Keyboard anxiety
Pierre Avril

MOSCOW — Slumped on the one of the fluorescent poufs in his Moscow office, a gothic T-shirt-clad Alexander Lyamin says he's "stunned." Founder of Qrator Labs, a Russian startup specialized in cybersecurity, and a staunch supporter of a free and borderless internet, Lyamin is seeing his world collapse around him.

Located opposite a huge flour combine from the Soviet era, his company's offices stand in stark contrast to the usual drab Moscow business decor. An exotic turtle paddles in an aquarium, a ping-pong table fills an entire room, and the two working spaces are wide open. The setting is reminiscent of the Silicon Valley of the early days, except that the insouciance and collaborative spirit that prevailed among transatlantic experts of computer security have given way to mistrust and paranoia.

Alexander Lyamin's liberal dream started turning sour last June when the American company Crowdstrike accused Russian hackers — some of them linked to military intelligence services — of being behind the attacks aimed at the Democratic Party during last year's presidential election. In retaliation, Barack Obama imposed sanctions on Russia's intelligence services and their subcontractors. Among them was Tsor Security, linked to Qrator Labs, which works for the Kremlin, Gazprom and Sberbank, among other clients.

Russian programmer Alisa Shevchenko was also cited, and in her sole comment on the matter, tweeted that she was "really trying to make sense" of how her small company (closed long ago at that) could possibly appear on the same list with the FSB and international terrorists.

fsb cybersecurity russia hq moscow

FSB's Moscow HQ — Photo: Seamas Culligan/ZUMA

One month ago, the Federal Security Service of the Russian Federation (FSB) announced the arrest of two of its senior officers specialized in cybersecurity along with a top manager at Kaspersky Lab, one of the world leaders in the sector. All three were charged with treason, accused of having passed classified information to the U.S. Finally, three Russian hackers, members of the "Shaltay Boltay" group were arrested on suspicion of having hacked the email accounts of Russian leaders. Among the intercepted conversations were those of Kremlin counselor Vladislav Surkov, in which he dictated political instructions to the Russian-backed separatist rebels in the Donbass region of Ukraine.

One of these hackers managed to flee to Estonia, where he's asked for political asylum. He accuses his superior, Vladimir Anikeev, of having been recruited by the FSB. According to the Russian press, the group's "curator" was none other than one of the two officials charged with treason. Incarcerated in solitary confinement at the Lefortovo Prison in Moscow, Anikeev has pledged to collaborate with the investigators in exchange for a reduced sentence — probably one-and-a-half years instead of the maximum five years the law allows. His lawyer, Ruslan Koblev, says his client is "more of an anarchist and lone crook."

Officially, there's nothing to connect these cases, but the revelations' consistency was enough to stir up trouble. "Their goal is to terrorize Russian cyberintelligence experts while keeping American agencies at bay," says Philippe Baumard, who heads the Paris-based cybersecurity company Akheros. In this context, Vladimir Putin recently stated in front of FSB senior officials that the number of cyberattacks against Russia had increased threefold since 2015.

While calling for the "restoration of dialogue" between Russian and American intel services, the Kremlin's leader has asked for a reinforcement of the means to fight against cybercrime. Simultaneously, Defense Minister Sergey Shoygu praised, in a speech at the State Duma on Feb. 22, the creation of cyberunits at the service of an "intelligent, specialized and efficient propaganda."

I have nothing against Americans, but that doesn't mean that I must have their spies inside my home.

These cases, after they had caused an amused surprise, soon paralyzed a community of experts who are used to sharing their data. Many of the specialists working in firms on the West Coast of the U.S. are of Russian origin, a country long renowned for the quality of its computer engineers and mathematicians. "On both sides of the ocean, insanity prevails nowadays," says says Alexander Lyamin, whose Qrator Labs used to collaborate with American colleagues. "It's hard to imagine how this confrontation will end. I thought tensions would decrease after the American election, but that's not what's happening. At some point, we will have to start talking to one another again."

Two years ago, one of his co-workers found himself caught in the middle of a story worthy of a John Le Carré novel. Contacted by a source inside the Russian Telecom and Mass Communications Ministry requesting his expertise, Alexander Viaria traveled to Sofia, Bulgaria, where he was put in touch with a representative from Rostec. This state-owned company, specialized in technology for civil and military use, is led by a man close to Vladimir Putin, Sergey Chemezov. After a demonstration that targeted the Ukrainian Defense Ministry, Rostec, under the FSB's cover, tried to recruit him to carry out DDoS attacks, according to what Viaria told the website Meduza, a claim that was confirmed by his former employer.

Alexander Viaria declined the offer. But after his return to Moscow, he saw that he was being followed, and eventually fled to Finland where he applied for asylum. Since then, "we've reduced to a minimum all our interactions with state organizations," Lyamin says. Answering our request, Rostec denounces "accusations that defy common sense and bear no relation to reality."

The company Kaspersky Lab, whose CEO Eugene Kaspersky is himself close to the Russian secret services, cannot afford to break off such ties. Ruslan Stoyanov, the head of the company's investigations unit, is currently accused of "treason" alongside two FSB officials. "Like all major market players, we're actively working together with the international community of experts and security organizations of different countries," the company said in a statement.

kaspersky eugene cybersecurity russia

Eugene Kaspersky — Photo: Web Summit

In the meantime, the firm's American partners are forced to put the brakes on their cooperation. "I don't want to endanger any of my partners knowing that the conversations they're having with me could be misinterpreted by their countries' authorities," explains John Bambenek, threat systems manager at Fidelis Security, which collaborates with Kaspersky Lab.

