Russia’s Gazprom has told customers in Europe it cannot guarantee gas supplies because of “extraordinary” circumstances, according to a letter seen by Reuters, upping the ante in an economic tit-for-tat with the west over Moscow’s invasion of Ukraine.
Dated 14 July, the letter from the Russian state gas monopoly said it was declaring force majeure on supplies, starting from 14 June.
Known as an “act of God” clause, a force majeure clause is standard in business contracts and spells out extreme circumstances that excuse a party from their legal obligations.
So, Europe and Germany get gas in exchange for rubles. But Russia can’t spend those rubles for most of what it needs from the West.
The question is, does Europe, especially Germany, need gas more than Russia needs rubles and an increased exchange rate (not always a good thing)?
Everyone has been concentrating on the winter and assuming Germany didn’t need much gas until then, but a great deal of Germany’s electrical grid is supplied by natural gas plants, and as you may have heard, there’s a heat wave in Europe and most of the rest of the world.
So much for air-conditioning. And if much of Germany’s industry will have to shut down as well.
Germany can lose a huge chunk of its industrial base if this continues. The whole “keep buying gas from Russia until we can transition off of it” idea was always dubious, because other gas is much more expensive, but it also rested on the idea that Russia was desperate to keep selling; that there was a symmetry of needs.
But Russia will suffer a lot less without sales than Europe will without gas, and in any case, a shutoff will likely increase the price of gas they are selling elsewhere, making up some of the losses.
The fact is that Germany, an industrial state without a lot of resources, and Russia, a resource state, are natural economic allies, but Germany needs Russia more than Russia needs Germany.
The companies who have been given notice that of force majeure are saying they don’t accept it, but what are they going to do?
The grace period for payments on two of Gazprom’s international bonds expires on 19 July, and if foreign creditors are not paid by then the company will technically be in default.
This is a non-threat threat, because Russia has already defaulted on loans, as it is largely shut out from the Western banking system and thus can’t even transfer the money. (As happened to Argentina.) More defaults theoretically mean that Russia will be unable to access Western loans and so on, but they already can’t, and they have access to the Chinese banking system, which is larger than any Western country’s and perfectly capable of keeping Russia and Russian companies afloat.
Understand clearly that most Germans and Europeans support the anti-Russia sanctions. This is a popularly backed policy: Europeans are paralyzed by fear of Russia and were long before Ukraine. I had a friend in Austria tell me how he scared he was of Putin back in 2016.
We will, however, see what the result of this is. I would guess that in the short-term, it will stiffen opposition to Russia, but I’m less sure about the medium- and long-term. German elites, especially, will feel a need to end the Ukraine war and get back to a steady Russian supply.
No matter what, however, it highlights the price Europe is paying for its anti-Russia stance.
VietnamVet
Nuclear armed Russia and NATO are in a proxy world war in Ukraine with consequences that the western dismantled governments are fundamentally unable to cope with. The Ukraine War must stop. If not, the world war will escalate uncontrollably like 1914.
Since the western financial system is built on exploitation of people and the environment, the present dangerous reality is simply not acknowledged. Either there is a new Iron Curtain of entrenched defenses in depth built from the Black to Baltic Seas and alternative energy and mineral supplies to Russia’s found, plus conservation enforced, or tactical nuclear weapons will be used to stop the other’s side’s invasion of Poland or Crimea.
The current western system is incapable of peaceful coexistence or halting climate change.
The Accountant
Russia can’t exchange Euros for Yuan. The Eurosystem run by the ECB won’t allow gazprombank to make the transfer of Euros to the Chinese entity.
All Russia can offer China is a “RuskiEuro” account with Gazprombank. The Russian equivalent of a 1970s Eurodollar.
Ian Welsh
Hrrrm. If this is true, then I misunderstood the situation. However, if so, it also means that Russia really has zero use for Euros, since they almost can’t spend them. In which case they have essentially nothing to lose by cutting Europe off.
brian wilder
Yves Smith of NC advises that the force majeure letter may have a very narrow application to one or a few specific gas utility customers, perhaps cases where Gazprom assets have nationalized (stolen) or (my thought) the gas transits Ukraine. As per usual, the non-business press dramatizes.
Of more practical significance is the contrast between the “performative” nature of the NATO/EU policy versus Russia’s pursuit of facts-on-the-ground in the absence of any opportunity to negotiate diplomatically an agreement.
Russia has been scrupulous as far as I know in keeping to agreements to supply oil and gas as well as to meet debt obligations on international bonds issued by entities like Gazprom.
