The horizon is not so far as we can see, but as far as we can imagine

Some actual serious sanctions proposed against Russia by the EU

Not shabby:

EU diplomats will weigh sweeping Russian sanctions on Thursday that include a proposal to ban all Europeans from purchasing any new debt or stock issued by Russia’s largest banks, according to a proposal seen by the Financial Times.

The sanctions measure, contained in a 10-page options memo prepared by the European Commission and distributed to national capitals, also proposes barring the Russian banks from listing new issues on European exchanges, preventing them from using London or other EU stock markets to raise funds from non-Europeans.

The proposal would not initially include a similar prohibition for Russian sovereign bond auctions out of fear the Kremlin could retaliate by ordering an end to Russian purchases of EU government debt, the document states.

Now these aren’t nearly as sweeping as they could be, but they aren’t a joke.  The practical effect would be to force Russian banks to raise money from China and the Muslim world.  The cost would be somewhat higher.

I do wonder if the Europeans have thought through Putin’s response, however.  What would be the next level of sanctions if these pass and Putin doesn’t do what they want?  What if, instead of de-escalating support for Ukrainian rebels, he increases support?  The Ukrainian rebels may have shot down an airliner, they have also shot down multiple military aircraft, and just shot down two jets.  What do you think they could do with more equipment and more men?

I’ve  never really understood why the West has gone all stick and no carrot with the Russia in relation to the Ukraine.  Putin’s approval ratings, thanks to the Ukrainian crisis, are sky high in Russia. If he invaded tomorrow, they’d be higher

What does he get if he does what Europe wants?  So far it’s all been downside.

I see this repeatedly in Western negotiations: Iran gets nothing for playing, except that it doesn’t get to have all its rights under the non-proliferation act and some sanctions (punishments) are eased.  The only carrot is “we’ll stop hitting you.”

I don’t think Putin’s the type of man, nor the Russians the sort of people, who respond well to those sort of threats.  They don’t see themselves as the “bad guys” (an infantilization in any case) in Ukraine.  From their POV a democratic government was overthrown, and they’re supporting ethnic Russians in the face of a government which wants to impoverish them through unnecessary IMF reforms.

They don’t see themselves as in the wrong in Ukraine.  They don’t see themselves as weak.  They don’t like being threatened.  They don’t like Europe and the US acting as if they have the “right” to punish them for looking after their own interests in ways the West rarely hesitates to

The Ukrainian mess is one of those situations where I can’t see the stakes for the West being worth the game.  What is West getting from this?  For Russia, on the other hand, the Ukraine in the West’s pocket is a spear ready to be thrust home at Moscow. It destroys strategic depth.  And Ukraine was ruled by Russia for centuries, this is their sphere of influence.  This is important to them, the stakes are high.

Why does the West keep acti9ng as if the stakes are high for it?  Is destroying Russia’s ability to defend itself from NATO that important?  Is keeping Russia from having strategic depth that important?

If it is, and it’s hard to see anything else in Ukraine worth fighting over (any natural resources would be sold to the West if they wanted them); then it’s hard not to conclude that Russians should be alarmed, because all the West gets out of this confrontation which is important, is Russian weakness.


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43 Comments

  1. John Measor

    Indeed, power is as power does … they are gambling for pretty high stakes though.

    The other factor is maintaining the Atlanticist bent of EU policy – or preventing Germany from aligning with Russia (and the minimal chance of England leaving the EU).

    I believe you’ve nailed it though – its simply a power play – for relatively no gains = wasteful.

  2. markfromireland

    Not going to comment until I’ve had a chance to read a bit more. However for those who haven’t a paid Financial Times subscription and aren’t willing to register with them for the very limited free access there is a way of reading the articles in full without either parting with your cash or giving your personal details to yet another site:

    Google the headlines as follows:

    EU to weigh far-reaching sanctions on Russia

    and

    The EU’s confusing course on Russian sanctions

    Google will refer you on to the FT site.

    mfi

  3. Formerly T-Bear

    Are not economic sanctions a direct act of war?

    Come October, the dolts leading US/EU/Tel Aviv axis of evil may likely have their wish.

    It is likely to be a cold winter in the EU; but the US economy will thrive according to financial figure finagling, just like the employment fairytales show the latest recovery. American dreams for the zombie citizen.

  4. Celsius 233

    @ Formerly T-Bear

    Yes. Following a similar tack brought on the Japanese attack on Pearl Harbor.
    While not saying Russia would follow the same course; the sanctions most certainly will elicit a response that will not bode well for the west. Alas, the war drums do seem to be playing…

  5. John Puma

    You ask: “What is West getting from this?”

    You partially answer: “The practical effect would be to force Russian banks to raise money from China and the Muslim world.”

    Full answer: the sanctions newly proposed, and all before and to come, simply strengthen BRICS (42% of the world’s population) – the alliance against Western imperialism – and hasten the day it is joined by “the Muslim world” (another 24% of the global population).

    The West is smugly and sanctimoniously slitting its collective throat.

  6. Why does the West keep acti9ng as if the stakes are high for it? Is destroying Russia’s ability to defend itself from NATO that important? Is keeping Russia from having strategic depth that important?

    Don’t impute too much rationality to this. We’re talking about neo-cons here. 10-cent wannabe Hari Seldons. They have likely dreamed of a Russia with no strategic depth for decades. The American Century at last! It’s “rational” in a clever teenager kind of way.

  7. Now these aren’t nearly as sweeping as they could be, but they aren’t a joke. The practical effect would be to force Russian banks to raise money from China and the Muslim world. The cost would be somewhat higher.

