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US mulls further sanctions on Russia; all of which however look counter-productive

Alexander Mercouris

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Jon Huntsman, the new ambassador to Russia who President Donald Trump has appointed, has downplayed the prospect of further sweeping sanctions against Russian companies and businesspeople being announced by the US on 29th January 2018.

Ambassador Huntsman instead says that only a report will be published on that day

The date when additional U.S. sanctions may be imposed on Russian individuals and companies has not been set, while January 29 is the date of publishing the ‘Kremlin report’, U.S. Ambassador to Russia Jon Huntsman told reporters on Tuesday.

The media has reported the possibility of new sanctions but all that has been happening so far is the implementation of the law, there is nothing new, Huntsman said.

The law Ambassador Huntsman is referring to is the new sanctions law voted by Congress in August and signed under protest by President Trump that month.

There has been much secrecy about this report, which the law specifies must be published by 29th January 2018.  Latest reports say that a list is being drawn up of 300 businesspeople and companies who are to be placed on a new sanctions list.

As I have discussed previously, additional sanctions against individual Russian businesspeople and companies might cause serious problems for the businesspeople and companies concerned but they will have little or no impact on the Russian economy overall.  On the contrary if they lead to more Russian businesspeople and companies keeping their money in Russia they will serve the Kremlin’s interests.

However there have been rumours that the US is considering more sweeping sanctions targeting not just individual businesspeople and companies but the entire Russian economy.  Three sorts of such sanctions have been mentioned

(1) Cutting off Russian banks from the SWIFT interbank payment system;

(2) Freezing Russian gold and foreign currency reserves held in the US; and

(3) Prohibiting US investors from buying Russian sovereign debt.

What are the prospects of any of these sanctions being imposed?

The first thing to say is that all three of these sanctions would be exceptionally aggressive steps, which would send shockwaves across the international financial system.  Countries like China which also have issues with the US – and which the US is now also threatening with sanctions in connection with the North Korean crisis – would almost certainly interpret such moves as a long term threat to themselves.

Implementing actions of this sort would over time only hasten moves by countries like China and Russia to set up alternative international financial institutions of their own.  That would undermine the US led ‘globalisation’ of the international financial system.  Since the US is the principal beneficiary of this system implementing these sort of sanctions would hardly be in the US’s own long term interests, which is of course precisely why such sanctions were not imposed on Russia at the peak of the Ukrainian crisis in 2014.

Assuming however that in the current hysterical atmosphere there really are proposals to impose these sanctions on Russia, what would their consequences be?

(1) Disconnecting Russian banks from SWIFT

The first point to make about this proposal is that the US does not have the power to impose it unilaterally.  SWIFT is based in Brussels, not the US, and is regulated by EU law, not US law.  The US government is not in a position simply to order that Russian banks be disconnected from SWIFT.

As it happens it is known that the Obama administration and the British government did actively lobby for Russian banks to be disconnected from SWIFT back in 2014.  However they ran into a wall of opposition both from SWIFT itself and from European governments, with the German and Austrian governments especially strongly opposed.

There is no indication that such a proposal is being seriously debated at this time in European capitals, which makes it unlikely that it is being considered.

However assuming that it is being considered, what would its effect be?

US and British politicians who have lobbied for Russian banks to be disconnected from SWIFT seem to think this is some of ‘magic bullet’ or ‘nuclear option’ which would tip the whole Russian economy into crisis, but is this really so?

There is a huge amount of mystification about SWIFT.  However ultimately it is nothing more than an electronic transfer system which banks use in order to transfer money between each other.

Banks could transfer money between each other before SWIFT appeared.  I can remember a time not so long ago when most money transfers between banks did not use SWIFT.

The fact that SWIFT is an electronic transfer system means that it can be duplicated, and that is exactly what the Russians have reportedly done.

Back in 2014 the disconnection of Russian banks from SWIFT would indeed have been a heavy blow because Russian banks used SWIFT to transfer money between each other within Russia itself.

However the reports that the US and Britain were lobbying for Russian banks to be disconnected from SWIFT caused the Russian Central Bank to create its own alternative to SWIFT as a back up system.

Not only does this system apparently already exist, but it has apparently been field tested, though for the moment it is not in actual operation because of the continued availability of SWIFT.

Most probably most Russian banks and bank branches are not yet connected to this alternative system.  However if Russian banks really were disconnected from SWIFT the alternative system would not only be rapidly brought into operation but priority would be given to extending it across the whole Russian banking system.

Doubtless there would be a period of disruption, but a country like Russia has the technological and administrative resources to solve that sort of problem, and I suspect doing so would take more than a few months.

Russian banks would of course still be prevented from making electronic transfers via SWIFT to Western banks.  However the impact of this can be exaggerated.

Since 2014 the big state owned Russian banks which account for 70% of the Russian banking system and an even higher proportion of the foreign operations carried out by Russian banks have been effectively cut off from borrowing in Western financial markets.  Their foreign based customers would no doubt suffer if they were disconnected from SWIFT , but it is unlikely the big state owned banks would themselves be seriously affected.

Which brings me back to the main objection to cutting off Russian banks from SWIFT.  Many of the bank customers who would be most seriously affected are Western companies and businesspeople with investments in Russia.

With trade between Russia and Western European actually increasing over the last few months, many European businesspeople and companies would be very seriously affected.

Not only would that hurt them badly but some of these are influential people and companies who would be likely to complain.  That of course is why the decision was taken back in 2014 not to disconnect Russian banks from SWIFT in the first place.

Overall disconnecting Russian banks from SWIFT looks neither like a magic bullet nor like something that European business would willingly accept.  Frankly the political and financial costs of doing it look greater than any conceivable benefit.

(2) Freezing Russian gold and foreign currency reserves

Since this would be tantamount to seizing the sovereign property of the Russian state it would unquestionably be illegal and would as Russian officials have said be equivalent to an act of war.  However US has officials shown an increasing willingness to take illegal actions and it is unlikely that the fact that this step is illegal would be enough in itself to deter them.

If the US did take this step what would its economic impact be?

Russia does keep some of its foreign currency reserves in the US with the IMF, but it is not clear how great the amount is and claims that it is much as a third of the reserves is probably an overstatement.

There is no doubt that such a step would have a serious impact, causing the value of the rouble to fall, at least for a short time.

