Merkel Warns Putin Of "Massive Damage", Russia Continues Piling Troops, Pro-Russia Oligarch Arrested, Gazprom Speaks

Tyler Durden's picture

It's crunch time for Ukraine.

With just over two days to go until the Crimea referendum, all the actors are stepping up the diplomacy to a fever pitch in a desperate attempt to talk Putin out of formally annexing the peninsula following results which are well-known in advance will show the population's allegiance to mother Russia. But while the generic rhetoric is well-known, one surprising place of escalation over the past 24 hours has been Germany's Angela Merkel, who for the most part had been willing to stay on the sidelines in the war of words, has suddenly stepped up her own phrasing, and warned Moscow on Thursday that it risked "massive" political and economic damage if it refused to change course on Ukraine, saying Western leaders were united in their readiness to impose sanctions on Russia if necessary.

Reuters reports that the chancellor, using her strongest language since the start of the crisis and removing any suspicion that Germany might seek to avoid a confrontation with President Vladimir Putin, said his actions would lead to "catastrophe" for Ukraine and much more.

"We would not only see it, also as neighbours of Russia, as a threat. And it would not only change the European Union's relationship with Russia," she said in a speech in parliament. "No, this would also cause massive damage to Russia, economically and politically."

Merkel has acknowledged that her efforts to persuade Putin to negotiate via a "contact group" with the transition government in Kiev - which he accuses of ousting Russian-backed president Viktor Yanukovich unlawfully - have failed and time is running out.

"To be absoultely clear, none of us want it to come to such measures but we are all ready and determined to if they are unavoidable," said Merkel.

Germany receives over a third of its gas and oil from Russia and over 6,000 German firms are active there. A poll last week showed that a majority of Germans oppose sanctions against Russia. So is Merkel doing the Western thing, and bluffing in a last-ditch effort to convince Putin she isn't, or does Putin still believe he has all the trump cards, and can bring the German economy to a crawl if Merkel acts out on her threat? We will known as soon as Sunday night.

Elsewhere, John Kerry headed out to London for some last ditch Russia talks on Ukraine. Expect this "effort" too to lead exactly nowhere.

In the meantime, Russia's response is well known, which is more of the same - and the Russian Ministry of Defense made it quite clear what the next steps are when it announced that the large-scale maneuvers near the Ukraine border now involve some 8,500 troops, 270 tanks and 180 APCs.

An indication of how "seriously" Russia takes the diplomatic threats was the news that it is ready to impose counter-sanctions. WSJ reported that Russia’s economy ministry is looking at what the consequences of possible sanctions from the West would be and stands ready to impose similar penalties, deputy economy minister Alexei Likhachev said Thursday.

We are ready for any developments, all options are being considered. But we hope that it will impose specific political sanctions but not a wider range of some trade and economic decisions,” Mr. Likhachev said.


Mr. Likhachev said Europe is unlikely to impose harsh sanctions against Russia as both sides have strong business and trade ties.


Unlike Europe, which is Russia’s major trading partner, the U.S. has more room to impose sanctions, he added.


“Our sanctions will be symmetric,” Mr. Likhachev said.

But it wouldn't be a Russian response if Gazprom didn't make an announcement or two. Which it did:

  • Gazprom CEO: Ukraine’s Failure to Repay Gas Deliveries Debt Puts Company Dividend Policy At Risk
  • Gazprom CEO: Ukraine Debt for Gas Deliveries Now at $1.8 Billion, Keeps Growing
  • Gazprom CEO: Ukraine Political Crisis Detrimental For Company’s Investment Program
  • Gazprom CEO Seeking Clarity On Gas Payments From Ukraine
  • Gazprom CEO Doesn’t “Want A Gas Crisis”
  • Gazprom CEO Doesn’t Address Cutting Off Gas Supplies In Statement

And while diplomacy is failing all around, and a trade and all too real war are potentially on the horizon, the real issue was and continues to the money. Which is why it was surprising to learn that earlier today the a Ukrainian oligarch, Dmytro Firtash, was arrested in Vienna this week at the request of U.S. authorities, the Austrian government sources said on Thursday.  Reuters reports that Firtash, 48, is one of Ukraine's richest men, an oligarch whose close links to Russia and involvement in the gas, chemicals, media and banking sectors gave him substantial influence, notably during the administration of recently ousted, Moscow-backed President Viktor Yanukovich.

The Federal Criminal Office, had identified the man taken into custody only as Dmitry F. and said he had been under investigation by the U.S. Federal Bureau of Investigation since 2006.

As a reminder, Stratfor's take on the richest Ukrainians was that they would play a "decisive role" in the conflict:

With presidential elections set for May 25 and parliamentary elections likely to be held later in the year, Ukraine's current administration will need the continued support of the oligarchs. More immediately, with Crimea on the verge of leaving Ukraine, the new government's urgent challenge is to keep mainland Ukraine together. Eastern Ukraine is crucial to this -- the region is a stronghold for pro-Russia sentiment and the main site of opposition, after Crimea, to the Western-backed and Western-leaning government.