    Yes, this latest set of “sanctions” is still a joke. Russia is a rentier state that lives and dies on the sale of hydrocarbons. That’s the money it raises. It doesn’t need Western banks when it has Nature’s bank. In case you haven’t noticed, Russia and its advocates brag about how it has so little debt compared to Western countries. That’s because its prodigious savings are buried in the ground beneath its feet. So yeah, this latest proposed round of “sanctions” is just more feckless window dressing. The artificially high price of oil is the bank that fuels Russia’s recent expansionist proclivities. Behind the scenes it’s still Business As Usual despite the media, alternative and mainstream, helping to conjure and stoke conflict where none previously existed. Strategy of tension is on full display — as always, and Putin’s Russia is playing its part marvelously.

  8. Dan Lynch

    What does the west get out of this? Psychopaths are motivated by power. It’s just that simple.

  9. John B.

    “…because all the West gets out of this confrontation which is important, is Russian weakness.”- our host

    yes. I think this is it. The US wants a Russia that grovels.

  10. oldskpetic

    Mandos, love that comment:

    “Don’t impute too much rationality to this. We’re talking about neo-cons here. 10-cent wannabe Hari Seldons. They have likely dreamed of a Russia with no strategic depth for decades. The American Century at last! It’s “rational” in a clever teenager kind of way.”

    Especially this part, which I will shamelessly steal and re-use…lol.

    “We’re talking about neo-cons here. 10-cent wannabe Hari Seldons. It’s “rational” in a clever teenager kind of way.”

    Because it really sums them up so well. After reading lots of their stuff pre and during the Iraq war (don’t do this at home folks it can really endanger your mental health) that’s the impression I get. A shallow ‘cleverness’ combined with a complete lack of empathy or ethics along with a total inability to think of consequences or to learn from the past.

    It amazes me just how influential they have become, because they really are total twits….But so many politicians find their ‘philosophy’ (triteness?) attractive, which says a lot about them. It is almost like an excuse for them to let out their inner sociopathy.

  11. Steve

    I think the West wants a new cold war and a new boogie man to help maintain the levels of spending on the military and a reason to increase debts. Not a “hot” war, where the bulk of resources are spent on men and material, but a new cold one like the last one, where money is spent on research for SDI systems that were never deployed. But instead of searching the skys for incoming ballistic missiles, the bulk of the money gets spent on surveillance of the populace. Besides, without an external enemy, what exactly is America’s purpose in the world?

  12. OldSkeptic

    There is still too little data and too much ‘noise’ to definitively work out what happened to MH-17. But I caught this in Vineyard site and it fits the known facts (to date) extremely well.

    One thing that surprised me was how quickly the ‘false flag’ fell apart (except in the western media of course). Though the Syrian gas one did pretty quickly too (if Seymour Hersh is correct, with significant help from the US Military) it might have lasted long enough to ‘justify’ the attack (only 2 days away apparently) without that ‘insider’ help. In which case it would have been moot and more that than likely the affected area would have been bombed to heck to eliminate any evidence.

    But right from the start the Ukrainian one started going wrong….

    Anyway I found this interesting:

    Anonymous Anonymous said…

    Look at this info: https://www.youtube.com/watch?v=UNW7kPmuXeohttp://anna-news.info/node/18766

    “From Vladimir Suchan \

    A fuller version of what happened starts emerging piece by piece. First, as I pointed out earlier, in one his daily battle reports, Strelkov or his associates indicated as if in passing that the Malaysian airliner, Boeing 777, was shot down by Ukrainian jet fighters. Then came the briefing by the Russian Ministry of Defense, which showed a Ukrainian SU-25 within 3-5 km from the Boeing at the very moment when the Boeing was hit. In the next four minutes, the Ukrainian fighter remained in the area. At the moment, when the Boeing was hit, it was also within the range of several Ukrainian Buk batteries, which were deployed close to Donetsk and then, just for that very day, 8km south of Shakhterskoye, which is also only several miles from the crash site.

    Today (July 23), Anna-News published an interview with a Russian Air Force retired colonel Aleksand Zhilin (????????? ?????) who is a frequent military commentator on the conflict in Ukraine. The most important information is stated at 2:00-5:00 in the interview.

    According to the colonel, at 16:19:45, a Ukrainian jet fighter targeted the Boeing with an air-to-air missile R-60. The missile damaged the right engine of the Boeing. The Boeing was hit, but still managed to stay in the air. However, in doing so, the Boeing turned 180 degrees to the left. It was at this moment that the false flag attack started falling apart. According to Zhilin, part of the plan controlled by the US with Ukrainian hands executing it was to have the Boeing crash past the southern frontline by the Ukrainian-Russian border. Had the Boeing fallen there, securing the crash sites with the troops in response to international pressure was on top of all else effectively allow Kiev to lift the encirclement of its brigades in the southern pocket by the Russian border.

    When, however, the Boeing started to turn in the opposite direction and was still apparently manageable, “the US-Ukrainian headquarters of the special operation panicked and order the Buk battery to destroy the plane in the air in order to pre-empt the possibility of the Boeing’s emergency landing.” A Buk missile was fired and the plane was then finally destroyed.

    The disclosure of the Russian electronic intelligence (in fact, only one part of it) on July 21 put the US against the wall. The existence of this intelligence and other data also means that the US cannot show the real intelligence, which they also have, including the data from their electronic warfare exercise SEA BREEZE 2014 and the data from their spy satellite, which just happened to be over the area during the downing of the Malasysian Boeing.