However Russia runs a trade surplus and has paid off most of its foreign debt and the Central Bank since 2014 has been letting the rouble float.

The economy would swiftly adjust as it did to the crisis of 2014, with the Russian trade surplus growing still further as Russia’s trade position benefitted from the rouble’s fall and from the surge in oil prices which would be likely follow such a measure.

Doubtless inflation in Russia would be higher, though it would be unlikely to go as high as it did during the inflation spike of 2015.  However the political impact of the increase in inflation within Russia would be mitigated with the Russian government in a position to blame the US for causing it.  Besides as happened following the inflation spike of 2015, once the economy adjusted inflation would fall back again.

If freezing the Russian state’s foreign currency reserves in the US would only have a short term impact on the Russian economy, it would nonetheless constitute a colossal shock across the world financial system.

It would show that the US is prepared to abuse its position at the core of the world finance system and as the host of institutions such as the IMF to target not just the financial reserves of the smaller economies such as Libya, Venezuela or Iran but also the reserves of big G20 economies such as Russia.

The Chinese especially – who have been on the receiving end of similar threats against their reserves for some time – would be horrified.

It would be difficult to imagine any step the US might take that would galvanise more countries like China and Russia to set up their own alternatives to the world financial system and its institutions which have historically been under the control of the US.  Such moves are already underway and following the freezing (ie. seizure) of whatever proportion of Russia’s reserves are on US territory that process would be bound to accelerate.

It is impossible to see how that would benefit the US.

(3) Prohibiting US investors from buying Russian sovereign debt

In my opinion this is by far the most likely of any further sectoral sanctions the US might introduce.  It is the one further sectoral sanction the Democratic Senators who published the recent report about Russia which I discussed in a recent article have actually recommended it.

The U.S. Treasury Department is required to report in early 2018 on the possible effects on Russia’s economy of sanctions on sovereign debt, which could have the potential to foreclose external sources of funds. While the head of Russia’s central bank believes that ‘‘there won’t be any seriously negative consequences’’ from such sanctions, economists have warned that such sanctions ‘‘may totally stop other foreign investors, not the U.S. investors only, from buying the new government debt, fiercely pushing up borrowing costs for Russia.”

This sanction would also almost certainly be illegal but as I have said in my previous discussion of the proposals to freeze whatever foreign currency reserves the Russian state has located on US territory (see (2) above) that no longer seems to be a significant constraint on US actions.

It would however only be a limited sanction.  The US cannot prevent Russia from floating bonds in the international money markets – in Asia if not in Europe – and the Democratic Senators’ assumption that prohibiting US investors from buying such bonds will dissuade other international investors from doing so is also almost certainly wrong (the cited authority for the claim are not ‘economists’ but two articles in Bloomberg Markets).

The problem anyway is that with Russia now expected to run a budget surplus next year, and with Russia’s trading position also in healthy surplus, and with Russia’s gold and foreign currency reserves now standing at more than $430 billion and growing, it is not obvious that Russia needs to borrow at all.

Unless this measure is combined with a freezing of Russian gold and foreign currency reserves, it is difficult to see how this could be more than a pinprick, just as the Democratic Senators report Russian Central Bank Chair Nabiullina having said.

However if the US were to freeze Russian gold and foreign currency reserves this step would not be necessary anyway, since US investors would not want to buy Russian foreign debt in those circumstances if the Russian reserves were frozen.

At that point of course the US would be facing all the consequences outlined in (2).

Needless to say, if US investors were prohibited from buying Russian debt but no action was taken against Russia’s reserves, then the US would simply be forcing its own investors to forego an opportunity to make money by buying into a strong financial asset which was being bought by other international investors elsewhere.  Again it is not obvious how this would benefit the US.\

Summary

What all these proposals have in common is that they highlight is the simple fact that the sectoral sanctions which were imposed by the West on Russia in 2014 have failed.

The sanctions did not break the Russian economy, or cause a popular revolution in Russia, or lead to an oligarchs’ coup against Putin – all things their advocates variously predicted would happen because of them.

Nor have they achieved their stated purpose, which is to force Russia to change its policies towards Ukraine.  Even the Democratic Senators in their recent report very grudgingly admit as much

Sanctions Pressure Has Been Insufficient: U.S. and EU sanctions have not resulted in the implementation of the Minsk Agreements nor the return of Crimea to Ukrainian control.  The Russian government appears to have been able to resist this pressure because the cost imposed by sanctions has been manageable.

The trouble is that faced with this simple fact the advocates in the US and elsewhere of more confrontation with Russia refuse to learn the lesson that sanctions against Russia do not work.

Instead they demand more and more sanctions of a sort which were rejected in 2014 when the original sanctions were imposed precisely because they the sort of sanctions that over the long term are more likely to cause harm to the US and the West than they are to Russia.

The key point is that the Russian economy is many orders of magnitude bigger and more sophisticated than the sort of economies – such as those of Cuba, Iran, Iraq, Libya, North Korea and Venezuela – upon which the US has imposed sanctions previously.  Applying the supposed lessons of the impact of sanctions on those economies in the case of Russia makes no sense, even if those lessons had been learnt correctly, which they have not. Unlike all those economies Russia’s economy is far bigger, already possessing the technology, capital and resources it needs to develop autonomously.

As a self-sufficient continental economy sanctions on Russia almost by definition can have only a limited impact, and one which over time must diminish anyway.

As it happens the most effective sanctions the West could have imposed on Russia, both in terms of their impact on the Russian economy and their limited impact on the economies of the West, were the sectoral sanctions which were imposed in 2014.

Those sanctions did stop for a time the flow of capital from the West into Russia at a time when Russia was facing heavy debt repayments and when the price of its main export products – oil and gas – was collapsing.  The result was to deepen the recession caused by the collapse of oil and gas prices whilst further lowering the value of the rouble in a way which intensified the inflation spike.

With oil prices now rising, most short term Russian foreign debt repaid, and with the rouble floating, none of the sanctions discussed in this article look like they can have anything like the impact on Russia that the sanctions imposed in 2014 did.

The fact that the Russian economy successfully – in fact almost effortlessly – adjusted to those sanctions despite the difficult conditions ought to serve as a warning that further sanctions against Russia will not work, and if they are of the sort discussed in this article are counter-productive.

