Streetwise Professor

August 5, 2017

A Brief European Tour

Filed under: Economics,Energy,Politics,Russia — The Professor @ 2:46 pm

Emmanuel Macron’s popularity has come off considerably since his victory in May. This is to be expected. He was the beneficiary of metropolitan France’s giddiness at the vanquishing of Le Pen, and the perceived slap at Trump (more on this in a bit). That intoxication has passed, and France is still France, riven as it always has been by deep political divides even among the elite.

I must confess that I may have misjudged M. Macron. I pegged him as a cipher whom Merkel would dominate. But if anything, Macron is proving to lean more towards Napoleonic ambitions, labeling himself “Jupiter” who aims to overawe the petty squabbling political nation.

Macron left some angered, and others nonplused, by his bonhomie with Trump during the president’s visit to France on Bastille Day. This actually makes perfect sense, and is the best demonstration of his intent to be his own man, rather than a Merkel flunky. As Empress Angela’s pretensions continue to swell, Macron knows that he needs a counterweight. He further knows that Merkel disdains Trump, and Trump don’t think much of her either. So the clever thing to do is to build a relationship to Trump. It signals independence. It will aggravate Angela. And it will provide Macron with some muscle in his dealings with Germany, and with the EU.

Speaking of the Germans, they are in a lather over the recently passed, and grudgingly signed, US sanctions on Russia. (Socialist) Foreign Minister Sigmar Gabriel called the sanctions “more than problematic” and accused the US of using the sanctions to advance its economic interests.

Vats good for ze goose is good for ze gander, eh, Fritz? German policy is all about advancing the interests of Germany, Inc. (or more properly, Germany AG). So spare me the sanctimony.

And as a factual matter, Sigmar is full of it. He states the US position to be “we want to drive Russian gas out of the European market so we can sell American gas.” This takes a very narrow and distorted view of the effect of sanctions on US companies, and energy companies in particular. The gains to US LNG are speculative, and would not be realized for some time. Other US firms–notably the oil majors–will suffer more with certainty, and suffer now, as a result of the new sanctions. Consequently, US energy firms fought the sanctions bill aggressively, and won some concessions.  So the idea that the sanctions effort was a Trojan Horse intended to advance US commercial interests is laughable. Congress proceeded with sanctions in spite of US economic interests, rather than because of them.

I think psychologists refer to what Herr Gabriel did there as “projection.”

One other thing about the sanctions bill. After it became law, Putin responded by ordering a reduction of 755 in staff at US diplomatic missions in Russia, and kicked the American diplomats out of some dachas. This is a good a confession of his strategic weakness. He really had no retaliatory measure available that would have really hurt the US without hurting Russia substantially more. So he was forced to resort to a purely symbolic measure. Something to think about the next time that you read about Putin the Colossus. Yes, he can be a pain, but when it comes down to it, he is playing with a very weak hand.

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12 Comments »

  1. Putin
    playing with a very weak hand. Let’s hope so. The German army, now a couple of hippies in a camper van.
    Meanwhile France joins and chucks NATO as it suits, or simply at random. Turkey,largest by numbers in NATO is getting cosy with Vlad.
    NATO needs to get a grip. Kick out Turkey, Germany & France and invest in the Baltics.
    And Germany trying to get Ukraine into NATO… beyond a joke.

    Comment by james — August 5, 2017 @ 5:20 pm

  2. James:

    Well put. In SWP shorthand style.

    VP VVP

    Comment by VP Vlad — August 6, 2017 @ 6:11 am

  3. When I see Germany AG so shamelessly prostituting themselves to Putin, whatever the cost to those lesser folk further east (just look at the latest Siemens scandal), I always remember that quote from Lenin about “capitalists gladly selling us the rope to hang them with”. He must have pictured some very specific Kapitalisten when he coined that.

