Ukraine's Tragic Mess-- And Iceland's Move Against Bankster-Imposed Austerity

Yesterday, on my travel blog, we took a little look at the demands in Thailand that Prime Minister Yingluck Shinawatra, sister of deposed right-wing populist Thaksin Shinawatra, resign. There are widespread anti-government demonstrations and increasing police reaction-- which have already led to several deaths and scores of serious injuries. Ukraine looks like it could be even worse. Hundreds of thousands of demonstrators want to see their country move out of the Russian orbit and towards the E.U. And they're demanding that President Viktor Yanukovich resign. This morning a no-confidence vote in Parliament failed, frustrating hundreds of thousands of self-styled "revolutionaries."

“I want the authorities to know that this is not a protest; this is a revolution!” Yuri V. Lutsenko, a former interior minister and an organizer of the Orange Revolution nine years ago, told a vast crowd here in Independence Square that many observers said outstripped even the biggest gatherings in 2004.

“Revolution!” the crowd roared back. “Revolution!”

Eleven days of intensifying protests over Mr. Yanukovich’s refusal to sign political and free trade accords with the European Union have now directly shaken the president’s prospects of remaining in power. Cracks have begun to emerge in his political base: His chief of administration was reported to have resigned, and a few members of Parliament quit his party and decried the police violence.

Many Ukrainians see the agreements with Europe as crucial steps toward a brighter economic and political future, and as a way to break free from the grip of Russia and from Ukraine’s Soviet past. Now, the outcry over Mr. Yanukovich’s abandonment of the accords is pushing Russia into a corner.

The Kremlin, which has supported Mr. Yanukovich as a geopolitical ally for years despite its frequent annoyance with him, used aggressive pressure to persuade him not to sign the accords. Now the anger over Russia’s role has made it all but impossible for Mr. Yanukovich to take the alternative offered by the Kremlin-- joining a customs union with Russia, Belarus and Kazakhstan. Any compromise with the protesters would have to revive the accords with Europe, and reduce Russia’s sway.

Even as Mr. Yanukovich was said to be considering declaring a state of emergency, parliamentary leaders began contemplating various ways to curtail his powers, rather than remove him from office entirely. Volodymy Rybak, the speaker of the Parliament, which is controlled by Mr. Yanukovich’s Party of Regions, on Sunday called for “round-table talks” to help resolve the crisis. Similar talks were conducted in 2004 to resolve the disputes that set off the Orange Revolution.

The steady escalation of the protests-- and the threat of further violent crackdowns-- has created a volatile situation that showed no sign of abating.

More violence erupted on Sunday afternoon when demonstrators clashed with a battalion of police officers guarding the presidential administration building. Smoke bombs and stun grenades were set off, and the police responded with tear gas.

The authorities reported Sunday night that about a hundred police officers and more than 50 protesters were injured, including some with burns to their eyes from tear gas. Witnesses said that some protesters, including women, were beaten brutally.

The police made scattered arrests, but did not immediately release a tally.

Protest leaders said they intended to make Mr. Yanukovich a prisoner in his own capital on Monday, with streets blocked, government buildings surrounded or occupied and possibly a general strike by workers and students. A map was posted on Facebook showing supporters where to put their vehicles to obstruct traffic.

By Sunday evening, demonstrators had taken police barriers meant to keep them out of Independence Square and repositioned them to mark their own control of a large area in the city center.

There were demonstrations in cities like Lviv and Chernivtsi, in the generally pro-European western part of Ukraine, and also in the predominantly Russian-speaking east, which tends to favor close ties with Moscow and where Mr. Yanukovich has his main base of support. Several thousand people rallied in Dnipropetrovsk in the southeast, defying a court order banning a protest there. Even in Donetsk, Mr. Yanukovich’s hometown in the east, hundreds rallied in favor of European integration.