    The other relevant information, which the Russian colonel revealed, was that the Malaysian Boeing was insured for $97 million against damages or losses as a result of military actions.” From a post at Zerohedge. http://www.zerohedge.com/…/meanwhile-ukraines

    Does anyone know anything about this?

    http://nemolchu.ru/video/ukrainskaja-voina/streljali-po-boingu-vsu-s-territorii-podkontrolnyh-kolomoiskomu.html

  13. oldskeptic: I remember reading emptywheel’s Anatomy of Deceit and liveblogging the Scooter Libby trial. Remember him? And then remember the whole biz with Simone Ledeen (daughter of the great neo-con thinky-thinker) and the kidz team going to turn Iraq into a Randroid paradise on Earth. It was really obvious that all these people were living a late-80s Saturday morning superhero cartoon plot, yeah, with Junior Rescuer spinoff series, but without realizing that they were the cackling villains.

  14. scruff

    “yes. I think this is it. The US wants a Russia that grovels.”

    I think the explanation for the all-stick-no-carrot behavior can be seen if one simply generalizes from the typical behavior of contemporary American police officers (and as I recall Ian has written extensively on this before). There seems to be a pervasive self-righteousness and paranoia, and they do not see themselves as owing anything to the class of people over whom they have any authority. Not just that, but that they are a fundamentally different type of person, set apart from the normal rules of give and take. They demand, you give, or else.

  15. Everythings Jake

    Among other things (notably I guess the desire to exert global control), we must keep the war machine going. A new (old) enemy is rotated in since the propaganda (Zbignew’s “corralling public opinion” on Latin America is still temporarily stale and played out (although it’s still a great source of revenues from both the drug trade and the Drug War). As is now the Middle East and Afghanistan (although Afghanistan is back to being an extremely lucrative source of opium, which has always seemed to me to be the point of invading in the first place, what with the Taliban very happy and tried to hand over Osama to a third party).

  16. Gaianne

    Ian, your last paragraph is the key one. This is all about weakening Russia in preparation for turning it back into a resource colony, like it was during the Yeltsin years. As you say, the Ukraine War is about eliminating Russia’s strategic depth.

    I think the Russians understand this implicitly, which is why in Russia Putin is increasingly popular.

    This is not1962 and the Russians will not be blinking. The Soviets understood then that Cuba was not on their own border. The Russians understand now that the Ukraine is.

    –Gaianne

  17. Gaianne

    @ Old Skeptic–

    Wow! I had not seen that! It is certainly plausible: That is exactly how the neo-cons think.

    It will be interesting to see if this story gets confirming evidence.

    –Gaianne

  18. Greg T

    It’s precisely about weakening Russia. The US hegemon identifies Russia as a potential threat to global dominion. Thus, US policy is fundamentally aggressive. Even Nixon- Kissinger recognized that other powers had spheres of influence that should be respected. The current administration has no such regard.

    The NATO angle is important, I think. If the US can deploy short range nukes in Ukraine, they can degrade ( or so they think ) Russia’s retaliatory capacity in a nuclear war. This make a nuclear war theoretically winnable. Without the nuclear deterrent, Russia has no military answer to US hegemonic power.

    There is no way Putin, or any Russian leader will allow this.

  19. OldSkeptic

    Lots of interesting stuff from the Vineyard of the Saker site.

    This one is fascinating, June 18, Militia person being interviewed, telling how Ukrainian fighter planes were using commercial jets as shields.

    About 1 minute into the video.
    https://www.youtube.com/watch?v=aKKoKmUtQXE

  20. wendy davis

    J P Sotille found that Cargill, Monsanto, Chevron and other multinationals have some keen interest in Ukraine. Links inside this piece at his newsvandal.com.

    http://newsvandal.com/2014/03/on-the-corporate-foreign-policy-deep-state-at-work-in-ukraine/

    But given that the US government invested $5 billion over the past decade, as NED and USAID (CIA), you’ve got to figure it’s not all a neo-con Empire investment, but bidness. Look at the NED board, for instance.

    http://www.ned.org/about/board

    I’ve been working on a ‘drumbeats for war with Russia’ piece, and now the US is claiming that the Russians are firing into Ukraine, poised to bring more heavy weapons to the ‘terrorists’, Obama is sending DOD ‘advisors’ to Ukraine to help Kyiv, *and* listen to Martin Dempsey at the Aspen Security Forum.

    http://www.commondreams.org/news/2014/07/25/gen-dempsey-were-pulling-out-our-cold-war-military-plans-over-ukraine

  21. wendy davis

    I figured one more link might have sent my comment to moderation, but to OldSkeptic, more on the Russian monitoring intel. Even the WSJ posted some of it. With bias, of course.

    http://rt.com/news/174496-malaysia-crash-russia-questions/

    Stir in the BRICS development bank creation, NATO/EU surrounding, yes, I think the Empire has a lot of strong reasons to want Ukraine as its puppet, and to crush Russia and her influence.

  22. amspirnational

    The answer is certainly not worth much of an elaboration, if any, but can anyone advise me here why Dreyfuss over at The Nation, unlike S. Cohen, is generally so anti-Putin? Or am I
    just hitting his negative pieces?

  23. markfromireland

    Ian – the amount of links in my next comment will trip your spam filter. Sorry in advance for giving you extra work.

    mfi

  24. markfromireland

    Ian you describe these proposed sanctions as “not shabby” however while they are somewhat more serious sanctions than heretofore it’s only somewhat. The most serious ones are the ones on Russia’s financial institutions. Yes it’ll raise costs but will hurt London and Frankfurt including reputationally. It will also have the effect of encouraging Russia’s efforts to build an alternative. And as the FT article points out in the quote you’ve given if pushed they could retaliate and hurt any chances of European recovery quite badly:

    The proposal would not initially include a similar prohibition for Russian sovereign bond auctions out of fear the Kremlin could retaliate by ordering an end to Russian purchases of EU government debt, the document states.