The oligarchs are key to keeping control over eastern Ukraine, not only because Ukraine's industrial production is concentrated in the east -- thus anchoring a shaky economy -- but also because many of the oligarchs have a stronger and more manageable relationship with Russia than the current government, which Moscow sees as illegitimate. Many of these business leaders hail from the industrial east. They have business ties to Russia and decades of experience dealing with Russian authorities -- experience that figures such as Klitschko and Yatsenyuk lack.


So far, the new government has been able to maintain the support of the country's most important oligarchs. In general, the oligarchs want Ukraine to stay united. They do not support partition or federalization, because this would compromise their business interests across the country. But this support is not guaranteed over the long term. There have been recent complaints about the new government, for example over the arrest of former Kharkiv Gov. Mikhail Dobkin. Akhmetov came out in Dobkin's defense, saying the government should not be going after internal rivals right now, but rather focusing on concerns over Russia. This can be seen as a warning to the new administration: The oligarchs' loyalty to the current regime is conditional and should not be taken for granted.


Ultimately, the biggest threat to the oligarchs is not the current government, over which they have substantial leverage, but Russia. The oligarchs stand to lose a great deal if Russia intervenes in eastern Ukraine. If Russia takes over eastern territories, it could threaten the oligarchs' very control over their assets. Therefore they have an interest in bridging the gap between Russia and Kiev, but it is Moscow they fear more. The oligarchs have substantial power to shape the Ukrainian government's decision-making as it moves forward. Their business interests and the territorial integrity of the country are at stake.

As always, follow the money, especially when some of the richest money ends up directly in prison in a country far away, under the orders of that global moralizer, the United States.

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Fukushima Sam's picture

Good old Vladimir "It Ain't Gay If It's a Young Boy" Putin.

Sudden Debt's picture

This movie shows how the Russians will take over the rest of Europe...

Arius's picture

Merkel's position will be key.  I firmly believe her visit to London to coordinate with the queen and british cabinet on the stand to the russian was no coincidence.  the germans must have had intellengence of pending aggresion upon completion of Sochi Olympics.


Will see ...but where Merkel will stand is the key!

MillionDollarBonus_'s picture

If Russia wants a World War 3 I say bring it on. I'll fight to the death for my country, and it's about time our lazy couch potato society got of their arses did something worthwhile. Combat is good for society - it teaches respect, courage, honor and other decent principles from a bygone era. It's time for the world to learn to stand up for their countries and start giving something back to the generations before them that fought and gave their lives the wars of the centuries. 

Sudden Debt's picture

are you for real??


I'm moving to somewhere sunny and peacefull sipping coctails if this turns sour for sure!

But don't dispair... I'll follow up on you guys on CNBC...

Arius's picture

it is sad to see replies to MDB's post, and the down arrows from the busy bees who dont have time or the guts to write smt.  the question is why such animosity towards a post that in other circumstances and perhaps more importantly made by someone else would have been considered simply patriotic ?

Mine Is Bigger's picture

MDB is playing a character.  Antagonizing poeple with his comments is what he does.  But you are serious about your comment, aren't you?

What part of "combat is good for society" is patriotic?

BandGap's picture

It's called satire. Look it up.

nope-1004's picture

Well I feel better knowing that the troll, who hides behind his keyboard, is willing to leave his cubicle and defend me "cuz it's the right thing to do".

Take lots of band-aids with you and don't break a nail on your excursion, ya condescending goof.  You obviously have never seen war up close, or you'd feel like the loser you are.


matrix2012's picture

Arius will fight to death for his/her Zio paymasters... a New World under the reign of the Babylonian Tribe... lol

Zerozen's picture

MDB is a troll, dude.

silvermail's picture

Patriot for liars, is not it?

MillionDollarBonus_'s picture

Your me-first creed is exactly what is wrong with this country. Our government will track you down issue a court martial for your selfish and cowardly actions. It's about time we siphoned off the unappreciative cynics in this country and tested the loyalty of each and every citizen.

firstdivision's picture

Your blind faith in a government that ignores the constitution it swore to uphold and protect, is what is wrong with this country.

bigkahuna's picture

LOL! Such comedy is difficult to find anywhere.

Its well crafted, you need to let people know you are joking MDB because you are actually upsetting some.

I have said before and I say again, we need to have a ZH convention were we just wear our screen names and get to meet the people behind the comments. Vegas would be nice.

Before you go MDB - let them know you are joking because some folks might want to throw down.

Kirk2NCC1701's picture

MDB, How's your Blog site doing?  Trolling here for hits there?

silvermail's picture

In "citizen" is the mind, honor and conscience.
Citizen does not accept US lies and hypocrisy.
But you are unable to understand this.

Sweet Chicken's picture


Joke or no joke, my children will not be cannon fodder for the oligarchs.

firstdivision's picture

You should be ready to go to Afghanistan then.  We're still at war with terrorists.  I'll help you pack.

prains's picture


you are a fool for joking about people sending themselves to the slaughter for fucking Oligarch's benefit. This is not irony it's just plain stoopid, as you are....

