Saturday, July 25, 2015

Chart that tells a story — Gold - Financial Times

July 25, 2015 at 5:09pm


http://www.ft.com/intl/cms/s/2/62b4f1a2-2fbb-11e5-91ac-a5e17d9b4cff.html?segid=0100320#axzz3gstqSK00



July 24, 2015 10:29 am
Chart that tells a story — Gold
By Lucy Warwick-Ching


The price ogold hit a five-year low of $1,088 a troy ounce on 20 July, falling 4 per cent in just a few minutes after the Shanghai gold exchange opened. The immediate cause of the drop was a surprise five-tonne sell order placed on the exchange by traders overnight.

This triggered “stop-loss” orders, which traders put in place to limit their losses by automatically selling when the price reaches a predetermined level. This caused the price to drop even more sharply.
Why is gold out of favour?
One of the reasons behind the decline has been the stronger US dollar. The value of the greenback typically has an inverse relationship with gold. Like other commodities, it is priced in dollars on international markets, which means when the dollar rises investors have less buying power and the commodity becomes more expensive.
Another factor is the prospect of an interest rate rise in the US after the Federal Reserve said it may increase the base rate from 0.25 per cent sooner rather than later, and possibly this year. That diminishes the attraction of non-yielding assets, such as gold.
One other factor may have been Friday’s news from the People’s Bank of China that it owns around 1,658 tonnes of bullion — far less than the 3,500 tonnes analysts had expected. This news prompted a $10 per ounce price drop on Friday.
Adrian Lowcock, head of investing at Axa Wealth, said: “Gold has traditionally been seen as a hedge against inflation and a weaker US dollar. Neither inflation or the US dollar have been an issue, with the latter remaining strong and the former low.”



In the small hours of Sunday morning, when most traders in London were asleep, one gold broker who was suffering a restless night said he happened to check the price of the precious metal on his phone. What he saw was one of the biggest and fastest moves in the recent history of the gold market.
Continue reading
He adds that the Greek bailout negotiations and a 30 per cent fall in Chinese stock markets should have been cause for concern among investors, resulting in a flight to safe haven assets. However, investors have been quite relaxed about both events and have not sold off riskier assets such as equities and bonds.
Why has it been a hit with investors over the years?
The precious metal has traditionally been seen as a haven and hedge against inflation and a weaker dollar, but with the US economy showing signs of recovery and the dollar strengthening, its attractiveness has waned.
Since it provides neither a dividend nor an income, there is an opportunity cost in holding it. That may be worth paying in bad times, when interest rates are low and the price is likely to be rising. But, with borrowing costs set to rise, commodities are losing favour with investors, as higher returns can start to be generated elsewhere.
What are the prospects?
Over the long term the price could fall much lower. Analysts once predicted prices would surge to $5,000 an ounce, but many are now saying it could fall back through the $1,000 mark this year. Some think the inflation-adjusted price is even lower than $1,000, so it is not out of the question that prices could continue to fall.
Mr Lowcock added: “In the short term gold could be volatile as investors digest the recent swings. However as the US economy continues its recovery and looks to raise interest rates supporting the strong dollar we could continue to see pressure on the gold price.”

Friday, July 24, 2015

6 Reasons Richard Branson Is the Most Popular Entrepreneur in the World - TIME

July 23, 2015 at 11:34am
http://time.com/3966542/richard-branson-popular-entrepreneur/

6 Reasons Richard Branson Is the Most Popular Entrepreneur in the World
Justin Bariso / Inc. 8:00 PM ET   






Richard Branson may be the most popular businessperson alive. Employees, peers, and even strangers seem to love him. With more than eight million followers, he is by far the most popular Influencer on LinkedIn-almost doubling the next figure (Bill Gates’s 4.4 million followers).

I’ll admit, I had never heard of Branson before I started working for myself some years ago. I quickly found out that his status among entrepreneurs is legendary.

So what makes Sir Richard so darned likable?

In a 2007 interview at the famous TED conference, conducted with curator Chris Anderson, Branson spoke about the ups and downs of his career:


Here are some traits and quotes from the interview that I feel help explain his extreme popularity.

1. He smiles and laughs. A lot.

Generally speaking, we like people who smile and laugh. Their joyful spirit is contagious, and they make us feel better about ourselves.

Add to that the fact that Branson appears totally unpretentious, humble, and unable to take himself seriously. Beginning at the 16:00 mark, you’ll find a potentially awkward exchange in which Anderson makes a joke at Branson’s expense. Branson simply laughs it off and keeps going.

Watch Sir Richard for a few minutes, and it’s hard not to like the guy.

2. He touches others.

Not just figuratively. Literally. (Check out point 1:34 in the video.)

Fellow Inc. columnist Dr. Travis Bradberry points out that when you touch someone while conversing, you release specific neurotransmitters in the person’s brain that make him or her associate you with trust and other positive feelings. (Of course, unwanted or inappropriate touching will produce the opposite effect.)

It’s safe to say that Sir Richard hasn’t given us any literal pats on the back lately. But watching how he deals with others makes him appear down-to-earth and relatable.

It’s almost like a subliminal message flashes across the screen, telling your subconscious: I’m trustworthy and genuine, and I sincerely like people. Now follow me on LinkedIn.

3. He values his employees. Really.

In his opening comments, Sir Richard opines: “I learned early on that if you can run one company, you can really run any company. I mean, companies are all about finding the right people, inspiring those people, you know, drawing out the best in people.”

That attitude has led to a reputation as a leader who puts employees first.

How can you not love that?

4. He’s not afraid to try new things. In fact, he thrives on it.

On coming up with the idea for Virgin Airlines: “If I fly on somebody else’s airline and find the experience is not a pleasant one, which it wasn’t 21 years ago, then I think, ‘Well, you know, maybe I can create the kind of airline that I’d like to fly on.’ And so … got one secondhand 747 from Boeing and gave it a go.”


 
Sir Richard has been known to try his hand at, well, almost anything. The Virgin Group has current or past companies in the music, hospitality, and space-exploration industries, among many more.

Not every venture has been a success. But as hockey great Wayne Gretzky famously said: “You miss 100 percent of the shots you don’t take.”

5. He hated school.

Branson states in the interview that he suffers from dyslexia and as a child had “no understanding of schoolwork whatsoever.” He left school when he was 15 years old, and never pursued a university degree.

But that doesn’t mean he hasn’t continued the learning process. As he puts it: “I just love learning … I’m terribly inquisitive … I’ve seen life as one long learning process.”

Branson’s alternative road to billionaire-ship holds out hope for dreamers and individualists everywhere.

6. He’s the anti-typical business hero.

In a world where people generally get rich by stepping on others as they climb the corporate ladder, Sir Richard seems different. His philosophy:

“I think if you treat people well, people will come back for more … All you have in life is your reputation and it’s a very small world. I actually think that the best way of becoming a successful business leader is dealing with people fairly and well. And I like to think that’s how we run Virgin.”

***

At the end of the interview, Anderson sums up how most people feel about Branson after a few minutes of observation:

“When I was starting off in business, I knew nothing about it … I thought that business people were supposed to just be ruthless and that was the only way you could have a chance of succeeding. And you actually did inspire me. I looked at you and thought, ‘Well, he’s made it. Maybe there’s a different way.'”

This post is in partnership with Inc., which offers useful advice, resources and insights to entrepreneurs and business owners. The article above was originally published at Inc.com.

Thursday, July 23, 2015

Why buying a car makes no sense - Financial Times

July 23, 2015 at 4:19pm
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/4de21c14-2f93-11e5-8873-775ba7c2ea3d.html#ixzz3gh0eBYmR

July 22, 2015 12:12 pm
Why buying a car makes no sense
Michael SkapinkerMichael Skapinker


In most cities, driving is horrible — there are greener, less stressful and cheaper alternatives
This picture taken on May 9, 2013 shows motorists commuting on a road during a traffic jam in Jakarta. The chronic jams cause losses of 1.8 billion USD (17.2 trillion rupiah) a year, according to official figures that take into account working hours lost, fuel wasted and health care costs for illnesses caused by noxious exhaust fumes. AFP PHOTO / Bay ISMOYO (Photo credit should read BAY ISMOYO/AFP/Getty Images)©AFP
The news this week that James Hind, 28, has raised £5.9m to launch Carwow, an online vehicle marketplace, took me back to the day when I bought a new car over the internet.
It was 2003, when Mr Hind was still a schoolboy, but, even then, Sir Richard Branson was declaring the whole business of going to a dealership and haggling with a salesman outdated.

By reimporting UK-assembled cars that had previously been exported to Cyprus, Virgin Cars was able to undercut the dealers. You chose a car online, made a payment and picked up your vehicle at an out-of-town garage.
The catch? There wasn’t one. When the car alarm went off for no reason, Virgin Cars sent someone around to fix it. And the Honda Civic, still running, if a little chipped and bumped, has not given a moment’s trouble since then.
So when it finally dies, will I buy a new car online? No. Virgin Cars is no longer around. Shortly after I bought mine, Sir Richard decided to get out of the business. Only 7,000 people were buying his vehicles annually, compared with hoped-for figures of over 50,000.
Carwow, which comes after US online sites such as CarsDirect, works differently from Virgin Cars. The company sends your online car preferences to 1,000 dealers, who contact you with their best offers, pay Carwow a commission and then sell to you directly.
I won’t be using them either. I can no longer see a reason to buy a car. It makes no sense. There are greener, less stressful and cheaper alternatives.
Start with the stress. In most cities, driving is horrible. It is stop-start, boring and bad-tempered.
Many people say they drive because they do not like being crushed against other sweaty, disagreeable commuters. I have driven and I have commuted. Fellow passengers are a great deal more civilised than other drivers — and their odours are less offensive than the emissions you inhale in a car.
In many cities today, there really is no need for a car. Public transport and walking can get you almost everywhere you need to go. It is healthier and it is greener. In London, I don’t drive for weeks, or sometimes months, at a time. (Others have taken to bicycles. I do not regard them as healthier — certainly not in London.)
Do not listen to anyone who tells you London’s transport is unreliable. I have taken the Northern Line, London Underground’s supposed “misery line”, twice every working day for 24 years. It lets me down two or three times a year.