    Also these measures would have to be agreed by all 28 members which I don’t see happening without a lot of acrimony. For more details if you’re interested see Leaked Russia sanctions memo: the details | Brussels blog :

    The arms sanctions are Europe shooting themselves in the foot at the behest of the Americans. They won’t hurt Russia. And indeed could wind up helping Putin’s modernisation drive (see  Russia has little to lose from arms embargo – FT.com

    Still, the Mistrals represent a rare example of Moscow turning to outside help when it comes to kitting out its military. As such, the effect of a western embargo could be limited.
    “[Blocking the sale] would be symbolic more than hurtful,” says Keir Giles, a Russian defence expert at Chatham House, a think-tank in London. “Russia is an arms exporter, not an importer. There has already been all this fuss in Russia about imports from abroad.”

    Indeed, since the Ukrainian crisis began to ratchet up international pressure on Moscow several months ago, the Russian defence establishment has become even more entrenched in its ambition to reconstitute parts of its defence industry that withered after the break-up of the Soviet Union.

    Most of Russia’s $81bn defence budget is spent internally.

    Since 2000, Russia has only engaged in 10 military contracts of any size from overseas suppliers: 4 light transport aircraft from the Czech Republic; 2 diesel engines from Germany; 8 drones from Israel; 60 light armoured vehicles from Italy; 3 light helicopters and 4 amphibious landing craft from France to complement the Mistrals; and from Ukraine, 264 engines, 34 transport aircraft and 100 guided missiles.

    Moreover as the FT points out (see: EU to weigh far-reaching sanctions on Russia – FT.com) "Many ex-Warsaw Pact countries still rely on Russian-made military equipment".  So far not so alarming other than as a statement of intent. What I do find alarming because it’s blatant aggression is the idea of targeting Russia’s energy development. That’s telling the Russians that America and Europe holds them in the same contempt they hold Iran. Not wise. If you try to strangle their economy and simultaneously point a dagger at their heart they’re going to conclude not unreasonably that you intend waging a regime change war in the not to distant future. Such a war is unlikely to end well for anyone and anyone who thinks that Russia will not strive to lay waste their enemies heartlands has never talked to a Russian soldier let alone a Russian officer. They take threats to their home and those who live there very seriously and they believe in playing rough. (See: Leaked Russia sanctions memo: the details | Brussels blog):

    For many involved in the debate – particularly the Obama administration – the energy sector is a far more important target given its centrality to the Russian economy. The measures under consideration in the document would restrict European sales of high-end energy technologies, which are similar to measures the US is working on. They would be very carefully targeted, however, and would only be aimed at long-term production so that it “should not disrupt current supply and trade in energy products”.

    So these putative sanctions are fourfold:

    1: Restricting access to EU capital markets by Russian state-owned financial institutions
    If you read the proposals you’ll notice that the brunt will fall on London and Frankfurt. Remember that the four largest state-controlled banks in Russia are: Sberbank, VTB, the Russian Agriculture Bank and VEB. Sberbank and VTB are both listed on the London Stock Exchange. I doubt the LSE will be happy to take a reputational hit.  Furthermore it’s not all clear to me how these sanctions are going to be tailored so that they also would hit companies such as Gazprombank, which is 100% owned by Gazprom – which in turn is state owned 50%.

    Which brings me to the question of alternative sources, in 2013 Russia issued €7.5 billion of bonds via Russian state-owned banks on EU markets. I don’t believe that refinancing such a relatively small amount  would be difficult if two markets in particular Singapore and Hong Kong  refuse to curb those firms’ access .

    2: Embargo on trade in arms
    So what? The arms embargo seems to me to be utterly pointless and will even hurt the defense preparedness of the EU’s eastern members. And for what? For nothing as the FT explains (see Russia has little to lose from arms embargo – FT.com):

    All of which matters little when it comes to US, EU and Nato efforts to dent Moscow’s military or economy as punishment for its activities in eastern Ukraine.
    Russia’s three biggest defence partners – absorbing 61 per cent of Russian exports between 2009 and 2013 – are India, China and Algeria, according to SIPRI data.

    Since 2000, the trio have bought $58bn of Russian arms, the think-tank estimates. The US has bought $16m.

    $16m? $16m isn’t even chump change.

    3: Restricting trade in dual use goods
    I’m not convinced that Russia has no alternative suppliers. I think it entirely likely that China will give  big "fuck you" to America and gleefully plunder all the patents it want to. It’s been their standard modus operandi up to now why should they change?


    4: Restricting trade in ‘sensitive technologies’ wprt the energy development sector
    See point 3 above.

    Finally the fact that these sanctions are forward looking is a major caveat, because it gives Russia time to diversify away in the direction of China in fact the measures on arms, tech and dual use both because they’re very imprecisely drafted and subject massive caveats could very easily undermine the EU and strenghten first China and then Russia.

    I think with this Ukraine situation we’re seeing something very alarming which is a complete utter and absolute inability of Western policy makers to even begin to understand the goals and objectives of such powers as Russia and China. If you recall

    Governments, politicians, and media in the "western" world seem incapable of understanding geopolitical games as played by anyone elsewhere. Their analyses of the newly proclaimed accord of Russia and China are a stunning example of this. If you recall what happened on May 16th last they announced:

    1: A "friendship treaty" that would last "forever" but was not (yet) a military alliance

    2: A gas deal, in which the two countries will jointly construct a gas pipeline to export Russian gas to China. China will lend Russia the money on very good terms with which to build its share of the pipeline the quid pro quo was that Gazprom made some not particularly onerous price concessions to China.

