Latest IMF data shows Russia outperforming Germany and UK
By Drago Bosnic | February 3, 2023
After the US-led political West imposed the most comprehensive sanctions in recorded history in an attempt to destroy the Russian economy, the most sanctioned country on the planet was expected to be isolated, economically devastated, with no access to high technologies of any kind and, most preferably, with an extremely angry populace, potentially causing protests and eventually a coup that would bring down the Russian government and bring about the “free and democratic” (i.e. compliant) Yeltsin-style puppet regime. And yet, despite nearly a year of this unprecedented economic siege, the Russian economy isn’t only still standing, but it’s even growing.
Russia’s trade exchange with the world is surging (by dozens of times in some cases) and, according to the latest data by the International Monetary Fund, it’s now expected to outperform both the United Kingdom and Germany, two of the leading European economies. The goal of making the Russian people quite angry was accomplished however – the Russians are furious at the political West and stand united in a way not seen since the Second World War, making the idea of a pro-Western coup in Moscow a perpetual pipe dream of the political elites in Washington DC and Brussels. Worse yet, if a coup ever happens, it would only bring more anti-Western political parties to power.
At first, the effects indeed seemed catastrophic for the Russian economy, with the ruble apparently in free fall and the stock market effectively shut down. However, after initially losing over 40% of its value, the embattled Russian currency didn’t just rebound, but also gained momentum and reached values higher than those before the start of Russia’s counteroffensive. And now, the latest IMF forecast predicts that Russian economic growth will outperform that of Germany, while the UK will go through a recession, as its economy was at its worst in over 300 years and is expected to perform even worse this year.
The prediction would have been nearly impossible to imagine less than a year ago and would have surely caused a roar of laughter in the mainstream media. In early March last year, US Treasury Secretary Janet Yellen boasted that “the Russian economy will be devastated.” The Russian government itself also expected a dramatic GDP contraction, with the finance ministry reportedly gearing up for at least a 10% decline. Even in December, many leading economists expected the GDP fall in 2023 to be 2.5%. And yet, the Russian economy fell by 2.2% in 2022 and is expected to grow at least 0.3% this year and 2.1% in 2024. The numbers indicate that the UK is in a recession and is expected to have a 0.6% GDP fall, while Germany will barely stay afloat with a 0.1% growth.
The sanctions were designed to cut off Russia from the international financial system by essentially stealing hundreds of billions of dollars of its foreign exchange assets, making it virtually impossible for Moscow to do business with basically anyone. Or so it seemed. However, what eventually happened was nearly a complete dedollarization of Russia’s trade exchange, as the Eurasian giant simply switched to trading in the domestic currencies of its international partners, including China and India. This made it possible for Russia’s industry to not only maintain its existing production level in the first 10 months of last year (officially it was down by a paltry 0.1%), but to even start growing in November and December. It’s expected to grow even more in 2023.
Additionally, Russia is home to many of the world’s most essential commodities, such as oil and natural gas. Moscow continues to hold dominant positions in global markets, including being the leading exporter of fertilizer and food. The world simply cannot afford to ignore Russia and there’s no indicator that it even wants to, despite the political West’s frenzied attempts to portray Moscow as the supposed “international pariah”. More than 80% of the planet not only continues to work with Russia, but is actively expanding its cooperation with the superpower. And while the political West is effectively trying to impose an oil and gas embargo on itself by sanctioning Moscow, giants such as China and India are increasing their Russian energy imports.
According to Bloomberg, India was importing 1.2 million barrels of Russian oil per day in 2022, an increase of 33 times in comparison to 2021. This is also expected to grow in 2023. Turkey, one of NATO’s leading members, also continues to expand its trade relations with Russia. In December, it imported 213,000 barrels of Russian diesel per day, a record amount in the last 7 years. Ankara also used the opportunity that many Western companies were forced by their governments to leave, so its export to Russia doubled, surpassing $1.3 billion. Imports from China increased substantially as their companies also filled the gaps left by their Western counterparts.
Despite all of its Russophobic posturing, the European Union also spent more than $150 billion on buying Russian fossil fuels in 2022. The EU’s suicidal anti-Russian sanctions caused a surge in energy costs, which hit both Germany and the UK, causing an exponential increase in inflation and severely undermining the purchasing power of hundreds of millions of regular Europeans. The latest data shows that retail sales in Germany fell sharply in the last two months of 2022, despite expectations of a slight increase due to Christmas and New Year. While economists expected sales to increase by at least 0.2%, what actually happened was a dramatic 5.3% fall.
The UK has been hit the hardest as inflation, mostly fueled by food and energy price spikes, has a detrimental effect on the cost of living. This also caused unprecedented political instability in London, with two prime ministers resigning in mere months, all with starkly different economic and fiscal policies, resulting in near complete chaos in the UK markets.
In contrast to this, Russia not only withstood the hammer of the political West’s sanctions war, but it’s now hitting back and Western economies are certainly feeling the bite. All the while, the Eurasian giant also continues to conduct its counteroffensive against NATO aggression in Europe and is now in the midst of preparations for a final push that could end the Ukraine crisis.
Drago Bosnic is an independent geopolitical and military analyst.
Scholtz failed to secure support for Ukraine on his tour of South America
By Ahmed Adel | February 2, 2023
German Chancellor Olaf Scholz’s trip to Argentina, Brazil and Chile was with the aim of involving them in the Ukraine conflict and to create a regional counterweight to China’s growing influence. These are similar actions already made by the US in South America and one that we can also expect from other European powers.
Scholz’s visit is an attempt to restore influence in a region that has been empowered by China and Russia to forge an independent path that is not under the umbrella of the “Monroe Doctrine.” It is not a coincidence that the German Chancellor visited the region just days after the Summit of the Community of Latin American and Caribbean States (CELAC), at which member states sought to strengthen regional integration in the context of Western powers attempting to prevent Latin America from strengthening relations with Russia and China.