Serhiy Lyovochkin, the chief of the presidential administration staff, reportedly resigned on Saturday over the crackdown. At least five lawmakers from the Party of Regions spoke out forcefully against the police violence, and at least two, David Zhvania and Inna Bohoslovska, said they had quit the party. Ms. Bohoslovska sent a text message to a protest leader, Yegor Sobolev, telling him: “If I can be useful, I am here. Let’s go to the rally.”

There were signs that some of Ukraine’s wealthiest business leaders, known as oligarchs, were turning against Mr. Yanukovich as well, or at least were positioning themselves for a major shift in the government. Mr. Sobolev said that a television channel owned by Rinat Akhmetov, Ukraine’s richest man, invited him to appear in prime time, which he took to be an effort by Mr. Akhmetov to reach out to the opposition.

The Orange Revolution in 2004 also centered on mass protests against Mr. Yanukovich, in response to blatant election fraud that made him the easy winner of the presidential election that year, contradicting early returns and exit polls that showed him losing to Viktor A. Yushchenko. The protests led to a new election that Mr. Yushchenko won, but Mr. Yanukovich made a comeback in 2010, defeating Yulia V. Tymoshenko, the former prime minister. Ms. Tymoshenko has since been prosecuted and imprisoned for abuse of authority.

Although Mr. Yanukovich condemned the police violence on Saturday and promised an investigation, his government drew heavy international criticism, including from the United States.

The chief of the Kiev police, Valery Koryak, submitted his resignation on Sunday, saying he had given the order to use force, though it was not clear whether he had control over the officers involved. The interior minister, Vitaliy Zakharchenko, did not accept the resignation, but said he was suspending Mr. Koryak pending the investigation.

Demonstrators in Kiev waved blue and yellow Ukrainian and European Union flags and chanted “Thieves out!” “Shame!” and “Criminals behind bars!” The crowd included the young and old, parents carrying small children on their shoulders and students who occasionally chanted the names of their schools as they marched. Every so often, another cry would go up: “Revolution! Revolution!”

Adrian Karatnycky, an expert on Ukraine with the Atlantic Council of the United States, a research group, said the protests were initiated by members of a new post-Communist generation who are increasingly frustrated that their country seems stuck in the past.

“The Euro-revolution is a mobilization around an aspiration-- Ukraine’s development along a European path,” Mr. Karatnycky said.

The video up top is a discussion from a more Russian perspective than the pro-western report from the NY Times. It's as important to watch the clip as it is to read the Times' report. It's also important to keep in mind that Ukraine is a massive country with 45 million people, a bigger population than Poland and about the same as Spain. And at stake here, at least in the near term, are the lives of millions and millions of ordinary Ukrainians caught in the crossfire, not in the crossfire between the pro-Russian police and the pro-E.U. "revolutionaries," as much as the crossfire between economic forces that are grinding them down. Iceland is going about creating a better future for ordinary citizens in a much different way-- and it's Americans as well as Ukrainians who should be paying close attention. In a huge anti-Austerity move over the weekend, Iceland announced a big a mortgage debt relief package. Like American homeowners, Icelandic mortgage holders were the victims of banister shenanigans that led to an economic collapse. Like our own, Iceland's economy is recovering-- but "many households are saddled with mortgages they cannot afford to repay, squeezing consumer spending and economic growth."

"The plan will assist over 100,000 households," Prime Minister Sigmundur Gunnlaugsson said. "This will be the beginning of an economic renaissance."

Debt relief will apply to some 1.36 trillion krona in mortgages linked to inflation, with a maximum limit of 4 million krona per household and totalling around 80 billion krona over the four-year period of the programme.

Mortgage holders will also be given tax breaks to encourage them to use pension savings to pay down their borrowing, a measure worth about 70 billion krona.

…The government said it would finance the measure through tax hikes on financial institutions and a haircut on around $4 billion in debts owed to overseas investors in Iceland's failed banks, which collapsed in late 2008.

Those debts are now mainly held by hedge funds, which bought them at a deep discount.

"The net impact on the Treasury is expected to be insignificant each year during the period 2014-2017," the government said.