Compare that to the hours drivers spent trapped by roadworks, diversions, or other cars. There is nothing convenient about driving.
In most European and many Asian and US cities, it is far quicker and easier to get around without a car. There are apps to tell you when the trains and buses are leaving. And there are apps to get you a car when you really need one.
In a blog post last year, Kyle Hill, chief executive of HomeHero, which provides carers for the elderly, explained why he had sold his Lexus and decided to do without a car — in Los Angeles.
He said he cycled on journeys up to five miles. For anything longer he used Uber. He calculated it was cheaper than running a car, with its purchase payments, interest, depreciation, insurance, petrol, maintenance and taxes.
And do not, he said, forget parking. At a recent dinner in New York, someone told me he paid $500 a month to park in his apartment building. When I expressed astonishment, everyone else chipped in that that was cheap.
A New York Times article in September said that the average residential parking space in Manhattan cost $136,052 to buy, and that some were selling for up to $1m. A secure underground parking space in Knightsbridge, London cost £350,000, the paper said.
Those are extreme prices, but all parking is a hassle, as are parking tickets.
There may be people who really cannot manage without a car: those who live in the country, for example, where there are no good bus services.
But the majority of us are city dwellers, and even in those places without good public transport, there will soon be online taxi services, if there aren’t already.
Some will say that none of this matters because cars will soon be self-driving. If so, that is another reason not to buy one you have to drive yourself, whether from a dealer or online.
michael.skapinker@ft.com
Twitter: @Skapinker

Wednesday, July 22, 2015

Australia’s banks told to boost mortgage capital - Financial Times

July 21, 2015 at 2:13pm
http://www.ft.com/intl/cms/s/0/630a2600-2e8e-11e5-8873-775ba7c2ea3d.html#axzz3gUo5ESdY

Last updated: July 20, 2015 10:16 am
Australia’s banks told to boost mortgage capital
Jennifer Hughes in Hong Kong


Australia’s biggest banks will have to find about $9bn in fresh capital in the next year, in the latest threat to the profitability of one of the developed world’s most richly valued financial sectors.
The capital requirement comes as a result of regulations detailed on Monday demanding that the biggest lenders hold more capital against their home mortgage books — their most profitable product.

A parliamentary inquiry last year called for Australian banks to be “unquestionably strong” with capital reserves that would put them in the top quartile globally.
Globally the average core tier one equity capital ratio — the standard measure of a bank’s capital strength — is 11.7 per cent, according to the Australian Prudential Regulation Authority. Over time, Australian banks will need to raise their ratios by about 200 bps to hit the top quartile.
While those targets will require banks to raise some A$27bn ($20bn) combined over the medium term, the latest rules focus on the average risk weighting that Australia’s biggest banks are required to apply to home mortgages, which will increase from 16 per cent to about 25 per cent, APRA said on Monday.
The banks affected are ANZ, Commonwealth Bank of Australia, Macquarie, National Australia Bank and Westpac.
The changes are based on narrowing the difference between capital held under standardised risk weighting, and the lower levels held by larger lenders allowed to use their own internal models.
Analysts estimated that Commonwealth Bank and Westpac would need to find about A$4bn ($3bn) apiece, with ANZ Bank and NAB each needing roughly half that.
Bank stocks closed slightly higher in line with the broader mood, although ANZ, which has the smallest domestic mortgage book of the big four, beat the market and added 1.3 per cent. Analysts said the latest regulatory demands were already priced in and were expected to be delivered via retained earnings and scrip dividends.
However, the need for more capital comes as Australia’s banks face an ageing population more interested in saving than in borrowing, and high house prices. The country’s lenders also serve a household sector that is more highly geared than either the US or UK were at their pre-crisis 2007 peaks, according to Goldman Sachs.
Mortgages were banks’ most profitable product in 2014, delivering a return on tangible equity of about 35 per cent. If the effect of the entire A$27bn were applied to last year’s earnings, ROTE would have fallen to 24 per cent, according to Goldman estimates. Overall bank returns would have dropped to 16.3 per cent from the 18.9 per cent reported.
Australia’s banks trade on price-to-book ratios of almost two, compared with European and US banks which trade much closer to their actual book values.

Tuesday, July 21, 2015

China’s President Faces Rare Backlash - TIME

July 10, 2015 at 3:03pm
China’s President Faces Rare Backlash
Market turmoil in China invites doubts over Xi Jinping’s autocratic leadership style

By MARK MAGNIER and JEREMY PAGE
July 9, 2015 2:52 p.m. ET

BEIJING—President Xi Jinping got the credit as China’s stock markets revved up. Now their unraveling is inviting rare finger-pointing at his forceful rule and putting his far-reaching economic goals at risk.

Vibrant stock markets are at the center of Mr. Xi’s plans for an economic makeover, intended to help companies offload huge debts, reinvigorate state enterprises and entice more foreign investment. Some economists called reviving the moribund markets among his most consequential reforms in the more than two years since coming to power. Investors talked of “the Uncle Xi bull market.”

But with the markets having lost around a third of their value in the past month, and the government appearing to panic in its response to the drop, some people are starting to voice doubts about Mr. Xi’s autocratic leadership style.


Sun Liping, a sociologist at Tsinghua University, took to his social-media account to say the stock-market crash has exposed crucial flaws in Mr. Xi’s highly centralized approach to government, including a lack of financial expertise and a pervasive instinct among subordinates to obey superiors.

“Power has limits,” he wrote.

Mr. Xi, who arrived in Russia on Wednesday for a summit, hasn’t commented publicly on the market moves or the criticism.

The criticism amounts to a rare backlash for a leader with an eye for publicity and who so commandingly put his stamp on the Communist Party, the military, economic policy and other areas. At the same time, Mr. Xi is facing resistance from officials and the business community upset with the slowing economy and how he has tried to concentrate power in his hands, among other policies.

Although Mr. Xi faces no immediate challenge to his authority, there is a risk that the stock market crisis could trigger social unrest and hamper his efforts to promote key allies at the next big leadership reshuffle in 2017. His government has placed a priority on quashing dissent and unrest, and recently passed a law that broadly defines national security threats to preserve the party’s leadership.


The sudden doubt in China’s leadership threatens to undermine Mr. Xi’s broad-ranging agenda to keep raising standards of living and transition to consumer economy.

“The market selloff is definitely the largest challenge that the new administration has faced,” said Victor Shih, a China expert at the University of California, San Diego. Chief among the weaknesses exposed, Mr. Shih said, was the ineffectiveness of Mr. Xi’s pledge to limit bureaucratic interference and give markets greater scope.

“He’s trumpeted reform for the past couple of years but a lot of so-called reforms have gone out the window with this dramatic…government intervention in recent days,” Mr. Shih said.

The government’s scattershot efforts, which have included cutting interest rates and ordering state-run companies and brokerages to buy and hold stocks, appeared to make headway Thursday after floundering for weeks. The benchmark Shanghai Composite Index rose 5.8%, the biggest daily gain in six years, while other indexes saw smaller rises. On Thursday, Chinese police visited the nation’s stock regulator and vowed to investigate any market manipulation.


Just how damaging the stock meltdown ends up being for Mr. Xi will depend on how quickly the market recovers and whether Beijing summons the unity to marshal its significant resources. The administration still has some $4 trillion in foreign reserves, and its policies to promote innovation and entrepreneurship offers a road map out of the slow-growth morass for many ordinary Chinese, said Cheng Li, a senior fellow with the Brookings Institution and author of a book on Chinese leadership.

“This is a very critical period, a test of public confidence, leadership capacity and how the international community views China,” Mr. Li said. “This week is pretty bad and if it lasts a few more weeks, it will be terrible, but we need to see how it unfolds.”

Mr. Xi took charge in late 2012, presiding over a group of leaders and senior officials applauded by China’s elite for wanting to shake things up. His central-bank governor and finance minister have argued for relying more on market forces and loosening controls on currency and cross-border investments.

A potential casualty of the concerted intervention, some economists said, is Beijing’s goal of getting the yuan named as a global reserve currency when the IMF conducts a review late this year. The effort relies on opening financial markets wider to foreign investors, whose confidence in the wake of the massive stock-market intervention has yet to be gauged.

One of Mr. Xi’s most popular policies, an anticorruption campaign against party officials high and low, has also run into headwinds. Businesses and even other Chinese leaders complain that the purge is paralyzing the bureaucracy, frustrating companies trying to gain approvals for projects. It has also antagonized some senior party figures who feel it is splitting their ranks and distracting the leadership’s attention from the economy.

That is why, some political insiders said, that the trial of Zhou Yongkang, the former security chief and most senior figure caught in the antigraft campaign, was held in secret and given little play in state media at its conclusion.

Related Video
The Chinese stock market behaves differently from most other big markets in the world in normal times. During a big selloff, things can get really weird. Photo: Getty Images.
Also battling from within are influential state industries that dominate large swaths of the economy and which have managed to delay the government from issuing broad guidelines for consolidation. Much of that reform program is premised on selling more shares to the public and converting corporate debt to equity, reforms that economists said are being set back by the efforts to stabilize the markets.