Jon Huntsman’s comments may suggest that there are people in the US who understand this, and that the demands of those who want ever more confrontation on this occasion are unlikely to be followed.

However the lesson of the last few decades is that to expect rational decision making in Washington especially on the subject of Russia is to expect altogether too much.

One way or the other the next few weeks will show the direction decisions in Washington are taking.

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Russia’s Rosatom is the world leader in international construction of nuclear power plants

Rosatom is currently constructing the Akkuyu nuclear power plant in Turkey.

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In spite of western sanctions, Russia’s Rosatom is the world’s number two in uranium reserves and has become number one globally in the implementation of nuclear reactor projects. Currently, Rosatom is working on six reactor projects in Russia and 36 abroad. Rosatom has acquired 67 per cent of the world nuclear plant construction market, the orders portfolio exceeding $133 billion. Rosatom is working on nuclear plants in Turkey, China and Bangladesh, to name just a few of the countries, where the Russian corporation is present. Rosatom is highly respected as the global technological leader in high-performance clean energy solutions and was also recently named best Russian employer for the year of 2018 by an international headhunter firm. On the 15th and 16th of April 2019, the eleventh ATOMEXPO FORUM was held in Sochi, Russia, upon invitation by Rosatom.

The Russian State Corporation Rosatom (Росатом), established in 2007, has its headquarters in Moscow. The organization comprises more than 360 enterprises, including scientific research organizations and the world’s only nuclear icebreaker fleet. Since 2016, its General Director is Alexey Likhachev.

Rosatom was ranked number one as best employer of Russia in 2018 by HeadHunter, a top HR management platform and resource centre. In a vote, the company achieved the highest score by employees, candidates and experts out of over 1.000 big Russian companies. Commenting on the accolade, Tatyana Terentyeva, HR Director of Rosatom, said:

“We’re immensely proud of this achievement which is a testament to our strong company culture of always putting our people first. The growth of regional and international projects has given employees and applicants a chance of working in multicultural, cross-divisional and cross-functional project teams. Digitalisation, alone, will open vacancies for 1.000 new specialists this year, from software developers to product and data scientists.”

“We believe that the responsibility lies with human capital stakeholders, such as large multinationals, universities and governments to begin discussing the policy response in earnest. We hope that the gathering of these parties at the global Skills Summit, taking place alongside the WorldSkills 2019 Conference in Kazan this August, to address the global skills gap which affects everyone, will be an important starting point from which companies and governments can work together to help solve this issue”, she further commented (CISTON PR NEWSWIRE, 28.03.2019).

Rosatom is currently constructing the Akkuyu nuclear power plant in Turkey. Laying the foundation has already been completed. The 17.000 cubic metres of self-compacting concrete foundations are due to be followed by the construction of the exterior and interior walls of the reactor. Construction of the concrete bases for the auxiliary reactors and control room have also begun. The work meets International Atomic Energy Agency safety standards.

Rosatom said that the entire first reactor would be finished by the end of the year 2019, with engineering studies for the second reactor already in progress and documentation being prepared to construct the third reactor in Turkey’s Mediterranean province of Mersin. The Russian nuclear utility is due to build four reactors, each with a capacity of 1.2 gigawatts. The plant is anticipated to have a working life of 8.000 hours per year and produce 35 billion kilowatts of electricity at full capacity. That will meet 10 per cent of Turkey’s electrical demands, according to the Turkish authorities. Akkuyu has an operational date for the first reactor in 2023 with full capacity targeted by 2025 (ENERGY REPORTERS, 15.03.2019).

In China, Rosatom built the Tianwan nuclear power plant, Phase I, Phase II and Phase III. Now, the Russians will construct Tianwan Phase IV. The general contract was signed in March this year for the construction of two further Russian-supplied reactors at the Tianwan nuclear power plant in China’s Jiangsu province. In addition, a technical design contract was signed for a second pair of reactors at the Xudabao site in Liaoning province.

Rosatom said that the contracts had been prepared in accordance with the strategic package of agreements signed during a visit by Russian President Vladimir Putin to China, in June 2018. This package defines cooperation between Russia and China in the nuclear industry for the coming decades.

Tianwan Phase I – units 1 and 2 – was constructed under a 1992 cooperation agreement between China and Russia. The first concrete was poured in October 1999. The units were commissioned in June 2007 and September 2007, respectively. Tianwan Phase II – units 3 and 4 – was constructed from December 2012 until December 2018. Unit 3 entered commercial operation in February 2018, with unit 4 following in December 2018. Tiawan Phase III – units 5 and 6 – both featuring Chinese-designed 1080 MWe ACPR1000 reactors, were begun in December 2015. Units 5 and 6 are planned to go into commercial operation by the end of 2021 (WORLD NUCLEAR NEWS, 12.03.2019).

Another Rosatom construction site is located in Bangladesh. Both Dhaka and Moscow expressed their satisfaction over the progress of construction work of the Rooppur nuclear power plant. It is being implemented under an intergovernmental agreement, signed between Russia and Bangladesh in November 2011. In December 2015, Atomstroyexport, Rosatom’s subsidiary, was appointed as general contractor for the construction of the Rooppur plant with two VVER 1200 power units, each with a capacity of 1.200 megawatts. In 2015 and 2016, preparatory work was carried out at the construction site, working documentation was developed and licencing documents were prepared.

In 2017, the regulatory authority of Bangladesh (BAERA) issued the required licence for the design and construction of the plant. In July 2018, unit 2 also went into the active phase of construction, following the “first concrete”. In August 2018, the installation of the “core catcher”, one of the most important passive safety systems, began at unit 1. The installation of the “core catcher” for unit 2 began in February 2019. Currently, construction of the main buildings of both power units is underway (DHAKA TRIBUNE, 10.03.2019)

Rosatom has further ambitious plans for NPP construction worldwide. Building a network of nuclear reactors across the world will help to extend Moscow’s influence into global energy markets, as it offers competitive deals and comprehensive service, including the provision of plutonium. Kirill Komarov, deputy CEO of Rosatom, told the media:

“We are the ultimate leader in the majority of nuclear sectors. Most of our projects are in the developing world. These are the countries which show the strongest economic growth. China, India, Southeast Asia, countries in the Middle East region. We see countries on the African continent and in Latin America.”