Behind Scholz’s visit was the fact that China has become very close to Latin America. Therefore, it is in Berlin’s interest to note this competition between the Great Powers in South America and follow the trends that are emerging in the region rather than just behave as Washington’s representative.
It cannot be overlooked that South America, especially Chile, has large lithium reserves. Scholz’s visit is a form of US and European effort to effectively make the Chilean economy work in their own interest, as was the case when the US installed Augusto Pinochet as dictator in 1973.
The West’s imperial attitude of previous centuries remains the same, but, now with China’s thirst for resources, South American countries are finding a way out from the grasp of US hegemony. It is reminded, for example, that Chile’s main copper export partner today is China and not the US.
Both Washington and Berlin want major Latin American countries, like Chile, to ratify commercial, diplomatic, and political relations with the West so that they are not absorbed into China’s sphere of influence. This is an endeavour that will take many years to undergo because China is already entrenched in the region, something that is problematic for Germany as they need immediate solutions to the self-imposed energy crisis caused by sanctions on Russia.
Germany’s own self-destructive policies made it show an interest in a region that it never traditionally did. If the war in Ukraine was not occurring, it is more than likely that Berlin would not be in a hurry to forge new relationships for alternative energy sources. The issue is that Germany wants to impose its own liberal ideology over Latin America as a condition for trade, which means a cut in trade and relations with China and Russia.
South America is not only an important source of resources, but is a major region that refuses to cut trade and diplomatic relations with Russia. Whatever anticipation or expectation Scholz had on his trip were quickly dashed as he did not find the response he was expecting from his Latin American counterparts. The positions of the leaders of Argentina, Brazil and Chile reflects the fact that these governments know how to distinguish economic cooperation from political dependence.
Involving Latin America in the Ukraine conflict is something that will face widespread rejection. For example, although new Brazilian President Luiz Inacio Lula da Silva “emphatically deplored Russia’s violation of Ukraine’s territorial integrity and annexation of parts of its territory as flagrant violations of international law” in a joint statement released with Scholtz on January 30, his government’s policies towards Russia have not deviated far from his predecessor Jair Bolsonaro.
However, Lula also confirmed that Brazil would not provide ammunition to Ukraine for German-made Gepard anti-aircraft guns, as reportedly requested by Berlin, and insinuated that Ukraine was not seeking peace. Effectively, Lula is happy to pay lip service to the West but will not take any concrete action in matters related to the war in Ukraine.
In the same light, Argentina and Chile’s leaders also ended any German hope that they might lend support for Ukraine despite the fact that they were happy to condemn Russia’s military operation as an “invasion”. On his Latin America tour, Scholz wanted to demonstrate that international unity against Russia extends beyond the Western World, but only managed to secure some statements that are unlikely to damage relations with Moscow.
For his part, Lula said Brazil will work with other countries to help achieve peace in Ukraine as his country has not taken sides – something objectively true despite some damning rhetoric. In fact, likely to the annoyance of the German Chancellor, Lula said that China has an important role to play in peace talks, which he said he will discuss on a planned visit to Beijing in March.
It can be said that although Scholz’s trip can serve as a foundation for German-South American relations, his main goals – to secure support for Ukraine and to make advances in the resource industry only found limited success. Although he secured some rhetoric against Russia, he could not secure any material support for Ukraine. At the same time, although Germany has pitched its entry into the resource market, there is no guarantee that it will come to fruition or even challenge China’s dominance in the region.
Ahmed Adel is a Cairo-based geopolitics and political economy researcher.
EU sanctions blocked Nord Stream repairs – company
RT | February 1, 2023
Norway’s Equinor on Wednesday revealed that it was the government in Oslo and EU sanctions that blocked it from responding to a request for assistance in dealing with the damage to Nord Stream pipelines. The Baltic Sea pipelines delivering Russian natural gas to Germany were damaged by sabotage in September, which Moscow blamed on the West.
“The Norwegian Ministry of Foreign Affairs has stated that work on the pipelines would be in breach of the Norwegian sanction regulations – and by extension the EU sanction regulations,” Equinor said a statement emailed to Reuters.
Equinor is the Norwegian oil company that administers the Pipeline Repair and Subsea Intervention (PRSI) Pool, established by Oslo to deal with leaks and ruptures. The Swiss-based operators for Nord Stream and Nord Stream 2 are among the 72 members of PRSI, and sent requests for assistance in October, shortly after both pipelines were damaged by undersea explosions.
Because PRSI “adheres to current legislation related to sanctions,” it “notified NS1 and NS2 (operators) that we were not able to do work as requested,” Equinor said in the statement.
Nord Stream 2 AG told Reuters that it had filed a request for support to inspect the damage, “as a full member of the PRSI Pool,” but was turned down. Its sister company, which operates the original Nord Stream, said in early October that the survey vessel it attempted to charter was waiting for permission from the Norwegian government.
The original Nord Stream was inaugurated in 2011, and supplied Russian natural gas to Germany and the rest of the EU while bypassing Ukraine and Poland. The second pipeline, which would have doubled the volume of gas deliveries, was finished in 2021 but Berlin refused to certify it for operations even before the conflict in Ukraine escalated. The US had sought to block the second pipeline’s construction with sanctions and vowed it would prevent it from becoming operational.
On September 26, 2022 both strings of NS1 and one string of NS2 were damaged in a series of powerful undersea explosions. As NS1 was pressurized at the time, a large quantity of gas was released into the Baltic Sea.
Washington insinuated that Moscow was behind the blasts, while Russia pointed the finger at the West for the “act of terrorism.” Sweden, Denmark and Germany launched an investigation into the explosion, but refused to share the results with Russia. Anonymous EU officials have since leaked to the US media that there was “no evidence” to suggest Moscow was behind the sabotage. Russia’s energy company Gazprom was allowed access to the site only once, in late October.
