The US Secretary of State Antony Blinken at a press availability at the State Department on Wednesday made the dramatic announcement that he intends to speak to his Russian counterpart Sergey Lavrov “in the coming days … for the first time since the war began” in Ukraine on February 24.
Interestingly, he gave an alibi that harks back to the Soviet era — prisoner exchange.
The US is offering a swap of a Russian entrepreneur Viktor Bout, who was arrested in Thailand in 2008 on a US warrant and later convicted to 25 years in prison on charges of weapons trafficking, in exchange for Brittney Griner, a basketball star who has been detained at Moscow airport on drug charges and, importantly, Paul Whelan, an ex-US Marine, who was arrested in Russia in 2018 and sentenced to 16 years in prison two years later on charges of espionage.
Whelan surely was a prize catch for the Russians. The American ambassador in Moscow had been visiting him in prison.
Blinken also added a second topic he’d like to discuss with Lavrov — implementation of the recent “grain deal”. Washington played no role in negotiating the deal and is presumably hoping to make a lateral entry into the matrix now. Blinken claimed he is “seeing and hearing around the world a desperate need for food, a desperate need for prices to decrease. And if we can help through our direct diplomacy encourage the Russians to make good on the commitments they’ve made, that will help people around the world, and I’m determined to do it.”
Interestingly, in a veiled reference to the US, Turkish Foreign Minister Mevlut Cavuсoglu stated Wednesday on broadcaster Tv100 that there were countries who “wanted to block” the grain deal between Russia and Turkey, who want the Ukraine conflict “to prolong”, as they think the longer Moscow’s special military operation continues, “the weaker Russia will be.”
Fair enough. Blinken then came to the real purpose of his forthcoming call with Lavrov — “the plans that Russia now has to pursue the annexation of Ukrainian territory.”
Blinken repeated the hyperbole that sanctions are having “a powerful and also growing effect” and has “weakened Russia profoundly” and the Biden administration will do all that it can “to strengthen Ukraine’s position on the battlefield so it has the strongest possible position at the negotiating table.”
However, what comes through is the growing disquiet in Washington that to its utter disbelief, the Russian stance has only hardened lately. Blinken said it is “causing alarms.” In particular, he noted Lavrov’s remark last week that the Kremlin’s goals in Ukraine had expanded. “Now they seek to claim more Ukrainian territory, beyond the Donbas,” he commented.
Indeed, the war has spun out of US algorithm. As Hungarian PM Orban pointed out last week, anti-Russian sanctions “have not shaken Moscow,” but Europe has already lost four governments and is in an economic and political crisis.
Russia is paying back to the US and NATO in the same coin that the latter did when they dismembered Yugoslavia. The NATO’s war in Yugoslavia came at a time when Russia was weak and it helplessly watched the West carving up a fellow Slavic country.
Russia will not be deterred now, as it is already past the mid-stream. Blinken noted frantically, “I think it’s very important now that we see what Russia’s next plan is – that is, the annexation of more Ukrainian territory – that the Russians, Foreign Minister Lavrov, hear directly from me on behalf of the United States that we see what they’re doing, we know what they’re doing, and we will never accept it. It will never be legitimised. There will always be consequences if that’s what they do and that’s what they try to sustain.”
However, the paradox is, the initiative still lies with the US. The Russian army will move deeper into Ukraine in proportion to the US’ supply of advanced weapons with long reach into Russian territory. But Moscow is interested only so that Russian territory is safe from any attack from Ukraine.
It is the Biden administration’s choice to extend the duration of the war or escalate the scope of the Russian operation. Washington made a catastrophic mistake to torpedo the Russian-Ukrainian deal stuck in April in Istanbul when Kiev agreed to settle for the modest Russian demands.
But those were halcyon days when US Defence Secretary Lloyd Austin quipped — with Blinken by his side — after a quick trip to Kiev that the US wanted to see Russia “weakened to the degree that it cannot do the kinds of things that it has done in invading Ukraine.” Austin boasted that Russia had “already lost a lot of military capability” and “a lot of its troops. We want to see them not have the capability to very quickly reproduce that capability.”
Hearing Austin’s battle cry, Blinken chimed in: “The strategy that we’ve put in place, the massive support for Ukraine, the massive pressure against Russia, in solidarity with more than 30 countries engaged in these efforts, is having real results. And we’re seeing that when it comes to Russian war aims.”
“Russia is failing. Ukraine is succeeding,” Blinken claimed. That triumphalism was not there in Blinken’s performance yesterday.
A great beauty about press conferences is that some journalists make it lively and revealing. So, one American journalist asked Blinken, “you have been talking about how Russia is isolated internationally, and yet we see Foreign Minister Lavrov jetting off around Africa and the Middle East and President Putin going to Tehran… They make the case that they’re not isolated, and now you’re about to have this conversation with them. So what does that say about the administration’s efforts to isolate Russia when you are actually now reaching out to them to talk about the issues?”
Blinken’s explanation: “Matt, in terms of some of the travels that the foreign minister, for example, is engaged in, what I see is a desperate game of defence to try somehow to justify to the world the actions that Russia has taken…”
Yet, EU foreign policy chief Josep Borrell bitterly complained yesterday, “Lavrov visits to try to convince Africans that European sanctions are to blame for everything that is happening … and the entire western press repeats this. When I’m going to Africa to say the opposite, that sanctions have nothing to do with it, no one picks it up!”
The spectre of the collapse of EU economies is rattling the Biden Administration. A CNN report yesterday was titled US officials say ‘biggest fear’ has come true as Russia cuts gas supplies to Europe. It said the Biden administration “is working furiously behind the scenes to keep European allies united” as the blowback from the sanctions against Russia hits them and the “impact on Europe could boomerang back onto the US, spiking natural gas and electricity prices.”
The report quoted an unnamed US official saying Russia’s retaliation for western sanctions has put the West in “unchartered territory.” Suffice to say, Blinken’s call underscores the desperate urgency in Washington to open a line of communication to Moscow at the political level.
How this volte-face plays out in European capitals, especially Kiev remains to be seen. Blinken led the western boycott of Lavrov at the G20 Foreign Ministers’ Meeting in Bali as recently as July 7-8. President Biden extended a glamorous welcome to Zelensky’s wife Olena Zelenska to the White House who was on a high-profile visit last week, even as Blinken was preparing his stunning announcement.
July 28, 2022
Posted by aletho |
Economics | Russia, Ukraine, United States |
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Beyond the damage in Ukraine, the war also has significant casualties in the rest of Europe as the continent is losing its most competitive energy supplies, compromising the region’s manufacturing edge and accelerating an inflation wave that through higher energy costs will severely affect the wellbeing of its population this coming winter.
Europe has been trying for years to diversify its energy sources but it did not have a comprehensive contingency plan to counteract the impact of abruptly severing access to Russia’s oil and gas since the beginning of the Ukraine war. European politicians have grossly exaggerated the substitution potential of other energy sources (like LNG) and are facing the need to accept alternatives that not too long ago were considered politically unpalatable, like the reopening of coal production in Germany.
How did this gross miscalculation take place? Clearly, the European leadership has been unable to foresee the true economic consequences in Europe and beyond of the economic war unleashed against Russia. One explanation for the boldness and self-confidence surrounding the European standing against Russia at the beginning of the war was a strong belief that the combination of anti-Russian sanctions and military support to Ukraine would cause a significant weakening of Russia’s political, social and military standing leading to its defeat. This explains for instance bold statements that the war would only be solved in the field as it was confidently said by the EU’s foreign affairs representative back in March.
It can be argued that the wrong assessment on the war outcome has its roots in faulty US-British intelligence which forecasted Russia’s defeat through economic warfare and, therefore, a limited impact of sanctions on Europe. This not being the case has now made European leadership to scramble for solutions. Meanwhile, the political fallout is already taking place, with Britain and Italy’s prime ministers being the most visible casualties as victims of domestic political events unleashed by their own Russian sanctions. More importantly, it doesn’t seem that the remaining European leadership (led by von der Leyen, Macron and Scholz) is willing to change course without losing significant credibility.
On the other hand, dissenting and unorthodox European political views are sounding louder, as Hungarian prime minister Orban’s recent speech where he boldly mentioned that Russian sanctions and arming Ukraine have failed, Ukraine can’t win the war, the more weapons go to Ukraine the more territory it will lose and that the West should stop arming Ukraine and focus on diplomacy.
At the heart of Europe’s current troubles is its inability to balance its economic and security interests with enough autonomy to be able to look after its own interests. European ambiguity is not new, it has roots in the post-World War II architecture and the aftermath of the collapse of the Soviet Union, and in relation to Ukraine it manifested in its ineptitude to enforce the Minsk agreements that clearly offered a Russo-Ukrainian peace path but were unable to be enforced by France and Germany due to relentless US and Ukrainian pressure.
It seems that only significant political alterations in the European countries that matter -namely France, Germany and Italy- will allow a meaningful change of course from the current path of confrontation with Russia and ultimately economic self-destruction. Otherwise, any political initiative towards solving the war will be left in the hands of Russia and the United States and, if that is the case, any lasting agreement will not have European interests at heart. It would be tragic that a core European problem like the Ukraine war is finally solved through the dealings of an Euro-Asian and an American power.
Oscar Silva-Valladares is a former investment banker that has lived and worked in North and Latin America, Western & Eastern Europe, Saudi Arabia, Japan, the Philippines and Western Africa. He currently chairs Davos International Advisory, an advisory firm focused on strategic consulting across emerging markets.