Pavel Vrublevsky, the founder of payment platform ChronoPay, suspects American intelligence services of infiltrating Russian companies. "It's probable that the people who stand accused of treason did take part in illegally exchanging information with the U.S., but that helped the cyber security market expand. I have nothing against Americans, but that doesn't mean that I must have their spies inside my home," this renowned expert says.

In 2013, Vrublevsky was sentenced to two-and-a-half years of prison for attacking one of his competitors, the company Assist, which is responsible for Aeroflot's online ticket service. "He's a talented man, and we valued his contacts," a certain Sergei Mikhailov had said at Vrublevsky's trial. It turns out the same Sergei Mikhailov, an FSB official, now stands accused of treason. It's a small and shady world indeed.

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Economy

European Debt? The First Question For Merkel's Successor

Across southern Europe, all eyes are on the German elections, as they hope a change of government might bring about reforms to the EU Stability Pact.

Angela Merkel at a campaign event of CDU party, Stralsund, Sep 2021

Tobias Kaiser, Virginia Kirst, Martina Meister


-Analysis-

BERLIN — Finance Minister Olaf Scholz (SPD) is the front-runner, according to recent polls, to become Germany's next chancellor. Little wonder then that he's attracting attention not just within the country, but from neighbors across Europe who are watching and listening to his every word.

That was certainly the case this past weekend in Brdo, Slovenia, where the minister met with his European counterparts. And of particular interest for those in attendance is where Scholz stands on the issue of debt-rule reform for the eurozone, a subject that is expected to be hotly debated among EU members in the coming months.

France, which holds its own elections early next year, has already made its position clear. "When it comes to the Stability and Growth Pact, we need new rules," said Bruno Le Maire, France's minister of the economy and finance, at the meeting in Slovenia. "We need simpler rules that take the economic reality into account. That is what France will be arguing for in the coming weeks."

The economic reality for eurozone countries is an average national debt of 100% of GDP. Only Luxemburg is currently meeting the two central requirements of the Maastricht Treaty: That national debt must be less than 60% of GDP and the deficit should be no more than 3%. For the moment, these rules have been set aside due to the coronavirus crisis, but next year national leaders must decide how to go forward and whether the rules should be reinstated in 2023.

Europe's north-south divide lives on

The debate looks set to be intense. Fiscally conservative countries, above all Austria and the Netherlands, are against relaxing the rules as they recently made very clear in a joint position paper on the subject. In contrast, southern European countries that are dealing with high levels of national debt believe that now is the moment to relax the rules.

Those governments are calling for countries to be given more freedom over their levels of national debt so that the economy, which is recovering remarkably quickly thanks to coronavirus spending and the European Central Bank's relaxation of its fiscal policy, can continue to grow.

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive.

The rules must be "adapted to fit the new reality," said Spanish Finance Minister Nadia Calviño in Brdo. She says the eurozone needs "new rules that work." Her Belgian counterpart agreed. The national debts in both countries currently stand at over 100% of GDP. The same is true of France, Italy, Portugal, Greece and Cyprus.

Officials there will be keeping a close eye on the German elections — and the subsequent coalition negotiations. Along with France, Germany still sets the tone in the EU, and Berlin's stance on the brewing conflict will depend largely on what the coalition government looks like.

A key question is which party Germany's next finance minister comes from. In their election campaign, the Greens have called for the debt rules to be revised so that in the future they support rather than hinder public investment. The FDP, however, wants to reinstate the Maastricht Treaty rules exactly as they were and ensure they are more strictly enforced than before.

This demand is unlikely to gain traction at the EU level because too many countries would still be breaking the rules for years to come. There is already a consensus that they should be reformed; what is still at stake is how far these reforms should go.

Mario Draghi on stage in Bologna

Prime Minister Mario Draghi at an event in Bologna, Italy — Photo: Brancolini/ROPI/ZUMA

Time for Draghi to step up?

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive. That having been said, starting in January, France will take over the presidency of the EU Council for a period that will coincide with its presidential election campaign. And it's likely that Macron's main rival, right-wing populist Marine Le Pen, will put the reforms front and center, especially since she has long argued against Germany and in favor of more freedom.

Rome is putting its faith in the negotiating skills of Prime Minister Mario Draghi, a former head of the European Central Bank. Draghi is a respected EU finance expert at the debating table and can be of great service to Italy precisely at a moment when Merkel's departure may see Germany represented by a politician with less experience at these kinds of drawn-out summits, where discussions go on long into the night.

The Stability and Growth pact may survive unscathed.

Regardless of how heated the debates turn out to be, the Stability and Growth Pact may well survive the conflict unscathed, as its symbolic value may make revising the agreement itself practically impossible. Instead, the aim will be to rewrite the rules that govern how the Pact should be interpreted: regulations, in other words, about how the deficit and national debt should be calculated.

One possible change would be to allow future borrowing for environmental investments to be discounted. France is not alone in calling for that. European Commissioner for Economy Paolo Gentiloni has also added his voice.

The European Commission is assuming that the debate may drag on for some time. The rules — set aside during the pandemic — are supposed to come into force again at the start of 2023.

The Commission is already preparing for the possibility that they could be reactivated without any reforms. They are investigating how the flexibility that has already been built into the debt laws could be used to ensure that a large swathe of eurozone countries don't automatically find themselves contravening them, representatives explained.

The Commission will present its recommendations for reforms, which will serve as a basis for the countries' negotiations, in December. By that point, the results of the German elections will be known, as well as possibly the coalition negotiations. And we might have a clearer idea of how intense the fight over Europe's debt rules could become — and whether the hopes of the southern countries could become reality.

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