Some economists said driving Beijing’s aggressive prop-up of the markets is fear of contagion and social instability as accounts fueled by debt started to rapidly lose value. Many of those hit hardest in the past few weeks have been individual investors with relatively small accounts—the majority of Chinese investors—some of whom have bought stocks on margin or with proceeds from real estate, another area hard hit by the economic slowdown. A 26-year-old graduate student at Peking University who would give only his surname, Zhou, said he has lost around 50,000 yuan [$8,050] on stocks in the past few weeks, leaving him depressed and scrimping on meals. Mr. Zhou said he blames the steep decline on the government, which did little to temper frenzied buying, and on state media for playing cheerleader.

“The People’s Daily made things worse by saying that the 4,000 level was just the beginning of the bull market,” Mr. Zhou said. “50,000 yuan is a big deal for a student. Some of this was money my parents gave me for my wedding.” On Thursday, the Shanghai market closed at 3709.33.

Write to Mark Magnier at mark.magnier@wsj.com and Jeremy Page at jeremy.page@wsj.com

Monday, July 20, 2015

Extremist political contagion is a bigger risk from the Greek crisis than its financial fallout - Financial Times

July 18, 2015 at 12:06pm
http://blogs.ft.com/brusselsblog/2015/07/16/donald-tusk-interview-the-annotated-transcript/

Donald Tusk interview: the annotated transcript
Peter Spiegel   Author alerts
| Jul 16 23:01 | Comment | Share

Donald Tusk, the European Council president, listens to a question during Thursday's interview

After spending much of the six-month standoff between Greece and its eurozone creditors on the sidelines, Donald Tusk, the former Polish prime minister who is now European Council president, became the central actor in the Greek drama over the weekend when a summit he chaired became the scene of 17-hour marathon talks that finally led to a deal on Monday morning.

In a 90 minute interview with the Financial Times and six European newspapers, Tusk gave a behind-the-scenes account of how the deal was brokered – but he also gave voice to fears that the standoff has given new energy to radical political forces in Europe that has made 2015 resemble 1968. Our full write-up of the interview, focusing on his concerns about renewed radicalisation can be read here.

But as is our practice at the Brussels Blog, we’re providing a transcript of the interview below. It is slightly edited to eliminate occasionally long-winded questions and topics not directly related to the Greek crisis.

The interview started with a question on Germany and whether Tusk agreed with some commentators that Berlin’s standing in Europe has been hurt by perceptions Angela Merkel, the German chancellor, bullied Greece and its leader, Alexis Tsipras, into a deal on her terms.

I think the position in Germany today, after this negotiation, is maybe not weaker, but for sure not more powerful. It was one of my main aims in these negotiations, to avoid this risk that someone is a loser and someone is a winner, especially because as you noticed, for sure, the discussion during this economic negotiation was also about things like dignity, humiliation, trust. From history, we know very well that we can’t ignore such values, or such feelings or emotions like dignity, humiliation and trust, especially when we go back to German history. The discussion about dignity and humiliation could recall the most dangerous time in Europe, and this is why I think it’s very important to avoid this dimension in discussions and in negotiation because for sure what we needed was to have no losers and no winners in this context.

I’m quite sure that today the result, this agreement between eurozone member states, it’s something like a draw. It means no losers and no winners. It also means that there’s a very visible lack of enthusiasm. Nobody’s satisfied. But for sure, this is what I’m 100 per cent sure, that Germany is not the winner in the context of political power. The result is rather evidence that the eurozone and the whole EU is also an idea to limit natural advantages of some nations and some countries. At the end of the day, Germany has to sacrifice much more than other countries when it comes to numbers and money. This was the main subject of the whole process.

After this discussion about Germany, Tusk, unprompted, turned to Tsipras’ appearance last week in the European Parliament in Strasbourg. Tusk was also in the chamber reporting on the results of a Tuesday summit where Tsipras had been given five days to propose serious economic reforms or face bankruptcy. Tusk said he was struck by Tsipras’ second address to the parliament – which came after dozens of MEPs had weighed in on the crisis – where he engaged in some anti-German rhetoric.

Tsipras answered and his one mention was very interesting, because it was his opinion about a part of German history. He talked about Germany, after the first and second world wars, they experienced European solidarity and debt relief. And it was a little bit anti-German in tone, can I say, and the context was anti-German. And the reaction of parliamentarians, of the MEPs, was very, very enthusiastic. In fact, it looked like an anti-German demonstration when it came to the left side of the chamber and the radical right. It was the first time I saw radicals with such emotion, in this context anti-German emotion. It was almost half of the European Parliament. This is why I think nobody – but in particular Germany– are political winners in this process.

The interviewers stayed on the topic of Germany, with the next questioner asking about the role of Wolfgang Schäuble, the powerful German finance minister, who tabled a proposal that would have had Greece temporarily leave the eurozone. As a finance minister, Schäuble did not take part in the leaders summit, but Tusk joked: “My feeling is that he was around the table all the time.” Tusk then went on to describe what he believed was a strong difference in opinion between Schäuble and Merkel on the temporary Grexit proposal.

I’m quite sure that this thinking represented by Schäuble, but not only by Schäuble, this possible controlled and prepared Grexit, intellectually it’s legitimate. It’s nothing extravagant. For sure, this was a possible alternative in this process.

It’s just my intuition, but I think it’s also what Wolfgang Schäuble believes. I think he sent this message very openly and clearly that for Europe and for Greece it would be better that Greece is out. But I’m absolutely sure that for Chancellor Merkel, it was only a useful tool in negotiation, but for sure not her political aim. I have no doubts that for all of them, the leaders and Chancellor Merkel, the only political target was to avoid this risk of Grexit. For sure, this role of Schäuble was useful as an argument which showed to Tsipras that the dramatic solution is quite realistic and achievable.

The next questioner asked about the belief expressed by many officials that the deal Tusk brokered on Monday is unlikely to hold and that it only put off the risk of Grexit temporarily.

This agreement is not a guarantee for years. It was something we needed to avoid, this real risk of chaos and possible Greek bankruptcy – and, as a political result, also Grexit. But this is [not even] the first half in a football match, but the first step in a long-perspective work. For now, it works.

Yesterday, the voting in the Greek parliament was full of emotions and, for me, also a controversial message from Tsipras that he’s ready to support an agreement that he doesn’t believe in. That’s, in fact, very original. But I think it’s also very honest and authentic, because when I observed his face during the negotiations it was absolutely visible and tangible that he was not satisfied, and for him this is a really tough test. But it’s shows how difficult this process is and will be, for sure. But it shows also that, for now, it works.

We have no guarantees. This is an ongoing process with some traps, for sure. But what is my intention? It is to avoid today, and tomorrow, to avoid this very risky discussion about trust. We need more [technical] discussions and negotiations. Humiliation and trust and dignity, this is not [technical]. When we are discussing assistance and money for Greece, it’s very important to discuss something [technical] and not emotional and feelings.

In fact, negotiations should be about numbers, laws, procedures. The discussion about dignity, humiliation and trust, this is not a negotiation. It is an introduction to fight, always in our history. I can understand emotions and feeling, and not only on the Greek side. For sure, you observed clear and very strong emotions on Merkel’s face. Emotions, this is not a typically southern specialisation in politics. Cold, Hanseatic politicians are also, from time to time, very emotional.

I try to be realistic, not optimistic. But if we stop this discussion about emotions and values like dignity and humiliation – not to ignore them, but I’m absolutely sure it’s a very important part of politics – but at this very moment we need more pragmatic discussion than political or ideological. It would be too risk to judge who is more humiliated, who has more right to dignity.

Tusk was then asked about whether he had geopolitical concerns as he led the negotiations, particularly whether a Grexit could push Greece into the arms of Russia.

The most important subject of the negotiations was assistance to Greece. This was the first, second and third priority. But as a mid-term or long-term consequence of a possible Grexit, especially as a chaotic and unpredictable process, for sure we have to discuss the possible political consequences, and not only geopolitical consequences.

I was quite sure that there was no risk of financial contagion even if Greece is out. It wasn’t a slogan, it wasn’t propaganda when [ECB president Mario] Draghi and other institutions confirmed the eurozone is relatively safe today and the risk of contagion doesn’t exist. But for sure, after a dramatic event like Grexit, we could predict some political, ideological and geopolitical consequences.

I am really afraid of this ideological or political contagion, not financial contagion, of this Greek crisis. Today’s situation in Greece, including he result of the referendum and the result of the last general election, but also this atmosphere, this mood in some comments – we have something like a new, huge public debate in Europe. Everything is about new ideologies. In fact, it’s nothing new. It’s something like an economic and ideological illusion, that we have a chance to build some alternative to this traditional European economic system. It’s not only a Greek phenomenon.

This new intellectual mood, my intuition is it’s risky for Europe. Especially this radical leftist illusion that you can build some alternative to this traditional European vision of the economy. I have no doubt frugality is an absolutely fundamental value and a reason why Europe is the most prosperous part of the world…. My fear is this ideological contagion is more risky than this financial one.

Tusk appeared to have dodged the question about Russia, so he was pressed again on whether he thought the Kremlin represents a problem when it comes to Greece.

The whole situation around Europe – Russia, of course, but the problem of migration and the unstable situation in the Mediterranean, terrorism – everything shows that the situation is very, very tentative. We can feel the European construction is quite fresh and fragile.