Copyright © 2022 by RonPaul Institute
July 28, 2022
Posted by aletho |
Economics, Militarism | European Union, Ukraine, United States |
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Samizdat | July 27, 2022
Berlin’s policy of trying to give up imports of Russian natural gas is likely to create hardship and spark unrest, seven mayors from the German island of Ruegen wrote in a letter sent to the regional and federal governments on Wednesday. They also urged the federal government to allow gas imports via the Nord Stream 2 pipeline, given the current technical difficulties with Nord Stream 1 – something Berlin has steadfastly rejected.
In the letter addressed to federal economy minister Robert Habeck and Manuela Schwesig, prime minister of Mecklenburg-Vorpommern, the mayors “strongly condemn” the current conflict in Ukraine but urge the government to consider the damage its policy could do to the German population and the economy, according to the news agency DPA.
“We are of the opinion that the path taken by the federal government to disconnect from Russian energy sources is not the right one,” the seven mayors wrote. Initially drafted by the leaders of Bergen, Binz and Sassnitz, the letter was later signed by four more jurisdictions on Ruegen, Germany’s largest island and a popular tourist destination.
Giving up gas imports from Russia would mean an explosion in the cost of living, which would lead to social instability and unrest that could get out of control, the mayors wrote, according to German media. Calls from the federal government to save energy – such as showering less and foregoing hot water – “defy understanding,” they added.
“As the mayors of this island, we don’t want to have to accept any further restrictions,” Sassnitz city manager Frank Kracht told the Mecklenburg-Vorpommern affiliate of the TV station NDR.
Rejecting the proposals to expand the number of wind turbines near residential areas, calling them a health hazard, the mayors advocated “a general rethinking of the solution to the current problems in relations with Russia.”
Among their suggestions was to get additional natural gas via the Nord Stream 2 pipeline. Finished in late 2021, the pipeline from Russia to Germany under the Baltic Sea was just waiting for the operating permit from Berlin – which was suspended indefinitely on February 22, two days before Russia sent troops into Ukraine.
NS2 was supposed to double the volume of Russian gas exports, but was delayed by US sanctions seeking to protect Ukraine’s gas transit earnings. Nord Stream 1, which continues to supply Germany with gas, is currently operating at only 20% capacity, due to maintenance requirements. Its operator, Gazprom, says several turbines at the Portovaya compressor station need servicing to maintain certification. The first one was held up by Canada, citing anti-Russian sanctions over the conflict in Ukraine, until Berlin intervened seeking an exemption. NS2 does not use Siemens turbines, and can be maintained regardless of the sanctions.
Berlin has refused to even consider the possibility of using NS2, however. Economy minister Habeck has said that the pipeline cannot operate without certification. He also accused Russian President Vladimir Putin of trying to damage EU solidarity with Ukraine by driving up the price of gas.
“Putin has the gas, but we have the power,” Habeck said on Tuesday, appealing to Germans to stand together.
Recent polls showed widespread pessimism in German industry regarding future business prospects. Commenting on the turbine delay last week, Foreign Minister Annalena Baerbock said gas shortages could lead to an insurrection.
“If we don’t get the gas turbine, then we won’t get any more gas, and then we won’t be able to provide any support for Ukraine at all, because then we’ll be busy with popular uprisings,” she told the TV outlet RND. Baerbock hastened to add that this may have been “exaggerated” and insisted most Germans supported sending weapons to Ukraine, though.
July 27, 2022
Posted by aletho |
Economics, Malthusian Ideology, Phony Scarcity, Russophobia | Germany |
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By Lucas Leiroz | July 27, 2022
The financial crisis in the US seems increasingly difficult to hide. The reality worries the Biden government, whose unpopularity creates a serious risk in the midst of this unstable scenario. In this sense, in order to avoid an unprecedented crisis of legitimacy, Washington’s officials seem to be betting on the redefinition of elementary concepts of the economic sciences as a way of masking the country’s social chaos.
According to US Treasury chief Janet Yellen, the current US economic status needs to be reassessed by experts as it would not be fair to classify it as a “recession”. Yellen said she considers the classical concept of recession “not technical”. Despite the decreasing numbers, Yellen thinks it is necessary to assess factors other than the national GDP in order to classify the situation more “appropriately”.
“That’s not the technical definition [of recession] (…) There is an organization called the National Bureau of Economic Research that looks at a broad range of data in deciding whether or not there is a recession. And most of the data that they look at right now continues to be strong. I would be amazed if they would declare this period to be a recession, even if it happens to have two-quarters of negative growth. We have a very strong labor market. when you are creating almost 400,000 jobs a month, that is not a recession”, she said during a recent interview.
The most interesting point is that this speech has been not limited to Yellen’s personal words but was also the topic of an article published on the US government website. The text was titled “How Do Economists Determine Whether the Economy Is in a Recession?” and its only objective is to point out directions for a “re-signification” of the concept of recession just to say that the American economic data for 2022 does not indicate what economists would call a recession.
“What is a recession? While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle. Instead, both official determinations of recessions and economists’ assessment of economic activity are based on a holistic look at the data—including the labor market, consumer and business spending, industrial production, and incomes. Based on these data, it is unlikely that the decline in GDP in the first quarter of this year—even if followed by another GDP decline in the second quarter—indicates a recession. (…) Recession probabilities are never zero, but trends in the data through the first half of this year used to determine a recession are not indicating a downturn”, the article states.
Experts reacted to these White House’s pronouncements by accusing the current Administration of being “propagandistic” in its economic reports. And, in fact, the case really looks like an attempt to hide the gravity of the American situation through propaganda techniques. According to the economic sciences, recession is a period of downturn in the economic activity, caused by one or more factors. Usually, the result of this economic drop is the emergence of visible material impacts for the population: decrease in GDP and HDI, decline in the population’s purchasing power, bankruptcy of companies, indebtedness, unemployment, inflation, among others. These characteristics are currently part of the American reality and there is no way this situation can be “masked”.
The US economy contracted by 1.4% in the first quarter of 2022 and 1.6% in the second, according to the Fed. GDP is the clearest and most direct indicator of the economic situation and it is the data that can define whether or not the country is – or is heading towards – a recession. However, even considering factors other than GDP, the American social reality is clearly complicated. Inflation is already at 9%, a record in more than 40 years. The purchasing power of American citizens is dropping. So even analyzing it “holistically” – as the White House proposes – it is obvious that the optimism about the economy is totally unjustified.
If Washington is experiencing a decline in GDP for two consecutive quarters of the year, then the country is definitively in recession and economic crisis. Changing the meaning of words and concepts will not imply material improvements for the American people. Call it a “recession” or something else, the result is only one: the American economy is in dangerous situation. Instead of trying to hide the truth, the Biden Administration should look for real solutions to this problem.
Lucas Leiroz is a researcher in Social Sciences at the Rural Federal University of Rio de Janeiro; geopolitical consultant.
July 27, 2022
Posted by aletho |
Deception, Economics | United States |
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Don’t worry, the economy is fine, we’re definitely not in a recession…according to the new definition

Our new series of micro-articles deals with the newly everyday occurrence of the modern media simply changing what a word means. Today’s word is “recession”.
The United States is not in a recession. The government want to be very clear about that.
Yes, it’s true that a “recession” is generally defined as…

a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
And yes, it’s true that the US has likely seen a “fall in GDP in two successive quarters”…but that doesn’t mean there’s a recession.
OK, it might technically be a recession but, apparently, there’s a difference between a “technical recession” and a “real recession”. The Whitehouse posted a blog about it a few days ago (as this reddit user pointed out):
What is a recession? While some maintain that two consecutive quarters of falling real GDP constitute a recession, that is neither the official definition nor the way economists evaluate the state of the business cycle.
There you have it – the US isn’t in a recession (not a real one, anyway), by this different definition of “recession”.
This does not constitute the Whitehouse changing the definition. They want to be very clear about that, too. And, as usual, the official “fact-checkers” have their back.
Newsweek headlines: Fact Check: Did The White House ‘Change Definition of Recession’?, which does a lot of prevarication and double-talking around the subject.
CNBC is both more forthright and more patronising, defending the Whitehouse position under the headline “Here’s how to know if we’re in a recession, and it’s not what you think”
Business Insider are even less subtle about it: “No, the White House isn’t changing the definition of a recession”
The point many of them are clinging to is that we can’t be in a recession because of all the “new jobs”. A startling piece of intellectual dishonesty, since the “new jobs” are not new at all, they’re all the old jobs everyone lost due to lockdown.
At the end of the day the price of energy is skyrocketing, inflation is hitting record highs all over the world, there’s a food crisis and a fuel crisis and a housing crisis and a general cost of living crisis.
… who cares what we call that? Does changing the name change the thing? A recession by any other name is still as deep.
The people in charge believe that as long as they keep changing the names of things it doesn’t matter that everyone is starving. They are wrong.
July 27, 2022
Posted by aletho |
Deception, Economics, Fake News, Full Spectrum Dominance, Mainstream Media, Warmongering | United States |
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A number of Katyusha rockets have struck a gas complex in Iraq’s semi-autonomous Kurdistan region, in the latest attack to target the facility owned by the United Arab Emirates (UAE) energy firm Dana Gas.
“It is still not yet clear if there was any damage” in the Monday evening attack on the Khor Mor complex, said Ramak Ramadan, district chief of Chamchamal where the facility is located.
The gas complex lies between the northern Iraqi cities of Kirkuk and Sulaimaniyah, in a region administered by Kurdish authorities.
No individual or group has so far claimed responsibility for the attack.
Sadiq Mohammed, an official from the adjacent Qadr Qaram district, said in a statement to the Kurdish-language Kurdistan 24 television news network that the attack was carried out using three Katyusha rockets, without causing any casualties.
