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Russian Prime Minister: We Are 'Approaching a Second Cold War'

7:08 AM, May 20, 2014 • By DANIEL HALPER
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Russian prime minister Dmitry Medvedev says that "we are slowly but surely approaching a second cold war." He also said that U.S. President Barack Obama could be "more tactful politically" and that he's disappointed in some of the decisions Obama has made.

"Yes, I believe that President Obama could be more tactful politically when discussing these issues. Some decisions taken by the US Administration are disappointing. We have indeed done a lot for Russian-US relations. I believe doing so was right. The agreements that we reached with America were useful. And I'm very sorry that everything that has been achieved is now being eliminated by these decisions. Basically, we are slowly but surely approaching a second cold war that nobody needs. Why am I saying this? Because a competent politician knows how to make reserved, careful, subtle, wise and intelligent decisions, which, I believe, Mr Obama succeeded at for a while. But what is being done now, unfortunately, proves that the US Administration has run out of these resources. And the United States is one of the parties to suffer from this," Medvedev said, according to excerpts of a partial transcript provided by Bloomberg Television.

Medvedev made the comments in an interview with Bloomberg Television:

Here's the excerpts provided by Bloomberg:

On Russian gas supplies to Western Europe:

 

Dmitri Medvedev: First off, every country or group of countries, including the European Union, has the right to diversify their source of supply. That is true. But we don't attach much importance to that simply because, so far, there's no viable alternative in sight to Russian supplies. We just happen to think that we, as a major energy-supplying power, should have an opportunity to deliver gas not only to Europe -- but also to Asia. We benefit from that. I wouldn't look for any politics in that, but I have no doubt that supplying energy to the Asia Pacific region holds great promise in the future. More than that, we have enough capacity and enough gas to send supplies via both the eastern and the western routes. But even if we look at the worst case scenario - purely theoretically - any undelivered European gas supplies can be sent to China by the eastern route. But that, let me stress the point again, is so far an absolutely theoretical possibility.

 

Ryan Chilcote: If western Europe was to move away from Russian supplies...

 

Dmitry Medvedev: You know, all this talk is absolutely abstract or politicised. Some of our partners, including in the USA, say: "We'll help you guys in Europe with LNG." OK. Let them give us the calculations. As far as I understand, even if this is done on a very balanced basis, the price of LNG supplied from the United States of America would be 40% more expensive than the Russian pipeline gas.

 

More on European gas supplies:

 

Dmitry Medvedev: Frankly, we, and I mean across the Russian Government, have no desire at all to help the Ukrainian authorities because we do not consider the current authorities to be legitimate and because they have not shown themselves to be honest and sincere partners. But it pains us to see what is happening in Ukraine and what is happening with the people residing in that country. So, in that sense, we're prepared to discuss any collaboration even as a humanitarian act, but in order for that to happen it's necessary for them to demonstrate a serious intention to cooperate, and the intention to pay.

 

Ryan Chilcote: Can Western Europe count on getting all of the Russian gas that they're expecting to get this year?

 

Dmitry Medvedev: If the Ukrainian market is stable and if Ukrainians fulfil all of their obligations, Europe will receive what it is entitled to in full. But we can't ignore the fact that Ukraine stands between Europe, the European Union, and Russia. Our task now is to calm the situation around Ukraine. This task includes agreeing on gas supplies to Ukraine. If we succeed, everything will be fine. I would like to note, though, that North Stream is a guarantee that - for Europe - everything will remain as before. If we are able to commission the South Stream in the next few years, then strictly speaking we won't need to ship gas through Ukraine, although we realise that Ukraine needs that. But if we get that done, the Europeans will have guaranteed access to gas at all times regardless of who's in power in Kiev.

 

On the effect of sanctions the Russian economy:

 

Dmitry Medvedev: You know, to put it simply, no one is happy about sanctions, since they are always a sign of tense relations. We don't support the sanctions. Moreover, you've probably noticed that we have not commented on them a great deal or responded to them harshly, although we probably could cause some unpleasantness for the countries that are imposing these sanctions. But it's bad for international economic relations, for our relations with Europe and the United States.

 

Let's be honest, these sanctions are a sharp knife for European business, and American business doesn't need them either. The only ones who want sanctions are politicians, who use them to reinforce their convictions and to demonstrate their power. For example, our American colleagues and President Obama need to show the Congress that America doesn't fear the Russians, that if anything happens they can hurt us. They need to show that the US President can take tough decisions, or rather that he is doing everything the Senate accuses him of not doing. This is what the Americans are doing. The situation is somewhat different for Europe.

 

On how he feels Obama has dealt with the situation:

 

Dmitry Medvedev: Yes, I believe that President Obama could be more tactful politically when discussing these issues. Some decisions taken by the US Administration are disappointing. We have indeed done a lot for Russian-US relations. I believe doing so was right. The agreements that we reached with America were useful. And I'm very sorry that everything that has been achieved is now being eliminated by these decisions. Basically, we are slowly but surely approaching a second cold war that nobody needs. Why am I saying this? Because a competent politician knows how to make reserved, careful, subtle, wise and intelligent decisions, which, I believe, Mr Obama succeeded at for a while. But what is being done now, unfortunately, proves that the US Administration has run out of these resources. And the United States is one of the parties to suffer from this.