One of the most important parts of this new thinking about Europe is in fact something like questioning Europe as an idea, the EU as an organisation. From time to time, I feel that some politicians and some intellectuals in Europe are bored by the EU and they are ready to question everything, they’re ready to change everything in Europe, including treaties, but also this traditional way of thinking about Europe and our values. Russia is important, but maybe not the most important element of this threat. The most important is what we feel inside.

For me, the atmosphere is a little similar to the time after 1968 in Europe. I can feel, maybe not a revolutionary mood, but something like widespread impatience. When impatience becomes not an individual but a social experience of feeling, this is the introduction for revolutions. I think some circumstances are also similar to 1968.

The most impressive for me was this tactical alliance between radical leftists and radical rightists, and not only in the European Parliament…. The discussion about Greece, it means a discussion against austerity, a discussion against European tradition, anti-German in some part. Everything was provoking enthusiasm on both sides. It was quite symbolic.

It was always the same game before the biggest tragedies in our European history, this tactical alliance between radicals from all sides. Today, for sure, we can observe the same political phenomenon.

The main melody today is anti-European. When I say anti-European I mean this traditional thinking about the EU and European and the common currency, and of course anti-market, anti-liberal – in fact, something revolutionary. From time to time, I feel for them it doesn’t matter what kind of ideology it is.

Another interviewer asked Tusk if part of his concern about the political debate had to do with outside commentators like Paul Krugman, the economist and New York Times columnist who has been highly critical of the EU’s handling of the Greek crisis.

The debate, and the main actors in this debate, everything they say today is very attractive and spectacular and intellectually brilliant. Unfortunately, it has nothing to do with the political reality. It’s also very similar to 1968. For sure today we need fresh discussion and we have new challenges, so we need new arguments and new debate. But I’m absolutely sure what we need as our main need today is very pragmatic and realistic discussion about what we can do with our organisation, the EU and our currency.

If I look for something inspiring when it comes to the economy, I am ready to look towards something wise and responsible in different sources than this kind of debate. For me, maybe the best school of thinking is the so-called “ordoliberals” in Germany, in this critical time after the Second World War. Very pragmatic, no ideology, no illusions. Books and also practical politics from [Ludwig] Erhard, [Walter] Eucken, [Wilhelm] Röpke. This, for me, is the source of thoughts that can be very useful for today. Wilhelm Röpke thought – and I think it’s very relevant here today – we have too much Rousseau and Voltaire and not enough Montesquieu.

After this highly-charged criticism against the far-left, one of the reporters asked him how he could deal with Tsipras, leader of Europe’s most successful far-left political party, fairly if he felt radical leftist ideologies were undermining the EU. He argued that he felt free to discuss history and ideology with reporters, but it was not something he did as Council president.

My role here is not to discuss ideology or history…. This is the biggest risk, to be too ideological here in Brussels. I am totally sure that we need to avoid this risk of vision, radical visions of ideologies…. I tried to convince them we have to negotiate numbers, laws and guarantees and not emotions and ideologies.

The issue of debt relief was then raised. Tusk has been one of the most vocal EU leaders when it comes to the need for eurozone countries to provide some kind of debt relief for Athens, which would mean the eurozone bailout loans would have to be restructured. But Tusk did not renew that call, instead talking more broadly about global indebtedness, citing French economist Thomas Piketty, who has proposed a global conference on debt.

Today, I am absolutely convinced debt is a global problem not a Greek problem, not a European problem, but a global problem.

It’s not a Greek phenomenon, the debt problem. I’m not sure we need a discussion about debt relief for Greece. In fact, the whole process in the last five years…we had debt relief for Greece for five years. Maybe not nominal haircuts [on bailout loans], but in the private debt [there were] nominal haircuts. If we need a discussion about debt it’s not a discussion about Greece only. We have to be very cautious, because debt relief for Greece is very sensitive and risky topic in other countries.

Tusk was then asked more pointedly about criticisms coming out of Athens, as well as other quarters, that Tsipras was forced into tough austerity measures as a punishment for questioning the EU’s established order. This is where Tusk became the most emotional during the interview.

I can’t accept this argument, that someone was punished, especially Tsipras or Greece. The whole process was about assistance to Greece. I can’t understand. It’s more about some politicians and journalists and intellectuals than Greek politicians. I can hear this argument here in Brussels, in Paris and Berlin, also, about this humiliation, and Tsipras is the loser. It’s absurd.

Prime Minister Tsipras negotiated €80bn assistance for his country, successfully. When we discuss facts, deeds and numbers, this is the only number on the table: €80bn for Greek assistance, and quite soft conditions, in fact. Not only [soft] financial conditions, but political conditions — in fact, without collateral. Come on. What is the reason to claim it’s something humiliating for Greece, or this is punishment for Tsipras?

This is why I think the debate is more ideological than about facts and real politics.

While on the topic of the weekend negotiations, Tusk was asked how close, really, the eurozone came to Grexit over the course of the three days of talks. Several news organisations, including the Financial Times, reported that early Monday morning, Tsipras and Merkel were prepared to walk away from the talks. Tsipras had asked for 24 hours to go back to Athens and consult with allies, while Merkel suggested holding another summit on Wednesday. Tusk confirmed that it was the moment he felt it could have all fallen apart.

The first sign that Grexit was possible was, of course, the result of the eurogroup on Saturday. Not only because the lack of a result, but because of this new mood and new words – this last sentence in the document about a possible Grexit. But also because of the irritation of almost all of them.

After the referendum, this irritation was very tangible. It meant the position of Tsipras was weaker, in fact, after the referendum than before – here, maybe not in Athens, but for sure here. This privatisation fund was, for sure, very provocative for Tsipras. This complex situation, one day before the euro summit, was the first sign a dramatic [Grexit] solution is very possible.

In the [summit] negotiations, it was just one time when I felt the risk is really close, really possible or probable. It was about 7 o’clock in the morning, when both of them – Chancellor [Merkel] and Prime Minister Tsipras – they wanted a pause.

For me, it was absolutely clear this was the end of the negotiation. In fact, they wanted to stop this summit, but they were not ready to say ‘this is the end’, and it was an excuse. But it was very spontaneous. It’s also why it was so dangerous, because it was an authentic reaction, fatigue, also irritation. Both of them were absolutely sure they compromised too much.

It was a really interesting moment, because the difference at this very moment was so small. At this moment it was about €2.5bn. In the end, the discussion was about how much money – virtual money – from this privatisation fund would go to investment and how much to debt. The position of the chancellor was €10bn for investment, and for Tsipras it was €15bn. And the proposal was €12.5bn for investment. For both of them, it was about €2.5bn. At the same moment, they felt it was enough.

I told them, ‘If you stop this negotiation, I’m ready to say publicly: Europe is close to catastrophe because of €2.5bn.’

One of the reporters noted that despite his detailed recounting of the weekends’ events, he had not mentioned Fançois Hollande, the French president, who has publicly claimed his efforts helped prevent Grexit. Tusk was asked about Hollande’s role.

President Hollande was more neutral and objective, but I think it was his presumption from the very beginning that he’s dedicated to this process for a solution, not tough negotiation. The division of roles was very natural. It was for all of us absolutely clear that, in the end of this process, we have to agree between Greece and Germany. For many reasons, not only because of money. This was a chance for President Hollande not to be in charge or be an arbiter, but a very active person and very helpful when it comes to moderating or calming down the emotions. He was really helpful in this context, because of his temperament.

Another reporter got back to the early-morning meeting between Merkel and Tsipras where Tusk though they were both about to walk away and Grexit was imminent. Why did they change their minds and stay to hammer out a deal?

It was close to illumination: ‘Yes, it’s true, we are too close to leave this room.’ When they realised that, in fact, we have an agreement, and we have just one detail – I think this was very difficult to describe, because it’s just my impression, but I’m quite sure it was something like that. And we needed just 10 minutes to draft this last text.

Mark Rutte, the Dutch prime minister, was brought in by Tusk during one of the small group sessions, and one interviewer asked why he had taken the unusual decision to include the Dutchman in meetings that had previously the exclusive realm of Merkel, Hollande, Tsipras and the Greek finance minister, Euclid Tsakalotos.

At about 11 o’clock, it was clear that Germany was not the toughest country. Maybe not Germany, but for sure Chancellor Merkel was ready to compromise and some countries were afraid this compromise might be unacceptable to them or their parliaments. Everything was informal.

I received a signal that for a group of five member states: Rutte would be the best representative. I was naïve, of course, because I thought at midnight we would be ready with the compromise. I knew that I should be 100 per cent sure it was not only a compromise between Greece and Germany. I wanted to avoid this trap that some countries might ignore or oppose this possible compromise.

The role of Christine Lagarde, the International Monetary Fund chief, was then raised. After the summit was completed, it came to light that the IMF was deeply sceptical about the direction of Greece’s economy and whether a new bailout could succeed without massive debt restructuring. To many, it looked like a signal the IMF did not want to participate in a new bailout when its current programme expires, so Tusk was asked whether Lagarde had raised those concerns in the summit.

My impression was absolutely unambiguous that Lagarde is ready to participate in this programme, and it was undisputable in fact. The discussion was between Tsipras and others, but not about the possible participation of the IMF in the programme, but only about the form: Tsipras wanted to avoid – and I can understand why – the uncomfortable situation that we would have in the agreement the formulation that Greece wants to invite the IMF into the process. It was about words. It was clear to Tsipras he cannot be the initiator of the invitation, because of his obligation in his own party and in the Greek parliament.

But what it comes to Christine Lagarde and all of us, it was absolutely clear this was a condition for all member states – excluding Greece– that we are ready to agree to the third programme only if the IMF is inside. Christine Lagarde was also unambiguous in this.