Other reports said five rockets were used in the attack.
Earlier in June, the Emirati-owned facility was targeted three separate times by rockets that did not cause casualties or damage. No one claimed responsibility for those attacks either.
A Katyusha rocket on June 25 targeted the Khor Mor gas complex.
“The rocket hit around 500 meters outside the complex,” a local official said at the time. There was no immediate claim for the attack.
Katyusha rocket attacks hit the same facility on June 22 and June 17, also without causing casualties or damage.
Energy infrastructure elsewhere in the semi-autonomous Kurdistan region has also come under attack in recent months.
Rockets struck the Kawergost refinery, northwest of the regional capital of Erbil, in April and May.
The assaults have come amid a simmering oil dispute between Kurdistan and the federal government in Baghdad.
The Iraqi government and the Kurdistan Regional Government (KRG) have been in a long-standing dispute over Baghdad’s share of Kurdish petrol, with the Iraqi government demanding full control of the region’s crude for years.
Under a deal between the two sides, the Kurdish region delivers 250,000 of its more than 400,000 barrels of daily oil output to Baghdad, in return for its share of the federal budget.
Over the past years, multiple reports have revealed that Iraqi Kurdistan is secretly selling oil to Israel at heavily discounted prices and that more than two-thirds of the occupying regime’s oil has been imported from the Kurdistan Regional Government.
London-based Al-Araby Al-Jadeed newspaper said in a report in March 2019 that Israel was buying significant amounts of Iraqi oil from certain parties and “mafias” in the Kurdistan region for prices as low as $16 or $17 dollars.
British daily the Financial Times had earlier reported that Israel had obtained 75 percent of its oil supplies from Iraqi Kurdistan.
Kurdistan’s secret dealings with Israel, which also include the region’s reported cooperation with the Israeli spy agency Mossad, come as Iraq’s parliament has recently passed a law making it illegal for the country to ever normalize its relations with the Tel Aviv regime.
The passage of the law cemented the Arab country’s invariable and age-old policy of refusing to recognize the occupying regime.
July 26, 2022
Posted by aletho |
Economics | Iraq, Israel, UAE |
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Hezbollah threatened Israel with war if Lebanon is not allowed to exploit its share in the Karish gas field. Palestinian resistance may do the same over the “stolen gas” off Gaza.
The maritime border dispute between Lebanon and Israel over the Karish gas field is reminiscent of the stolen gas fields in Palestine’s Gaza Strip. With the naked eye, Gazans can only stand by and watch the Occupation’s gas drilling platforms a few kilometers off their own coast.
This situation could change though, and may depend on the way in which the resistance in Lebanon handles the conflict over Karish.
That scenario may encourage the Palestinian resistance to follow their northern neighbor’s example in threatening to target Israeli platforms if Palestinians are denied their rights to the “Gaza Marine” field.
So long as Palestinians are deprived of basic living condition rights (electricity, fuel, food and medicine shortages) by their Israeli occupiers, they would be foolhardy to ignore the game-changing potential of gas extraction off their own coastline.
However, Lebanon’s current dispute is not the only issue that has led to the Palestinian claim resurfacing. Indeed, there are other factors related to the energy crisis, and it involves the Europeans.
Not Israel’s gas to export
On 15 June, it was announced in Cairo that a memorandum of understanding (MoU) had been signed to export Israeli (stolen Palestinian) gas to the European Union (EU) through Egypt.
The MoU, which Israel and the EU described as a “historic agreement,” extends over three years and is automatically renewable for two further years. It includes transporting gas from Israel to liquefaction stations in Egypt (Idku and Damietta in the north), then shipping it to Europe, which imported 155 billion cubic meters (bcm) of gas from Russia last year.
In light of the EU’s faltering standoff with Moscow over Ukraine, Europe is seeking – among other sources – “Israeli gas” to compensate for about 10 percent of this amount, while Israel for its part is eager to increase its production of natural gas to 40 bcm (billion cubic meters) annually.
Experts estimate that most of this quantity will come from Palestinian gas extracted from “Gaza Marine 1” which is adjacent to the Strip, and “Marine 2” which is located within the maritime border area between Gaza and Israel.

Not the PA’s right
Understandably, news of the MoU angered the Palestinian resistance, especially since the Palestinian Authority (PA) in Ramallah did not take any practical steps to demand Palestinian rights in this matter.
Informed, anonymous sources have told The Cradle that the EU has bought the silence of the PA by giving it a 4 percent share of the value of the extracted gas, while most of the agreements signed between Ramallah and the extraction companies, in the past two decades, stipulated a ratio ranging from 10 percent to 27.5 percent.
There are also accusations that the PA will only collect some taxes on monthly production, in addition to accelerating EU aid to the Palestinians.
On 12 June, the European Commission approved a new aid package for the Palestinians worth 224.8 million euros, as a ‘bribe’ for the PA, with a verbal pledge to support Palestinian rights and confront Israeli policies that undermine the two-state solution, particularly in Jerusalem.
The EU also pledged to press for the allocation of part of the extracted gas for Palestinians at preferential prices in order to operate the power plants in Gaza and Jenin.
In return for these gestures, the PA committed to the charter of the “Eastern Mediterranean Gas Countries,” and will not object to any steps in the region’s energy file, specifically with regard to the start of exploration and extraction of natural gas from the Gaza Marine field and the Rantis field west of Ramallah. The PA further agreed not to raise the issue of Palestinian rights to energy in the areas under its “control.”
In this context, Israel tried to indirectly buy the restraint of the resistance in the Gaza Strip by increasing work permits for Palestinians in the occupied territories to 20,000.
Gaza’s gas
Located in Palestinian territorial waters 36 km west of the Strip in the eastern Mediterranean Sea, the Gaza Marine gas field was first discovered around 1999 by British Gas who were contracted to develop it.
Despite its discovery, gas has not been extracted from the area despite the PA’s conclusion of several agreements with foreign companies, which were aborted because Israel refused to allow the operations to proceed.
Significantly, the Gaza Marine includes approximately 8 adjacent fields and is estimated to contain 12 trillion cubic meters of gas, at an attractive depth that makes the cost of extraction low.
Pirates of the Mediterranean
Israel controls the gas fields in Palestinian waters in the north of the Gaza Strip and in the eastern Mediterranean, including the so-called Yam Tethys fields, which were proven to be Palestinian property according to maps submitted by the state of Palestine to the United Nations.
In 2019, an investigation conducted by Al-Jazeera showed that Israel drained the “Mari B” gas field in the Gaza Sea (it contained enough gas for the Strip for 15 years). An investigation by Middle East Eye concluded that the Palestinians could claim 6,600 square kilometers of marine area, five times the area they now own.
Lebanon and the Gaza Strip face similar economic difficulties brought about through different foreign tools of economic besiegement. In the case of Gaza, the blockade is direct, as Israel controls the factors impacting their standard of living and welfare. As for Lebanon, it faces US sanctions and diktats that have contributed to the country’s economic meltdown.
The way in which Lebanon’s resistance movement Hezbollah manages the Karish field file will be interesting as it is likely to influence how the Palestinian resistance choose to go about protecting and reclaiming their rights.
With gas revenues estimated at $4.5 billion annually, Ramallah’s budget – which in 2021 was set at $5.6 billion, of which $3.9 billion was provided by internal revenues – could achieve self-sufficiency. Additionally, these resources could provide a radical solution to the fuel and electricity crises in the Strip.
A meeting of minds in Beirut
Informed sources have told The Cradle they have credible reason to believe the Palestinian resistance factions will take advantage of the battle that Hezbollah Secretary General Hassan Nasrallah has threatened to ignite if Israel continues to ignore Lebanon’s right to its gas fields. Nasrallah has set a deadline – the start of September – for this access to be provided.
The sources also say that Hamas’ Political Bureau Chief Ismail Haniyeh discussed the gas file with Nasrallah during their meeting in Beirut on 23 June, and suggested that the resistance in Gaza would likely participate in any future war, especially in the face of Israel’s continued theft and deprivation of natural resources.
Haniyeh spoke of “Lebanon’s right to extract gas from its maritime borders, and to stop Israeli piracy.”
However, there are calculations which must be taken into account before the Palestinian resistance gets involved in any war. This is related to the scale of the hypothetical war and the Israeli reaction to it, as well as to the logistical capabilities of the resistance at the naval level.
Yet it is the Palestinian silence on both the official and resistance level which has angered Lebanese authorities. The Director General of Lebanon’s General Security, Major General Abbas Ibrahim, demanded that Palestinians take a coherent political stance towards what “Lebanon is negotiating regarding the gas that is in the Palestinian waters occupied by Israel.”
A military response
However, well-informed sources in the Palestinian resistance tell The Cradle that their factions have now placed the military option relating to Gaza Marine on the table, triggered by the signing of the tripartite gas agreement (between Egypt, Israel and the EU) in June.
Political analyst Ismail Muhammad believes that the Haniyeh-Nasrallah meeting resulted in a preliminary agreement, which could be implemented at the military level if necessary.
Speaking to The Cradle, Muhammad explained that “the resistance cannot miss such regional circumstances to remind of its right to Palestinian gas which has been stolen before its eyes. Just as Lebanon’s economic future depends on the extraction and sale of gas, Palestine in general, and Gaza in particular, needs such income to end the economic dependence on occupation and to liberate its political decision-making.”
Muhammad refers to the expected strategic results of any victory in the battle over the Karish and Gaza Marine fields, not just the potential economic outcomes. Extracting the right to one’s energy resources, whether by military force or by an agreement, effectively ends the Israeli-US economic blockade in both Gaza and Lebanon.
