was well-liked by co-workers at the Moscow-based company where he helped develop equipment for oil exploration.
But there was no sign that he would one day become a multibillionaire.
"He was full of energy and the life of the party," said one of Vekselberg's former co-workers at the company, Konnas. "He had a creative approach and always showed initiative.
"No one expected him to choose a different career path," said the former co-worker, who still works for Konnas and asked not to be identified because he was not authorized to speak with the media.
Those personal qualities, however, allowed Vekselberg, 54, to become the head of one of Konnas' departments and subsequently buy the whole company.
The eyes of the business community turned to Vekselberg this week after he resigned as chairman of United Company RusAl, accusing its management of drawing the world's largest aluminum producer into crisis and bringing a conflict between him and majority owner Oleg Deripaska into the open.
Vekselberg, who holds 15.8 percent of RusAl, had chaired the aluminum giant since it was established in 2007 from the merger of his SUAL, Deripaska's Russian Aluminum and Swiss-based Glencore International. SUAL — founded by Vekselberg and his university classmate Len Blavatnik, who bought aluminum assets across the country in the 1990s — was one of the world's biggest aluminum makers at the time of the merger.
Vekselberg, ranked 64th in Forbes magazine's list of the world's wealthiest businessmen with an estimated fortune of $12.4 billion, is said to have made his first million selling scrap copper from worn-out cables abroad.
A graduate of Moscow State Railway University, he founded Renova in 1990 and expanded it into a diversified holding with assets in oil and gas, metals and mining, energy, construction and telecommunications. Vekselberg is Renova's chairman.
In 2010, President Dmitry Medvedev appointed him to oversee the creation of the Skolkovo innovation center, the Russian answer to California's Silicon Valley.
Vekselberg is independent in his decision making but "absorbs the experience of others," said Alexander Galitsky, managing partner of a venture capital fund, Almaz Capital Partners, and a board member of the Skolkovo Foundation chaired by Vekselberg.
"He's very responsible, and if he starts doing something, he sees it through to the end," Galitsky said.
Unlike many tycoons, Vekselberg is very open in communicating with various people, he added. "There were many people at his last birthday party, but he managed to spend some time with everyone," he said. "His family is also very nice."
Vekselberg has an adult daughter and a son. His wife, Marina Dobrynina, chairs the Dobry Vek charity for people with mental disorders.
Like many oligarchs, Ukrainian-born Vekselberg has an expensive hobby: He is the world's largest private collector of Faberge eggs, which he has repatriated to Russia.
But there was no sign that he would one day become a multibillionaire.
"He was full of energy and the life of the party," said one of Vekselberg's former co-workers at the company, Konnas. "He had a creative approach and always showed initiative.
"No one expected him to choose a different career path," said the former co-worker, who still works for Konnas and asked not to be identified because he was not authorized to speak with the media.
Those personal qualities, however, allowed Vekselberg, 54, to become the head of one of Konnas' departments and subsequently buy the whole company.
The eyes of the business community turned to Vekselberg this week after he resigned as chairman of United Company RusAl, accusing its management of drawing the world's largest aluminum producer into crisis and bringing a conflict between him and majority owner Oleg Deripaska into the open.
Vekselberg, who holds 15.8 percent of RusAl, had chaired the aluminum giant since it was established in 2007 from the merger of his SUAL, Deripaska's Russian Aluminum and Swiss-based Glencore International. SUAL — founded by Vekselberg and his university classmate Len Blavatnik, who bought aluminum assets across the country in the 1990s — was one of the world's biggest aluminum makers at the time of the merger.
Vekselberg, ranked 64th in Forbes magazine's list of the world's wealthiest businessmen with an estimated fortune of $12.4 billion, is said to have made his first million selling scrap copper from worn-out cables abroad.
A graduate of Moscow State Railway University, he founded Renova in 1990 and expanded it into a diversified holding with assets in oil and gas, metals and mining, energy, construction and telecommunications. Vekselberg is Renova's chairman.
In 2010, President Dmitry Medvedev appointed him to oversee the creation of the Skolkovo innovation center, the Russian answer to California's Silicon Valley.
Vekselberg is independent in his decision making but "absorbs the experience of others," said Alexander Galitsky, managing partner of a venture capital fund, Almaz Capital Partners, and a board member of the Skolkovo Foundation chaired by Vekselberg.
"He's very responsible, and if he starts doing something, he sees it through to the end," Galitsky said.
Unlike many tycoons, Vekselberg is very open in communicating with various people, he added. "There were many people at his last birthday party, but he managed to spend some time with everyone," he said. "His family is also very nice."