As time began to run out, Tusk was asked if creditors had made a mistake not striking a deal with Antonis Samaras, Tsipras’ predecessor as prime minister, who was unable to complete Greece’s bailout at the end of his term because the IMF and ECB determined his government had not completed all the reforms they had promised. Instead, Samaras was forced to request a two-month extension of the bailout and call snap elections, leading to a Tsipras victory.

For sure, Samaras was more cooperative when it came to the substance of this cooperation on assistance and reforms. I think the process of negotiations on a possible third programme would have been easier. I think that’s nothing controversial. But I’m not sure the result of the last general election in Greece would have been different than what happened. I don’t like discussion after the fact. You have to be responsible, cautious and wise beforehand. It’s absolutely useless to pretend you’re the wiseguy after something happens.

Lastly, we again turned to the question if Monday’s deal would last. It only is an agreement that will lead to a reopening of bailout talks – it is not, in itself, a new bailout agreement. Is it possible summiteers could be back in Brussels before the summer is out?

I can’t exclude that we would have more summits also in the summer, but I hope [not]. The voting in Athens was, in fact, promising. Molotov cocktails are more attractive. It’s obvious Molotov cocktails are not a Greek invention. But support was really massive in parliament, and the demonstrations not so huge – visible and spectacular, but maybe this is a breakthrough in a mental context. I hope so.

Tags: Donald Tusk, EU summits, Greece
Posted in EU, Greece | Permalink

Sunday, July 19, 2015

Delors had the answer to the Greek question - Financial Times

July 18, 2015 at 3:45pm
http://www.ft.com/intl/cms/s/0/0bf55c60-2aef-11e5-8613-e7aedbb7bdb7.html#axzz3gDdJaI7J

July 16, 2015 1:11 pm
Delors had the answer to the Greek question
Philip Stephens


The 1989 blueprint for the euro emphasised responsibility and solidarity would sit side by side
Ingram Pinn illustration©Ingram Pinn

There is a well-worn aphorism heard among British politicians that says the way to keep a secret is to announce it in the House of Commons. Something similar is true of Europe. This week’s deal to keep Greece in the euro leaves two questions: will it work; and what can be done to strengthen Europe’s monetary union. Sad to say, the answer to the first is “probably not”; as for the secret formula that would secure the future of the euro, it was published 25-odd years ago.
The obvious observation on the latest bailout plan is that its harsh terms were at once inevitable and potentially counter-productive. There can be no argument that Greece requires radical reform. This has nothing to do with whether it stays in the single currency or returns to the drachma. Dismantling clientelism and collecting taxes are prerequisites for Greece to become a modern, functioning democracy. The big danger of so-called Grexit is that the impetus for change would evaporate. Greece’s future would be as Europe’s Venezuela — only without the oil.

What is also true is that the creditors — and above all Germany — have allowed their explicable anger and frustration with the antics of Alexis Tsipras’s Syriza government to cloud their judgment about the shape of a new agreement. The International Monetary Fund’s latest evaluation of Greece’s dire economic predicament told us what we knew: whichever way you cut it, Athens needs a sizeable debt writedown.
The word in Berlin is that this is a problem for the long term. The immediate debt-servicing burden is relatively light. This is to ignore political psychology. The Greek people need incentives to embrace change — light at the end of the tunnel, as the cliché has it. The chances of Athens sticking rigorously to a new programme were always going to be fairly slight. Without the promise of debt relief they vanish.
As negotiations get under way in the coming weeks, creditors should also be flexible about short-term fiscal targets. You do not have to be a paid-up Keynesian to believe austerity can be counter-productive. There should be a trade-off with structural reforms. The more Athens does to clean up governance and allow markets to work, the less fixated creditors should be on the precise size of its primary surplus.
Ah, I hear politicians in Berlin say, but what about Chancellor Angela Merkel’s problems with the Bundestag? Her party will not accept any concessions. The answer is straightforward. If Ms Merkel wants to keep the euro afloat then Germany too has to own up to reality. Leaders sometimes have to spend accumulated political capital. Or does Ms Merkel want to be remembered as the author of the fracture of Europe?
Whatever the outcome of the negotiations — and I admit it is hard to be optimistic — deeper doubts about the future of the euro remain. Sure, Anglo-Saxon economists have been predicting its imminent demise for the past five years and have been wrong on every occasion — mostly because they have not paid attention to politics. But to rescue the single currency is one thing; to underwrite its long-term future another.

For now, the euro is stranded in no-man’s-land. Perhaps that is why smart officials in Berlin have been rereading the report produced in April 1989 by a committee of central bankers and eminent experts. Chaired by Jacques Delors, then president of the European Commission, the committee was charged with producing the blueprint for a single currency. Its Report on Economic and Monetary Union in the European Community did just that.
Among the authors of the Delors report there were doubts much would come of it. As an economics writer for the Financial Times, I was counselled by senior figures in Frankfurt not to pay much attention to the plan, even though Karl Otto Pöhl, then president of the Bundesbank, was a prominent signatory. Germans, I heard, would never consent to give up the Deutschmark.
In depth


Greece debt crisis
Athens has caved in to an ultimatum from its creditors and agreed to rush through long-resisted economic reforms in a bid to stay in the eurozone
Further reading
The authors, though, could not have predicted that six months later the Berlin Wall would come down, transforming the political dynamics of European integration. Germany’s Helmut Kohl got German reunification and François Mitterrand, the French president, secured economic and monetary union.
Except that this last sentence is not quite right. What was agreed at Maastricht two years later was monetary union. The “economic” bit was dropped, because France, among others, was jealous of its national sovereignty.
By opting for a strictly monetary union, EU leaders sidestepped the core tension that still torments the euro. Where does the balance lie between solidarity — a eurozone budget and transfers from rich to poorer nations — and the collective responsibility of mutually binding economic and fiscal rules?
The committee foresaw that the eurozone could never be modelled on the US. European nations would never pool sufficient sovereignty. But the report emphasised that economic union demanded serious constraints on national decision-making and, at times of stress, official resource transfers: responsibility and solidarity, in other words, would sit side by side.
Critically, the committee concluded: “Economic and monetary union form two integral parts of a single whole and would therefore have to be implemented in parallel.” They never were, and that was the big mistake. The euro will be safe only when it is rectified.
philip.stephens@ft.com

Saturday, July 18, 2015

How We Know Russia Shot Down MH17 - TIME

July 18, 2015 at 2:56pm
http://www.thedailybeast.com/articles/2015/07/17/how-we-know-russia-shot-down-mh17.html


FORENSIC DETAIL07.17.151:00 AM ET
How We Know Russia Shot Down MH17
One year after 298 civilians fell to earth over eastern Ukraine, Putin’s regime is still denying culpability. Here’s definitive evidence to the contrary.
It’s been a year since Malaysia Airlines Flight MH17 was shot out of the sky, killing all 298 civilians onboard. The results of the official inquiry have yet to be released, and while the fact that this Boeing 777 was immolated has not been disputed, various theories have been floated by the Ukrainian government, the Russian government, and other interested parties as to how it was and who ultimately bears responsibility for this tragedy.

The vast majority of the evidence adds credibility to the theory that an anti-aircraft Buk missile launcher, controlled by either Russian soldiers or Russian-backed fighters and fired from a field south of the town of Snezhnoye, destroyed the commercial airliner. The Buk is an advanced weapons system capable of destroying military aircraft or even ballistic missiles at an altitude up to 82,000 feet, and so its presence on Ukraine’s battlefield was always set to change both the scope and intensity of the conflict. But it suspiciously arrived in the arsenal of the Russian-backed fighters at a time when the Ukrainian military was making rapid gains and was perhaps closing in on a military solution to the conflict.

Before MH17

After Russia’s illegal annexation of Crimea in March 2014, bands of pro-Russian fighters began to seize police stations, government buildings, and other strategic areas across eastern Ukraine. Even at that time there was evidence that these raids were organized or led by men who were associated with or members of the Russian military. Initially, the Ukrainian military, left in serious disrepair by the ousted Yanukovych government, was hesitant to respond to this threat. It’s likely that the Ukrainian interim government was initially concerned about a possible counter-revolution launched by disloyal members of the police, military, and security apparatus. Whatever the cause, the “separatists” began to take control of large parts of eastern Ukraine.

The Ukrainian military began its “Anti-Terror Operation,” or ATO, in April to reclaim territory that had been seized by the pro-Russian insurgents, many of whom were operating under the command of Russian citizens (and probably Russian soldiers) who arrived to fight against the new government in Kiev. On June 7, Ukraine elected its first post-revolution president, Petro Poroshenko, who won partially as a result of his pledge to restore order quickly to eastern Ukraine. The ATO had already started to gain momentum throughout May but, perhaps feeling that it had survived the aftermath of a sometimes violent revolution and now had a public mandate to act, the Poroshenko government mobilized the military to confront the separatist threat even more forcefully.

And for a while, it worked. By early July, the Russian-backed fighters had begun to lose considerable ground, including the key coastal city of Mariupol. On July 5, the Ukrainian military regained control of Slavyansk and nearby Kramatorsk, two major separatist bases. The next day Ukraine regained control of Artemivsk; by July 7 the majority of separatists in the northwestern area of their control zone had retreated to the city of Donetsk, their de facto “capital,” which was also soon besieged by the ATO.

If the rate of Ukrainian victories continued unabated, the Ukrainian military would soon be in a position to isolate the separatists from Russia, which Kiev had maintained from outset was supplying them with fighters and materiel. In less than a month the ATO had drastically shrunk the size of the self-proclaimed “People’s Republics” of Donetsk and Lugansk, and were creeping up on the command centers of both.

