Russian President Vladimir Putin had a rough time at the G20 summit in Brisbane, Australia, at the weekend, the first time he has met with the assembled world leaders since Russia annexed the Crimea in March.
Australian Prime Minister Tony Abbott said he would "shirt front" Putin when they met and Canadian Prime Minister Stephen Harper told the Russian leader: "I guess I'll shake your hand, but I have only one thing to say to you: you need to get out of Ukraine." And US president Barak Obama bluntly accused Putin of not living up to a ceasefire agreement in Ukraine, signed in the Belarusian capital of Minsk on September 5, but offered no new plans on how the West could force Russia to change its policies in the stand off.
However, despite the frosty reception – Putin left the summit early before the joint communiqué was released – he met with key leaders to lay out his position. The summit showed that Putin has dug in his heels and is waiting for the West to make the next move.
"At the closing of the evening program of the G20 summit [in Brisbane] Vladimir Putin held bilateral meetings with German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker. The discussions were very long and thorough, bilateral relations have been discussed… The sides also focused on exchanging opinions on the situation in south-eastern Ukraine. President Putin explained in details the Russian approach to the conflict,” Presidential press spokesman Dmitry Peskov said.
German press reported that Merkel came out of the meeting unsettled. In comments to the press after the meeting she warned that Russia's actions was destabilising the whole of eastern Europe.
"After the horrors of the WWII and the end of the Cold War, the whole of the European peace order is now in question. And the cause is the continuation of the Russian efforts to destabilise eastern Ukraine," Merkel said in comments reported by the Frankfurter Allgemeine Zeitung.
She went on to warn Putin that the rest of Europe would "not back down as it once did in the times of the German Democratic Republic".
For his part, Putin is striving to unite the other emerging markets – and especially his allies in the BRICS (Brazil, India, China and South Africa) to form a political alliance, as well as an economic one, that will give them more clout in global affairs. The G20 summit is the perfect forum to push for this more "multipolar" worldview.
"The GDPs of the BRICS countries calculated at purchasing power parity are greater than those of the G7. As far as I know, the GDP of BRICS is $37.4 trillion, while that of the G7, $34.5 trillion. What if they (G7) are told: ‘No, thank you, we shall be doing this and that here on our own and we don’t care how you will carry on?’ There will follow nothing but worse imbalance. If we really wish to decide something, we should decide it together," said Putin in an interview before the meeting.
Putin went to the G20 summit with no intention of defending Russia's actions in Ukraine or complaining about sanctions imposed on Russia since the annexation of Crimea. "There's no sense to discussing the sanctions," Putin said, implying the two sides are now at loggerheads.
"Of course, [sanctions] run counter to the very principle of G20 activities, and not only the activities of the G20 and its principles, they run counter to international law, because sanctions may be introduced only through the United Nations and its Security Council. Moreover, they are against the principles of the WTO and the General Agreement on Tariffs and Trade, the GATT," said Putin.
However, he went on to threaten that the East and Russia may simply abandon any attempt to work with the West in the future if sanctions remain in place.
"Take our case: imagine our partners have restricted the access of our financial institutions to international money markets. In the meantime, by drawing capital from international financial markets, our financial institutions finance our companies that import finished products from the very same industrialised economies, thereby supporting jobs, the social sphere and economic growth. If we stop doing that, disruptions will follow there. These are in-depth matters. They are not lying on the surface, they are not obvious at first sight," says Putin. "Our joint work with the Federal Republic of Germany maintains some 300,000 jobs there. If there are no contracts, these jobs may be lost."
While Putin admits the sanctions are painful, he pointed out that Russia's reserves and huge mineral resources mean it can cope.
"A country like ours finds the situation easier to cope with. Why? Because we’re producers of oil and gas and we handle our foreign exchange/gold reserves and government reserves sparingly. Our reserves are big enough and they enable us to feel assuredness over our ability to stay committed to social obligations and to keep all the budgetary processes and the entire economy within a certain framework."
The meeting is significant as it is not just Russia that is worried about the US dominance of geopolitics; Russia has found a willing ally in China, which is also keen to reduce Washington's clout on the global stage. The two are manifesting this change by ended the use of the dollar to price and settle international trade deals.
"We’re moving away from the diktat of the market that denominates all the commercial oil flows in US dollars," said Putin. "We’re boosting as much as possible the use of national currencies – both the ruble and the yuan."
BRIC by BRIC
The G20 is the to-be global workshop, but the practical day-to-day politics will be run under the auspices of the BRICS, which have started to build institutions to function as a multinational body (and is ironically a mirror image of the G7, an emerging market version of the biggest economic powers in the East).
“The decisions to create BRICS' financial institutions are being implemented successfully. The efforts to form the Development Bank and a pool of currency reserves instituted at the Fortaleza summit are nearing completion,” said Putin. He recalled that the bank’s aggregate capital constituted an impressive $200bn.
“In this way we shall obtain common mechanisms capable of stabilising the national markets of capital in case of critical situations in the global economy,” said Putin.
Russia will take over the rotating presidency of the BRICS group in April and has promised to focus on the further expansion of cooperation within the association.
“Russia is drafting an economic partnership strategy and an investment cooperation road map,” Putin said at a meeting of the BRICS leaders.
Looking for a way out
And Putin is looking for a way to bring the conflict and resulting stand off with the West to an end. Putin explained in details Moscow’s stance on the situation in eastern Ukraine to German Chancellor Angela Merkel and new European Commission President Jean-Claude Juncker on Saturday, Russia's presidential spokesperson said.
Merkel wants to continue dialogue with Putin, despite disagreements on Ukraine, deputy government spokeswoman Christiane Wirtz said on Friday. Wirtz said explicitly that there will be no new sanctions imposed on Russia, but left the possibility of adding more names to personell lists, especially of military figures in Eastern Ukraine.
Wirtz said Merkel “has been talking with the Russian president for weeks and months, since the beginning of the crisis” in Ukraine and “listens to what the Russian president has to say", RFE/RL reported.
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