Russia, Ukraine and Europe's big chill: It is that time of year in Europe, when a serious chill sets in, Russia and Ukraine bicker, and a lot of people freeze to death. No one has attributed any of Europe's fatalities -- 139 reported at the time of this writing -- to the routine winter row between the former Soviet neighbors. But customers such as Italy (pictured above, St. Peter's Basilica at the Vatican), Hungary and Poland say their imports from Russia -- which supplies 100 percent of the gas consumed by some European nations, and a quarter of the continent's demand as a whole -- are down considerably during Europe's worst cold snap in some six years. Russia is blaming Ukraine, reports Reuters. Gazprom deputy CEO Alexander Medvedev says that Russia has actually stepped up gas exports to Europe, but that Ukraine is siphoning off more than its fair share. Ukraine replies that it is meeting its contractual obligations. Thus, neither country answers the question -- are they or are they not supplying the gas that Europe requires to stave off the cold? The backdrop is mostly that Russia simply cannot handle all the demand in such extreme temperatures. But another dimension is the continuing contractual warfare between Russia and Ukraine -- Ukraine wants to reduce the volume of gas it's contractually required to buy from Gazprom, which it says charges too much when compared to the spot market. Other European countries also gripe about Russian gouging, and Gazprom has responded by cutting gas prices for some of them (not Ukraine).

Edward Chow, an analyst at the Center for Strategic and International Studies, suggests that much of the problem would be resolved if Ukraine's corruption was reduced, and it pumped more of its own natural gas. As it is, the bickering is directly responsible for a tense pipeline rivalry between the West and Russia -- Russia is building new gas export pipelines in order to bypass Ukraine, Poland and other unfriendly neighbors, and the West is trying to build and fill up its own new pipeline from the Caspian Sea to serve Europe. One suspects that Russia will again be the loser in this game of tit-for-tat. Scenes such as Hungarian villagers "scavenging for coal with their bare hands," as Reuters' Marton Dunai reports, will make Russia look heartless.

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End-of-year edition

Bad year for petro-tyrants: Did today's trouble for petrocrats truly originate with Muhamad al-Bouazizi, the Tunisian fruit-and-vegetable seller whose self-imolation a year ago preceded the Arab Spring? I don't think so. Before Tunisia and Egypt, before the crumbling of the Berlin Wall and the Soviet collapse, before the rise of Benazir Bhutto, and before even the fall of Chun Doo-Hwan and the birth of South Korean democracy -- there was Corazon Aquino's People Power revolution in the Philippines. At this moment 26 years ago, yellow-clad Aquino supporters with their ubiquitous "L" signs, made with outstretched thumb and forefinger (in photo above, re-enacted earlier this year in a Manila celebration), seemed quaintly outmatched by then-dictator Ferdinand Marcos as they prepared for a snap presidential election. Yet, just two weeks after a fraudulent count gave Marcos the victory, a pair of military men defected, setting off the massive crowds of EDSA, Marcos' ignominious flight out of the country aboard a U.S. aircraft, and his exile in Hawaii. The remarkable string of democratic breakouts in the quarter-century since -- regardless of their imperfection in action -- began on EDSA, with the Laban hand signs, and Freddie Aguilar's haunting renditions of "Bayan Ko."

I am reminded of the Philippine events not because of the anniversary -- I witnessed the revolution as a young correspondent in my first foreign posting -- however, but some similarities with current events in Russia. The fatal cracks in the Marcos edifice were defections, starting with the Catholic church; then government election-commission computer workers; and finally the desertion of Marcos' defense minister, Juan Ponce Enrile, and his vice chief of staff, Fidel Ramos. In Moscow, Patriarch Kirill I, the leader of the Russian Orthdox Church, is an outspoken critic of this month's Russian parliamentary elections, reports the New York Times' Sophia Kishkovsky (the Wall Street Journal's Greg White and Rob Barry have produced a must-read systematic evaluation of the elections.). A regional executive of the powerful state company Gazprom -- Sergei Filippov -- has called for a full accounting of the indications of fraud, reports the NYT's Michael Schwirtz. An unidentified official in the city of Vladimir sums up the quandary for Putin and the ruling United Russia party: "This is probably what United Russia is scared of most: that someone from the inside will start to talk," this official tells Schwirtz.

This unnamed Vladimir official is right. A truly massive public uprising in Russia appears all but impossible, not the least since there is no unifying opposition figure. Lucian Kim writes that that is not necessarily a bad thing -- Putin, he argues, is actually a pretty good reformer. Yet, recalling those days in Manila, I do not recollect a single colleague or source forecasting Marcos's ouster, either.

Go to the Jump for more of the Wrap.

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Russian Prime Minister Vladimir Putin's decision to reclaim the Kremlin is a bet on high oil prices.

The weekend announcement has rattled markets a bit, Reuters reports -- the value of the ruble dropped after the current president, Dmitry Medvedev, fired Russia's rebellious finance minister, Alexei Kudrin, who is much respected abroad. Some of the angst is rooted in Russia's continued reliance on revenue from its 10 million barrels a day of oil production, and continued failure to diversify its economy.