A part of the wreckage is seen at the crash site of the Malaysia Airlines Flight MH17 near the village of Hrabove (Grabovo), in the Donetsk region July 21, 2014. Russia's Defence Ministry on Monday challenged accusations pro-Russian rebels were to blame for shooting down a Malaysian airliner and asked the United States to produce satellite images to support its assertions. REUTERS/Maxim Zmeyev (UKRAINE - Tags: DISASTER TRANSPORT TPX IMAGES OF THE DAY) - RTR3ZJU5
Maxim Zmeyev/Reuters
These battlefield victories are crucial to understanding the context of the MH17 tragedy because all available evidence suggests that this is the exact period in which Moscow increased its direct support for its proxies in the area. By late August, the momentum of this war had quickly turned, the ATO was rapidly losing territory, and Kiev and Western governments declared that this was only made possible because of a massive influx of Russian military hardware—and conventional Russian soldiers. Indeed, the “Russian invasion” of eastern Ukraine became an established fact as of August 2014.

Among the weapons imported into eastern Ukraine in this period were advanced anti-aircraft systems including the Strela-10, Pantir-S1, and the Buk.

The Anti-Aircraft War

In November 2014, the weapons and munitions experts from Armament Research Services published the most comprehensive catalog of weapons used in this conflict to date. In the report, they note that advanced anti-aircraft systems like the Strela-10 (9k35) and 9k33 Osa were first seen in this conflict in early July. The influx of advanced anti-aircraft systems during this period corresponded to a growing number of Ukrainian aircraft that were shot down in combat.

Curiously, while most of the separatist weapons were supposedly captured from the Ukrainian military, these weapons showed up on Ukraine’s battlefields at a time when the Russian-backed fighters were on the defensive. So where were they captured from?

The first video showing one of the weapons, the Strela-10, in a tracked and armored vehicle designed for front line combat support, may provide a clue.

It was reportedly filmed on July 2, 2014. In that video, the Strela-10 is seen traveling on a road that is well-known to Ukraine researchers because the Buk missile launcher was seen traveling on it after MH17 was blown up 15 days later, but in the opposite direction and minus one missile.

The rate at which Kiev lost aircraft escalated quickly. According to ARES, from late April to early May, five Ukrainian helicopters were shot down near Slavyansk and Kramatorsk. However, soon the separatists began targeting Ukrainian military planes. On June 6 the Russian-backed fighters shot down their first fixed-wing aircraft, an Antonov An-30 surveillance craft northeast of Slavyansk, near Drobyshevo. On June 14, a Ukrainian Ilyushin Il-76 strategic airliner was shot down over Lugansk. One month later, on July 14—three days before MH17’s immolation—a Ukrainian Antonov An-26 was downed over the Izvarino border crossing. Remarkably, Russian media reported that this aircraft was shot down by a Buk that had been captured weeks earlier from the Ukrainian military.

Our team at The Interpreter reported on the claim that separatists had captured a Buk, and pointed out that this story only ran on TV Zvezda, a network run by the Russian Defense Ministry. No other sources appeared to carry this newsworthy information except for a curious tweet from the Twitter fan account for Natalya Poklonskaya, the pro-Moscow Crimean prosecutor who became a celebrity after Russia’s Anschluss of the peninsula, saying the separatists had received some “cookies” in the form of the Buk. Was it possible, therefore, that TV Zvezda was already creating a cover story to explain how the Russian proxies managed acquire such a recherché Russian weapon?

The Day Before

On July 16, two new milestones were reached in what can feasibly be called the Ukraine-Russian War. First, a Ukrainian Sukhoi SU-25M1 close air support jet fighter was shot down over the border. In that incident, the spokesperson for the Ukrainian National Security and Defense Council claimed that an air-to-air missile fired by one of Russia’s jets was likely responsible.
Second, The Interpreter was able to definitively document through geolocated YouTube videos that a group of Grad rocket launchers positioned on the Russian side of the border were firing into Ukrainian territory.

The Day Of

On the morning of July 17, news surfaced that another plane, possibly a Ukrainian military cargo plane, had been shot down near Torez. Citizens and reporters near the crash site had already begun to post pictures and videos of the smoking debris. We now know that the only plane that crashed in this area was a civilian airliner, Malaysia Airlines Flight MH17.

The separatists, it seems, were also confused. A social media page associated with the then-military leader of the Russian-backed fighters, Colonel Igor Strelkov (aka Igor Girkin), took credit for the shooting down of an aircraft near Torez. At 17:50 Moscow time—approximately 30 minutes after the aircraft was struck but well before most of the world was aware that a civilian airliner had vanished from the sky—a group on the Russian social-networking site VKontakte called Strelkov’s Dispatches posted the boast of the downing of the plane (with some of the same videos The Interpreter had already posted, used as corroborating evidence), adding: “We warned them—don’t fly ‘in our sky.’”
When the darker truth was eventually discovered, the post was deleted, although we had already captured screenshots. Titled “Report from the Militia,” it had in fact been copied from another forum where Strelkov was the moderator, called Antikvariat.ru, at 17:37 Moscow time.

While Strelkov’s Dispatches has been challenged as “inauthentic,” in fact it was used by Strelkov and other separatist leaders before July 17 and since to post official information about the war. It’s also been cited by Russian state media on several occasions and has never been disavowed by Strelkov personally. He continues to allow the group to use his name and likeness, despite the renaming of the VKontakte group the “Novorossiya Militia Dispatches.”

The Buk missile launcher was seen traveling on that road after MH17 was blown up 15 days later, but in the opposite direction and minus one missile.
More revealing, the Russian media, including ITAR-TASS, RIA Novosti, and Vzglyad.ru, cited this forum and other sources that claimed the separatists had shot down a Ukrainian cargo plane—until, of course, it was learned that the crashed plane was a civilian airliner.

But Vzglyad.ru added another important detail:

“Ukrainian military claim that the losses were caused by actions by Russia. The militia refuted this information, correcting that they had shot down the plane from a ZRK ‘9K37M1’ (better known as a Buk).”

In Putin.War, Russian opposition leader Boris Nemtsov’s posthumously published report on Moscow’s military involvement in Ukraine, he points out that Russia’s ambassador to the United Nations, Vitaly Churkin, tried to excuse the fact that the separatists claimed responsibility for the attack thus:

A group of Ukrainian miners assist rescue workers in the search for bodies of victims in a wheat field at the site of the crash of a Malaysian airliner carrying 298 people from Amsterdam to Kuala Lumpur in Grabove, in rebel-held east Ukraine, on July 18, 2014. Pro-Russian separatists in the region and officials in Kiev blamed each other for the crash, after the plane was apparently hit by a surface-to-air missile. Members of the UN Security Council demanded a full, independent investigation into the apparent shooting down of a Malaysia Airlines jet over Ukraine.
Dominique Faget/AFP/Getty
“People from the east [of Ukraine] said that they had shot down a military plane. If they believed that they had shot down a military plane, it was confusion. If it was confusion, then it was not an act of terrorism.” In other words, a high-ranking Russian diplomat was trying to account for why separatists shot down MH17—a disclosure that, as we shall see, was ignored and then vehemently rejected by Churkin’s superiors.

The Missile

One problem was immediately apparent after MH17 was reduced to a scattered pile of wreckage. Details began to emerge about the altitude it was traveling at before it fell from the sky—33,000 feet.

Each anti-aircraft missile has a rating for how far away and how high it can hit a target. This relatively high altitude ruled out multiple missile systems that had so far been documented on the battlefield in Ukraine. But Associated Press journalist Peter Leonard reported after the incident that one of his reporters saw a Buk missile system moving through the town of Snezhnoye.


The Buk is capable of hitting targets more than twice as high as MH17 was traveling. Furthermore, as The Interpreter’s original report on the incident catalogs, multiple pictures, videos, and eyewitness reports have emerged that place the Buk missile launcher in several of the surrounding towns. A significant amount of evidence puts the Buk clearly within range of MH17 when the aircraft was hit.

The Incriminating Tweet

In the hours that followed the announcement that a civilian airliner, not a military cargo jet, had been destroyed, the Russian-backed separatists took several steps to hide some of their previous statements. As we noted above, the claim by “Strelkov’s Dispatches” that the pro-Russian fighters had shot down a Ukrainian plane with a Buk was removed. But it was not the only incriminating Internet post that was removed.

On June 29, the official Twitter account of the press office for the Donetsk People’s Republic had tweeted a picture of a Buk missile system that they said their troops were now controlling (the origin of the missile is left unclear in the language of the tweet). This tweet, too, got deleted, and when Time magazine reporter Simon Shuster later queried the separatist leadership about whether they ever possessed a Buk, they said they didn’t.

Separatists were perhaps too eager to claim that they, and not the Russian military, were responsible for the downing of what they assumed was another Ukrainian military plane—a media strategy that quickly backfired once it became clear that a commercial jet was hit.

In an interview with the radio station Echo of Moscow, Dmitry Muratov, the editor of the well-respected independent Russian newspaper Novaya Gazeta, said Alexander Boroday, the self-appointed head of the self-declared “Donetsk People’s Republic,” told Russian journalists that his troops shot down MH17. Muratov was vague about his sources for the story, suggesting that they were reporters for other news agencies. Muratov told the radio station: “I know that Alexander Boroday called the head of one of the main media organizations that covers events in Ukraine approximately 40 minutes after the Boeing perished and said, ‘Likely we shot down a civilian airline.’ I was told this and people talked about this whose words I am accustomed to taking seriously.”

