Streetwise Professor

June 17, 2017

We Can Now Bound From Above the Price of German Principles

Filed under: Commodities,Economics,Energy,History,Military,Politics,Russia — The Professor @ 12:30 pm

If you really concentrate, I’m sure you can stretch your memory to recall those long past days when Angela Merkel was hailed as the new Leader of the Free World, most notably because of her stalwart stance on Russia, in contrast to Trump, who was deemed a squish on Russia at best, and a collaborationist at worst. But that was so . . . May. Now in mid-June, the Germans and much of the rest of Europe and their fellow travelers here in the US are totally losing it over the 98-2 vote in the US Senate (the two dissenters being ideological bookends Rand Paul and Bernie Sanders) to strengthen the sanctions regime on Russia, and notably, to limit Trump’s ability to relax sanctions unilaterally.

So: In May, soft on Russia bad, hard on Russia good. In June, hard on Russia bad. In May, Trump had too much power. In June, limiting Trump’s power is inexcusable.

What changed? Actually nothing changed. This is volte face reflects an enduring constant: German commercial interests. The Senate sanctions bill would impose potential penalties on those assisting in the construction of Russian pipelines, most notably NordStream 2. NordStream 2 is a joint project between Gazprom and a handful of major European, and particularly German, corporate behemoths.

German explanations of the motivation behind the Senate’s action betray extreme psychological projection. Echoing Gazprom (an action which if you were to do it in the US would immediately bring down upon on your head screams of “RUSSIAN TROLL”), several European policymakers have claimed that this action was intended to advance the interests of US LNG exporters.

Um, no. Not even close. The objections of the US to NordStream date back to the Obama administration, which was hardly a major promoter of the US natural gas industry. Further, the main drivers in the Senate were people like McCain, for whom economic considerations are tertiary, at best: McCain et al have had it in for Russia generally and NordStream particularly for geopolitical reasons, and their opposition dates back years. Moreover, the bill reflects the current anti-Russia hysteria in the US, which in turn reflects a strange mix of political factors, not least of which is the clinical insanity of the Democratic Party post-November, 2016.

Indeed, US opposition to Russian gas pipelines into Europe dates back to the Reagan administration. The US tried to stop the pipelines through Ukraine that Putin is now trying to outflank with NordStream, because it thought the pipelines provided an economic benefit to the USSR and made Europe hostage to Russian economic pressure. This was in fact a source of one of the few disagreements between Thatcher (who supported the pipelines) and Reagan.

How much did the US hate the USSR-Europe gas pipelines, you ask? Enough to blow them up. Blow them up real good: “The result was the most monumental non-nuclear explosion and fire ever seen from space.”

Those who claim economic motivations say a lot more about themselves than they do about the US Senate: adopting a policy to advance German/European economic interests is exactly what they would do, and they are projecting this motivation on the US.  Indeed, the Germans’ hysterical reaction demonstrates just how important economic considerations are to them, and how marginal are geopolitical considerations vis-a-vis Russia.

If you think the Russians are as big a threat as the Germans and other gas-poor nations say, they should be deeply grateful for the emergence of US LNG which reduces their dependence on the evil Russkies. But the Germans say: we don’t want your methadone, we’d rather continue to buy smack from this really nasty dealer.

The hypocrisy and projection don’t stop there. Of course German economic policy is strongly oriented towards boosting its exports, often at the cost of beggaring its supposed European brothers and sisters (especially the swarthy ones down south). What’s good for zee goose, kameraden. .  .

Further, recall (if you can remember back that far) that one reason for the German/European freakout over Trump in May was his refusal to acknowledge solidarity with our allies by mouthing the words “Article 5.” All for one! One for all!

Right?

Well, eastern Europeans–the Poles in particular–think that NordStream basically sells them out to the Russians in order to benefit Germany. The Germans have totally blown off this criticism, and have subjected the Poles and Baltic States to considerable criticism and pressure for their opposition to NordStream. So much for European solidarity. It’s all for one, all right: that one being Germany. That one for all . . . not so much.

It gets better! Merkel and other Euros are fond of saying “more Europe.” Well, that’s exactly what the dispute and the sanctions are about, isn’t it? The economics of NordStream 2 are dubious, but it presents a nearly existential threat to Ukraine. The entire reason for the conflict in Donbas and the seizure of Crimea (conflicts that Merkel is allegedly attempting to mediate) were Ukraine’s attempt to move closer to Europe.

That is: (1) Ukraine takes “more Europe” seriously, and enters into an agreement with the EU that would open up trade with an eye on Ukraine joining the union in the future, (2) Putin takes exception to this, and initiates a series of actions that culminate with the ouster of Yanukovych followed by the seizure of Crimea, and a hot war in Donbas, (3) the US Senate attempts to penalize Russian actions by sanctions, and (4) the Europeans scream bloody murder at US intrusion into their policy domain.

In other words, when forced to put their money (and their gas) where their mouths are, the Europeans jettison “more Europe”. And then turn around and slag the US for taking them at their word.

Hey, they can do what they want. And the US can do what it wants. Just spare me the sanctimonious bullshit about standing up to Russia, European solidarity, more Europe, and on and on. It’s all about the Euros, baby–€–and German € in particular. Every “principle” that supposedly earned Merkel the designation as Leader of the Free World went out the window in a nanosecond, once some big German companies were going to have to pay a price for those principles.

We can now bound from above the price of German principles. The upper bound is in the billions of Euros. I am sure that the true price is far lower than that.

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4 Comments »

  1. The price of German principles has been well-known since at least the time Merkel torpedoed the US effort to offer NATO Membership Action Plan to Georgia and Ukraine, effectively trading Russian invasions of these countries for a few more years of Mercedes exports. I sure hope all those rumors the Trump administration is working in concert with Merkel trying to water down the bill are pure fake news…

    Comment by Ivan — June 18, 2017 @ 1:27 am

  2. https://www.washingtonpost.com/archive/politics/2004/02/27/reagan-approved-plan-to-sabotage-soviets/a9184eff-47fd-402e-beb2-63970851e130/?utm_term=.e8ba97164ac3

    Thanks for this great reference on the soviet pipeline explosion. I’ve never heard of this before.

    What a caper from the Gipper!

    Comment by AndyEss — June 19, 2017 @ 9:51 pm

  3. Let’s see– and guess who was visiting Iran before the ink dried on the “Give Iran Nukes
    Agreement!”

    Comment by eric — June 19, 2017 @ 10:08 pm

  4. […] said before, I think this is merely the tip of a very large iceberg. Streetwise Professor recently wrote a post on Germany citing the importance of European unity in one breath while stitching up eastern Europe […]

    Pingback by Germany’s Two Faces | White Sun of the Desert — July 6, 2017 @ 2:49 am

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