    Remember all that? On May 15th the Western establishment media printed ream  after ream after ream of complete absolute and utter shite about how such an accord was impossible. Then it happened and the Western establishment media printed ream  after ream after ream of complete absolute and utter shite about how it wouldn’t make much geopolitical difference. Yes it will, it will make a massive difference because it’s perfectly clear to anybody except apparently the American government and its collaborators in Europe that Russia and China are highly averse to the  United States’ and European suggestions that America and its allies should get directly officially involved in the Ukrainian civil war and ultimately that they become militarily involved. Ukraine is not Syria it’s far far far more important than that and Russia will go to war over it if they have to. If Russia goes to war because the Americans and their assorted catamites in European capitals force a war upon them they do so knowing that they have China’s backing and support both overt and covert when they do so. America is in no position to fight a multi-front war in Ukraine, Northern Europe, and Asia.

    If you think about it it’s pretty clear that what China and Russia want is a Renversement des alliances with Russia and  Germany becoming close partners leading ultimately to a Berlin – Moscow – Paris axis. And what China wants is to simultaneously tame the USA and reduce its role in East Asia ideally they’d like to do this while simultaneously strengthening China’s economic links with the US. It also wants the US to help it prevent Japan and Korea becoming nuclear armed powers. Could such a renversement work? Yes but getting there won’t be easy. Let’s take the Russian-German alliance first.

    The advantage to Germany of including Russia within the Western European sphere would be:

    1:  The consolidation of its customer base in Russia.

    2: Securing German access to long-term energy supplies and other raw materials not least of which is wheat.

    3: Incorporation of Russian military strenght as an instrument of German long-term strategic planning. An alliance between these two fundamentally conservative powers would be to the benefit of both and would have the advantage for Germany of enabling it  to hasten NATO’s demise and the creation of a post-NATO European order in which Germany takes its natural role as a leading state. Impossible? No, not at all impossible, there’ll be one hell of a push back, within Germany and the Poles and the Baltic republics will throw tantrum after tantrum about it but ultimately does anyone in Berlin really give a toss about what the government in Warsaw thinks when there’s such a clear and sparkling opportunity for Germany? The same applies to German consideration of what the three Baltic pygmies want if it comes to the point of screwing the Baltics or screwing their own interests the Baltics – not for the first time in their history are going to be kicked down and then kicked again to keep them down.

    The Russo-Chinese "friendship treaty" has concentrated certain minds in Berlin, Frankfurt, AND MUNICH wonderfully. They see a glittering prospect slipping away and alarm at this has strengthened the position of those who say that Germany’s long-term survival depends not on NATO where it’ll never be anything more than a subservient satrapy but on working closely with its natural allies in Moscow.

    I’ve outlined above What the Chinese want so the question arises is there a corresponding desire in the US? If you look at the prevailing ideology amongst Washington politicians and think tanks you might be tempted to think that the prospects are nil but that’s less the case when you look at what’s in the interest of the major commercial structures who need access to Asia far more than Asia needs access to them.

    Both China and Russia in other words want to encourage Germany and the US to move in directions useful to  them and this "friendship treaty" is one of the tools they’re using to accomplish this. They have everything to gain and absolutely nothing to lose and given that they have absolutely not lose and everything to gain the question becomes one of how the debate in Berlin and Washington will play out in the medium to longterm. For obvious reasons I’m most interested in Europe’s future and so for me of the two debates it’s the debate in Germany that’s the most important. So I’ll deal with the emerging debate in the US first just to get it out of the way.

    Jacob Heilbrunn  had an article in the LA TImes you can read it in full here The German-American breakup – LA Times I’m going to quote just a part of it:

    What’s more, leading German politicians are calling for reassessing negotiations with Washington over a transatlantic free-trade agreement that could be vital to the economic futures of both Europe and the United States. And Interior Minister Thomas de Maiziere announced that Berlin would terminate a no-spy agreement it has enjoyed with the U.S. and Britain since 1945 and begin monitoring them in Germany. As Stephan Mayer, a spokesman for Merkel’s party, put it, "We must focus more strongly on our so-called allies."

    So-called? Such statements, unthinkable only a few years ago, accurately reflect a broader antipathy toward America among the German public, which largely sees Snowden as a hero, particularly for his revelations about the extent of American surveillance in Germany.

    Ever since the Bush administration launched the Iraq war in 2003 — which then-Chancellor Gerhard Schroeder vehemently opposed — many Germans have come to view America as a militaristic rogue state, more dangerous even than Russia or Iran. Indeed, a recentInfratest Dimap poll indicates that a mere 27% of Germans regard the U.S. as trustworthy, and a majority view it as an aggressive power. Indeed, a recent
    Infratest Dimap poll indicates that a mere 27% of Germans regard the U.S. as trustworthy, and a majority view it as an aggressive power

    Emphasis mine. Heilbrun concludes by saying:

    "If Obama is unable to rein in spying of Germany, he may discover that he is helping to convert it from an ally into an adversary. For Obama to say Auf Wiedersehen to a longtime ally would deliver a blow to American national security that no amount of secret information could possibly justify."