Kirill Komarov explained that “Rosatom is offering solutions for developing countries to enable them negotiating the regulatory challenges involved with going nuclear. Rosatom is a unique company in that we have activities in all areas of the nuclear business; starting with mining of natural uranium, enrichment fuel fabrication, developing our own nuclear equipment, construction of nuclear power plants, decommissioning, waste management … everything” (ENERGY REPORTERS, 05.10.2018).

General Director of Rosatom is Alexey Likhachev. He assumed office in October 2016. Alexey Likhachev graduated from Gorky State University and started his career as an engineer in the Gorky Research Institute of Instrumentation. In 1998, he graduated from the Economic Faculty of Nizhniy Novgorod State University with a Ph.D. in economics.

In 2007, Alexey Likhachev joined the Ministry of Economic Development of Russia, where he held a wide variety of leadership positions. Throughout his career, he held senior positions in other governmental bodies and public organizations as well. He was a member of the State Duma, serving as Deputy Chairman of the Committee for Economic Policy, Entrepreneurship and Tourism, from 2000 to 2007.

According to Alexey Likhachev, Rosatom plans to retain its leading role in nuclear power plant construction worldwide, during the decade of 2020 to 2030. The Russian corporation aims to maintain a portfolio of foreign orders in the amount of at least $130 billion per year.

“Several years ago, we assumed the leading role on the global nuclear power plant construction market,” Alexey Likhachev said. “The market is moving, so our share on the market fluctuates between 68 and 72 per cent. I think we will be able to maintain it above 60 per cent at least, this is how we see our goals for the coming decade” (TASS, 13.01.2019).

Since the beginning of the 21st century, with President Vladimir Putin coming into power, the Russian Federation has moved upwards, building a vast nuclear empire spanning South and North America, Europe, the Middle East, Africa and Asia. Rosatom is the government corporation behind this enormous expansion, exporting nuclear technology all over the world, thus becoming the world’s leading nuclear powerhouse.

The International Atomic Energy Agency predicts that nuclear power will continue to grow in the next 15 years. The agency’s latest report puts the low margin of growth at 17 per cent and the high at 94 per cent. The Russian Federation is uniquely positioned to capitalize on this projected growth – it has a rich legacy of research and engineering in the field, as well as a history of cooperation with countries on all continents.

The Russian Federation is ensuring its steady presence on almost every single continent through the export of nuclear power projects, expanding its sphere of influence beyond traditional military and hydrocarbon means. Building nuclear power plants is a geopolitical tool, allowing Russia to tie up strategic foreign governments into long-term cooperation. In this way, Russia is demonstrating its prowess by building nuclear rectors across the world (GEOPOLITICAL MONITOR, 17.05.2016).

With these projects, the Russian Federation is gaining a strong foothold on the ground because nuclear power plants require transfer of technological know-how and long-term engagement of scientists, engineers, diplomats. The plants are, in essence, embassies and commerce chambers, which guarantee Russian access to local governments and politicians. Besides, the Russian Federation is opening its universities for students from future nuclear clients and building networks of cadres across the world.

One of the possiblities for Rosatom to reach foreign government agencies and business people is the international ATOMEXPO Forum, a major event in the global nuclear industry. Upon invitation from Rosatom, the 11th forum took place in Sochi, on the 15th and 16th of April 2019. The forum included an exhibition and a convention with an extensive business programme, centred around a plenary discussion. The forum provided a good opportunity for networking and signing partnership agreements. The forum also offered an entertaining cultural programme with possibilities to visit the beautiful Russian seaside resort of Sochi on the Black Sea and the nearby Caucasus mountains.

Seen in this light, Rosatom functions not only as a powerhouse exporting nuclear power plants but also as a corporation of diplomatic and geopolitical importance for Russia.


Olivia Kroth: The journalist and author of four books lives in Moscow.

Her blog: https://olivia2010kroth.wordpress.com

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What’s Really Behind The State Department’s Meddling In Ukraine?

US meddling in Ukraine and support for a schismatic Ukrainian Church is not just about weakening Russia’s ‘soft power’ and geopolitical position but about expanding the reach of the US’s identity, gender and sexual politics

Jim Jatras

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This article is republished with the author’s permission.  Previously published by Chronicles

On March 31 the first round of Ukraine’s presidential election was held. In line with all polls, the top spot (with about 30 percent of the vote) was taken by Volodymyr Zelensky, a comic actor who played President of Ukraine in a popular TV series, making him the leading candidate for the position he once spoofed. He was followed (with about 16 percent) by incumbent President President Poroshenko, known as the oligarchic “Chocolate King” because of his confectionary company, Roshen. Poroshenko has also sought to emulate another king, England’s Henry VIII, through creation of his own Ukrainian church, which late last year Poroshenko declared independent of the Russian Orthodox Church with assistance from an unlikely duo, the Greek Orthodox Patriarch in Istanbul and the US State Department.

(Trailing behind Poroshenko with about 13 percent was perennial candidate and former prime minister Yulia Tymoshenko, also known as the “Gas Princess” (for her prominent role in the shady natural gas industry), “goddess of the Revolution” (for her firebrand image in Ukraine’s turbulent post-Soviet history), and the “Princess Leia of Ukrainian politics” (for her trademark folk-motif braids). Tymoshenko claims, quite plausibly, that Poroshenko stole the second spot from her but that Ukraine’s judicial system has been “privatized” by Poroshenko and it’s pointless to challenge the results in court.)

Zelensky and Poroshenko will now square off in an April 21 second round. The smart money favors Zelensky, given how badly he trounced Poroshenko in the first round. The smart money is probably wrong. Poroshenko—for whom the stakes are likely either self-imposed exile to avoid prosecution or continued slopping at a lucrative trough—has a lot of cards he can play, both what they call locally “administrative measures” to pad his vote and goodies to get former rivals to support him.

Most of all, he can count on western governments, notably that of the United States, and their hangers-on to not only turn a blind eye but to positively enthuse over Ukraine’s democratic vitality.

In world in which Washington routinely thunders from on high about other countries’ democratic legitimacy, the see-no-evil attitude toward Ukraine speaks volumes. (Imagine if, say, Venezuela’s Nicolas Maduro, Russia’s Vladimir Putin, or Syria’s Bashar al-Assad had while in office racked up a 10,000 percent income increase, mainly from a shady Zurich-based fund.)