 

On MasterCard, Visa and SWIFT suspending some of their services in Russia:

 

Dmitry Medvedev: This is a question I would like to speculate over for a little longer, if you don't mind. In fact, a great number of our people are used to using foreign payment systems, mainly Visa and MasterCard, but also American Express. Other electronic payment systems are also widely used.

 

Now let me speculate over what happened. I will not be focusing on the sanctions and political decisions, which are considered an act of Parliament or an act of God in Anglo-Saxon law. Let's look at this issue from another perspective. I am an ordinary holder of an international bank card - to be more precise, a Russian card issued by a foreign payment system. By the way, there are around 200 million cards of this type in this country - more than the population count. I would like to stress that I do not have a relationship with a foreign state. I have a relationship with the bank that issued my card. And it never occurred to me that my payments depend on the political stance of a foreign state. Therefore, I would like to note that in the context of our law - and, I'm sure, also US and EU law - what Visa and MasterCard did was a direct violation of their contract with Russian clients - not a bank, but concrete individuals who trusted these payment systems. If I were a lawyer, which I'm unfortunately not at the moment, I would have gladly spent my time and effort to take these payment systems to court.

 

I think that this is a gross violation of effective contracts and agreements. As far as I can see, our partners at Visa and MasterCard are aware of the weakness of their position, but they had to take this decision upon the recommendation of the Treasury Department and the State Department.

 

I'd like to remind you that the world is monitoring this conflict because if I were a Chinese or Brazilian, I'd think: Why should I carry cards that largely depend on the stance of the US administration? Better choose the Chinese way. As you know, our Chinese partners are developing a national payment system, which, considering the global nature of the Chinese economy, is already influencing global payment systems.

 

I would like to reiterate that we do not want Visa or MasterCard to leave Russia. Overall, our cooperation with them has been quite productive. However, I believe that before taking such decisions, these companies should have thought about the fact that such actions - responding in such an awkward manner to official requests - undermine trust in them.

 

On the U.S. suggesting U.S. CEOs not attend the St. Petersburg Economic Forum:

 

Dmitry Medvedev: I think this is bad. It reminds me of the decisions made in this country during the Leonid Brezhnev period. Business interests suffer because of ideology. You should ask these CEOs themselves - I have actually met some of them - from the US and Europe if they are happy about these decisions. Why do they have to sacrifice their business interests for the sake of some strange sense of solidarity?

 

Ryan Chilcote: That puts them in a difficult position because they want to make money, on the one hand, but they don't want to go against their government's wishes, on the other.

 

Dmitry Medvedev: Exactly. So, this is bringing ideology to market relations and the economy, which is exactly what the Soviet Union did in the past, when it adopted bans on trade with particular countries because [their ideology] didn't suit the government. This is exactly what the US administration is doing now. This is a path to a dead end. It is destroying international economic ties and will affect the interests of US and European business.

 

There is one more thing I'd like to say, since you keep talking about sanctions... I'd like to remind you that no sanctions were introduced against MPs even in the most difficult periods of US-Soviet relations, like during the Cuban missile crisis or when the decision to deploy troops in Afghanistan was taken. We maintained contacts at the top political level. By enacting such sanctions, our US and European partners are destroying the very fabric of international relations. Are they trying to scare us? This will lead nowhere. Once a new administration comes to power in the United States and a new president takes office after Obama, these sanctions will be forgotten. In the end, nobody stands to win.

 

On the Internet and whether he agrees with President Putin that the internet is a CIA project:

 

Dmitry Medvedev: My answer is yes and no. It is true that the Internet was born within defence-related structures. As far as I know, it was DARPA, not the CIA. What this means is that, at the outset, this network served a defence purpose. But afterwards, it grew into what is called the World Wide Web, serving as a universal phenomenon, bringing together huge numbers of people. I have never made an ideal out of the Internet, but I do believe that there is no other thing in the world with such a great unifying potential, since it creates communication opportunities, and it should be properly appreciated.

 

Ryan Chilcote: You say that it has to be valued, but can you guarantee that Facebook, Twitter, Instagram, will be working in Russia in a year's time? Because, as you are well aware, a Russian official not too long ago said that they may have to be closed.

 

Dmitry Medvedev: This was just a poor choice of words by an executive from an oversight department. Perhaps, he should have considered his words more carefully before speaking. The issue is fairly simple: everyone who works in the Russian segment of the Internet must comply with Russian regulations.

 

Again, it's part of the worldwide history of communications. Millions of Russians use social media. I use it as well, I believe that it's a good and useful thing; therefore, on the one hand, there must be compliance with Russian laws, but on the other hand, there should be freedom of access to information that is not at odds with the law.

 

On VKontakte and Pavel Durov - the Zuckerberg, many say, of Russia - leaving the country:

 

Dmitry Medvedev: It's difficult for me to discuss Mr Durov's motives. I've met him only once, in this very room, where we discussed development prospects. He is very talented, but like every talented person he has many illusions. As far as I know, he had an argument with the company's shareholders and his business partners and, as a result, sold his shares. As it often happens, he cited political circumstances to explain his actions and started another project. It was his decision, but VKontakte will continue to exist. It is a completely open platform.

 

Ends/

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