SoilMyselfRotten's picture

Wow MDB, i thought you were just a tool. Didn't realize you're just a fool.

fijisailor's picture

No need to fight to the death.  You can vailiantly die while in bed screwing your significant other during a nuclear strike.

caconhma's picture

 MillionDollarBonus_ said: I'll fight to the death for my country.

What is your country(s)? 

indygo55's picture

"Combat is good for society"

Are you fucking kidding me? You obviously never engeged in combat you fucking asshole. People next to you die. You change. You will never be the same and you would never, NEVER say those words if you had. FACT!


ebworthen's picture

You'll fight to the death for Jamie Dimon, Diane Feinstein, and Kathie Lee & Hoda?


tony wilson's picture

million dollarbonus

you go fight the russian then flat foot.

yer big fat tub of microsoft  lard.


rubiconsolutions's picture

You've obviously never seen war up close and personal or you wouldn't say that. Combat is good for society? In what way? Combat veterans suffer from PTSD and alcoholism in greater numbers than civilians. Not to mention a very high rate of suicide. To say that combat teaches respect, courage and honor is ludicrous. Trust me pal, it teaches none of that. I went back to SE Asia in 1999-2000 to help with de-mining efforts in Cambodia and Laos and saw first hand what war does to people after the fact. And when I got home I promptly put my DD-214 and (not so) honorable discharge in the shredder and threw my ribbons and medals away. I was ashamed at what America did over there. Your bravado belies someone who has watched way too many movies. As Tim O'Brien wrote awhile back -

"A true war story is never moral. It does not instruct, nor encourage virtue, nor suggest models of proper human behavior, nor restrain men from doing things men have always done. If a war story seems moral, do not believe it. If at the end of a war story you feel uplifted, or if you feel that some small bit of rectitude has been salvaged from the larger waste, then you have been made the victim of a very old and terrible lie."

Volkodav's picture wanna fight and die for something? travel Russia and strike blow on male your size...even an old man...

I think that will be enough war for you..


stewie's picture



First time I yell here btw.  It felt good.

ZeroHedge really has to implement a thread collapse/expand function into the site.  That way I could just collapse MDB's stuff and save precious minutes scrolling and trying to figure out where the reply ends.

kaiserhoff's picture

Merkel is about to put an end to this shit.

Comrade Midget had better listen.  This isn't the old Soviet Union.

old naughty's picture

Right on cue of Soro's "Europe may not survive"...hummmmm.

Is S-He fearmongering or feared?

Another chess move.


tony wilson's picture

and i here david cam moron is with tony liar blair in israel for more mossad coordination.

funny old zion saturn loving world

silvermail's picture

Merkel, as the footman U.S. will stand where her will be commanded from Washington.

fx's picture

nope. It all started with the violent mob at the maidan so the West had the timing in his hands all along. No coincidence. right. But you are looking for the pre-planned actions in exactly the wrong places.

asteroids's picture

The West is controlled by banksters too busy sucking every dollar they can. Angela is a bankster proxy.  They have no brains or stomach to stand up to Putin.

666's picture

Merkel took the western stance because she wants her gold back. In 7 years. Eventually. Even if it comes from the Ukraine stash in NYC.

lakecity55's picture

Ho ho ho, Vlad should offer the krauts some of his russky stash of Au.

that would complicate the picture.

silvermail's picture

In Russian there is a saying:
"If someone want to revise the results of World War II, we'll show this to you again".

Trample the Weak. Hurdle the Dead.'s picture

NO WAY!  It will go down with armored divisions.... this way:

Thought Processor's picture



Except for the whole area containing Chernobyl and it's fallout.   They won't touch that.   

That will fall off the map literally.   An active Nuclear facility without a state sponser.


DeadFred's picture

I think the map they show on the X men movie is closer to the ned result. It follows the language distribution better. The biggest question I have is whether Putin wants Odessa and Kiev or if he'd rather someone else dealt with their problems.

Volkodav's picture

Odessa absolutely...Kiev not so much..

Independent's picture

Well at least he didnt kiss the child's ass like some clergy here in the USA

Its an affectionate thing parents and relatives do to kids

Perhaps you are reading in more than you should, if it had been done with only Putin and the kid in a room yeah ok you have something there, but this is in public in front of cameras

Sam the story is from 2006, do you keep a dossier of little kids photos and stories? Cause you what....get kicks out of it? You are the sick one Sammy go get some therapy

Listen up SamTurd you been posting the same crap over and over on a bunch of different stories, if you got nothing but young boys on your mind we can tell Tyler to flag your email with the Feds for a possible child molester on the loose.

Fukushima Sam's picture

Second time I have posted it and yes, I do believe the Putin lovers around here need to realize the guy is just another scumbag oligarch with perverse tendencies.

agent default's picture

No, he is just a presentable front man for the boys in Lubyanka.  They have an entirely different style of perversion.

Winston Churchill's picture

I don't thik anyone has any illusions about Putin being a nice guy.We are just sick

of our bad guys doing shit in our name ,and our glad when anyone stands up against them,

even another bad guy.

The enemy of my enemy etc.

Fukushima Sam's picture

I get that. But the real war, in the end, will come down to the people versus the oligarchs, and as you say, we should have no illusions about the matter.