At this point it’s appropriate to stop and ask: why should anyone in the US care about Ukraine and its elections? Perhaps the more important question is, why does the State Department care so much? The answer has many facets: historical, geopolitical, ideological, ethnic, moral, and—perhaps surprisingly for some who may not think of “mere religion” as being particularly important in a postmodern Europe—spiritual.

In fact, upon examination Ukraine is a revealing showcase of all that’s wrong with American global policy, including a fanatical determination to impose a post-Christian moral order on what are still unexpectedly vibrant Christian societies rebounding from decades of communist repression. Sadly, this determination has not slackened under the Trump administration but has continued as though the previous administration had never left. In this regard, whatever his very public professions of his Christian faithwhited sepulchre Secretary Mike Pompeo and his State Department area at the forefront.

One of the major claimed accomplishments of incumbent Ukrainian President Petro Poroshenko’s reelection campaign of “army, language, faith” is creation of an autocephalous Ukrainian Orthodox Church (i.e., completely self-governing, with no tie at all to the Russian Orthodox Church). Western governments and media have uniformly—and inaccurately—hailed this as a reality already fulfilledwith the awarding of a tomos (literally, a small book containing an authoritative pronouncement or declaration) from Ecumenical Patriarch Bartholomew I of Constantinople to Poroshenko and religious figures in Ukraine who had up until then been universally shunned as schismatics by all Orthodox jurisdictions. As of this writing, no other autocephalous Church has endorsed Constantinople’s actions, and several, notably the Patriarchates of Belgrade and Antioch—and notably Church of Albania, which is largely Greek by ethnicity—have taken sharp exception to it.

The Ukrainian Church situation is complex and contentious. It will be months if not years before it works itself out. Indeed, it may lead to a permanent split within Orthodoxy, not only in Ukraine but worldwide. Also, despite Patriarch Bartholomew’s stated intention to foster accord and reconciliation in Ukraine, his actions clearly have aggravated already raw feelings among believers there. Far from creating a united Ukrainian autocephalous Church, he has only managed to cobble together a new body under the authority of Constantinople in opposition to the canonical Moscow-linked Church, which continues to exist under its primate Metropolitan Onufriy. Violence in various forms is inevitable as Ukrainian authorities harass the canonical Church and prepare to seize its parishes and monasteries, notably the historic Kiev Perchersk Lavra and the Pochaev Lavra in western Ukraine.

Conspicuously, Poroshenko’s blatant politicking in Church affairs—which has been criticized even from quarters favoring autocephaly—has been applauded by western governments, notably by American officials. Just a few days after a high State Department career officer commendably declared in September 2018 that “any decision on autocephaly is an internal [Orthodox] church matter” he was reversed by endorsements of autocephaly by Secretary Pompeo, US Special Representative for Ukraine Kurt Volker, and US Ambassador in Kiev Marie Yovanovitch (an Obama appointee but still in place). Following the December Robber Council of Kiev on December 15, the US Embassy tweeted out its congratulations in English and in Ukrainian (not in Russian of course). Secretary of State Mike Pompeo placed a personal call to the “newly elected head of the Orthodox Church of Ukraine Metropolitan Epifaniy” (Dumenko). US Ambassador Marie Yovanovitch extended her congratulations to Dumenko in person. It should also be noted that The Atlantic Council, an über-Establishment Washington-based think tank operating in close coordination with the US government (and heavily funded by US and allied government agencies and contractors), has been an active advocate for autocephaly in the policy community and media.

Moreover, there is reason to believe the US State Department’s involvement was not just hortatory. As reported by this analyst in October 2018, according to an unconfirmed report originating with the members of the Russian Orthodox Church Outside of Russia (an autonomous New York-based part of the Moscow Patriarchate), in July 2018 State Department officials, possibly including Secretary Pompeo personally, warned the scandalridden and broke Greek Orthodox Archdiocese of America (also based in New York but under authority of the Ecumenical Patriarchate) that the US government was aware of the misappropriation of a large amount of money, about $10 million, from an estimated $37 million raised from believers for the (now stalled) construction of the St. Nicholas Greek Orthodox Church and National Shrine in New York (to replace the original St. Nicholas church destroyed in the 9/11 attack on the World Trade Center). The State Department warning also reportedly noted that federal prosecutors have documentary evidence confirming the withdrawal of these funds abroad on the orders of Ecumenical Patriarch Bartholomew. It was suggested that Secretary Pompeo would “close his eyes” to this theft in exchange for movement by the Patriarchate of Constantinople in favor of Ukrainian autocephaly, which helped set Patriarch Bartholomew on his current course. Moreover, the State Department’s direct hand in this sordid business may not have consisted solely of wielding the “stick” of legal threat: there’s reason to believe there was a “carrot” too. There are numerous unproven reports of a $25 million payoff to Constantinople from Poroshenko (although allegedly Poroshenko initially attempted to hold back $15 million for himself). Attributions of the original source of that money differ. Some claim it came from organized crime bosses in Dnipro. This analyst was told by an unsolicited, confidential informant in the Greek Archdiocese in New York that the funds came from the State Department.

We may never know the truth about any such payment. But whatever the details, one still has to ask why the US is so keenly committed to creating an autocephalous Church in Ukraine. Aside from the obvious impropriety of the United States’ taking sides in a question of the Orthodox Church’s internal governance, why is the State Department so committed to promoting a transparently political power grab by Poroshenko, the Ukrainian schismatics, and Patriarch Bartholomew of Constantinople?

Given the various lobbies with a lot of influence in Washington, including those of foreign states and ethnic communities, it is natural to look in that direction to identify relevant actors and driving forces on the American side with respect to formulation of policy toward Ukraine. Among those that might come to mind are the Ukrainian diaspora in the United States (just under a million people), the Greek-American community (variously estimated at between one and three million, depending on self-identification), and so forth. There is precedent for such influences on US policy in Eastern Europe. One is reminded of the role the Croatian and Albanian diaspora communities played in the breakup of Yugoslavia. It should be noted that the Yugoslav conflicts took place as the post-Cold War drive for US global hegemony was only beginning to take form, and Bosnia and Kosovo were catalytic in its development.