While the German gas company Uniper has estimated it would take 6-12 months to repair the pipelines, it is unclear whether Berlin even wants to do so.
Amount of frozen Russian investments revealed
RT | January 31, 2023
Nearly $81 billion in funds belonging to Russian investors have been blocked by Western financial institutions, according to estimates by the Bank of Russia revealed on Tuesday.
As of November 30, the volume of frozen assets held at Western financial institutions totaled 5.7 trillion rubles ($80.8 billion). More than 20% of these funds are owned by retail investors, the regulator pointed out.
Last year, in an effort to minimize risks and protect investors, the Russian central bank banned brokers from executing trades for unqualified investors to purchase securities from so-called ‘unfriendly’ countries. The regulator has also imposed retaliatory restrictions on assets under Russia’s jurisdiction owned by nonresidents.
Speaking at a conference on the global challenges facing Russian financial markets, the head of the central bank’s investment department, Olga Shishlyannikova, stated her view that the frozen asset “story” is “very complicated” and that it will continue to have a negative impact on investors.
However, some solutions have been implemented, she noted. For example, direct payments of income from Russian securities trading in foreign markets to Russian investors were allowed.
Also, under a scheme introduced last year, Russian companies are able to issue local ‘replacement’ bonds with settlement in rubles to replace outstanding Eurobonds, a type of bond denominated in foreign currency. Russian issuers have experienced major difficulties servicing these bonds in light of Western sanctions.
“If all Russian Eurobonds are replaced, then retail investors will be able to withdraw more than 50% of their assets and start making use of those funds,” Shishlyannikova explained.
The rest of the assets are foreign securities from foreign issuers that have no direct connection with the Russian economy, she added.
Last September, Russia’s National Settlement Depository applied to the finance ministries of Belgium and Luxembourg for general licenses in order to unlock the frozen assets. In December, a general license was issued to release certain frozen funds and economic resources belonging to non-sanctioned Russian investors. However, the Bank of Russia assessed the chances of Western countries returning Russian assets as “extremely low” despite the fact that they haven’t been legally confiscated.
US to pressure partners into enforcing anti-Russia sanctions
RT | January 28, 2023
The US Treasury Department’s top sanctions official will visit Türkiye and the United Arab Emirates next week to warn officials and businesses there that Washington will punish them if they dodge its sanctions on Russia, Reuters reported on Saturday.
Brian Nelson, the department’s undersecretary for terrorism and financial intelligence, will travel to Oman, the UAE, and Türkiye between Sunday and Friday. Meeting with government officials, businesses and financial institutions, Nelson will caution them that they could lose access to US markets “on account of doing business with sanctioned entities,” a Treasury spokesperson told the news agency.
US officials have repeatedly highlighted Türkiye as a potential hub of sanctions evasion, and unnamed Western officials told the Financial Times in August that they were “deeply concerned” about allegations of trade between Turkish firms and sanctioned Russian entities.
Ankara responded that it “would not allow the breaching of sanctions by any institution or person,” following a phone call in which US Deputy Treasury Secretary Wally Adeyemo seemingly threatened the “success of the Turkish economy” and “the integrity of its banking sector.”
The UAE has also received warnings from Washington, with Adeyemo urging the Emirates’ financial institutions last summer to be “exceedingly cautious” about doing business with other institutions connected to “the Russian financial system.” The Treasury spokesperson told Reuters that Nelson will condemn the UAE’s “poor sanctions compliance” during his visit.
In the last month, the US has sanctioned a prominent Turkish businessman over allegedly laundering money for Iran’s Islamic Revolutionary Guard Corps, and a UAE-based aviation firm over alleged sales to Russia’s Wagner private military corporation. Multiple Emirati companies have also been penalized for evading US sanctions on Iran.
Both Türkiye and the UAE voted at the UN General Assembly last year to condemn Russia’s military operation in Ukraine, but neither has imposed sanctions of their own on Moscow. Turkish President Recep Tayyip Erdogan has maintained close contact with his colleagues in both Kiev and Moscow, and said from the outset that his diplomatic handling of the conflict would be “balanced.”
With Türkiye and the US also at loggerheads over Ankara’s refusal to sign off on Finland’s and Sweden’s bids for NATO membership, Erdogan and Russian President Vladimir Putin last week affirmed their intent to “develop comprehensive cooperation,” including by increasing the supply of Russian gas to Türkiye.
Expert: Seizure of Russian Funds Could Make EU No-Go Investment Area for Rest of World
Sputnik – 27.01.2023
The European Commission’s plans to seize frozen Russian assets and use them to pay for the reconstruction of Ukraine will make the European Union a “no-go investment area” for other non-Western countries that will be scared away by these measures, geopolitical expert Charles Gave told Sputnik.
“I believe that Europe would become a no-go investment area for the non-Western world the day Europe seizes the assets of the Russian sovereign state… there is no legal base for seizing the assets of a foreign state,” the expert said.
In November, European Commission President Ursula von der Leyen proposed the creation of a special structure to manage the frozen assets of the Russian Central Bank and private assets to support Ukraine. On Thursday, a senior EU official said that the possible use of Russia’s frozen assets in the EU was accompanied by complex legal issues, with various EU institutions continuing discussions on the matter.
Gave, who is also a fund manager and investor, criticized another idea of the commission — to use Russia’s frozen funds to generate interests that could be confiscated and then allocated to provide infrastructure help to Ukraine — as he called this step “ridiculous” and “illegal.”
The expert gave the example of a situation where EU or G7 states could seize the interest generated by German bonds that belong to the Russian Central Bank and are deposited at the Bundesbank, the central bank of Germany. In this case, out of 3.4 billion euros ($3.7 billion) invested, the bloc would get only 340 million euros in interest over a year at a rate of 1%, Gave estimated, adding that this would not be enough for Ukraine’s reconstruction.
“It would take years to generate a substantial revenue from European investments of confiscated Russian assets. The G7 has no authority to decide anything. It would be a colossal abuse of power,” the expert added.
