Monday, March 03, 2014

Central Europe braces for escalation in Ukraine

Leaders criticize Russia, seek to reassure population as markets plunge.

By Jason Overdorf
GlobalPost - March 3, 2014

BERLIN, Germany — Political leaders across Central Europe slammed Russia's invasion of Ukraine on Monday and sought to reassure their own people amid mounting fears that the crisis may escalate into war.

“Europe undoubtedly faces its sharpest crisis since the Berlin Wall came down,” German Foreign Minister Frank-Walter Steinmeier said at a special meeting of EU foreign ministers in Brussels.

“The danger of a new division of Europe is real,” he added. “The situation in Ukraine intensifies daily.”

Steinmeier's comments followed a strained weekend telephone conversation between German Chancellor Angela Merkel and Russian President Vladimir Putin.

Merkel told Putin in no uncertain terms that the invasion violates international law and called the military intervention “unacceptable,” according to a spokesman for the chancellor's office.

Apart from stern words, however, Germany has pledged little in the way of action, having proposed only the formation of a contact group and sending a "fact finding mission" of the Organization for Security and Cooperation in Europe (OSCE) to eastern Ukraine and Crimea.

Polish Prime Minister Donald Tusk said Sunday that the United States and its European partners must stop the Ukrainian crisis from expanding into a wider regional conflict.

If anything, Tusk — whose country shares a border with Ukraine — showed stronger resolve than his German allies.

"History shows — although I don't want to use too many historical comparisons — that those who appease all the time in order to preserve peace usually only buy a little bit of time," Tusk told reporters in a thinly veiled reference to the Allied capitulation to Adolph Hitler's annexing of Czechoslovakia’s Sudetenland in 1938.

Meanwhile, internet users speculated that troop movements underway in Poland were intended to beef up defenses on the border with Ukraine, although an army spokesman said the shift has “absolutely no connection with the events in Ukraine.”

Reactions were more muted elsewhere in Central Europe.

Czech Prime Minister Bohuslav Sobotka on Monday looked to control the damage after his defense minister over the weekend effectively threatened that the Russian invasion could prompt the Czech Republic to select a bid from US-based Westinghouse over a consortium led by Russia's Atomstroyexport for the planned $10 billion expansion of a Czech nuclear power plant.

"It is impossible to imagine that we will burn all bridges and because of this crisis will cancel all trade relations with Russia," Sobotka said.

Hungarian President Viktor Orban, fighting an election and banking heavily on Russian financial support, opted out of the fray altogether.

“Hungary is not part of the conflict,” he said on state-owned media.

He also sought to reassure Hungarians that they are safe from any spillover of violence and emphasized that his government is working to ensure that remains the case.

Investors weren’t convinced. Germany's DAX closed down 3.44 percent, while key stocks on the Warsaw Stock Exchange dropped more than 5 percent.

Ukrainian companies listed on the Polish bourse plummeted a whopping 16 percent.