It is true that some Ukrainian-Americans (heavily weighted by those with western Ukraine origins) have long taken part in activities of various “Captive Nations” and “ethnic heritage” groups operating after World War II, notably the CIA front “American Committee for Liberation from Bolshevism” and the “Anti-Bolshevik Bloc of Nations” (originally spun off by the United Kingdom’s MI6 from the earlier “British League for European Freedom”). Mainly though not exclusively oriented toward the Republican Party they operated under the banner of anti-communism but really (to an extent many non-“ethnic” Americans may not fully have understood) were vehicles for their various ethnic agendas. These agendas related less to communism than dissatisfaction with the territorial arrangements that existed after 1945, giving these groups the character of World War II losers’ associations. Russophobia (and with respect to the Balkans, Serbophobia) was a common point of agreement.

It should also be noted that while American Greeks were not notable in these activities the US government has valued the utility of the Constantinopolitan Patriarchate since at least the 1940s. Today, while his flock within Turkey dwindles to almost nil (in effect, it is what in English parliamentary context was known as a “rotten borough”), Patriarch Bartholomew has sought to expand his profile as a “player” on the world stage, exemplified by his demonstrative environmentalism as “the Green Patriarch” and, together with Pope Francis, welcoming Muslim migrants to Europe through Greece. Moreover, his actions in Ukraine are an expansion of Constantinople’s longstanding quasi-papal ambitions built on uncanonical claims to “universal” status as a kind of “Eastern Pope,” misuse of doctrinally troubling incarnational language, and adoption of a breathtakingly arrogant tone that would cause even the most ultramontane proponent of the Rome’s supremacy to blush.  Given strong support for Ukrainian Orthodox autocephaly from the Ukrainian Greek Catholic Church, which now sees a new opportunity for it to be elevated to a patriarchate within Roman Catholicism, Ukraine also advances Constantinople’s warm ecumenical embrace aimed at reunion with the Roman Papacy, with a Ukrainian church in communion with both Rome and Constantinople as a possible catalyst. In short, whatever the carrots and sticks involved, the State Department was pushing on an open door at the Phanar.

However, as described below, by 2005 the ideological and methodological aspects of the US policymaking establishment’s aspirations for global hegemony were already fully formed. A key part of this was turning Ukraine into a forward salient against Russia, as attested to in the “Orange Revolution” of 2004-5 and the 2008 NATO Bucharest declaration regarding Ukraine’s (and Georgia’s) destiny as part of NATO. Today, attacking the Orthodox Church in Ukraine is another logical—and well-targeted—element of that aggressive aim. While some elements in the Greek and (especially) Ukrainian communities no doubt had a hand in it, they don’t have the influence to set the agenda and should be regarded more as implementing a program thought up by others. I would compare the US apparat in this regard to that of the Soviet Union: the imperatives are ideological and bureaucratic; while ethnic lobbies (comparable in their day to pro-Soviet Third World “national liberation movements”) are useful, they are the tools of policy, not its masters.

The origin of the US focus on Ukraine and its religious issues must instead be sought within the larger perspective of American policy since the end of the first Cold War in 1991 and the development of the current one in the course of the 1990s: the American “unipolar moment,” as the bipartisan US policy establishment sought to consolidate and perpetuate its hegemonic control over the entire planet, taking advantage of the vacuum left by the demise of the USSR. Perhaps the fullest expression of this was a 1996 article by neoconservative ideologists William Kristol and Robert Kagan, misleadingly titled “Toward a Neo-Reaganite Foreign Policy,” in which they called for the US to establish and maintain indefinitely “benevolent global hegemony”—American world domination. As scrutinized by this analyst in Chronicles magazine the following year, Kristol and Kagan laid down virtually all of the elements that have guided US foreign policy during the ensuing years. It is no accident that GOP neoconservatives were enthusiastic supporters of Bill Clinton’s Balkan interventions of 1990s, under the guidance of people like then-Secretary of State Madeleine Albright, who once opined regarding the sanctions-related deaths of a half million Iraqi children that “the price is worth it.” In the US establishment, there is little dissent on either side of the partisan aisle with Albright’s sincere conviction that a militant United States has a special wisdom: “If we have to use force, it is because we are America; we are the indispensable nation. We stand tall and we see further than other countries into the future . . . ”

The result is a kind of neo-Bolshevism, where as the vanguard of all progressive humanity the United States sees itself as the midwife of history to advance the principles not of the USSR’s “peace, progress, and socialism” but of a similarly ideologized triad of “democracy, human rights, and free markets.”

Viewed this way, a revived, non-ideological, nationally minded Russia is an obstacle that must be overcome—one way or the other. (A similar attitude exists toward China and Iran.) Recently the administration of US President Donald Trump, who as a candidate repeatedly stated his desire to improve ties with Russia but has been prevented from doing so, has taken to describing the neoconservative program of previous administrations as (in Secretary Pompeo’s words) as reassertion of sovereignty (but only for the US and our allies!) and “reform” of “the liberal international order.” The rhetoric is new but the policies are the same as under Trump’s predecessors.

Sometimes we are told that the current Washington-Moscow standoff is just a turf war, that unlike the 1945-1991 rivalry it “lacks an ideological dimension” beyond the authoritarian determination to elevate “the Russian state, ruled by [Vladimir Putin] and his clan.” Such a view totally dismisses the fact that following the demise of communism as a global power bloc there has been an eerie spiritual role reversal between East and West. While it’s true that during original Cold War the nonreligious ruling cliques in Washington and Moscow held basically compatible progressive values, ordinary Christian Americans (mainly Protestants, with a large number of Roman Catholics) perceived communism as a murderous, godless machine of oppression (think of the Roman Catholic men’s organization Knights of Columbus’ campaign to insert “under God” into the Pledge of Allegiance). Conversely, today it is western elites who rely upon an ideological imperative to justify a materialist global empire and endless wars, much like the old Soviet nomenklaturadepended on Marxism-Leninism both as a working methodology and as a justification for their prerogatives and privileges. In that regard, promotion of nihilist, post-Christian morality—especially in sexual matters—under the guise of “democracy and human rights” has become a major item in the West’s toolkit.

This has a special importance with regard to Russia, where under Putin the Orthodox Church has largely resumed its pre-1917 role as the moral anchor of society. This elicits not only political opposition but a genuine and heartfelt hatred from the postmodern elites of an increasingly post-Christian West, not only for Putin personally and Russia generally but against the Russian Orthodox Church—and by extension against Orthodox Christianity itself.