    Comment by Ivan — August 6, 2017 @ 12:20 pm

  4. Scott ‘Dilbert’ Adams noticed that the release of transcripts of Trump’s phone calls with the Mexican president and with Australia’s Malcolm ‘Lord Waffleworth’ Turnbull were released after the sanctions were legislated. He thought they might have been part of the Russian reaction.

    If so, then it reinforces your point about the weakness of the Russian position: the transcripts actually aren’t too bad for Trump (as far as I can see).

    And, if his suspicion is true, then I suspect it’s only the second time that Australia has played a role, albeit minor, in US-Russia relations. The first time was when Turnbull’s predecessor, Tony ‘The Mad Monk’ Abbott threatened to ‘shirtfront’ Putin at the G-20 meeting in Brisbane in 2014. (My money would have been on Putin winning that one).

    Off topic, a former chief economist of mine is worried that Kim ‘The Only Fat Person in North Korea’ Jong-Un might think the empty wastes of Australia’s north and centre might make the perfect testing ground for his new weaponry. So, the Great Sandy Desert might become the Great Glassy Desert before long.

    Comment by Global Super-Regulator on Lunch Break — August 7, 2017 @ 8:09 am

  5. Well, The Fat Kid might have had something with a Trinity-size yield on his last underground test, but with several fizzles on the way. However sticking that on the end of his doubtfully-performing fireworks is a whole different ballgame. I think the Japanese should be more worried by U235 contamination from a failing launch than you guys in Oz getting a glassy hole in Uluru.

    Comment by Tractor Gent — August 7, 2017 @ 2:01 pm

  6. Something else Napoleonic about Macron: Despite having an overwhealming majority in parliment, he is trying to pass a law giving himself wide powers to pass employment reform by decree. His majority is unassailable and was elected specifically on a promise to reform employment law – why on earth does he need to do it by decree? I think he needs to dial back the messiah-complex a notch or two…

    The Germans are a bit odd about Russia: On the one hand, they’re all with the human dignity and the pacifism when the UN is looking to blow something up, but large sections of their population (not just big corporations) seem to have a blind-spot the size of Putin’s wealth when it comes to how countries unable to resist Russian influcence are treated…

    @James: But the French are the only sizeable European force that actually spends the 2% of GDP that they’re supposed to.

    Comment by Hiberno Frog — August 7, 2017 @ 4:23 pm

  7. @Regulator: I’d say a more likely and very dangerous scenario is a high-altitude test near one of their perceived enemies, destroying electronics for miles around…

    Comment by Hiberno Frog — August 7, 2017 @ 4:25 pm

  8. @ Frog: Indeed.

    My guess is that a number decision-makers in Japan, Korea and the US are receiving some mightily uncomfortable briefings right now.

    Comment by Global Super-Regulator on Lunch Break — August 8, 2017 @ 4:14 am

  9. […] first from Streetwise Professor on Emmanuel Macron, with which I agree and wish I’d written […]

    Pingback by Two Quotes | White Sun of the Desert — August 8, 2017 @ 5:49 am

  10. ISTR that the Germans attain their 2% by including what they spend on their autobahns. How convenient! Lovely big roads with nothing to manoeuvre on them!

    Comment by Green As Grass — August 9, 2017 @ 2:40 am

  11. “His majority is unassailable and was elected specifically on a promise to reform employment law”

    Up to a point, Lord Copper. Remember that Macron was part of Hollande’s government and tried to get these reforms through. The result was the destruction of Hollande’s government. Quite why the French voted for Macron is something only a Frenchie could understand but I imaghine it was a form of “anyone rather than Le Pen”.

    Comment by Graeme — August 9, 2017 @ 6:58 am

  12. Actually, Putin has made serious threats against the US, through his controlled media, all those politicians and TV show hosts talking about how Russia can turn the US into an irradiated wasteland etc. He just gets his puppets to say it for him.

    Comment by Andrew — August 11, 2017 @ 2:50 am

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