Ukraine’s Intercepts

Eyewitness and journalist accounts placed a Buk near MH17 on July 17, and the Russian media and the separatists themselves acknowledged, in multiple outlets, that they shot down an aircraft—with a Buk. Notably, the Ukrainian government was also quick to adopt this narrative.

Only hours after the plane crashed, Kiev released what it said was a leaked audio recording, reportedly an intercepted phone call, reportedly between Igor Bezler (Bes, or “Demon”), a commander of the Russian-backed fighters, and Vasily Geranin, who is described as a colonel in the Russian Federation’s GRU (military intelligence). In that conversation, the two men confirm that “a plane has just been shot down” outside Enakievo, a town 62 miles northwest of Snezhnoye, by one of the separatist militias. After this, two men who are identified as “Major” and “Geek,” presumably two of the fighters, sound shocked as they learn that the plane was filled with civilians.

In a separate release by the Ukrainian Security Service (SBU) later in the day, another separatist leader, Mykola Kozitsin, reportedly has a conversation with one of his fighters in which he is audibly unnerved that a civilian airliner, not a Ukrainian cargo plane, that was shot down. “What the fuck were they flying in here for? There’s a war on,” a frustrated Kozitsin told the man on the other end of the line.

The next day, the SBU released another allegedly intercepted conversation, this time between a separatist commander and a GRU officer who goes by the callsign “Oreon.” In this exchange, which can be read in English here, the separatist commander says: “We already have the Buk and we will shoot them [Ukrainian military planes] down.” Oreon replies: “Yes, I know that.”

In the same release, a separate conversation between two separatist commanders can be heard in which the fighters admit that they have “received” a Buk anti-aircraft system and that it came “through the stripe”—code for the security cordon on the border between Russia and Ukraine.

The Kremlin narrative has been ever-changing, woefully substantiated, and largely contradictory.
On July 25, eight days after the downing of MH17, the SBU released a fourth audio tape that it claimed was recorded just two minutes prior to the Boeing’s being hit. A man the SBU identifies as Igor Bezler speaks to a man called Naymanets (“hired hand” in Russian). Naymanets tells Bezler that a “birdie” is flying in his direction.
Bezler: “A ‘birdie’ has flown to us?”

Naymanets: “Yes, one, for now.”

Bezler: “A scout or a big one?”

Naymanets: “It's not visible behind the clouds. It’s really high.” [Emphasis added.]

Bezler: “That it’s—I understand. Got it.”

Naymanets: “Uh-huh.”

Bezler: “Announce up top [‘report up the chain].”

The Russian government and the Russian-backed separatists have denied the authenticity of the tapes. Can they be authenticated?

The first clue that the tapes were real came from the speed with which they were released and the integrity of the details and narratives on them. The first two tapes were disclosed soon after MH17 was shot down; a third was released the next day, as the world struggled to piece together what had just happened and how. The tapes conform exactly to the narrative put forth by the Ukrainian government and are supported by a large body of empirical evidence.

But the most important confirmation of the tapes’ authenticity comes from none other than the separatists themselves.

Soon after the first audio leaks were released, and perhaps in a hurry to deny responsibility for an incident that had killed so many innocent civilians, Igor Bezler released a statement in which he admitted that it was indeed his voice on the recording with Geranin. But that conversation, Bezler insisted, happened before July 17, when a different plane was shot down. Bezler accused the SBU of editing the recording to make it sound like he was referring to MH17.

So Bezler confirms the authenticity of the conversation but denies its context. Yet in his confirmation is an important revelation: In his phone call with Geranin he describes a plane traveling over Enakievo, a town MH17 passed over before it was struck above Snezhnoye. This plane is described as flying at a high altitude (as was the one discussed between Bezler and Naymanets in the other intercepted conversation).

And yet according to the ARES analysis of all downed Ukrainian military aircraft until November 2014, no plane or helicopter was hit anywhere near Enakievo before July 17. (A MiG-29 fighter jet was downed close to the town on August 7.) Bezler cannot have been right in claiming that his conversation with Geranin occurred before MH17 was blown up

Members of a group of international experts inspect wreckage at the site where the downed Malaysia Airlines flight MH17 crashed, near the village of Hrabove (Grabovo) in Donetsk region, eastern Ukraine August 1, 2014. International experts started recovery work at the wreckage site of the downed Malaysian airliner in east Ukraine on Friday despite clashes nearby between government forces and pro-Russian rebels.
Sergei Karpukhin/Reuters
Buk at the Scene of the Crime

Before we consider some of the more technical aspects of this incident, it’s worth considering a more basic fact. Before July 17, several anti-aircraft missiles were documented as being in the possession of the Russian-backed fighters. The earliest examples of these are shoulder-launched MANPADS, which are more than capable of shooting down low-flying aircraft such as helicopters. Some of the newest additions, as explained above, were vehicle-based systems like the Osa and the Strela-10. These weapons are far more advanced, capable of downing helicopters but really designed to shoot down faster-moving aircraft like ground-attack jets. The presence of these weapons could explain the destruction of some of the Ukrainian aircraft that were shot down earlier in July. But none of these weapons is capable of shooting down an aircraft flying as high as MH17 was on that fateful day.

The only weapon in the area capable of shooting down MH17 and spotted by journalists, dozens of eyewitnesses, and many videos and pictures taken by citizen journalists was the Buk.

Proof that at least one Buk missile launcher was within range of MH17 when the aircraft was shot down:

■   Journalists from the Associated Press saw a Buk missile launcher in Snezhnoye before MH17 was shot down.

■   In a detailed report, Roman Bochkala, a journalist for TV Inter in Ukraine, wrote that he witnessed the Russian-backed separatists in possession of a Buk missile system, driving in a convoy from Torez toward Snezhnoye.

■   A geolocated video posted on July 17, the day of the incident, shows a Buk missile launcher in the center of Snezhnoye, driving south.

■   The Guardian interviewed residents of Torez who positively identified the Buk missile launcher and said it traveled in a convoy toward Snezhnoye.

■   A geolocated picture shows a Buk launcher in Torez, moving in the direction of Snezhnoye. BuzzFeed journalists later visited Torez, confirmed the details of the picture, and spoke to residents who saw the Buk travel through the town toward Snezhnoye.

■   Journalists from Novaya Gazeta traveled to the area around the crash site and interviewed witnesses to the MH17 disaster. One resident of Grabovo, where MH17 actually crashed, claims a “‘ball’ flew at high speed from the southeast [from the direction of Snezhnoye]” and disappeared behind the clouds before an explosion was heard. Novaya Gazeta also interviewed citizens of Pervomaiskoye, just south of Snezhnoye, where some suspect the Buk actually fired the missile. The reports of these citizens—many of whom were afraid to talk for fear of repercussions from the separatists who still control the area—are confused and somewhat contradictory (more on this in a minute), but they all seem to agree that a projectile or projectiles fired from the ground shot down the aircraft.

There is also a clear pattern to the data. Before the missile launch, multiple eyewitnesses, journalists, pictures, and videos describe the Buk as moving from Torez toward Snezhnoye, and from there south toward Pervomaiskoye. We also see that some eyewitnesses described the missiles as flying from somewhere south of Snezhnoye. This theory is backed up by open-sourced forensics and investigations launched by journalists.

A further clue about the launch site of the Buk was furnished by an obscure picture released by the Ukrainian government on July 18. Revealed later to have been taken by a Torez photographer from his roof, the image allegedly shows a smoke trail created by the missile as it traveled toward MH17.

The Ukraine at War blog was able to use landmarks in that picture to estimate where the picture was taken. The launch site, then, was somewhere south of Snezhnoye and west of Pervomaiskoye, just as was indicated by some of the eyewitnesses.

BuzzFeed’s Max Seddon confirmed where that picture was taken, from a vantage point looking toward the field in question. The Telegraph’s Roland Oliphant visited that field and found scorch marks on the ground, likely the backfire from a missile launcher, as well as other debris that suggests that Russian-backed separatists were operating there. Those reports match interviews conducted by The Guardian’s Shaun Walker and others.

Ukraine at War then pinpointed the location of the possible launch site and compared satellite images taken three days after the incident with images taken before it to confirm that unusual tracks were visible in the fields, as if a tracked vehicle—perhaps a Buk—had traveled through the fields.

In December 2014, Dutch photographer Olaf Koens found the man who took the photo, and several others that were never published. Soon after, so did Russian blogger Sergei Parkhomenko, whose report was republished by Putin.War, the Nemtsov report. According to the photographer, he heard a loud missile launch, much louder than anything he had heard before, snapped a picture of the smoke trails, and then noticed the black smoke rising from the opposite direction, from Grabovo—the area where what was left of MH17 eventually crashed. This description matches exactly multiple other reports of the incident pieced together by various sources.

The Story Told by Debris

Investigators have access to an even more definitive forensic body of evidence—the debris field from the aircraft.

The Buk has a very different signature than many other types of missiles. Infrared tracking missiles, like the Strela-10, fire a missile that is attracted to the heat-generating engines and explodes on contract. Similarly, infrared homing air-to-air missiles fired by aircraft also target the engines.

Not so with the Buk, which uses radar-proximity missiles. These missiles travel toward the target and then explode when they get within adequate range. The explosions send fragmentation into the targeted aircraft, often ripping it apart. A defense analyst with IHS Jane’s noted that the pattern of damage seen on the fuselage of the plane was consistent with the theory that a Buk surface-to-air missile was used. A ballistics expert and lecturer at ANU Strategic Defence Studies Centre, Stephan Fruhling, agreed, noting that the damage was consistent with a fragmentation device such as a Buk, not a weapon such as an air-to-air missile, which targets the engines and does not send fragmentation rounds into the aircraft. A spokesperson for the SBU noted that some of the bodies of the victims of MH17 contained metal fragments not consistent with the aircraft itself. A journalist for Dutch broadcaster RTLNieuws discovered a fragment at the crash site that arms experts say is part of the explosive charge of a Buk missile.

