This story needs significantly "a bit of context" if one is to appreciate the speciousness of the Russian argument. (I have been on the sovereig debt trading business since the late 80's, so trust me on the general facts. I have left the specifics vague because I am too lazy to go check prices, etc.)



With the fall of the Soviet Union, the first Russian government(s) defaulted on their Soviet-era debts. (After some horse-trading with the most obvious victims of Russian-Soviet domination -- the CIS republics -- the Russians "more or less" accepted the debt as being their responsibility but claimed they had no money to honor it.) Subsequent negotiations with the main creditors produced a restructuring of this debt, which locked-in substantial losses (write-offs) for the foreign lenders (mostly European and Japanese banks), including below-market repayment terms.



From the mid-1990's until 1998 the Russian government paid this restructured debt, and used the good will this generated, to issue new debt -- this time in the form of public bonds. In 1998, the Russians (editorial comment: with a lot of help from the IMF, Wall Street, and Robert Rubin) screwed things up so badly that they were forced to default on most of their obligations, including those Soviet-era debt loans which had already been deafaulted and restructured by the Russians (not the Soviets). The Russians argued that it was still "sort of legacy debt, Vneshtorg bank debt not Russian Federation debt, blah, blah, blah". But morally everybody knew who was defaulting to whom. (They did not deafult on the bonds, but this was mostly because they represented at the time a small percentage of their debt and because they wanted to show that there was a diffierence between "loans with legacy" and new issue bonds.)



A couple of years later, for the second time, Russians stuck creditors with another restructuring (of course, they did engineer it as a "voluntary exchange!") that cut the value of the creditors' claims back by another large amount. This time even Wall Street could not stomach more Russian chicanery, and it insisted that the new debt instrument be Russian bonds.



This, my friends is the overwhelming bulk of the debt which remains out there. Now you tell me if they have ANY claim to ANY MORE debt forgiveness?

So the initial agreement at least was odious.

Yes, but with each passing day, I am starting to think that Putin and his bi-polar government wants to earn the title of odious, not just inherit it...

Gotta restore order before freedom can function. Putin has to decide if he has it within him to be Russia's Franco or Pinochet.

I have a feeling that Russian policy is being driven by something a lot more sinister than that (though admittedly, it may just be my lurid paranoia coming to the fore).



The problem being, that the US believes (with not a little justification) that it won the Cold War; and that the USSR lost (end of history, etc., etc.). And that everyone recognizes that and goes home as it were to continue with their lives for better (hopefully) or worse.



But this is shortsighted and may not be at all realistic. Some nations and peoples have very long memories. The extremely negative feelings that the Russian populace appear to hold for American, I would venture to say, is totally incomprehensible to most Americans. (Nor should traditional Russian mastery of subterfuge be discounted, nor should Russian chauvinism be ignored.)



Hence the question: What if Russia sees the fall of the Soviet Union not as losing the Cold War, but as (merely) having lost a battle? Leading one to ask, was its support for Saddam's regime merely economic or tactical? And if the latter, how far did it go? (There are already stories afoot about Russia providing Saddam with intelligence on European leaders, as well as offers of assassination.)



And what of Russian support of Iran's nuclear program?



Is there a larger pattern here that we, in our naivete (and in our firm belief that they're just like us, in wanting a better life with more opportunities to succeed) refuse to recognize?



Once again, these musings may be paranoid fantasies of someone who has too much time on his hands....

Barry:



That doesn't actually matter though. The question is do they understand why they lost, that totalitarianism is so inherently weak that it can't defeat democracy in battle. If they become more like us in order to beat us it will already be too late because they'll lose the desire to.

I have a long memory for czarist bonds -- whose

original holders were mostly French.