This presents “a victory for the resistance, which increases its political influence and reduces the influence of external dictates,” he added.
“This is a major battle. Winning it against the Israeli-American-Arab alliance will change the future of the region.”
Expected scenarios
There is near unanimity that there is as much a chance of a gradual military escalation as there is of reaching a fair solution to the Karish field dilemma. There are three scenarios for the role of the Palestinian resistance in the event that Hezbollah is forced to resort to force:
First, that Hezbollah initiate a gradual escalation using a qualitative weapon to strike the British/Greek drilling ship in Karish. This will deprive all parties of benefiting from the field, and return the gas file to square one.
On the other hand, Israel absorbs the blow and responds in a limited manner that does not lead to an all-out war. In this case, it is expected that the resistance in Gaza will maintain its readiness without providing guarantees of non-interference, which means that Israel will have to occupy thousands of its soldiers, along with a few squadrons of its aircraft and at least a tank battalion, to contain any reaction in Gaza.
Second, that Israel ignore Nasrallah’s threats to strike the gas platforms in “Karish and beyond Karish,” which effectively means to paralyze the entire Israeli energy sector by expanding the range of targets to include the fields of Athens, Tanin, Dolphin, Leviathan, Dalit and Aphrodite.
These fields represent the cornerstone of the energy sector, on which Israel relies to secure its gas and oil needs and provide it with financial revenues. The fields located off the shores of occupied Ashkelon and Gaza, such as Kirin, Nawa and Marin Bay – about 190 km from Gaza – also fall within the scope of Nasrallah’s “beyond Karish” equation.
Sources in the Palestinian resistance who spoke to The Cradle suggest that this scenario means a comprehensive regional war. In this case, their decision would be to “directly participate” in such a war. Although their logistical capabilities do not allow for “accurate point” hits to the gas rigs, the fire intensity provided by the suicide drones and missiles will put these fields out of action.
One source points to the Palestinian resistance’s success in targeting the Tamar natural gas field off the shores of Ashkelon and the Eilat-Ashkelon gas pipeline, which was hit by about twenty missiles, during Operation Sayf Al-Quds (Sword of Jerusalem) in May 2021.
“Israel will not be able to launch a large-scale operation against the Strip. It will not venture into an irregular war on two fronts at the same time, especially since the priority is for the Lebanese front, where there is a huge stockpile of weapons and advanced capabilities. Most probably, it will be satisfied with conventional air strikes against civilian and military targets in Gaza,” he says.
Third, the resistance also takes into account the scenario of a comprehensive war in which all the components of the Resistance Axis can participate; in Lebanon, Syria, Iraq and Yemen.
In such a conflict, the Palestinian resistance will spare no effort in igniting all the fronts, in Gaza, the West Bank and Jerusalem, and even in the 1948 occupied territories, as it will be an opportunity to change the “map of the region” and hit a “historic blow to the entire Zionist project,” even though the current international circumstances make such scenario unlikely to happen.
Palestinian pragmatism
It is evident that the resistance in Gaza views the gas crisis between Lebanon and Israel as an opportunity that must be exploited to demand legitimate Palestinian rights. The continuation of difficult living conditions in the Gaza Strip in particular, hostage to conditional Israeli facilities, is something worth sacrificing to change.
Therefore, Gaza’s participation in a war between Lebanon’s Hezbollah and Israel stems from the existence of a common interest, and not just a mutual foe.
July 25, 2022
Posted by aletho |
Economics, Ethnic Cleansing, Racism, Zionism | Gaza, Israel, Lebanon, Palestine, Zionism |
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From the front pages of The Washington Post and Wall Street Journal, Foreign Affairs, the Economist, to The New York Times’ Best Sellers List; from CNN and MSNBC to FOX and NEWSMAX; from think tanks to Pentagon planners, congressional testimonies and White House statements: CHINA! So singularly focused and omnipresent has the narrative of the China Threat become, one can be forgiven for forgetting that China is in fact a middle income country of modest capabilities and with no stated intention of doing any harm to Americans or the United States. Further, that China is not bent on world domination; and further still, as shall be clearly demonstrated, even if it secretly were there is a negligible chance of that coming to pass whatever Beijing’s efforts.
The reasons for this are many. From China’s own internal problems, including a lack of critical resources, dependence on external markets, lopsided demography, combative ethnic minorities, resentful elites, ongoing economic slowdown, and possible economic collapse—to China’s daunting external problems, including its lengthy borders and limited access to the Indian and Pacific Oceans, to the number of neighboring states that are either uneasy about an increasingly powerful China or seeking to outright counter or otherwise impede its rise. These include India, Japan, Australia, South Korea, the Philippines, Vietnam, and Indonesia. This is to say nothing of Taiwan, officially recognized by both the United Nations and Washington as a breakaway region of China, and which stands as the most serious point of transitional friction at present.
While China is growing more relatively powerful, much of the very real danger that exists in the region stems from attempts by its aforementioned neighbors to balance against a more assertive Beijing—which, as it has grown more relatively powerful, has begun to press its own interests more forcefully in dealing with its neighbors, as well as with more distant powers such as the United States. The latter is particularly important. For while planners in Beijing believe the gravitational pull of its enormous and still growing economy will eventually allow it to get what it wants from its neighbors, the United States stands alone as the one country that cannot be bought off or bullied in this way. Further, as will be detailed, much of China’s newfound assertiveness stems directly from the increased sense of threat it feels vis a vis the United States.
It is in its attempts to push back against the United States that Beijing has ultimately wound up thoroughly alarming many of its neighbors, prompting the formation of a still growing balancing coalition. Therefore, before detailing the myriad reasons China won’t be taking over the world, or even enjoying regional hegemony, and why Washington should be pursuing a policy of restraint in dealing with China, it is first necessary to appreciate the extent to which the United States has been involved for over a century in meddling in domestic Chinese affairs, and to understand how Washington’s broader policies toward China have negatively shaped Chinese perceptions of the United States and its intentions toward China; and further, how it is these actions that have created what few real dangers exist.
Western interventions in domestic Chinese affairs began in earnest in 1842, when the British Empire forced open the country following the end of the First Opium War. Access to trade, immunity for its nationals from Chinese law, and entry of Christian missionaries were forced on a faltering Qing dynasty. While it officially protested, successive U.S. administrations insisted on the same privileges for itself and its merchants as the other European empires. This was the so-called “open door” policy. Bostonian merchants in particular made good trade running Ottoman opium to China. The Second Opium War, which broke out in 1856, actually featured American forces fighting alongside the British at the battles of the Barrier and Taku Forts. Such U.S. military assistance to the European empires in their depredations of China would continue, helping to put down the Boxer Rebellion at the turn of the century, occupying Peking and extracting a large indemnity for itself.
With the fall of the Qing dynasty and the birth of the Republic of China (1912), there was hope on both the Chinese right and left that U.S. policy toward China might change. But despite having initially signaled support for the restoration of at least the German-occupied parts of China to the young Republican government in exchange for their dispatch of hundreds of thousands of Chinese laborers to assist the Allied war effort on the Western front, at Versailles President Woodrow Wilson abandoned the idealism of his vaunted Fourteen Points, instead granting the former German Imperial holdings to the Japanese. A nominal wartime ally, the rapidly expanding Japanese Empire had opportunistically occupied German possessions in Asia once hostilities in Europe commenced, and Wilson used the recognition of Tokyo’s claims as leverage to buy Japanese involvement in his League of Nations project.
As for fledgling Republican China’s other petitions, that the unequal treaties imposed following the Opium Wars be abolished and control of its revenue collection returned to Chinese authorities, these too were denied. This led a young Mao Zedong, formerly a rabid Wilsonian, to call the Americans “a bunch of robbers who only cynically champion self-determination.”
The disillusion with America and its purported idealism continued into the 1920s, with Warren Harding’s administration declining to recognize the uneasy, cobbled together coalition of republican and communist forces under the loose leadership of Sun Yat-sen, opting instead to recognize a series of feuding warlords who happened to seize control of the capital, Peking.
It was only with the defeat of the warlords and the subsequent split between the Chinese right and left, precipitated by the former under the new leadership of Chiang Kai-shek, that the familiar Cold War and present day alignments began to take shape—with Moscow and the Chinese Communist Party (CCP) on one side and Washington and the ROC on the other. The latter was particularly slow in developing, however, with the depression distracting and the American public disillusioned by the apparently pointless deaths of over 100,000 Americans in World War I. Content to let the warring Chinese and Japanese bleed one another through the 1930s and early 1940s, it wasn’t until near the conclusion of the U.S. Pacific theater campaign against the Japanese that real aid started to flow to the corrupt, ineffectual, and dictatorial Chiang Kai-shek and his nominally republican forces. Though the aid would continue in the years immediately following the Japanese surrender, it was clear, particularly to George Marshall, who visited China to encourage a reconciliation between the Kuomintang and the CCP, that good money was being thrown after bad.
With the triumph of the CCP in 1949, the so-called “loss of China,” and the retreat Chiang Kai-shek and his followers to the fortress island of Formosa (Taiwan), successive U.S. administrations beginning with Harry Truman effectively prevented the conclusion of the decades long Chinese Civil War by using American naval power to defend the Taiwan Straits, and further refused to recognize the communist government now in place in Beijing. These policies continued with little change over the following two decades, and included hot conflict between the two in Korea (1950-53), as well as proxy conflict in Vietnam (1955-75).