    I think that Heilbrun is being both optimistic and pessimistic. Pessimistic in that his cri de coeur isn’t going to be listened to in Washington and pessimistic in that from what I can make out in convesations with German friends and colleagues the process of German relations moving from being allied to America to being an American adversary is well underway. Including – particularly, in those sections of the German establishment who have heretofore been America’s most loyal allies. The article is worth reading in its entirety (see Druckversion – Germany’s Choice: Will It Be America or Russia? – SPIEGEL ONLINE – News – International ) but it’s more than a little telling that Der Spiegel is printing things like this:

    During an interview in his heavily secured office, Ambassador Emerson* says he comes from the financial industry, an industry in which a rule applies that is also valid in politics: "Satisfaction is expectations minus results." Emerson’s apparent implication is that Obama was already fighting a losing battle when he came into office — the Germans’ expectations were simply too high.

    Emerson doesn’t deny that a few things have gone wrong in recent years. But at the end of the day, he adds, the decision to maintain close ties between Germany and the West should be obvious. Which country has a free press? The United States or Russia? Which president takes a stand and is willing to discuss the limits of intelligence activity with the entire country? Obama or Putin? "We share the same values," Emerson says, and that must be emphasized again and again.

    The Last Straw?

    This may be true in theory, but in practice Europe and America are drifting farther and farther apart. This is even evident to people like Friedrich Merz, whose job description includes keeping the divide as narrow as possible. Merz is the chairman of the Atlantic Bridge, a group that has promoted friendship between Germany and the United States for more than 50 years. At the moment, Merz is busy promoting the trans-Atlantic free trade agreement. "The agreement would be a sign that Western democracies are sticking together," he says.

    But even a conservative advocate of the market economy like Merz is often baffled by what is happening in the United States. Merz welcomes all forms of political debate, but when he sees how deep the ideological divides are in the United States, he is pleased over Europe’s well-tempered form of democracy. Responding to the new spying allegations last Friday, he said: "If this turns out to be true, it’s time for this to stop."

    America Has Become Unattractive

    To put it differently, it has become uncool to view America as a cool place. Only a few years ago, for example, the post of head of the German-US Parliamentary Friendship Group in the Bundestag was a highly coveted one, filled by such respectable politicians as former Hamburg Mayor Hans-Ulrich Klose. Today it is less desirable. After the most recent parliamentary election, Philipp Missfelder, the head of the youth organization of Germany’s conservative sister parties, the Christian Democratic Union (CDU) and Bavaria’s Christian Social Union (CSU), decided to resign from his post Coordinator of Trans-Atlantic Cooperation and assume the position of CDU treasurer in the state of North Rhine-Westphalia instead. For Missfelder, managing party finances took a priority over a once attractive trans-Atlantic post.

    (* incredible though it might seem Emerson the Ambassador to Germany can’t speak a word of German.  The Americans’ casual contempt for their allies in appointing somebody without any German as Ambassador to a major strategic diplomatic post has not passed unnoticed in German political circles – mfi).

    When somebody like Friedrich Merz says "it’s time for it to stop" not you will note that "it’s time for us to have a frank discussion" just a flat out ""it’s time for it to stop" then you know that not only are American-German relations in crisis but that even if they manage a temporary reconciliation the structural dynamic between the two countries is irreparably altered. What’s important is that the problem is structural. The individual missteps borne of American complacency and arrogance aren’t important although they’re interesting in and of themselves what’s important is that the breach is structural and thus irreparable.

    The basic structural problem is that America is no longer a viable hegemon. It’s been visibly in geopolitical decline for quite some time now and American politicians and policy makers are utterly incapable of coping with this fact. Most of them can’t even accept it let alone handle it competently by minimising American losses. So they keep on flailing about trying do the impossible which is to restore the status quo ante and repair the irreparable. American hegemony or "leadership" to use the term American politicians and policy makers prefer is over.

    But the American inability to cope with this simple fact is what makes America so very dangerous because it leads Americans to believe that they can engage in the sort behaviour appropriate to a hegemony at the height of its power without even the possibility of adverse consequences to  themselves. This is why there are so many calls by America to "act" and to "lead" the American policy elite is labouring under the impression that America is still "indispensable" to use Albright’s expression. Very reluctantly the German political elite – and Chancellor Merkel’s party and their allies are coming to realise that the greatest threat to their survival is no longer from the East but from the West.

    They’re coming reluctantly but ineluctably to realise that American actions are going to be increasingly at variance with underlying realities, with European well-being,  with European prosperity, and even with European survival and are likely to be increasingly erratic. The United States has committed the one unforgivable crime it has become "unreliable". And so the Germans  are looking for an alternative and the logical and natural alternative is a European concert of nations that includes Russia. It will be slow and hesitant for the first few years but it’s the way Germany is moving. There are all sorts of issues to be decided such as if German geopolitical survival means they can no longer trust Washington how are they going to trust Moscow? How sweet does the deal they offer Russia have to be? It has to be sweet enough that the Russians will find it in their interests to abide not only by its letter but by its spirit.

    The debate has moved on from how to repair relations with Washington that was yesterday’s problem today’s problem is how to cosy up to Russia. That is what’s being discussed in Berlin, Frankfurt, and Munich in intra-elite German policy discussions and those discussions are taking place because of the irreparable breach of trust with the United States that the American government and policy elite initiated.

    mfi

  25. Celsius 233

    @ mfi

    That post was a tour de force; thank you. Anybody with an operational brain knows America is overstepping AND underestimating the world at large. The MH17 blame game was just embarrassing, not to mention incompetent. Foolhardy comes to mind.
    Again, thanks…

  26. Celsius 233

    Arrogance and incompetence are a very bad combination and the unequivocal support of the Israeli incursion into Gaza has won no friends for the American foreign policy.
    A true and telling sign of decay/rot from within…

  27. Excellent post by MFI. I read Western European media regularly, including Spiegel, and I can definitely see that the mood in continental Europe towards the USA is souring. When the Snowden thing broke, it didn’t blow over; European, particularly German public opinion is still choking on the idea of Merkel’s phone being tapped. And the concept of higher heating bills just to play a stupid Cold War game against Russia is not going to be very popular either…

  28. mfi – Your post echoes my worldview at the moment nicely, and the details in your analysis were very illuminating. Thanks for doing the work.