Gave also stated that the revenue from the interest of Russia’s assets would be low and it would divert the focus of the EU from the real issues, including the current excessive debt of member states, which could be difficult to repay once inflation falls.
The geopolitical expert said that the issue of Ukraine’s reconstruction should be discussed once the conflict was over. There has to be a negotiated settlement between the two sides, and only then the EU and other Western nations could start rebuilding the country’s infrastructure, Gave concluded.
The European Commission estimates the damage caused by the military operation that Russia launched in Ukraine a year ago at 600 billion euros. The West has blocked 300 billion euros worth of Russian Central Bank reserves and 19 billion euros in Russian businessmen’ assets, according to von der Leyen. Once sanctions are lifted, these funds “should be used so that Russia pays full compensation for the damages caused to Ukraine,” she said last year.
For its part, Moscow has warned that any attempts to confiscate frozen Russian assets fall under the definition of expropriation of property in violation of the European Constitution and international law, pledging to take measures in response if the West goes through with the move.
Why Net Zero is nonsense: a briefing document for opponents
By Robin Guenier | TCW Defending Freedom | January 26, 2023
I’m increasingly alarmed at how all the UK’s major political parties are committed to the Net Zero policy. If implemented, it will have appalling consequences for the economy and for most people, few of whom understand the quite simple issues involved. I have therefore put together a ‘briefing document’ which marshals three arguments that I hope may contribute to curtailing the policy before it’s too late.
1. It’s unachievable. Many vehicles and machines (used for example in agriculture, heavy transportation, commercial shipping and aviation, mining and construction) and products (eg concrete, steel, plastics, fertiliser, pharmaceuticals, lubricants, paints, adhesives and asphalt) essential to our lives and wellbeing require the combustion of fossil fuels or are made from oil derivatives, and there are no easily deployable, commercially viable alternatives. The complex engineering, reliability and cost challenges of establishing a Net Zero grid and the vast scale of what’s involved (immense amounts of material and space are required because the ‘energy density’ of wind and sun is so low) make it most unlikely that the UK could generate sufficient renewable electricity for current needs, let alone for the mandated electric vehicles and heat pumps. In any case, the UK doesn’t have enough technical managers, engineers, electricians, plumbers, mechanics and other tradespeople (probably over a million) to do the many tasks that would be essential to achieve Net Zero.
2. It would be socially and economically disastrous because: (a) the UK’s all-renewable energy project doesn’t include a fully costed engineering plan for the provision of comprehensive grid-scale back-up when there’s little or no wind or sun, so millions of people, especially the poor and vulnerable, would be put at serious personal risk (including death) from electricity blackouts; (b) our crippled economy would be tipped deeper into decline by enormous additional costs and energy unavailability, further blighting our poor industrial productivity; (c) China essentially controls the supply of materials (in particular so-called rare earths) needed for renewables, so the UK would increase its already dangerous dependence on it, putting our energy and overall security at serious risk, and (d) the vast mining and mineral processing operations required for renewables would have appalling environmental and human consequences affecting in particular fragile ecosystems and some of the world’s poorest people – not least as a result of Chinese human rights abuses.
3. Above all, it’s pointless. Most major non-Western countries – the source of more than 75 per cent of CO2 emissions and home to 84 per cent of humanity – don’t regard emissions reduction as a priority and, either exempt from or ignoring any obligation to reduce their emissions, are focused instead on economic and social development, poverty eradication and energy security. As a result, global emissions are increasing and will continue to increase for the foreseeable future whatever the UK (the source of less than 1 per cent of global emissions) may or may not do. It therefore makes absolutely no sense for Britain to pursue this unachievable and disastrous policy.
New Asian contracts to double Russian gas project’s revenue – Reuters
RT | January 26, 2023
The Sakhalin-2 liquefied natural gas (LNG) project is expected to generate twice as much revenue in 2023 compared to its earnings before the Ukraine-related sanctions rained down on Russia’s energy sector, Reuters reported on Thursday, citing industry analysts.
The boost is attributed to long-term contracts with clients from the Asian region, along with higher global energy prices.
Renewed deals with Asian buyers are expected to secure demand for up to 6.5 million tons of the super-chilled fuel annually from Sakhalin 2, according to calculations by the agency and contractual volume data provided by the GIIGNL international group of LNG importers.
The contracts could earn up to $4.5 billion in revenue for Sakhalin 2 shareholders, which include state-run energy giant Gazprom and Japanese companies Mitsubishi and Mitsui, according to Masanori Odaka, a senior analyst on Rystad Energy’s gas and LNG team.
The enterprise is expected to generate another $7.45 billion in 2023 if production remains in line with 2022, while its sales on the spot market are retained at 4.9 million tons, Alexei Kokin, chief analyst at Russia’s Otkritie brokerage, told Reuters.
On Thursday, Sakhalin Energy, the operator of the project, said it produced 11.5 million tons of LNG and some 3.7 million tons of its Sakhalin blend crude oil at the Sakhalin-2 facilities in 2022, exceeding its production plan. That is 10% more than the project produced in the previous year.
The company had managed to continue production despite “a period of unprecedented pressure from external factors on production and economic activity,” according to Andrey Oleinikov, Sakhalin Energy’s managing director.
According to the company’s statement, LNG and oil shipments in 2022 were delivered to the buyers on time in full compliance with the terms of Stock Purchase Agreement, while its production remained on schedule. The major markets for exports are Japan, China, South Korea and Indonesia, Sakhalin Energy said.
Weapon Manufacturers Record Skyrocketing Profits From US Arm Sales in 2022
By Ian DeMartino – Sputnik – 26.01.2023
War has always been big business in the United States. According to the seminal anti-war essay “War is a Racket,” gunpowder manufacturer Du Ponts saw their profits increase by more than 950% during The Great War.