Vekselberg has an adult daughter and a son. His wife, Marina Dobrynina, chairs the Dobry Vek charity for people with mental disorders.
Like many oligarchs, Ukrainian-born Vekselberg has an expensive hobby: He is the world's largest private collector of Faberge eggs, which he has repatriated to Russia.
среда, 14 марта 2012 г.
NATO Lessons From Libya Mission One Year On
NATO's intervention in Libya one year ago helped to avert a humanitarian catastrophe and created the conditions for Libya's citizens to end Moammar Gadhafi's dictatorship.
The military operation highlighted important improvements in European leadership since the Bosnian debacle in the 1990s, but the conditions underlying the Libya mission's success cannot be counted upon to exist again in the future. Indeed, NATO's accomplishments in the Libya operation risk obscuring persistent weaknesses in Europe's military capabilities.
Europe's unity of purpose in Libya contrasts sharply with its divisions and indecisiveness as Yugoslavia disintegrated in the early 1990s. The United States had to coax many Western European countries into helping to stop the slaughter of innocents in Bosnia. Although the trans-Atlantic alliance was more unified and responsive during the subsequent Kosovo crisis, the United States was still firmly in the driver's seat. In Libya, the roles were reversed: Western Europeans had to push the United States to take action.
The manner in which U.S. President Barack Obama brought the United States into the effort to protect Libyan civilians mollified European concerns about American hubris that had grown out of the Iraq war.
It also made possible a broad coalition of countries, as well as the first-ever call for intervention from the Arab League. Obama's decision that the United States should play a supporting role with other NATO partners — particularly France and Britain — taking the lead, reinforced the global perception of the mission's legitimacy.
Today, the growing debate about a Syrian intervention raises legitimate questions concerning whether Libya was a unique situation. Libya's proximity to Europe both lowered barriers to participation and stimulated Europe's sense of responsibility, while Gadhafi was a reviled figure with few friends.
Moreover, many European countries have direct interests in Libya and thus had a clear stake in the outcome. Libyans' opposition to Gadhafi was relatively well organized, was recognized by the international community and had explicitly called for outside intervention.
While the conditions in Libya were certainly optimal, the situation in Syria is better described as uniquely complicated for any intervention. For starters, Syria's location in the eastern Mediterranean is not as advantageous as is Libya's position in North Africa.
In addition, Syria's borders with Turkey, Iraq, Lebanon and Israel present unique challenges to regional security, given the potential not only for international conflict, but also for destabilizing cross-border flows of refugees. Syria also has allies — above all, Russia with its veto-wielding seat on the United Nations Security Council.
The significant obstacles to intervention and the genuine risk of making an already terrible situation worse makes direct military intervention in Syria a remote possibility at this time. That is tragic in many ways, but it does not mean that the positive post-Libya momentum toward the protection of civilians is entirely lost. Even though it ended in failure, the Arab League agreement with the regime of Syrian President Bashar Assad to allow observers into Syria to facilitate an end to the conflict was brokered, as Oman's foreign minister said, "to save the Arab world from Western intervention."
The Arab League's mission did not stop the killing, but it represented an escalation of pressure to end the slaughter — and it was based on leverage gained in Libya.
For NATO, that leverage depends upon its members' ability to marshal the will and resources to intervene if necessary. In Libya, Europe finally had the will to lead, but it largely lacked the means and thus relied heavily on the United States.
In addition to its air-strike deficiencies, Europe demonstrated serious shortfalls across all of the areas required to sustain any air campaign. As General Mark Welsh, commander of U.S. Air Forces in Europe, told top officers and industry executives at a gathering last summer, "We need more intelligence, surveillance and reconnaissance capability, and we need it now."
Unfortunately, the ongoing economic crisis is exerting downward pressure on defense budgets across NATO, exposing the need for greater cooperation among the alliance's European members.
The harm caused by budget cuts is likely to multiply if all European governments slash spending in the same areas. German Air Force Commander Lieutenant General Aarne Kreuzinger-Janik warns that this would create "even bigger gaps and shortfalls." European governments must now work to ensure that they invest their limited resources in the right areas.
The trans-Atlantic alliance has reached a fork in the road. Down the path less traveled lies greater coordination on both strategic objectives and development of military capacity — particularly within Europe, where governments must better allocate resources among themselves to overcome the key deficiencies revealed by the Libya mission. The more familiar road leads to wasteful overlap and lower investment in key technologies, leaving wider gaps than ever in Europe's defense capability.