  29. I suspect the objective is the struggle for markets. EU and to a lesser extent US are pursuing a neo-mercantilist strategy, to offset the effect of domestic austerity policies. Germany, in particular, needs to find new markets because the “captive” EU market is in danger of drying up thanks to the stingy monetary policy. Russia is holding out because, well, Russia is a far bigger market than Ukraine, and to lose Russia would in no way be compensated by “winning” Ukraine, whose economy is in any event being annihilated by the civil war and Russia’s own economic warfare. This, in my view, is holding back the EU (though not the US), and the knowledge Russia can turn to other capital markets, and other suppliers of high-tech goods (I’m sure Samsung would welcome it if the Russian iPhone market dries up), or seriously invest in some large-scale import substitution which so far was not economical, given the easy access to Western imports and capital.

  30. EGrise

    Excellent post, mfi!

  31. OldSkeptic

    Overall agree with you MFI, but this is a medium to long term strategy.

    In the short term there is a considerable array of forces determined to get into a conflict (economically or militarily …or both) with Russia and as soon as they possibly can.

    The US foreign policy elite (of course).
    The EU bureaucrats.
    NATO commanding elite.
    Most EU military and national security elites, virtually to a person their first loyalty is to the US (inc Germany, raising the specter of a coup if the politicians go too far).
    Western Media.
    UK political elites.
    Most of the eastern EU (and NATO) members political elites.
    Western Ukraine and their political elites.

    The last two are surprising since it is their territory that would be turned into radioactive rubble first in any serious conflict. But it is explainable in that their elites are totally subverted by the US.

    So, at the moment, the ‘Asiaists’ are seriously outgunned in the power game by the ‘Atlanticists’.

    One of the concerns is the total subversion by the US of most European military and national security elites. The EU has demonstrated that it will kill democracy in EU countries (troikas and all that) merely because of economic reasons. I don’t think they would hesitate for a minute to do the same (along with NATO) over a country trying to separate from the US/NATO line.

    So in the short (and now increasingly dangerous) term there is going to be considerable internal tensions is many countries over what direction to follow. And there is no guarantee that the EU satraps won’t willingly self destruct for the sake of their US ‘masters’.

    The US’s ultimate wet dream (apart from a radioactive smoking Russia) is for the EU to end all gas and oil purchases from Russia, of course totally self destructing economically…but that is a bonus from the US’s point of view. A totally crippled Germany would be all to the good from their point of view these days.

  32. Celsius 233

    @ mfi

    What is your opinion of the Vineyard of the Saker? He’s a Russian with great English language skills.
    http://vineyardsaker.blogspot.com/2014/03/today-every-free-person-in-world-has-won.html
    He seems a great source of information regarding Russia/Ukraine. Cheers

  33. Celsius 233

    The sanctions will not work. What would the west do if Putin just went into Ukraine and stopped the western madness? My guess, nothing. Nothing but puff and bluster. Everything I’m reading gives Putin the upper hand. Sanctions will hurt the EU and ultimately America as well.
    America has corporations (big corporations) in Russia, how about them being nationalized?
    The U.S. is playing a weak hand and trying to bluff a guy who doesn’t bluff, because he knows what is what. MH-17? It’s still possible it was shot down by a Ukraine fighter or a ground to air BUK via Ukraine.
    My amateur assessment is the U.S. has vastly over-played it’s very weak hand and is trying to bullshit (bluff is too weak a term) its superpower position to leverage.
    It ain’t going to work because the world at large is waking up to America’s bullshit, no?
    And Putin ain’t no sissy…

  34. VietnamVet

    MFI thanks for the great post. We should be clear, the United States is now at war with Russia; the shooting just has not started yet. Corporate media is in full blown propaganda mode the likes I have never seen in my lifetime. Right Sector Nazis are America’s boots on the ground. Ukraine is still compressing the insurgent’s area of operations. Russia can’t let Donetsk fall and millions of ethnic Russians massacred or placed in concentration camps. The Ukraine civil war is on the direct path to intervention by Russia and then NATO in response. This is 1914 all over again.

    Since 1945 there never has been a shooting war between two nuclear powers because it will inevitably lead to a nuclear weapons exchange. Mutual Assured Destruction (MAD) is still real even if ideologues on one side in this conflict are insane and believe the USA can win a nuclear war.

  35. markfromireland

    Thanks to all for the kind comments – to answer some specific points:

    @ OldSkeptic:

    Yes it’s medium to long term. But it’s been building for a long time, not so sure I agree with you that the German elites have been completely subverted patriotism is respectable again in Germany – and not before time. A mix of profit and patriotism can be very compelling.

    @ Celsius 233

    I read the Saker’s blog – there’s a lot of good information there. A lot of this is wait and see. Once winter comes particularly if it’s a hard winter Putin’s hand becomes a lot stronger. It also depends very much on how incompetent what I suppose we have to call loyalist forces are. So far they seem to have been doing very badly.

    @ Vietnam Vet

    There’ve always been a significant number of Americans who’ve believed that America would survive a nuclear war and advanced plans for winning it.

    mfi

  36. OldSkeptic

    MFI, good points and this is so true “A mix of profit and patriotism can be very compelling.” …lol. Yet another good line that I shall also shamelessly steal and re-use elsewhere.