This points to why, from the point of view of the State Department, the Russian Orthodox Church – and hence the canonical autonomous Ukrainian Orthodox Church—is nothing more than an instrument of the Kremlin’s soft power. According to one person rather new to the relevant issues but nonetheless considered authoritative by the State Department:

‘The Church, for its part, acts as the Russian state’s soft power arm, exerting its authority in ways that assist the Kremlin in spreading Russian influence both in Russia’s immediate neighborhood as well as around the globe. The Kremlin assists the Church, as well, working to increase its reach. Vladimir Yakunin, one of Putin’s inner circle and a devout member of the ROC, facilitated in 2007 the reconciliation of the ROC with the Russian Orthodox Church in Exile (which had separated itself from the Moscow Patriarchate early in the Soviet era so as not to be co-opted by the new Bolshevik state), which reconciliation greatly increased [Patriarch of Moscow] Kirill’s influence and authority outside of Russia. Putin, praising this event, noted the interrelation of the growth of ROC authority abroad with his own international goals: “The revival of the church unity is a crucial condition for revival of lost unity of the whole ‘Russian world’, which has always had the Orthodox faith as one of its foundations.”’

Hence, weaken “Russian state’s soft power arm,” weaken the Russian state.

But there is even more to it than that. The authors of the current US anti-Russia, anti-Orthodox Church policy know, or at least instinctively sense, that the revival of Russia’s Church-State symphonia after a hiatus of eight decades is not just a political alliance of convenience but is the source of deep spiritual, moral, and social strength. This is reflected, for example, in Putin’s warm remarks on the dedication of a Moscow monument to Aleksandr Solzhenitsyn, the acknowledged godfather of Russia’s restoration as a Christian country, on the centenary of the writer’s birth.

In Russia’s reborn symphonia, President and Patriarch speak as one:

‘At the height of the Cold War, it was common for American conservatives to label the officially atheist Soviet Union a “godless nation.”

‘More than two decades on, history has come full circle, as the Kremlin and its allies in the Russian Orthodox Church hurl the same allegation at the West.

‘“Many Euro-Atlantic countries have moved away from their roots, including Christian values,” Russian President Vladimir Putin said in a recent keynote speech. “Policies are being pursued that place on the same level a multi-child family and a same-sex partnership, a faith in God and a belief in Satan. This is the path to degradation.” [ . . . ]

Mr. Putin’s views of the West were echoed this month by Patriarch Kirill I of Moscow, the leader of the Orthodox Church, who accused Western countries of engaging in the “spiritual disarmament” of their people.

‘In particular, Patriarch Kirill criticized laws in several European countries that prevent believers from displaying religious symbols, including crosses on necklaces, at work.

‘“The general political direction of the [Western political] elite bears, without doubt, an anti-Christian and anti-religious character,” the patriarch said in comments aired on state-controlled television.

“We have been through an epoch of atheism, and we know what it is to live without God,” Patriarch Kirill said. “We want to shout to the whole world, ‘Stop!’”’ [“Who’s ‘godless’ now?Russia says it’s U.S.: Putin seizes on issue of traditional values,” by Marc Bennetts, The Washington Times, January 28, 2014]

Such sentiments can hardly sit well with Western elites for whom celebration of the same-sex partnerships decried by Putin is a mark of social enlightenment. That’s why an inseparable part of the “European choice” the people of Ukraine supposedly made during the 2014 “Revolution of Dignity” is wholesale acceptance of “European values,” including the kind of “Pride” symbolized by LGBT marches organized over Christian objections in Orthodox cities like AthensBelgradeBucharestKievOdessaPodgoricaSofia, and Tbilisi. (Note that after the march in Odessa in August of this year a priest of the canonical Church targeted by Poroshenko cleansed the street with Holy Water.)

There is no doubt that the moral/sexual component of undermining Orthodox Christianity in Ukraine is a key factor in US policy. There is a curious consistency between advocacy for non-traditional, post-Christian sexual morality and support for the schismatics sponsored by Poroshenko and Patriarch Bartholomew. This is well understood by Constantinople’s pseudo-Church in Ukraine. In December, shortly after his “enthronement,” “Metropolitan Epifaniy” Dumenko responded to a phone caller claiming to be a western parliamentarian (but in fact was a Russian prankster), suggesting that “if the new church will soften its position regarding the LGBT community, the gays of Ukraine, and it will take liberal values, it will be a great stimulus to develop European values. We spoke with Secretary Pompeo and he agrees that you should the increase your LGBT and gay values in the future.” Taking the bait, Dumenko said that “because we are moving towards Europe . . . we should depart from the Russian conservative tradition” and adopt a progressively more “open” position on such matters.

Indeed, the relevant US government officials cheering on Poroshenko and the Ukrainian church schismatics are remarkably up-front and visible in their advocacy of the LGBT agenda in Ukraine. The US Embassy Kiev website displays Pompeo’s declaration on behalf of all Americans that “The United States joins people around the world in celebrating Lesbian, Gay, Bisexual, Transgender, and Intersex (LGBTI) Pride Month, and reaffirms its commitment to protecting and defending the human rights of all, including LGBTI persons.”

Ambassador Yovanovitch has really gone the extra mile – literally. Not only did she tweet out her own Pride message, she also participated in the parade (and took 60 Embassy personnel and family members with her!) proudly marching behind the American flag (as shown in this MUST WATCH video tweeted by the embassy—your American tax dollars at work!). Additional videoposted by HromadskeUA, an “independent” Ukrainian media outlet reportedly funded by, among others, the US Embassy, the Canadian Embassy, and George Soros’s International Renaissance Foundation (though the cited HromadskeUA financial reports no longer seem to be available). Both Yovanovitch’s remarks in the video and the posted text draw an explicit connection between the “freedom” of the 2014 regime change and the new sexual morality (Google auto-translation from Ukrainian):

‘The atmosphere is wonderful. It is important for us because we maintain equal rights. In 2014, people in Ukraine were in favor of freedom, and this is an organic continuation—US Ambassador Marie Yovanovich goes to the March of Equality Column. With her together with about 60 representatives of the American embassy.’ [emphasis added]

The locals were quick to make the same connection. “KyivPride,” a local LGBT advocacy group unsurprisingly supported by the US Embassy (again, our tax dollars at work), the Canadian government, the German embassy, the US Agency for International Development (USAID), and Freedom House were quick to hail creation of the new pseudo-church, no doubt reflecting the deep Orthodox piety of the group’s members. As posted by OrthoChristian.com, The organization posted a message on several platforms, including Facebook and Instagram, reading:

‘KyivPride congratulates all LGBTI Orthodox believers on the formation of a united and independent Ukrainian Orthodox Church and reminds everyone that love does no harm to others! Also remember that article 35 of the constitution of Ukraine states: “Everyone has the right to freedom of personal philosophy and religion. This right includes the freedom to profess or not to profess any religion.” Human rights above all!’