Indeed, the Russian state-operated manufacturer of the Buk, Almaz-Antey, claims that a Buk was responsible for the shooting down of MH17, although it claims the missile was fired from Ukrainian government-held territory (a theory we will examine in a moment).

Perhaps most critically, the Dutch Safety Board’s initial investigation stated that the aircraft was “penetrated by a large number of high-energy objects” which “originated from outside the fuselage,” a description consistent with a Buk. This week sources working with the official Dutch investigation conducted by the Dutch Safety Board told CNN that their official findings will definitively say that a Russian Buk, fired from territory controlled by Russian-backed fighters, shot down MH17.
Russian Disinformation

There have been two alternative theories put forth by the Russian government. The first is that a Ukrainian Su-25 fired an air-to-air missile at MH17 and the second that a Buk fired from ATO-monitored terrain shot down the airliner.

The Su-25 theory was put forth by the Russian government four days after the grim event (but after significant, often contradictory, and widely conspiratorial speculation by the Russian state-owned media). It was immediately dismissed by experts who pointed out that the Su-25 is not capable of flying the flight plan described by the Russian government nor, in all likelihood, was it capable of shooting down a plane flying at over 33,000 feet. Furthermore, the Dutch Safety Board’s initial finding was that the missile which shot down MH17 exploded “from above the level of the cockpit floor,” not at the engines or below the aircraft, which is what we would expect to see from missiles fired by a Su-25. As the investigative bloggers at the citizen journalist website Bellingcat noted the problems with this theory are legion.

Even the Russian government seemed to abandon this line of thinking quickly. Engineers for the Russian manufacturer of the Buk missile claimed that, yes, the airliner was shot down by a Buk, but the specific missile in question is not used by Russia, and the missile that was used was not fired from near Snezhnoye, but rather from Zaroshchenskoye, territory controlled by the Ukrainian government.

All of these points were debunked.

A rebel commander arrives at the scene expecting to find the remains of a Ukrainian Su-25 fighter jet that he seems to believe his troops have just shot down.
The first problem with the engineer’s report: Even the separatists claimed at the time that Zaroshchenskoye was controlled by the Russian-backed fighters, not the Ukrainian military.

The second problem: Novaya Gazeta’s Pavel Kanygin went to both Zaroshchenskoye and the area around the MH17 crash site. While those near the crash site gave contradictory and somewhat confusing statements, they did see a surface-to-air missile fired at MH17, while no one interviewed in Zaroshchenskoye saw either the Ukrainian military nor a Buk missile launcher.

The third problem: The missile in question is used by the Russian military, and multiple missiles of this variety were documented in convoys moving on the Russian side of the border close to Ukraine.

The core absurdity with Moscow’s alternative theories—conspiracy theories, really—is even more basic. The Ukrainian government, citing intelligence sources, swiftly put forth a narrative whereby a Buk missile launcher was transported from the Russian border to the area where MH17 was downed; then the missile was fired and destroyed the civilian airliner before the launcher was evacuated back across the Russian border.

The Ukrainian narrative has been consistent from the start, and although Kiev made at least one mistake in its initial press release, a significant body of subsequent evidence supports this narrative. The Kremlin narrative, on the other hand, has been ever-changing, woefully substantiated, and largely contradictory—and many of the various theories put forth by its surrogates in the state-controlled media have been risible.

Who’s to Blame?

How did the separatists get a Buk anti-aircraft missile? Did they capture one from the Ukrainian military, or were they given a Buk by the Russian government? Is it even possible that Russian soldiers pulled the trigger?

The first key to answering this question is to track the movement of the Buk on the morning on July 17, 2014. In The Interpreter’s first comprehensive report on this issue we published a timeline of events that combines our own work with a timeline posted by the Associated Press, which also includes claims from the Ukrainian intelligence assessment. An updated version is below:

■   01:05—Buk enters Ukraine on flatbed truck. (AP—Ukrainian counterterrorism chief Vitaly Nayda)

■   09:00—Buk reaches Donetsk, disembarks flatbed truck. (AP—Ukrainian counterterrorism chief Vitaly Nayda). A picture of the Buk was taken that places it in Donetsk at approximately 11 a.m. (read more on this here.
■   Approximately 11:40—Picture places Buk in Zuhres, between Donetsk and Torez. (Bellingcat)

■   Approximately 12:00 to 13:00—Social media posts place Buk in Torez, then moving toward Snezhnoye. (Bellingcat)

■   Approximately lunchtime—Buk reaches Karapetyan Street in Snezhnoye. (AP—eyewitnesses)

■   13:05—AP journalists see Buk moving through Snezhnoye in convoy with two civilian cars. This was reported by AP before MH17 was shot down. (AP)

■   16:18—Intercepted audio released by Ukrainian SBU has separatist commander Igor Bezler speaking, told by rebel spotter that a “birdie” flying “really high” was moving into range. (The Interpreter)

■   16:20—Locals in Snezhnoye report one or two loud blasts. One minute to a minute and a half later, a second blast is heard. MH17 falls from the sky after this. (AP)

■   16:33—Intercepted phone call has separatists realizing that they shot down a civilian airliner, not a military transport plane. (The Interpreter)

■   16:40—An intercepted phone call has Bezler speaking to Vasily Geranin, who is described as a colonel in the Russian Federation’s GRU, indicating that an aircraft has been shot down. There is a discrepancy with the time stamp since only one aircraft was shot down in this area. Bezler says it was “30 minutes ago,” but it was really only 20 minutes earlier. (The Interpreter)

■   16:50—The VKontakte community “Strelkov’s Dispatches” posts a report “from the militia” about the downing of “an AN-26″ in the “region of Torez.” (The Interpreter)

■   17:14-17:42—Separatists see that the wreckage of the what they shot down is indeed a civilian aircraft, not a military one. The “Mayor” admits that they have shot down a “a super big civilian craft,” and a separatist reports “fragments right in the yards” and “civilian stuff, medicine, toilet paper, towels.”

■   17:18—Pro-Kremlin outlet Vzglyad.ru reports separatists taking credit for downing “an AN-26” (actually MH17) with a Buk; admissions of possession of Buks also covered on July 14. (The Interpreter)

■   Approximately 20:00-21:00—Video released by the Ukrainian government shows a Buk, missing one missile, in Lugansk on the road to Krasnodon, which leads to a key border crossing, likely approximately at sunset.

■   02:00-04:00 on July 18—The Buk launchers reportedly cross the border into Russia. (Ukrainian government)

Even more evidence has come to light since that fleshes out the Buk’s travels before and after MH17 was shot down. The investigative bloggers at Bellingcat were able to analyze a photograph, originally published by Paris Match, which places the Buk in Donetsk at approximately 11 a.m on July 17. The numbering on the side of the Buk in that picture, 3x2, with the “x” being a missing number, matches precisely a video of a Buk located in Stary Oskol, Russia, on June 23. Other investigations by Bellingcat suggest that the vehicles in the June 23 convoy were part of Russia’s 53rd Anti-Aircraft Missile Brigade.

There is another far more basic reason to believe that the Russian military either directly controlled the missile that shot down MH17 or helped the separatists conduct the attack: the sheer complexity of the weapon, which mere “volunteers” could not operate by themselves. (See The Aviationist for a brief view of how complex the controls for this weapons system are.)

Evidence Still Emerging

Though MH17 was destroyed one year ago Friday, even more new evidence is coming to light. News Corp Australia has just released a new video that shows the Russian-backed fighters arriving at the scene of the crash site. In the video, the voice of a rebel commander can be heard issuing orders and communicating with other Russian-backed fighters by both radio and phone. He arrives at the scene expecting to find the remains of a Ukrainian Su-25 fighter jet that he seems to believe his troops have just shot down. Instead, he finds nothing but a civilian airliner.

News Corp also says that their investigation has unearthed evidence that the locals on the ground were being instructed to say that a Ukrainian jet shot down the civilian airliner.

The video is disturbing. Russian-backed fighters rummage through the luggage of the recently deceased in search for the aircraft’s black boxes and other identifiable paperwork and USB sticks. The commander continues to repeat that “they [the Ukrainians] brought down the passenger plane [with a fighter jet] and we brought down the fighter.” The problem—there is no fighter. This commander's troops have just shot down a civilian aircraft, a fact that begins to dawn on them over the course of the 17-minute video.

The commander can be heard off camera saying: “They say the Sukhoi [fighter] brought down the civilian plane and ours brought down the fighter…But where is the Sukhoi? There it is…it’s the passenger plane.”

Putin’s Cover-up

The last year has seen Moscow lie, fabricate, and insult the intelligence of all thinking people by tossing up self-evidently absurd “explanations” for how almost 300 innocents met their end. The Kremlin has also conducted a concerted smear campaign against journalists and investigators trying to unearth the truth in every damning detail. Most recently, President Vladimir Putin has rejected a Dutch attempt to convene an international tribunal seeking to find out who was responsible for the MH17 tragedy, saying it would be “counterproductive.” In short, in trying to hide its culpability for a horrific accident, the Kremlin has disparaged the memory of the victims and mocked the suffering of their survivors. It has therefore compounded a crime of sheer negligence with the greater one of obstruction of justice.