That is until President Richard Nixon and his National Security Advisor Henry Kissinger recognized that the apparently monolithic communist front in Eurasia was in fact split along sharply nationalist lines, with the Chinese refusing to follow Moscow’s directives by the late 1950s and openly competing for influence in the Third World by the mid-1960s. Nixon’s secret trip to Beijing, and the Three Communiques that followed, formed the basis for the eventual normalization of relations and the recognition of the Chinese Communist Party’s legitimacy by Jimmy Carter in 1978. The communiques were focused exclusively on U.S. respect for China’s sovereignty, and required the U.S. to break off diplomatic relations with Taiwan, eliminate its military treaty with Taipei, and agree not to station U.S. forces on the island—now officially recognized by Washington, as well as the U.N., as part of China. While Beijing never renounced the potential use of force in the event that Taiwan ever declared independence, they were now committed with Washington to try to work with Taipei to bring about peaceful reunification.
Nixon’s opening to China had been premised on the idea of using Beijing to balance against the Soviet Union, a strategy followed by each of his successors all the way to the end of the first Cold War approximately a decade and a half later. With the death of Mao and the ensuing struggle for power having been won by the reformer Deng Xiaoping, China gradually opened up to foreign trade and investment and began to experiment with markets, prices, and private ownership of the means of production. So began the most incredible period of economic development the world has ever witnessed, with a billion Chinese eventually raised from the lowest levels of poverty to the position of an industrialized and rising middle income society by the late 2000s.
In the meantime, however, with the end of the first Cold War and the disintegration of the Soviet Union a few years later, the logic of Nixon and Kissinger’s strategy of using China to balance the Soviet Union no longer held. U.S. policy makers had a new idea, however: integrating China into the U.S. created and dominated global institutional order would make it a “responsible stakeholder,” and with time, as the country grew wealthier and more integrated, would lead to the liberalization and democratization of China.
But this did not happen.
Instead, granting China most favored nation trading status and allowing it into the WTO, despite it never really following the rules, resulted in the loss of millions of American manufacturing jobs at the same time it granted the communists in Beijing legitimacy at home as a provider of material well-being. As China’s economic power increased, so too did its military capabilities. And rather than focusing on aircraft carriers and other power projection capabilities PLA planners instead focused on building up an area denial capability sufficient to deter any potential U.S. intervention in the event of a war between Taipei and Beijing: which the CCP leadership view as the final remnant of China’s “century of humiliations,” the last impediment to the full restoration of Chinese sovereignty.
Though open hostility between the two officially ceased with the normalization of relations between Washington and Beijing (they even partnered to punish the Vietnamese for intervening to remove the murderous Khmer Rouge regime in Cambodia [1979]), relations between the two were quickly complicated by continued U.S. interference in Chinese domestic affairs. This included congressional sanctions over Tiananmen (1989), to U.S. actions during the Taiwan Straits Crisis (1996), the gradual erosion by Washington of the Three Communiques, to sanctions on Beijing for its treatment of ethnic minorities, such as the Tibetans and Uighurs.
The sense in Beijing of a China under threat was reflected in its reorientation of military planning in the 1990s, when its attention shifted away from preparing to fight its Eurasian neighbors to focusing first and foremost on a future conflict with the United States in southeast Asia. Again, this was particularly so with respect to Taiwan, which the U.S. never officially ruled out militarily intervening to defend under the tactic of “strategic ambiguity.” U.S. interventions in the post-Cold War era, from Iraq to Serbia, increased this sense of urgency for CCP planners. In the case of the first Iraq War, Operation Desert Storm, Washington’s demonstration of the so-called “revolution in military affairs” highlighted the gap between the two in military capabilities; while in Serbia, U.S. willingness to ignore the U.N. and act unilaterally was compounded by its attack on the Chinese embassy in Belgrade, which Beijing to this day declines to acknowledge as an innocent error, and which killed multiple Chinese nationals.
But just as Beijing was ramping up its own capabilities, on the back of an ascendent economy resultant from its integration into the global capitalist system, Washington’s apparent “hyperpower” was dealt a series of serious, self-inflicted blows. Beginning with the second Iraq War and the invasion of Afghanistan, the façade of apparent U.S. military invincibility and political will was slowly eroded. At the same time, the illusion of U.S. economic unimpeachability was also shattered, with the Global Financial Crisis incubated in the United States paralyzing Western economies while China’s own less integrated capital markets and rapid fiscal interventions effectively insulated the Chinese economy and acted as a force for global stability during the period of ensuing related crises in Europe and elsewhere. As Washington dithered in the desert and Western economies floundered, the CCP leadership decided it was time to abandon the policy first articulated by Deng and followed by each Chinese leader since, to “hide our capabilities, keep a low profile, and bide our time.” Beijing’s opening moves in this regard began with its assertion of a sphere of influence in its immediate vicinity, not dissimilar, indeed derived directly from, the example of Washington’s own assertion of the Monroe Doctrine. While what Beijing sought was effective control over the waters directly adjoining the country, it prompted an immediate and alarmed response from Washington.
Obama’s 2011 “pivot” or “rebalancing” to Asia could hardly have been more transparent. While really the CCP was simply seeking to reconcile the difference between its newfound economic and military power with its existing, relatively lowly geopolitical station, in effect becoming what FDR and Truman had envisioned it becoming during the post-World War II period, one of the globe’s “four policeman” responsible for maintaining security and economic stability in its region, Washington, high on unipolarity, immediately set about trying to block China’s attempts at asserting its prerogatives in southeast Asia. Largely dormant since the 1950s, and only half-heartedly pursued since the end of the first Cold War, U.S. policymakers ramped up efforts at alliance building in southeast Asia. At the same time, it overtly sought to undermine attempts by Beijing to build alternative regional institutions to those constructed by the United States during the post-World War II period, such as the Asian Infrastructure Development Bank, while developing new institutional frameworks, like the Trans-Pacific Partnership and Quad, that would exclude Beijing. Along with Washington’s support for organizations advocating separation from China, such as the World Uighur Congress, and the construction of a new Cold War narrative pitting “democracy versus authoritarianism,” the Trump administration, filled with China hawks, made the new U.S. policy of weakening and containing China explicit in a series of documents formulated within a year of his taking the White House. This stance, inherited by Biden, has been fully embraced by his new administration.
Without irony, it is the United States, which since the end of the Cold War has invaded multiple countries without UN resolutions, run a secret network of black site torture facilities, helped topple or supported the toppling of multiple governments, and killed millions of civilians via economic warfare and covert drone campaigns, which accuses Beijing of threatening global peace and security. CCP planners now rightly believe that if China is to have its proper place at the table, one commensurate with its hard and soft power capabilities, it will have to fight the United States. While it has achieved a great deal, and may achieve still more, so far as its own dreamiest aspirations and the worst nightmares of Pengtagon planners, the reality is that China’s outlook is severely limited. For all the talk of China’s apparently inevitable rise and route to global domination, a closer look at its internal and external situation leaves significant room for doubt—including about the long-term durability of the Chinese state as presently constituted.
When it comes to China’s power projection capabilities, these doubts can be broken down into five basic categories: geographic impediments, resource constraints, demographic collapse, national cohesion, and economic slowdown.
China’s geography is frankly terrible in terms of potential power projection capability. Internally, it features endless flatlands to the north, abutting deserts and mountains running to the west, with more mountains and dense jungle to the south, while its eastern coast is ringed by states terrified of an expansionist China. And because of its vast population it is seriously strapped for foodstuffs. A shocking statistic: on a per capita basis it has less arable agricultural land than Saudi Arabia, making the fact that it has long been the world’s largest food importer unsurprising. Further, what farmland China does have requires enormous amounts of petrochemical fertilizers and laborers to keep even moderately productive. Further, lacking a confluence of natural and traversable interconnected east-west-flowing waterways, moving mass amounts of produce around internally is expensive and inefficient over the vast distances that locally produced foodstuffs must travel to arrive at the highly populated eastern seaboard provinces. Given these facts, as presently situated China is arguably the most globalization-dependent state on earth.
On pace to become the world’s largest consumer of oil in coming years, surpassing the United States, China itself holds less than 2% of all proven oil reserves. Little wonder the so-called “Malacca and Hormuz Dilemmas,” which could effectively shut down China’s entire economy overnight, have long been a central focus of CCP military planners. While it has plenty of coal (the fourth-most globally according to estimates), the already serious amount of environmental degradation wrought upon China by the CCP’s policy of breakneck industrialization, resulting in regular protests and serious widespread health problems, make use of it difficult to sustain socially and politically. In terms of natural gas, what little China has lies in the culturally distinct Sichuan and Xinjiang provinces, a potential source of myriad problems that may, along with the advanced technologies required to effectively exploit it, explain Beijing’s relative reluctance to embrace its development. Apart from the paucity of high-yield agricultural land, China is also plagued by water scarcity; its solutions, which cost an estimated $100 billion/annually, are causing increased desertification and displacement in the parts of the country from whence water is being diverted. An environmental disaster zone, lacking many of the basic necessities to sustain its enormous population, any serious disruption to the existing globalized order, created and sustained by the United States, would cause hundreds of millions of Chinese to famish if not starve to death.
The CCP’s former social engineering projects add their own complications to China’s already considerable domestic problems. From a combination of more or less forced mass urbanization, state-induced famine, and two-child, then one-child policies, the CCP faces demographic collapse. Specifically, it is going to run out of taxpayers, laborers, and consumers. Even worse, not only did changing to a one-child policy in the 1980s amplify the severity of the coming crisis, but it led to an epidemic of selective sex abortion. Basically, right about the time China’s economy collapses in on itself, it is going to have tens of millions of young men unable to find a job or a girlfriend—this while China by 2030 will have four retirees for every two workers and child.