Last but certainly not least should be noted the involvement of certain fringe elements in the Orthodox Church itself, who perhaps can be compared to the Roman Catholic Church’s far more powerful “Lavender Mafia.” As this analyst warned months ago the Ukrainian church crisis seemingly facilitates the anti-Christian moral agenda of certain marginal “Orthodox” voices like “Orthodoxy in Dialogue,” Fordham University’s “Orthodox Christian Studies Center,” and The Wheel. As Anatoly Karlin points out, “many of the biggest supporters of Ukrainian autocephaly in the West are for all intents and purposes SJWs [social justice warriors]. The website Orthodoxy in Dialogue, for instance, wants Orthodoxy to get with the times and start sanctifying gay marriage:”

‘We pray for the day when we can meet our future partner in church, or bring our partner to church.

‘We pray for the day when our lifelong, monogamous commitment to our partner can be blessed and sanctified in and by the Church.

‘We pray for the day when we can explore as Church, without condemnation, how we Orthodox Christians can best live our life in Christ in the pursuit of holiness, chastity, and perfect love of God and neighbour.

‘We pray for the day when our priests no longer travel around the world to condemn us and mock us and use us as a punching bag.

‘We pray for the day when the one, holy, catholic, and apostolic Church of Christ ceases to be our loneliest closet.’

In sum, US official involvement in Ukrainian Church affairs is not really about Ukraine or Ukrainians at all. It is about hostility to Russia, which in turn reflects Washington’s own drive for unlimited worldwide political and moral supremacy. Breaking Ukraine’s spiritual ties with Russia is at least as important to breaking of political ties and enlisting Ukraine as part of NATO’s anti-Russian deployment. Even something as simple as Poroshenko’s making (western) December 25 Christmas a public holiday with (Orthodox) January 7 is hailed by The Daily Signal, a publication of the Heritage Foundation, as “a leap of faith” towards “ditching Russian influence.”

But underlying this geopolitical aspect is another, darker motive: to inflict on Ukraine and indeed all Orthodoxy the social, especially sexual, pathologies that have wrought havoc in western societies. As an ideological imperative built on Cultural Marxist dichotomies of oppressor and victim classes according to sex, race, language, religion, etc. (as  described by this analyst in Chronicles) this effort to transform all human society supplies a missionary zeal no less relevant to American officials’ and their fellow travelers’ efforts than their aspirations of global political dominion.

Jim Jatras is a former U.S. diplomat and former foreign policy adviser to the Senate GOP leadership. He is the author of a major study, “How American Media Serves as a Transmission Belt for Wars of Choice.” Find him on Twitter @JimJatras.

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German fake news reports Russian invasion of Estonia [Video]

German TV’s Russian invasion ruse meant to uphold the narrative that Russia is evil; Russian reaction is, “just more of the same nonsense.”

Seraphim Hanisch

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Germany’s news media joined the chorus of fake news regarding Russia as “threat” as the 70th anniversary of NATO was being marked by the alliance’s member nations. On the news program “Heute” (English: “Today”) hosted by Claus Kleber, the anchor announced that Russian Armed Forces carried out an invasion of Estonia.

From Sputnik News, this translation:

“The US Army along with German and European allies are heading for Estonia in order to boot out units of the Russian military forces that intruded there just like they did several years ago in Crimea”, RIA Novosti cited Kleber as claiming.

Shortly after inciting an understandably strong reaction from his viewers, Mr. Kleber then simply announced that this was not true, but that it was a description of realistic events.

Ostensibly this act was played out to justify the continued existence of NATO, even as questions rise about the purpose of the alliance now that the Soviet Union (which it was intended to ward off) is no more.

The Russian news media and political spokesmen were not happy about this. Apparently, neither was NATO itself, as General Petr Pavel, the chairman of the NATO Military Committee went on record specifically saying that the alliance does not see any open aggression from Russia regarding the Baltic states.

Vesti News made their own set of comments about this stunt:

According to the website www.tellerreport.com, the Chairman of the Russian Federation’s Council’s committee on Information Policy, Alexei Pushkov, had some things to say about this event:

The Russian senator in his Twitter noted that “Russia has not invaded and will not invade Estonia.”

In his opinion, the statement of the German TV channel is an “information provocation” in order to “play along” with the North Atlantic Alliance.

And since Russia has no aggressive plans, they need to be invented. In this and only this is the meaning of information provocation on the ZDF channel. Play up NATO, demonize Russia.The attack on the brain is in the spirit of the current information war, ”he wrote.

It would appear that this assessment is correct. Russia has repeatedly noted it has no intentions or desires to exceed its borders for any reason. However, the country has developed an array of extremely powerful weapons, from tsunami-causing nuclear torpedos to hypersonic missiles that cannot be stopped.

While the Western angle on this weapons development has not quite established a footing on the claim that these weapons developments are aggressive in nature, the media seems eager to push as close as they can to making such a claim. This “report” by the German anchorman is a good example of when this desire for sensationalism and perhaps some further scapegoating exceeds its bounds.

Relations between Russia and the West began to sour at least as early as 2014, when Russia’s President Vladimir Putin forbade homosexuals to be anywhere near children at the Sochi Winter Olympic Games. (The common narrative blames the Maidan Revolution and the rejoining of Crimea to Russia as the cause of pressure, but these are likely only to be the “acceptable” excuses for the increasing pressure not only on Russia, but on its Orthodox Church, and all Orthodoxy Christianity in general.)

A very nasty ideological war is simmering right now between Russia and the West, and military action would actually be a distraction from that war. Still, agitprop is the weapon of choice by the West to isolate Russia for not going the way of the world.

 

 

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