US arms sales to other countries skyrocketed in 2022, providing a tidy sum of profits for weapon manufacturers, according to data released by the State Department on Wednesday.
US weapon sales to other countries, largely driven by NATO’s response to Russia’s special military operation in Ukraine and increased tensions in Asia, jumped from $35.8 billion in 2021 to $51.9 billion in 2022.
Direct weapon sales from US-based weapon manufacturers also saw a massive increase, jumping from $103.4 billion in 2021 to $153.7 billion in 2022.
In Europe, the largest purchasers include Germany, which ordered 35 F-35 Joint Strike Fighter airplanes for $8.4 billion, and Poland, which spent $6 billion on 250 M1 Abrams tanks.
The United Kingdom, Spain, and new NATO member Bulgaria also made significant purchases in 2022.
Meanwhile, tensions in Asia over Taiwan and competing claims in the South China Sea have also been a boon for weapon manufacturers. Significant weapon sales in the area include $13.9 billion from Indonesia for 36 F-15ID fighter jets and a $1.95 billion purchase from Australia for 40 Black Hawk helicopters and other equipment. South Korea and Japan also made significant military purchases, totaling $790 million and $588 million respectively.
The Biden administration also approved a $1.1 billion weapons package for Taiwan in an effort to deter China from militarily seizing the island.
The Middle East, always a reliable profit center for military contractors has continued to be so. The two countries pushing the brutal war in Yemen, Saudi Arabia and the United Arab Emirates, have asked for $3 billion and $2.2 billion in military weapons and equipment from the United States respectively.
During the 2020 campaign, the Biden administration pledged to stop sending weapons to Saudi Arabia because of its war in Yemen.
Unsurprisingly, this has led to significant revenue gains by weapon manufacturers.
Revenue for Lockheed Martin, which develops the F-16, F-22, and F-35 fighter jets rose 7.13% to $19 billion in the fourth quarter of 2022. Northrop Grumman, which also makes F-35 fighter jets, is expected to report 11.8% revenue growth compared to fourth quarter earnings when it issues its financial reports on Thursday.
Meanwhile, Raytheon, the maker of the Patriot Air Defense System the Biden administration recently announced it will supply Ukraine with, saw its Q4 profit rise of nearly 18% compared to last year.
Stop Whining & Turn Tap On: Why German Politicians Fear to Tell Truth About EU Energy Crunch
By Ekaterina Blinova – Sputnik – 25.01.2023
German Economy Minister Robert Habeck pinned the blame for the nation’s energy crunch and shift to dirty fuels on Russian President Vladimir Putin, who, according to the minister, “turned off the gas tap.” International observers dismissed Habeck’s remarks as utter nonsense while speaking to Sputnik.
“What else is left for Mr. Habeck to do? He cannot say that it were his actions that led to such unfortunate consequences for the German economy and for German consumers,” Alexey Grivach, deputy head of Russia’s National Energy Security Fund, told Sputnik.
“After all, it is precisely because of his rash actions that all German citizens are now suffering – and not only Germany, but the entire European Union. Therefore, Habeck has engaged in such a political, verbal balancing act, trying to convince someone that if there is no gas in the pipe, then Russia is to blame. But, fortunately, everyone knows perfectly well what really happened.”
Speaking to journalists last Friday, Habeck claimed that half of Germany’s entire gas supply had been stopped by Russia. He added that given that Nord Stream pipelines had been destroyed, Germany would not be able to get Russian fuel through them in the foreseeable future.
Done by Habeck’s Own Hands
Sputnik’s interlocutors have been perplexed by Habeck’s whining: it was Berlin that succumbed to Washington’s pressure last year and froze Gazprom’s Nord Stream 2 pipeline project that would have doubled the total capacity of the Nord Stream system from 55 billion cubic meters (bcm) to 110 bcm.
It was Robert Habeck, in propria persona, who on February 22, 2022, instructed the withdrawal of a security-of-supply assessment granted under former German Chancellor Angela Merkel’s tenure, which was required to authorize Nord Stream 2.
It was Habeck, again, who pledged in early May 2022 to replace all Russian energy imports, most notably natural gas, by as soon as mid-2024, following the beginning of Moscow’s special operation to demilitarize and de-Nazify Ukraine on February 24, 2022.
The minister gleefully announced at that time that Germany’s share of Russian gas had already dropped from 55% in 2021 to around 35% by mid-April 2022, adding that even faster progress was achieved for oil and coal where shares had dropped to 12% and 8%, respectively. To that end, Berlin leased four floating LNG terminals online to supply some 33 bcm/year, seeking to start operating the first of the Floating Storage Regasification Units (FSRU) in late 2022 and 2023.
Apparently, Germany did not resist the actions of Canada which slapped sanctions on Russia and had long refused to return a Gazprom turbine for Nord Stream’s gas equipment. Russia initially sent the turbine to Siemens Canada in Montreal for a scheduled overhaul.
However, in June 2022, Canada imposed restrictions on Russia’s energy companies, including Gazprom, and the turbine remained stuck in the North American country. That disrupted the Nord Stream system’s work and raised concerns about pre-planned maintenance service for the other five turbines. After back-and-forths, Ottawa agreed to issue a “time-limited and revocable permit” to exempt the return of the equipment.
“For some reason, this turbine was returned to Germany without the appropriate documents and guarantees that further maintenance of such turbines will be carried out in accordance with the obligations and not in some kind of sanctions mood,” Grivach noted.
Only in late August 2022, the Canadian authorities said that they would allow for the maintenance of the remaining five turbines used by the Nord Stream 1 pipeline, but the damage was done in terms of reducing the flow of natural gas from Russia to Germany.
A month later, a sabotage attack destroyed three out of Gazprom’s four Nord Stream pipelines. So far, neither Germany nor its European peers have lifted a finger to initiate repair works. This apparently indicates that they don’t need Russian gas, remarked Alexey Fenenko, associate professor of the Department of International Security, Faculty of World Politics of Moscow State University.