Yet it is this very hydrocarbon foundation that Putin is banking on in a new period as president starting next May. Western financial analysts wring their hands that Russia needs at least $116-a-barrel oil to balance its budget, while the price of the Brent benchmark is just $105 at the moment and is forecast to drop over the next year or so. But, with his move, Putin aligns himself with the longer-term outlook of most oil-price forecasters, who foresee a major spike in prices starting in roughly 18 months or two years and running until the end of the decade. At that point -- 2020 or so -- many forecasters think oil prices will be so high that they will begin to trigger more or less a permanent destruction of much demand as consumers switch to alternatives.

By that time, Putin will be the end of a new 12-year run as president. His last, highly popular 8-year term as Russian president coincided with high world oil prices -- reaching a record high of $147 a barrel -- which he used to boost employment, to build up a war chest of financial savings, to elevate the buying power of ordinary citizens, and to lead a voluble, chin-out foreign policy.

In remarks in recent days, former Finance Minister Kudrin said that Russia already is having problems absorbing the income from oil prices, resulting in the flight of $31 billion in largely oil proceeds out of the country in the first half of the year, Bloomberg reports. But Putin could simply begin to resume socking away the largesse into a rainy-day fund, or a sovereign wealth fund.

What ails Russia? In large part it is Russians themselves, says President Dmitry Medvedev. In a penetrating interview with the Financial Times, the best I've seen with the 45-year-old leader (abbreviated video here), Medvedev describes his economic program for transforming the world's largest country, but says that, ultimately, Russians need to look in the mirror. "Our main enemy is inside us -- in our perceptions, our habits and cumbersome bureaucratic apparatus," Medvedev told the newspaper. "Indeed, if we manage to overcome these habits, reform will be more successful. I mean, one has to admit that we have a strong paternalist thinking. It goes for many people and even statesmen." He said:

For a variety of reasons, people in this country invested all their hopes in the kind Tsar, in the state, in Stalin, in their leaders, and not in themselves. We know that any competitive economy means reliance on oneself in the first place, on one's own ability to do something. This is the challenge every person has to deal with. Certainly, this is not done by a decree or with a stroke of the pen, but this is the problem anyway.

One cannot get carried away with the significance of Medvedev's remarks, since unlike prior Russian leaders who thought critically and fundamentally -- Mikhail Gorbachev; Yuri Andropov; and, reaching far back, Peter the Great -- Medvedev isn't actually in charge of either the nation's or even his own destiny. Prime Minister Vladimir Putin occupies that role.

Yet that is precisely the point. If one presumes that Medvedev relies on Putin's good will for his position, then one also must assume that such remarks do not come from left field -- Medvedev has first market-tested them in rough or polished form with Putin. This does not mean that Putin agrees with all of Medvedev's thinking. But he does not object to Medvedev so expressing himself if he wishes. My colleague Josh Keating suggests that at least some of the photographs of these fellows demonstrating camaraderie are so much empty staging. But it seems to me that you get what you see -- Putin and Medvedev actually do collaborate in a respectful manner; they agree on a ruling strategy, with Putin holding the deciding vote; and they genuinely are fond of each other. While the photos are not all spontaneous and must be opportunistic, I think the men themselves are not faking. Read on to the jump.

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Notions can be an indispensible force in the achievement of big leaps in business, science, sports, politics, personal fortune and military conquest. That's how souls among us have taken apart genomes, drilled in ultra-deep water, run the 4-minute mile, put a black man in the White House, earned a billion dollars, and overthrown Mubarak.

Sometimes notions and gigantic personalities combine, and the result can be a determination to go on, and on and on. Such is the case with missile defense. Three decades after Ronald Reagan visited Cheyenne Mountain and got the notion that the United States could shoot down a missile, the United States has spent more than $130 billion to prove the great man correct. In January, for example, the U.S. Missile Defense agency halted deliveries of the core weapon in the American-based system of ground-based interceptor missiles -- a Raytheon-made anti-missile device that failed yet again to hit a target. Yet, a week ago, Defense Secretary Robert Gates was in Moscow, attempting to fulfill one of President Obama's strategic priorities of the year -- getting a missile-defense deal with Russia -- and the Pentagon is asking for $10.6 billion on more development in its next budget.

One matter is the pure indomitability of Reagan's notion. The other is its indomitability in the context of events around the world -- 9/11, the wars in Iraq and Afghanistan, and now the revolutionary fervor in the petro-states of the Middle East. Are we fighting the proverbial last war? "In 1999, 2000, 2001, the Russians were saying, ‘Look you knuckleheads, the real threat is Osama bin Laden and the Taliban.' Then 9/11 happened and they look pretty right," Andrew Kuchins, who runs the Russia and Eurasia Program at the Center for Strategic and International Studies in Washington, told me over the phone.

The question is not whether the Pentagon ultimately will manage to figure out the missile conundrum -- this notion could yet prove itself out. Clay Dillow at Popular Science, for example, reports that Northrop Grumman has achieved a breakthrough with the ability to track a ballistic missile through all phases of flight. Poniblogger at CSIS has some interesting thoughts about missile defense progress.

It is rather whether Western military and security minds ought to be focused on how to adapt to a tectonically different Middle East, including how to secure the world's energy supply. It is whether it's best to continue what's now a 28-year-long effort to engage Russia on missile defense, or to shift the focus to a cooperative policy on energy, arguably a more enduringly strategic problem. It is also what to do about nuclear energy given Fukushima.