Two additional things are worth pointing out here: first, that while it is true Xi reversed the CCP’s policies, it isn’t going to matter because the cost of raising children in China makes having more of them prohibitively expensive, while at the same time urbanization and industrialization naturally decrease birthrates anyway—see every other industrialized and post-industrial country in history; and second, this surfeit of single young males unable to find a job or wife is probably the U.S. hawks strongest argument for why China might pose a serious threat to one or more of its neighbors: unable to do anything else with such a potentially dangerous lot, Beijing may decide to throw them into a meatgrinder over Taiwan or in another border war with India, though both of these actions would likely have devasting additional consequences for the regime stemming from the economic consequences sure to follow.
Apart from the separatists holed up on Taiwan, large populations of Uighurs and Tibetans inconveniently located in strategic areas far from Beijing, as well as dozens of much smaller ethnic groups in the mountainous jungles to the south, mean the CCP leadership faces multiple permanent secessionist dangers far from its northeastern core. Such threats follow directly from the geography of the country, with wealthier eastern coastal provinces such as Jiangsu and Zhejiang wanting and having far more to do with wealthier Japan, South Korea, and the rest of the outside world than with the hinterlands of China’s western barrens. Such provinces have historically resisted Beijing’s control, and the CCP’s most recent moves against the Shanghai-centered tech sector and its billionaire class ought to be understood in this light. So, too, its decision not to try and duplicate the U.S. shale revolution because of the location of Chinese shale deposits in large, wealthy, and culturally distinct Sichuan province while its intense campaigns against the Uighurs and Tibetans already receive considerable international opprobrium. While force or the fear can keep them all in line, including Hong Kong’s recently suppressed population and internal party members who do not favor Xi’s policies, that ability to use force rests on the CCP’s claim to legitimacy and its ability to mobilize sufficient resources to effectively police these regions and put down any potential trouble—which is to say its state power.
Since state power ultimately rests on economic power, it is worth appreciating the myriad problems China’s hitherto racing economy faces, both on the domestic and foreign fronts. Because of its unique position over the past thirty years as a mass global exporter, the CCP has managed to stave off any potential economic slowdowns with boundless state credit, industry subsidies, and dumping, thereby maintaining near-full employment. However, decreasing returns on additional debt and continued overproduction, combined with domestic underconsumption and low-cost labor competition in its region and around the world, mean the bill is about to come due. It’s going to be enormous. Total debt is now three times the output of the Chinese economy annually, and the expansion of debt and credit has accelerated in recent years. Until the past year, the Chinese financial system was creating five times the money supply of the never shy Federal Reserve System per month. According to Citigroup, for example, in 2018 alone, the Chinese financial system accounted for 80 percent of all private credit creation globally. Because of centrally directed malinvestment, these nonperforming loans total an estimated $7 trillion. For some perspective, the subprime crisis that crippled Western financial markets was saddled with less than a trillion dollars of such bad loans. Further, much of the debt is short term, meaning it is frequently rolled over with new debt. This ongoing practice is yielding ever-decreasing returns. According to The Economist, fully three-quarters of new loans in China simply go toward paying the interest on existing debt. Meanwhile, total factory productivity, which had soared during the first decade of the new century, has flatlined since then—with its billion citizens still producing nowhere near what the industrialized Western economies do per capita—and Xi’s own insistence on reasserting state control over the private sector, which is responsible for most of the productivity gains over the past two decades, is likely to continue this already worrying trend.
Abroad, the Belt and Road Initiative (BRI) is only making things worse; spawning even more Renminbi (or Yuan), which are lent and spent on projects of questionable economic value and equally dubious means of repayment. Again, however, CCP policies that privilege employment and state stability over efficiency and productivity mean China’s industrial overproduction has to have somewhere to go, even if it means lending to countries like Venezuela, that quickly default, or like Sri Lanka, which when forced to sign over its principal port resulted in a wave of anti-Chinese sentiment within the country and bad press for so-called “debt-trap development” around the globe. This is to say nothing of problems in places like Pakistan, one of the BRI’s key nodes, which has featured repeated setbacks and disturbances, particularly in violently separatist Baluchistan.
The project, a geopolitical brainchild of Xi, is now subject to regular, if polite, criticism within Chinese academic and policy circles, with increasing numbers of critics coming to recognize the project for what it is: a boondoggle aimed at increasing Chinese power and influence abroad rather than doing anything to increase the welfare of the still relatively poor Chinese people domestically, whose income per capita is 79th globally. In fact, alienating the United States and broader West by challenging its development models has resulted in damage to its trade relationships and is only likely to reverse the gains made in the country since it was allowed into the WTO in 2001.
Though it brought China quickly up the ranks of the developing economies, the CCP’s relationship of mutual economic interdependence on the collective West, and the United States in particular, now hangs ominously over its head. The U.S. and China’s economic interdependence was part of the Clintonite strategy of integrating China into the world economy as a means of ensuring its passivity as regarded U.S. prerogatives. As the relationship deepened, both sides came to recognize that they were now locked into a situation of mutually assured economic destruction—as evidenced by Beijing’s unwillingness to pounce on the United States during its prolonged economic crisis just over a decade ago. However, there exists a key asymmetry within the relationship, and every U.S. security strategist knows it: in the event of a massive economic crash, in a democracy there is another election, while in an authoritarian state there is a revolution. This danger has been highlighted by the U.S.-coordinated Western response to Russia’s invasion of Ukraine in March. China, whose domestic economy is far more tied into world trade, has just seen what a coordinated response from the richer Western nations can do. While Russia will be able to outlast U.S. sanctions by shifting commodity exports to a willing developing world, were a similar situation to occur over Taiwan China would not have any such outlet for its abundance of manufactured goods, and its internal market, while growing, is still too underdeveloped to absorb the surpluses.
As though these multi-front problems and looming disasters weren’t enough, China, unlike the United States, has the further misfortune of being surrounded on all sides. While a detailed analysis of each of China’s fourteen neighbors is beyond the scope of this essay, a summary of the major players, their domestic incentive structures, and their perception of a rising China as a threat to its own security and wider interests is vital to understanding why China is unlikely to attain even regional hegemony regardless of Washington’s own policies aimed at preventing that outcome.
Despite its history of non-alignment, Washington set out to cultivate India as a future balancer against China beginning with George W. Bush. Creating a legal loophole that allowed Delhi to proceed with its nuclear program without fear of U.S. sanctions—the so-called 123 Agreement—Washington simultaneously played on Indian fears of Pakistan and its relationship with China. Not eager to be seen overtly choosing sides, Delhi mostly kept its head down through the 2000s, focusing on growing their economy, military, and increasingly its overall state power.
Never doing anything contrary to its own perceived interests, whatever Washington might have preferred, it was Beijing’s growing assertiveness in the 2010s that finally pushed Delhi into embracing Washington’s increasingly overt attempts at containing China, including joining the re-formed Quad in 2017. Following a series of standoffs over disputed regions on the border between China and India, these finally erupted in a series of skirmishes between Chinese and Indian troops in 2020. These were a “turning point,” according to Delhi, which realized the possibility of 1960s style full-out conflict between it and its larger neighbor was indeed a distinct possibility. With a population almost as large as China’s, an economy already the fifth largest in the world as measured by GDP, ideal geography for power projection in the Indian Ocean, and growing naval power to match, China’s loss of India to the side of the growing balancing coalition was huge and totally self-inflicted.
Along with India, Japan was the most significant of China’s neighbor’s never likely to partake in band-wagoning with a rising Beijing. The historical animosities, both ancient and recent, are deep, and Japan’s capacities to resist, like India’s, were too considerable to make that a desirable or palatable option. Still the third largest economy in the world despite decades of government mismanagement, Japan has long had the ability to quickly remilitarize and even nuclearize, the latter likely within the span of months rather than years. Like Delhi, Tokyo has outstanding border disputes with China over the Senkaku/Diaoyu Dao Islands, and was one of the first to sound the alarm over growing Chinese assertiveness in the South and East China Seas. Unlike India, whose vital natural resource imports would not even be threatened by Chinese regional hegemony given its open access to the Indian Ocean and Middle East, under such conditions Tokyo could find itself on the receiving end of a Malacca Straits-style dilemma. Home to multiple U.S. Army and Navy installations, and playing host to nearly 60,000 U.S. troops, Japan is happy to foot the bill for anyone that wants to contain China. Before his recent assassination, former Prime Minister Shinzo Abe was not so quietly shaping policy behind the scenes in a more hawkish direction.
Yet another neighbor with outstanding border disputes with Beijing, the Philippines aren’t eager for confrontation with China but recognize their own strategic interests are threatened by their increasingly assertive larger neighbor. If there was any doubt following the confrontation over the Scarborough Shoals in 2012, this was made clear when Beijing waved aside the 2016 Permanent Court of Arbitration’s ruling in Manila’s favor over the issue of China’s so-called “nine-dash line.” Even Rodrigo Duterte, who came to office openly pursuing partnership with Beijing, eventually backtracked and reverted to the side of the growing balancing coalition, moving to restore prior defense agreements, supporting AUKUS, and expanding joint military exercises. Again, this was largely the product of Chinese belligerence over disputed islands and reefs, as well as under-delivery on Chinese promises of the economic benefits that would flow to the Philippines were it to align with Beijing. Along with Japan, Taiwan, Brunei, Indonesia, and Malaysia, the Philippines forms part of a dense thicket impeding Chinese access to the Pacific and Indian oceans. While still dwarfed by China economically, and alone standing no chance against China in an economic or kinetic conflict, together they have a large population to draw on, considerable resources, and not irrelevant economic heft, while their disparate thousands of islands and jungle geographies make the idea of an all-out military campaign against them a hopeless endeavor.