Furthermore, following the September 2022 sabotage, European leaders immediately pointed the finger of blame at Russia and did not allow Moscow’s specialists to participate in EU investigations into the blast.
However, in December 2022, the US mainstream press quoted European officials and investigators as saying that they had not found any evidence confirming Russia’s guilt. They admitted that Moscow would have nothing to gain from blasting its own pipelines and agreed that there had been plenty of international players interested in Nord Stream’s destruction. Nonetheless, western journalists and European officials have not made any step to name potential suspects.
“It is clear that if it were Russia, as some had the audacity to assert, then they would have proved it very quickly. But, apparently, the facts indicate some very unpleasant, and maybe even some taboo topics,” Grivach remarked.
Habeck’s gloomy sentiment with regard to Germany’s prospects of receiving Russia’s gas is sly, according to Sputnik’s interlocutors.
First, in October 2022, Russian President Vladimir Putin signaled his readiness to deliver gas to Germany through a Nord Stream pipeline not damaged by the blast. “It has a capacity of 27.5 billion cubic meters per year, which is about eight percent of all gas imports to Europe,” Putin stated on October 12, 2022, stressing that the ball is in Europe’s court. “Russia is ready for the start of these deliveries (…) If [European leaders] want it – they have to turn on the tap, and that’s it.”
Second, the same month, Moscow suggested creating a new gas hub in Turkey capable of delivering the fuel to the Old Continent.
Third, Russia is ready to restore gas supplies through other gas pipelines, as Vladislav Belov, deputy director of the Institute of Europe of the Russian Academy of Sciences and head of the Center for German Studies told Sputnik.
“Germany still has every opportunity to receive [Russian gas],” said Belov. “There is the Yamal-Europe gas pipeline, blocked by Poland, there is a gas pipeline through Ukraine, but it has reduced pumping through it by 40%. Germany has ample opportunity to put pressure on its allies. In addition, there is also the Turkish Stream, through which Russia fully fulfills all its obligations. In general, Russia is ready to supply gas to Germany, but the Germans themselves turned the tap off. It is up to them to be able to get as much gas as they need to keep their homes warm, to fill storage facilities and get gas at the prices that are currently on the spot market.”
It Was Europe’s Decision to Axe Russia’s Gas Supplies
The dramatic reduction of Russia’s gas supplies to Europe is the result of a political decision by EU member states, according to observers.
“The reasons are political. The European Union decided to stop the supply of all raw materials coming from Russia for political reasons.”
For his part, former Greek Energy Minister Panagiotis Lafazanis noted in an interview with Sputnik that he fully supports the position of former Austrian Vice-Chancellor Strache, who said that the German authorities are afraid to tell their own population the truth about the real reasons for rising gas and electricity prices and about a possible shortage of energy resources.
“Europe is paying a high price for the expensive natural gas it now has to buy,” said Lafazanis, adding that Europe itself is entirely responsible for the consequences of its energy policy and shift to LNG.
What’s more interesting, some European countries are continuing to buy Russia’s energy commodities nonetheless, Stepan noted.
“For example, Russian LNG is bought by France, the Netherlands, Belgium, Spain and, of course, the United States are continuing to buy Russian LNG,” Stepan said. “The same applies to Russian oil. The UK claims it does not import anything from Russia, and suddenly there is news in the newspapers that several tankers with Russian oil will arrive in Britain (…) It turns out that there’s a double standard approach: on the one hand, politicians issue statements, and on the other hand, in practice, governments pretend that they know nothing about their companies continuing to import Russian raw materials, or they themselves violate their regulations.”
The allegations that Russia “weaponized” its energy supplies repeatedly voiced by western politicians look ridiculous to say the least, according to Sputnik’s interlocutors.
Moreover, Europe’s energy crisis started long before the Russian special operation in Ukraine, which is routinely cited as one of the causes behind spiking gas prices, according to Mehmet Dogan, a Turkish energy expert and CEO of energy consulting agency GazDay.
“Even before the aggravation of the situation in Ukraine, everyone was talking about the threat of an energy crisis,” Dogan told Sputnik. “Gas prices skyrocketed even before the outbreak of hostilities.”
“The gas crisis in Europe began even before the escalation in Ukraine. It was based on a sharp rise in prices for blue fuel. But European countries have tried to make Russia and Putin responsible for this crisis,” echoed Turkish energy expert Volkan Aslanoglu, stressing that Habeck’s recent statement appears to be completely detached from reality.
Russia Supplying EU Despite Sanctions & Military Aid to Kiev
There is yet another aspect to the ongoing debate that is rarely touched upon, according to Alexey Fenenko. The Russian academic considers Habeck’s remark about the blocking of the “gas valve” by Russia strange, given the intention of the EU to defeat the Russian Federation in an economic war.
Moreover, German Chancellor Olaf Scholz made it clear at the latest World Economic Forum in Davos that to end the conflict in Ukraine Russia’s special military operation “must fail.” To that end, Germany and other western countries provide the Kiev regime with heavy weapons as long as needed, according to Scholz.
Indeed, the German media has reported that Berlin is now planning to send its Leopard 2 tanks to Kiev, something that the German leadership had been previously reluctant to do. Earlier this month, Berlin vowed to supply Ukraine with armored personnel carriers and a Patriot missile battery. In addition, on January 15, expanded combat training of Ukrainian forces kicked off in Germany, according to the US press.
European leaders have stepped up supplies of weapons to Kiev since the beginning of Russia’s special military operation with prominent leaders rubbishing the idea of a diplomatic solution to the conflict, rather claiming that it should be sorted out on the battlefield.
All this time, despite the EU’s bellicose rhetoric and their de facto participation in the Russo-Ukrainian conflict, Russia’s energy producers continued to observe their obligations and supply Europe with natural gas, oil and petroleum products.