If Europe is to build on its success in Libya, it needs to take the road less traveled. It will make all the difference.
John D. Podesta, chief of staff to President Bill Clinton from 1998 to 2001, is chairman of the Center for American Progress in Washington. Ken Gude is chief of staff and vice president of the Center for American Progress. © Project Syndicate
The military operation highlighted important improvements in European leadership since the Bosnian debacle in the 1990s, but the conditions underlying the Libya mission's success cannot be counted upon to exist again in the future. Indeed, NATO's accomplishments in the Libya operation risk obscuring persistent weaknesses in Europe's military capabilities.
Europe's unity of purpose in Libya contrasts sharply with its divisions and indecisiveness as Yugoslavia disintegrated in the early 1990s. The United States had to coax many Western European countries into helping to stop the slaughter of innocents in Bosnia. Although the trans-Atlantic alliance was more unified and responsive during the subsequent Kosovo crisis, the United States was still firmly in the driver's seat. In Libya, the roles were reversed: Western Europeans had to push the United States to take action.
The manner in which U.S. President Barack Obama brought the United States into the effort to protect Libyan civilians mollified European concerns about American hubris that had grown out of the Iraq war.
It also made possible a broad coalition of countries, as well as the first-ever call for intervention from the Arab League. Obama's decision that the United States should play a supporting role with other NATO partners — particularly France and Britain — taking the lead, reinforced the global perception of the mission's legitimacy.
Today, the growing debate about a Syrian intervention raises legitimate questions concerning whether Libya was a unique situation. Libya's proximity to Europe both lowered barriers to participation and stimulated Europe's sense of responsibility, while Gadhafi was a reviled figure with few friends.
Moreover, many European countries have direct interests in Libya and thus had a clear stake in the outcome. Libyans' opposition to Gadhafi was relatively well organized, was recognized by the international community and had explicitly called for outside intervention.
While the conditions in Libya were certainly optimal, the situation in Syria is better described as uniquely complicated for any intervention. For starters, Syria's location in the eastern Mediterranean is not as advantageous as is Libya's position in North Africa.
In addition, Syria's borders with Turkey, Iraq, Lebanon and Israel present unique challenges to regional security, given the potential not only for international conflict, but also for destabilizing cross-border flows of refugees. Syria also has allies — above all, Russia with its veto-wielding seat on the United Nations Security Council.
The significant obstacles to intervention and the genuine risk of making an already terrible situation worse makes direct military intervention in Syria a remote possibility at this time. That is tragic in many ways, but it does not mean that the positive post-Libya momentum toward the protection of civilians is entirely lost. Even though it ended in failure, the Arab League agreement with the regime of Syrian President Bashar Assad to allow observers into Syria to facilitate an end to the conflict was brokered, as Oman's foreign minister said, "to save the Arab world from Western intervention."
The Arab League's mission did not stop the killing, but it represented an escalation of pressure to end the slaughter — and it was based on leverage gained in Libya.
For NATO, that leverage depends upon its members' ability to marshal the will and resources to intervene if necessary. In Libya, Europe finally had the will to lead, but it largely lacked the means and thus relied heavily on the United States.
In addition to its air-strike deficiencies, Europe demonstrated serious shortfalls across all of the areas required to sustain any air campaign. As General Mark Welsh, commander of U.S. Air Forces in Europe, told top officers and industry executives at a gathering last summer, "We need more intelligence, surveillance and reconnaissance capability, and we need it now."
Unfortunately, the ongoing economic crisis is exerting downward pressure on defense budgets across NATO, exposing the need for greater cooperation among the alliance's European members.
The harm caused by budget cuts is likely to multiply if all European governments slash spending in the same areas. German Air Force Commander Lieutenant General Aarne Kreuzinger-Janik warns that this would create "even bigger gaps and shortfalls." European governments must now work to ensure that they invest their limited resources in the right areas.
The trans-Atlantic alliance has reached a fork in the road. Down the path less traveled lies greater coordination on both strategic objectives and development of military capacity — particularly within Europe, where governments must better allocate resources among themselves to overcome the key deficiencies revealed by the Libya mission. The more familiar road leads to wasteful overlap and lower investment in key technologies, leaving wider gaps than ever in Europe's defense capability.
If Europe is to build on its success in Libya, it needs to take the road less traveled. It will make all the difference.
John D. Podesta, chief of staff to President Bill Clinton from 1998 to 2001, is chairman of the Center for American Progress in Washington. Ken Gude is chief of staff and vice president of the Center for American Progress. © Project Syndicate
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