    I totally agree that what you propose is how it is going to end up (unless we are all radioactive dust that is). The logic is too compelling.

    I also totally agree that the economic elites are far more ‘Asiaist’ and increasingly anti-US, not the least because of US economic policies since the GFC, the endless chaos that it is creating around the world (as Pepe Escobar calls it, the Empire of Chaos), as well as the current pressure on Germany to ‘economically fall on its sword’ to suit the US.

    Their political elites will in the end do what all of them do..follow the money.

    But the modus operandi of the US has long been to subvert the national security/military elites, which it tends to be remarkably successful at. So I’ve been watching the start of a clear out of the NS people there with great interest. Finding and prosecuting spies is a wonderful way of pulling these people back into line.

    I just have a gut feeling that is those sort of moves that are going to be key factors in the internal power struggle to determine Germany’s direction. We shall all wait and see with great interest.

  37. markfromireland

    @ OldSkeptic July 28, 2014

    Steal away and with my blessing 🙂

    All of that is true however you also need to remember the structure of the armed forces. They’re citizen soldiers and German pride and German patriotism is very much on the increase – no bad thing either. I think the process is starting despite Merkel. It probably won’t be until the next generation of politicians and policy makers come into their own that the process will start in earnest but at that point we’ll see a strong convergence between the civilian policy, military policy, and indigenous economic elites.

    It’ll be very interesting to see what goes on in the CDU from about 2016 on and I’m not just talking about von der Leyen and de Maizière I’m talking about the layer just under them and on whom they rely for support.

    Seeing Germany really assert itself against the Americans is a consummation devoutly to be wished but then I’ve never hidden my belief that Europe needs to cut loose from the US and the UK. A Berlin – Moscow -Paris axis would be ideal in this regard from my POV the three small ‘c’ conservative powers acting in concert to preserve European independence particularly economic independence would be very good for Europe.

    mfi

  38. OldSkeptic

    “…. three small ‘c’ conservative powers acting in concert to preserve European independence particularly economic independence would be very good for Europe. ”

    And the World.

    More than military/etc things the destabilising impacts of US economic policy (zero rates, endless money pumping, etc) is seriously damaging the whole World’s economy. The serial ‘asset bubbles’ that keep getting created on the wave of cheap $US, apart from anything else, are causing all sorts of malinvestment and speculation all over the place.

    And as they endlessly crush their working and middle classes, the role of the US as the ‘consumer of last resort’ is fading. From being ‘the market’ is is now declining to be a ‘big, but not the only market’ and will become increasingly less important.

    Plus the ever greater willingness of the US to use economic weapons against even its close allies is starting to scare the crap out of people. From occasional now it has become almost an automatic reflex over just about anything.

    It’s totally misusing its privileged position as the reserve currency and clearing house .

    So a more stable economic regime for the World will benefit us all, because they are not going to get any better, they are just going to get worse.

  39. markfromireland

    @ OldSkeptic July 28, 2014

    All true particularly about the bubbles. The increasing financialisation of the US and UK economies is doing them more and more harm but that choice was theirs so I don’t care. What I do care about is that they’re doing everybody else harm including, particularly, the country where I live. I care about that deeply.

    It wouldn’t do any harm at all for there be another reserve currency. Nor would it do any harm for Europe to concentrate on manufacturing high value added products. It also wouldn’t do any harm at all for the US and UK speculators to be hurt and hurt badly. I do not buy the “too big to fail excuse” nor do I buy the idea that the increasingly predatory American buy out and asset strip firms should be allowed get away with it. They add nothing to Europe’s economy on the contrary they damage it. Unrestrained ‘free trade’ coupled with IP is nothing more than a framework to enable the US and UK to rape the planet the trade is in any case very far from free and the use of IP has strayed far from the original intent.

  40. hvd

    Although I absolutely agree with you about the necessity of there being a counterweight to the increasingly disastrous U.S./U.K. financialist hegemon, I’m not so sure I’m happy with having the Germans lead the charge. They haven’t exactly been kind to their southern tier partners in the euro. And have, in fact, shown every bit as much the propensity for going for the jugular as has the U.S./U.K. Of course there isn’t much of an alternative at present.

  41. markfromireland

    @ hvd

    What I’m describing is realpolitik to use a German word not happy families, of course they went for the jugular international politics is about power not principle. You can dress the EU up as much you like in feelgood fripperies but the fact is that it’s primary function remains unchanged from the days of Schumann, Monet, and Adenauer to tie the two Western European superpowers together so closely that they can never again devastate the continent by going to war with each something which prior to that they had been doing once a generation.

    mfi

  42. Formerly T-Bear

    @markfromireland 28 July 2014

    First: would wish to add kudos to your comments above, well done.

    Second: “… to tie the two Western European superpowers together …” leads to an observation about the power of the words being used. Here the adjective super(power) removes scale, whereas the older version ‘Great Powers’ retains a scale between large powers. It is not so easy to presume omnipotence of the held powers or to assume dominance of the possessed power. If anything, when the Washington, Wall St. axis of evil began referring themselves as a sole hyper-power is when the wheels started falling off their buggy.

  43. markfromireland

    @ Formerly T-Bear July 28, 2014

    Thanks. Re: Terminology I did consider saying “Regional Super Power” but even ‘though it’s very clear it’s also very clunky. I think your suggestion of going back to saying “Great Powers” is a good one and am going to adopt it.

    Agreed on ‘hyper power’ it does seem that once imperialists get too busy boasting about it to be able to secure it properly their power starts to slip away.

    mfi

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