Russia is still warming up the Old Continent, be it direct oil and gas exports or ensuring the flow of energy carriers through its territory, energy expert Milos Zdravkovic told Sputnik. Moscow is signaling openness and readiness to provide Europe with energy, even though Russia has enough lucrative opportunities in Asia.
European Gamble Doesn’t Bode Well
Meanwhile, EU economic prospects don’t look good, according to Zdravkovic. He noted that the EU does not know what energy prices will be in the foreseeable future both for heating and the needs of industry. European goods are set to become much more expensive than those produced by Asians and Americans due to turbulent gas costs. This will adversely affect the economy of Europe, Zdravkovic warned.
“Europe consumed at least 500 billion cubic meters (bcm) a year,” Zdravkovic explained. “Its consumption grew by about 10 bcm per year.”
In 2021, the EU imported 83% of its natural gas with Russia delivering over 40% of this volume. Given that, it’s impossible to swiftly replace Russia’s gas with LNG supplies, according to Zdravkovic.
“The capacity of the total fleet of LNG tankers and all terminals on our planet, on all continents, is 400 bcm,” the Serbian energy expert noted, adding that European leaders shouldn’t expect that these volumes will all go to the Old Continent.
Moreover, a complete shift to American LNG would require building the appropriate infrastructure, according to Alexey Fenenko. One should also add fuel costs for tankers which will carry LNG from the US to Europe when supplies become regular. All these costs will make energy pretty expensive for Europeans, the Russian scholar remarked.
Of course, European countries could also switch to coal and nuclear energy, but it will take at least ten years for them to reorient to these sources of energy, Fenenko added.
“Every cloud has its silver lining,” said Zdravkovic. “I am convinced that at the end of this crisis (…), no one will ever be able to force large European economies, EU civilians and inhabitants of [the Old Continent] to join such a gamble again. I think this will definitely never happen again and that in the future there will be much more cooperation.”
Goodbye empire? US sanctions are failing in the face of multipolarity
By Felix Livshitz | RT | January 25, 2023
Foreign Affairs, a highly influential US magazine – effectively a US empire house journal – has published an article detailing how sanctions are quickly losing their efficiency as a weapon in Washington’s global arsenal.
Published by the Council on Foreign Relations NGO, Foreign Affairs provides space for officials within the US military industrial complex to communicate with one another on matters they believe to be of the utmost significance. Therefore, it is important to pay attention when the magazine makes major pronouncements on any issue.
It recently published an appraisal of US sanctions – the conclusion being that they are increasingly ineffective, have prompted Beijing and Moscow to create alternative global financial structures to insulate themselves and others from punitive actions, and that Washington and its acolytes will no longer be able to force countries to do their bidding, let alone destroy dissenting states, through such measures in the very near future.
The article begins by noting that “sanctions have long been the US’ favored diplomatic weapon,” which “fill the void between empty diplomatic declarations and deadly military interventions.” Despite this, it predicts “the golden days of US sanctions may soon be over.”
These “golden days” were the immediate post-Cold War era, when Washington was “still an unrivaled economic power,” and therefore could at the press of a button cripple each and every overseas economy, in theory. This was due to “primacy of the US dollar and the reach of US oversight of global financial channels.”
As international trade was overwhelmingly conducted using dollars, Washington could stop any country from exporting or importing any and all goods it wished, whenever it liked. Even then, Foreign Affairs recalls, US leaders themselves worried if sanctions were applied too liberally. In 1998, then-President Bill Clinton claimed his government was “in danger of looking like we want to sanction everybody who disagrees with us.”
The Foreign Affairs article says Clinton’s fears were “overblown,” but this is precisely what came to pass. Governments, and the countries they represented, have been sanctioned for pursuing the wrong policies, refusing to be overthrown in US-backed coups and military interventions and showing any degree of independence in their domestic or foreign dealings whatsoever. In the process, millions have died, and even more lives have been ruined for no good reason.
This approach has backfired, and badly. In response, states “have begun to harden their economies against such measures.” For example, after the US cut off Iran from the SWIFT global banking system, many other countries took note. Restricting China’s access to numerous technologies as part of the new Cold War has also served to place both Washington’s allies and adversaries alike “on notice their access to crucial technology could be severed.”
Beijing and Moscow lead the way in the push to create “financial innovations that diminish US advantage,” creating a raft of “currency swap agreements, alternatives to SWIFT, and digital currencies” that serve as “preemptive measures” against any “potential penalties” down the line.
Currency swaps, which connect central banks directly to each other and eliminate the need for trades between them to be dollar-backed, have been eagerly embraced by China. It has signed deals of this kind with more than 60 countries across the world, thereby enabling its companies “to circumvent US financial channels when they want to.”
In 2020, Beijing settled more than half its annual trade with Moscow in currencies other than the dollar, making the majority of these transactions totally immune to US sanctions, and that figure has only risen ever since. In March that year also, the China and Russia-led Shanghai Cooperation Organization officially prioritized development of payments in the local currencies of its members.
Beijing and Moscow are also, Foreign Affairs reports, “busily preparing their own alternatives” to various Western-dominated international systems. Their alternative to SWIFT, the Cross-Border Interbank Payment System, isn’t yet a match in terms of transaction volume, but that’s not the point. It prevents them, and any state or organization enrolled in the framework – 1,300 banks in over 100 countries already – from being unable to make international financial transactions, should they be cut out of SWIFT.
Similarly, China is expanding the reach of the digital renminbi, the currency issued by Beijing central bank, at home and overseas. More than 300 million of its citizens already use it, and a billion are forecast to by 2030. The currency is completely sanctions-proof as the US has no ability to prevent its use, and Beijing has encouraged several countries to pay for its exports exclusively using it – “other such deals will probably follow,” Foreign Affairs predicts.