South Korea’s interest in balancing against a rising China is perhaps the most obvious of any state detailed thus far. While its own territorial dispute with Beijing is relatively negligible, that of Socotra Rock, without outside help its highly militarized northern neighbor with its million man army, nuclear weapons, and backing by China looks formidable—and, of course, the war between north and south still hasn’t officially ended. Like the territory of modern Vietnam the Korean Peninsula was also for centuries part of the Chinese sphere of influence. South Korea’s interests, therefore, while complicated like everyone else’s in the region by economic ties with China, are solidly with any balancing coalition. Were one not to form (unlikely given the incentives of the other major states already detailed) it is conceivable Seoul would turn to Beijing for protection from Pyongyang, but this is a stretch. In terms of its values, economy, politics, and world outlook, it is solidly opposed to Chinese regional hegemony. With the tenth largest economy in the world, South Korea brings a rich consumer market, loads of cutting edge industry, and strategic location to a balancing coalition, as well as providing willing basing to any allies on offer to go with its own considerable naval power, eighth largest in the world in total tonnage.
While their interests often conflict in many areas, from trade to natural resource rights to human rights, on the issue of balancing against Beijing the interests of each of the above countries, as well as Vietnam, Australia, Malaysia, and Indonesia (to say nothing of Taiwan) almost perfectly coincide. Those of China’s neighbors variously willing to brook increasing Chinese dominance, such as Cambodia, Myanmar, and Thailand, are unreliable, impoverished, and in each case suffering multiple armed insurgencies and secessionist groups that receive various levels of outside aid. Coupled with China’s own internal problems already outlined, Beijing’s daunting perimeter of rival states means the threat of Chinese regional hegemony is a distant, if totally unrealizable, prospect. For all the CCP’s propaganda, fragmentation rather than unity has defined Chinese history. Spanning approximately two millennia, for only three hundred of those years were the borders of more or less today’s China united under a Han-dominated central political authority. Left to itself, locked in the South and East China seas, it would likely face the threat of serious collapse and fragmentation by the late 2030s.
While China is far from a paper-tiger, the real danger when it comes to U.S.-China relations isn’t any direct threat Beijing poses to the United States or to the interests of the American people. But, rather, the real danger is that increasing belligerence emanating from Washington provokes a disastrous conflict over what Beijing considers core Chinese interests. Particularly with its shift in posture over the past decade, from Obama’s more geoeconomic approach to Trump and now Biden’s increasing militarization of relations between the two, Washington risks provoking a conflict over Taiwan, or in the South or East China Seas.
Knowing there are certain red-lines Beijing would have to respond to if crossed, like over Taiwan, it may be, as Robert Kagen argued this past year in Foreign Affairs, that U.S. policymakers think they should push China into a confrontation now, when it is more likely to lose than later when they believe Beijing’s relative position will be even stronger. Such a loss would destroy the CCP’s credibility, they argue, opening up the possibility of a change in political regimes at the same time it diminished China in the eyes of its neighbors and the world.
This is a questionable assumption, however. While it would probably mean the end of Xi’s time as leader, the institution of the CCP has weathered significant tumult before and could likely do so again. In fact, in the event of a conflict with the United States over one of its core interests, it is just as easy to imagine the opposite occurring. Afterall, the sense of a state under siege strengthens, rather than weakens, the hand of an authoritarian regime. In this sense, both the Trump and Biden administrations’ actions and rhetoric are playing right into the CCP’s grateful lap. Facing imminent multifront disasters, the now openly confrontational U.S. attitude is likely to give the CCP its best chance of staying in power as these crises all come to a collective head: by arguing that only it, the CCP, has been able to make China great again and prevent its exploitation by looming foreign imperialists, and that only it can protect China from a United States newly determined to subvert and dominate it.
Troublingly, though a conflict between the two could easily escalate to the point of a humanity-ending nuclear exchange, as well as the fact that China is unlikely to ever pose a serious threat to core American interests, there are many domestic forces here in the United States that are pressing just such an escalatory dynamic. From entrenched institutional interests within the military and security bureaucracies determined to hold on to their positions and power, to weapons manufacturers who want to see their contracts continually renewed or expanded, to think-tankers determined to avoid getting real jobs and a corporate media that has never seen a potential war it doesn’t like, to a high-tech industry that would rather insource critical components from places like Taiwan in the name of saving a few bucks, as well as domestic manufacturing industries seeking insulation from Chinese competition, and Republicans and Democrats seeking to score cheap points by trading insults over who is “softer” on China.
The situation is exceedingly dangerous, though completely unnecessary. The “China Threat” is a clear canard, and an extension of what the late Justin Raimondo described as “all foreign policy being domestic policy.” Unfortunately, none of the existing dynamics in play are likely to change—no matter how valid the criticism. And the American people, as well as the rest of the world, will have to just hold their breath and hope for the best.
July 25, 2022
Posted by aletho |
Economics, Militarism, Progressive Hypocrite, Timeless or most popular | China, United States |
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The social and economic destructive power of the political Net Zero agenda across the European Union, and by extension the U.K., is laid bare in a damning new report from the Global Warming Policy Foundation. In a long and detailed presentation, energy writer John Constable warns that the European Green Deal seems all but certain to break Europe’s economic and socio-political power – “rendering it a trivial and incapable backwater, reliant on – and subservient to – superior powers”.
It is easy to read into the report that “superior powers” include countries that supply Europe with vital oil and gas and make the industrial goods required to enjoy current lifestyles. If they wish, European consumers and politicians can continue to indulge in monumental green virtue signalling, print money until kingdom come and even consider resurrecting old economic and social disasters like pointless Covid restrictions. The TalkTV host Julia Hartley-Brewer often notes that Net Zero is “borderline insanity”. The use of the word “borderline” seems superfluous.
The collapse in competitive manufacturing capacity is nowhere more evident than in the renewable sector itself, says Constable.
It is clear that renewable energy equipment manufacturing has no future in the EU, and indeed manufacturing of any kind exposed to international competition will struggle to survive, except in niche areas.
The all but total collapse of the Spanish solar industry within eight years is highlighted. Constable describes it as “extraordinary” and in large part explained by the curtailment of subsidies. Overall, he says, “subsidised deployment in Europe has failed to give European industries a secure position in the world markets for renewable energy equipment. The field is now dominated by China”.
Again, it might be noted that if you can’t even pay companies to produce hardware under local economic conditions, Boris Johnson’s promise – backed it seems by almost all politicians – to bring plentiful green jobs in the U.K. across the ‘Red Wall’ is just windy rhetoric.
News of an impending Net Zero calamity is rarely far from the headlines. Tata Steel has been trying to obtain subsidies approaching £1.5bn from the U.K. Government to pay decarbonising costs and keep Port Talbot steelworks operational. “The new Prime Minister is unlikely to be willing to hand over subsidies on this scale, not least because every other industry hit by demands for decarbonisation would insist on handouts too,” said Dr. Benny Peiser, Director of Net Zero Watch. “It is becoming more evident by the day that the Climate Change Committee misled Parliament over the true cost of Net Zero,” he added.
The lack of Net Zero discussion in the current Tory leadership battle is interesting. Savvy politicians are starting to become aware of the disaster that is hurtling towards society as it seeks to quickly remove the cheapest and most efficient fuel it has from the energy mix and replace it with intermittent sources – described by Constable as “thermodynamically incompetent”. On the other hand, large swathes of the population have become convinced that the climate is breaking down, as evidenced by the hysteria that surrounded the recent brief heatwave. The science is ‘settled’, although a more realistic interpretation is that green activists and financiers have pursued a ruthless 30-year campaign to outlaw the scientific method from atmospheric climate science.
Constable argues that a change of course is inevitable to undo the “deeply embedded” harm of nearly 30 years. Moving towards “fundamentally cheaper energy” will require substantial reductions in European living standards. “Explaining this to the European people will form the greatest political challenge of the next 50 years,” he says.
In his wider report, Constable attempts to demonstrate that the enthusiastic adoption of the green agenda in the 1990s and early 2000s “has effectively produced gradual industrial and economic disarmament”. The ‘”resultant enfeeblement” compared to Europe’s competitors will make arresting the decline difficult: “Recovering the situation entirely may be impossible.” The author lists numerous body blows to overall competitiveness. Electricity prices to industry in the EU between 2008-2018 have been about 30% above those in the G20, an organisation that includes China, India and Russia. Gas price were 20-30% higher. Electricity prices were 80% and 30% higher respectively for industry and households, and this would have hit competitiveness hard and placed heavy energy costs on some of those least able to afford them. Petrol prices were approximately 30-50% higher, and diesel 10-40%, figures again that were guaranteed to destroy competitiveness outside the EU’s protective internal single market.
Meanwhile, energy consumption in the EU has been falling and is now said to be at levels last seen in the early 1990s. Such a deep and sustained decline is said to be unprecedented in the modern era. In the U.K., electricity consumption is reported to have fallen back to levels not seen since 1970. Energy efficiency, of course, plays a part, but Constable notes the effect of “price rationing and demand destruction”. The report labels Europe’s “green experiment” as a “costly failure”, noting that “carbon dioxide abatement costs in the EU are on average several times greater than even high-end estimates of the social cost of carbon”. This is said to indicate that the economic harm of the EU’s mitigation policies “is greater than the climate change it aims to prevent”.
