Should Crimea be leased to Russia?

Russian ship in bay of Sevastopol

Is there a commercial solution to the crisis in Ukraine?

Lord Owen, the former foreign secretary who has advised Russian businesses interests for some time, thinks there may be.

He told me that a settlement could, in his view, involve Russia negotiating with Ukraine a lease on Crimea - which he regarded as analogous to America's lease on Guantanamo in Cuba.

And the background, of course, is that Russia already has a lease till 2042 on its substantial naval base at the Crimean port of Sevastopol. Originally negotiated in 1991, it was extended by 25 years in fraught negotiations in 2010.

Back then, the final pact involved Ukraine receiving substantial subsidies on Russian natural gas.

If that lease was viewed by the world as ethically tolerable, how big a leap would it be to negotiate a lease on all Crimean territory?

There is an argument that via a lease and negotiation of rent, at least the rest of the Ukraine would receive some kind of economic benefit for Russian occupation of Crimea.

That said, it will stick in the craw of many that the exercise of military might by Russia would apparently have its reward.

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There is certainly something very 'modern Russia' about gas or cash being exchanged for territorial rights”

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Lord Owen also argues that the natural parties in such a negotiation would be the UK, US, Ukraine and Russia, since in 1994 they agreed the continuing use of Sevastopol as a base for Russia's Black Sea fleet, as part of a wider agreement on nuclear non-proliferation.

The important point is that whatever the credibility of Russia's claims to wish to protect Russians living in Ukraine, the strategic importance for President Putin of the Sevastopol and Crimean base is huge.

It is vital for President Putin in ensuring all-year-round access for the Russian fleet to the warm waters of the Indian Ocean and Mediterranean.

Analysts say there is no possibility of Russia compromising or sacrificing this naval access via Crimea.

Anyway, there is certainly something very "modern Russia" about gas or cash being exchanged for territorial rights.

In some ways it would be redolent of the blunt tactics employed by the Russian government and a troika of oligarchs that eventually saw Rosneft, the Russian state-owned oil giant, acquire control of the substantial TNK business from BP and those billionaire plutocrats.

None of which is to argue that the world should be carved up on the basis of who has the deepest pockets and the most bulging military muscles.

Nor is it to say that it would be easy to calculate a fair rent for the whole of Crimea.

But the alternative, a region tottering sine die on the brink of catastrophe, may be worse.

Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 104.

    The Russian Black Sea Fleet is a museum piece from Tzarist days. The very old Russian naval ships should be towed away and scrapped! Russia needs to understand that they are no longer fighting off Napoleon, and Hitler is long dead & buried in his bunker. The people of Ukraine are not Nazi's, and to suggest such a thing is plain silly

    Putin looks more of a fool the longer his stupidity carries on!

  • rate this

    Comment number 124.

    The Ukranian people have thoroughly chased corruption and theft out of their country. ex President has lost his luxury stuff, confiscated, and now scuttled off to Russia, while wanted posters are up all over the Ukraine to catch him and to bring him to trial for murder!

    This is the kind of man that Putin is supporting, and likely because he is also afraid the same will happen to him?

  • rate this

    Comment number 91.

    Turn out the Russian Black Sea Fleet as redundant. Tow it all away to the scrap heap then open the naval port to proper commercial use.

    Trade and commerce is much more important than blustering and guns, nationalist nonsense? Whoever would want to be a Russian with authoritarian Putin as dictator. Ex KGB regime men are very out of date.

  • rate this

    Comment number 98.

    @94 please move to Russia. Bored of reading your pro-Putin bs every single day.

    @95 - go and read up about the end of WWII and subsequent cold war that run until late-80's. Of course it is!

    '97 - Quite the opposite, it should be and all other Europeans nations if they choose to be.

    My conclusion is thus, some of you have no spine. God Bless America.

  • rate this

    Comment number 118.

    Was this a coup against a democratic government"

    Democratic governments do not murder demonstrators by placing marksmen on public buildings.

    " Global Yawning
    Didn't the Greek Prime Minister try and give Greece and in-out referendum on the EU"

    No. Selective and faulty memory methinks.

    " CzarPeter
    A lot of EU companies are using Ukrainian developers"

    Yes and many universities too.


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