The American empire’s obsessive reliance on sanctions has now created a Catch-22 situation, by the magazine’s reckoning. The already hostile relations between the USA, China and Russia mean Moscow and Beijing are pushing ahead with this revolutionary effort no matter what. If “things get worse,” they’ll simply “double down on their sanctions-proofing efforts,” taking more and more countries with them.
“These innovations are increasingly giving countries the ability to conduct transactions through sanctions-proof channels. This trend appears irreversible,” the article bitterly concludes. “All this means that within a decade, US unilateral sanctions may have little bite.”
It is all these developments, along with Moscow’s economic pivot eastwards after the 2014 Ukraine coup, and move towards self-sufficiency in energy and food and in other vital resources, which account for the embarrassing failure of US-led sanctions against Russia.
Western leaders, academics, journalists, pundits and economists promised when these sanctions were imposed that they would soon lead to Russia’s total political, economic and military collapse. They have not, demonstrating that elites in Europe and North America do not understand the global economy they claim to rule. They should get to grips with the new reality they inhabit in short order, though – for a multipolar world has begun to emerge in 2022, and it is here to stay.
How rapidly US elites are reckoning with the radically different reality in which they are now forced to operate is ironically underlined by how quickly the author of the Foreign Affairs article, Agathe Demarais, seems to have completely changed her tune on the subject of sanctions. On 1 December, less than a month earlier, she authored a piece for Foreign Policy – another US empire in-house journal – that offered a radically different take on the matter.
Boldly declaring “sanctions on Russia are working” in the headline, Demarais dismissed suggestions punitive Western measures were intended to “force Putin to back down and pull out of Ukraine,” or to provoke “regime change” in Moscow, or to prompt “a Venezuela-style collapse of the Russian economy,” despite the fact every single one of these outcomes was explicitly cited as a motivating factor behind the sanctions by Western officials, pundits, and journalists at the time.
Instead, she argued, sanctions were effective in the quest to “send a message to the Kremlin” that “Europe and the United States are standing with Ukraine.”
Whether or not Kiev will be thrown under a bus by its Western backers in due course, and the anti-Russian measures will endure after the war is over, seems to not matter so much, though – for, as Demarais was herself forced to acknowledge less than four weeks later, the effectiveness of sanctions is rapidly diminishing. The speed of this about-face could well be an indication of how irresistibly the multipolar world is coming to be.
Featured Video
The Sordid History of the CIA – Part 3
or go to
Aletho News Archives – Video-Images
From the Archives
Mossad ‘in contact from very beginning’ with killers of Italian PM, reporter reveals
By Kit Klarenberg and Wyatt Reed | The Grayzone | October 5, 2025
A roving reporter who covered Italy’s top politicians explains to The Grayzone how his country was reduced to a joint US-Israeli “aircraft carrier,” and raises troubling questions about an Israeli role in the killing of Prime Minister Aldo Moro.
For years, Israel’s Mossad monitored and secretly influenced a violent communist faction that carried out the March 16, 1978 kidnapping and murder of Italian statesman Aldo Moro, veteran investigative journalist Eric Salerno has documented.
Having worked closely alongside multiple Italian heads of state during his 30-year career as a correspondent, Salerno published an expose of their secret relationship with Israeli intelligence in 2010 called Mossad Base Italy. … continue
Blog Roll
Aletho News- USDA/NIAID-Funded Scientists Build Chimeric Bird Flu Viruses with 100% Mortality in Mammals: Journal ‘npj Vaccines’
- The Sordid History of the CIA – Part 3
- West Bank is Defenseless – This is Why Israeli Settler Attacks Continue
- Systematic Israeli targeting of Gaza police seen as deliberate prelude to chaos
- Netanyahu destabilizing region, US hindering talks: Pakistani official
- Iran FM to hold no talks with Americans in Islamabad; US media lied again: Report
- When It Comes to Using Proxies, The US Far Surpasses Iran as a Sponsor of Terrorism
- Hidden history: How Mossad infiltrated Italy
- Promises, pressure, pullout: Why US nuclear talks with Iran were never about a deal
- Somalia bans Israeli-linked vessels from Bab al-Mandab Strait
- If Americans Knew
- Christians in Israel and Palestine, past and present
- Israel eager to restart Iran war, Gaza genocide – Daily Update
- Meet the Top “Content” Producers Linked to Canary Mission
- Lebanese Journalist Amal Khalil Bombed and Left to Die by Israel
- Israel Moves to Re-establish Ganim Colony In Jenin
- Two Iranian Women in ICE Detention Are Not, In Fact, Related to Qasem Soleimani, Documents Show
- “The shooting was not in the air”: Testimonies from the Flour Massacre
- Israel chases down, kills Lebanese journalist, massacres 5 in Gaza, all during “ceasefires” – Daily Update
- Gaza’s unseen casualties: A surge in stillbirths and birth defects
- ‘Day of Ordinary Terror’: Israeli Attack on West Bank School Kills Man, Child
- No Tricks Zone
- European Institute For Climate And Energy: “Climate Debate is Seldom About Science”
- New Study: The Climate May Be 5 Times More Sensitive To Solar Forcing Than Commonly Assumed
- EV Industry Reached $70 Billion In Losses In 2024 Due To Delusional Green Ideologies
- Reality Check: Maldives Have Actually Grown In Size Or Remained Stable Over Recent Decades
- Abrupt Climate Change Also Occurred NATURALLY In The Past …25 Times During Last Ice Age
- Cave Discovery Reveals Today’s Desert Climates Were Recently Far Warmer, Wetter, Teeming With Life
- German Expert: Heat Dome Led To Record Temps In Western USA…Warmer In 1934, 1936
- New Study: No Linear Warming Or Glacier Retreat Along Northern Antarctic Peninsula Since 1980s
- An Inconvenient Tree: Uncovered In Alps… Europe Much Warmer Than Today 6000 Years Ago
- New Study Reports A 60% Slowdown In Greenland’s Ice Loss Rate In The Last Decade
Aletho News 