Politicians – and green activist commentators – often blame inflation, high energy prices and food shortages on recent events such as Russia’s war in Ukraine. But Constable argues that the Ukrainian war, while bringing the failures of climate policies into sharper focus, does not mean that the harm is of recent origin. “On the contrary,” he argues, “the environmental policies have been damaging to the EU’s interests, and advantageous to those of its rivals, from the very beginning.”
July 24, 2022
Posted by aletho |
Economics, Malthusian Ideology, Phony Scarcity | European Union, UK |
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Net Zero Watch | July 22, 2022
London – With the exorbitant costs of Net Zero plans threatening Port Talbot steelworks with closure, the next Prime Minister will be faced with a stark choice: pause Net Zero plans for energy-intensive industries or preside over the end of the UK steel manufacturing.
The warning comes from the director of Net Zero Watch, Dr Benny Peiser.
Tata Group, the owner of the UK’s largest steel manufacturer, has threatened to shut down operations if the government does not agree to provide £1.5bn of subsidies to help it reduce CO2 emissions.
The crisis for UK steel demonstrates that the cost of Net Zero is an existential threat to British industries and manufacturing.
As an energy-intensive manufacturer of internationally traded commodities, the steel sector is particularly sensitive to the astronomical cost of decarbonisation. It is the first to acknowledge that the industry simply can’t survive Net Zero without multi-billion handouts – but it won’t be the last.
Tata Steel and the energy-intensive sector more broadly can be regarded as a canary in the coalmine, giving early warning of a more general economic and industrial disaster, as the rising costs of Net Zero trickle down to the rest of the economy.
Dr Peiser said:
“The new Prime Minister is unlikely to be willing to hand over subsidies on the scale demanded by Tata, not least because every other industry hit by demands for decarbonisation would insist on handouts too.
“It is becoming more evident by the day that the Climate Change Committee misled Parliament over the true cost of Net Zero. Most energy-intensive businesses in the UK won’t be able to survive the looming Net Zero cost crisis unless the new Prime Minister takes swift action.”
July 23, 2022
Posted by aletho |
Economics, Malthusian Ideology, Phony Scarcity | UK |
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Samizdat – 23.07.2022
Russia-related sanctions have not shattered Moscow’s resolve, while Europe has already lost four governments amid economic and political crises, Hungarian Prime Minister Viktor Orban said on Saturday.
“The West’s strategy is like a car with flat tires on all four wheels… The sanctions did not destabilize Moscow. Europe is in trouble, economically and politically, and four governments have become victims: UK, Bulgarian, Italian and Estonian… People will face a sharp increase in prices. And the better part of the world deliberately did not support us as well — China, India, Brazil, South Africa, the Arab world, Africa — everybody is aloof from this conflict, they are interested in their own affairs,” Orban said, delivering a speech in the Romanian city of Baile Tusnad.
Orban further noted that the Ukrainian conflict is likely to “put an end to the Western hegemony, which could unite the world against someone,” and that a “multipolar global order will knock on the door.”
Hungarian Prime Minister Viktor Orban said on Saturday that Europe needs a new strategy aimed at peace in the Ukrainian conflict.
“Hungary should not be under the illusion that we can influence the strategy of the West. Nevertheless, it is a matter of honor and morality for us to state our position that a new strategy is needed, the goal of which would be peace and the formulation of a good proposal for peace. The task of the European Union is not to take sides, but to stand between Russia and Ukraine,” Orban said in the Romanian city of Baile Tusnad.
Orban noted that for the first time since World War II, Europe again has no say in important security issues as decisions are made by the United States and Russia.
Peace in Ukraine may be established only after the negotiations between Russia and the United States, and Europe has lost its chance at mediation since it failed to ensure the fulfillment of the Minsk agreements, Hungarian Prime Minister Viktor Orban said on Saturday.
“When we are talking about the war, it begs the question: what should we do? Peace talks between Russia and Ukraine will not take place. People who are waiting for them, they are waiting in vain. Russia wants security guarantees, that is why only the talks between Russia and the US can end this war. Until Russian-American negotiations take place, there will be no peace,” Orban said, delivering a speech in the Romanian city of Baile Tusnad.
Orban noted that Europeans cannot mediate the process anymore as Moscow is not willing to listen to the EU after the failure of the Minsk agreements.
“We lost it after 2014 when we could not ensure the fulfillment of the Minsk agreements containing the guarantees from France and Germany. And the Russians do not want to conduct talks with us anymore,” he added.
On February 24, Russia began a military operation in Ukraine responding to calls for help from the breakaway republics of Donetsk and Lugansk. The United States and its allies responded by imposing comprehensive sanctions against Russia while also ramping up their military support for Ukraine.
July 23, 2022
Posted by aletho |
Economics | European Union, Russia, Ukraine, United States |
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Samizdat – 22.07.2022
Western nations have faced skyrocketing energy prices, creeping inflation, and plummeting growth amid their attempt to “punish” Russia into submission for Moscow’s military op in Ukraine. According to the Russian president, the sanctions’ outcome hasn’t at all been “what the initiators of the economic blitzkrieg against Russia were counting on.”
The current sanctions war against Russia by the European Union and the United States bears striking parallels to Napoleon Bonaparte’s ill-fated early 1800s attempt to institute a blockade against Great Britain, which ultimately culminated in the French Empire’s economic ruin, French economist Olivier de Maison Rouge believes.
In a recent op-ed in Le Figaro, de Maison Rouge pointed out that the EU’s sanctions on Russia in response to the “military aggression on its eastern flank” have so far only led to the appreciation of the Russian ruble, and a stark and unpleasant realization of just how much Europe depends on Russian natural resources for its well-being.
The present situation is not unique, and has a historical parallel in the 19th century, the economist, who teaches at the Paris-based ILERI School of International Relations, and the School of Economic Warfare, explained.
“Take for example the European blockade declared against England by Napoleon I. Although English industry initially faltered, it was ultimately able to forge new commercial partnerships with its vast empire, enabling it to reach the height of its glory, on land and at sea, in the 19th century,” de Maison Rouge wrote.
In a Napoleonic decree penned in November 1806, the British Isles were declared to be in a state of blockade, with all trade prohibited, and all letters or packages with English addresses, or to Englishmen, or written in the English language, banned from being sent at France’s post offices and seized.
A year later, de Maison Rouge recalled, in the decree of Milan of December 17, 1807, Napoleon “ordered any boat anchored in a British port, whatever its nationality, to be considered flying the British flag and therefore confiscated by the customs administration. The direct consequence of this policy for France was the disruption of supplies.”
The professor noted that with each of Napoleon’s European conquests, the restrictions on trade with Britain were extended, with the emperor envisioning a ban on “all British goods from Lisbon to Saint Petersburg.”
With the Treaty of Tilsit of July 1807, Russia and Prussia joined the blockade, and between 1807 and 1810, Sweden and Portugal were also made to join the embargo (Russia would exit from this arrangement in 1810 when the tsar began allowing neutral ships to land at Russian ports, culminating in the French invasion of 1812).
Britain’s response to the restrictions, de Maison Rouge wrote, included its own embargo on the young American republic’s trade with continental Europe, thus disrupting France’s access to the riches of the New World. At the same time, the blockade led to a virtual drying up of major ports in France, Holland, Germany, and Italy.
“England, for its part…was able to forge new commercial relations, particularly with Canada, and then with the United States and Latin America,” the economist noted. In the meantime, in the French-occupied nations, local merchants, sometimes aided by corrupt French officials, were able to organize smuggling routes, “partially wiping out the effects of the blockade” and ultimately forcing French customs to start granting import and export licenses in 1809 to certain shipping companies and for certain goods.
“The Emperor’s wish was to collapse the English economy by cutting off its commercial outlets, and incoming flows of raw materials for the supply of manufactured goods (cereals, weapons, ammunition, cotton, wool, etc.). Indeed, it is estimated that England’s exports fell by 20 percent between 1808 and 1810.”
However, in time, “the effects of the blockade proved counterproductive, because goods like machine tools ran out, while [lost] sales of European goods outside Europe were never compensated. While England knew how to forge an economy turned toward other markets (in particular in Latin America)…and established its maritime power against the continent, creating new outlets which would make its fortune in the 19th century, France, centered on the continent alone, was not able to find alternatives beyond its domestic markets,” de Maison Rouge explained.
In the end, “despite temporary economic crises (in 1808 and 1810) England ultimately emerged strengthened from this ordeal, subsequently enlarging its empire and its clientele and becoming the dominant nation of the 19th century,” the economist concluded.
In recent weeks, Western officials, academics, and media have expressed fears that the West’s push to “punish” Russia for its military operation in Ukraine has backfired on the European Union, shaping up to be the region’s most severe inflationary and energy crisis since the 1970s Arab oil embargo and stagflationary crisis. The US, which had far weaker trade ties to Russia before the escalation of the crisis, has also been affected, with the White House blaming spiking inflation and gasoline prices on Russia and calling the problems “Putin’s price hike.”
Last week, Romanian Deputy Prime Minister Hunor Kelemen warned that as the Ukraine crisis shows no signs of letting up, European countries “will all pay the price” for the restrictions slapped on Russia during the coming winter. “This will be a harsh winter, and possibly the harshest winter in the past 40, 50 or 60 years, and, unfortunately, for the whole of Europe”, he said.
Earlier this month, Putin suggested that the West had already lost its “sanctions war” against Russia, and sparked the start of the “radical breakdown of the American-style world order.” Admitting that sanctions have created some difficulties for the Russian economy, the Russian president stressed that their outcome nevertheless hasn’t at all been “what the initiators of the economic blitzkrieg against Russia were counting on.”
July 22, 2022
Posted by aletho |
Economics, Timeless or most popular | European Union, France, Russia, UK |
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