The struggle between Russia and the “Collective West” is over whether their relationship will be governed by negotiated agreements — both commercial and diplomatic — or by the games played under “a rules-based international order”.
The “games people play” flavor of the EU Cool Kids trying to freeze out the despised and feared Ruskies and finding out to their surprise and dismay that that their “cancel culture” tactics are backfiring because the “reality” of economic resources and military capability matter, while the manipulation of propaganda and symbol manipulation and pretending and fantasy and gaslighting create illusions of power — it all speaks to a whole ruling class caught up in a bubble of their own making, where they do not know how their economies work or what the consequences are for the populations for which they are responsible.
Ukraine under Zelensky took the lead in declaring a committment to non-negotiation of anything (which built on his government’s refusal to implement by Minsk II) and the whole EU followed that same line. Every round of sanctions from the EU has come without any hint of the conditions or circumstances that might lead to their being lifted. It is as if the behavior, let alone the interests, of Russia simply do not matter.
The childishness of canceling Tchaikovsky concerts or barring Russian tennis players from Wimbledon reinforces this sense of the whole thing being carried forth at the level of Middle School politics. But, substantively, what is being ruined on the Western side is trust that agreements will be kept. The “gotcha” of technical default on international bonds in foreign currencies induced by central banks freezing reserves and excluding most Russian banks from SWIFT is egregious and bound to backfire. Germany “nationalizing” Gazprom subsidiaries and reneging on Nordstream 2 is provocative. The sanctioning of “oligarchs” because of a fantasy that Putin cares or is some kind Mafioso capo di tutti i capi (and which fantasy ignores the Russian people’s attitudes toward the ex-patriate oligarchs, not to mention the drain they place[d] on Russia’s financial capital — it all speaks to an EU leadership class that cannot think realistically.
Tallifer
Related to this topic, I can recommend this 360-page outline of the history of the Ukraine which I have recently read. It is written by an academic, but clearly for a popular audience, since it provides only a bibliography for each chapter instead of endnotes. https://www.goodreads.com/book/show/25255053-the-gates-of-europe?ac=1&from_search=true&qid=rmky2xHf1j&rank=1
Purple Library Guy
I thought they were insisting on being paid in rubles. What happened to that?
Keith Newman
It is my understanding that Russia is in fact able to buy much US+its satellites’ stuff except for certain targeted items like computer chips and food. In any case these sanctions are a plus for Russia’s long term economic development. It will be forced to develop its own industries and know-how rather than take then lazy route of depending on imports.
NL
“the other’s side’s invasion of Poland” — well, as I mentioned before, the Russians will call NATO/US and ask it to move a little bit away from the Polish troops, so that they can hit the Polish without hitting us — and we will… cause the alternative is very bad.
Going to the comment regarding population mobilization from the previous post — yep, the oligarchies can not mobilize the population, because they command no solid loyalty and operate through a simulacrum of political discourse. It is acknowledged that WWI and WWII (together with the existence of the alternative social system represented by the Soviet Union) had contributed to the establishment of the social state here and in Europe as a way to gain loyalty from the population. But later on, the oligarchies decided to disentangle themselves from appeasing the demos, as they always do. There will be no hot war with China…
Putin’s oligarchic regime’s war seems to provide some loyalty in time of economic dislocation and the inability to deal with the pandemic. And it enjoys positive approval, unlike here where our regime is not doing so well in terms of public approval.
NL
“Russia can’t exchange Euros for Yuan.” Right, cause Euros (at least those used for gas but not yet for oil as far as I know — but this can be extended to anything purchased from Russia) must be exchanged for rubles on the open exchange before the rubles are used to pay for Russian gas, hence no Euro accruing to Russia’s energy companies. And of course, who will sell rubles to European companies — other Russians mostly who need Euros to buy something from Europe (or none Russian entities who got paid in rubles and want Euros). In this mechanism, the cost of gas is aligned with the Russian need for Euros to buy something from Europe. If no one in Russia needs Euros, then there are no ways to get rubles — or the ruble climes through the roof, as we have seen.
Then of course Russia and China have currency swap agreements and some such…
Ian Welsh
Corrected the article for my stupid mistake about Euros. Sorry folks, given how much I’ve written about the subject I should have remembered.
In other news, moving into my new place on Thursday. That wouldn’t have been possible without the emergency help many of you gave, and I appreciate it more than words can convey. Thank you.
(Also a nicer place, managed to find a tiny (very tiny) but cheap bachelor in a fairly good location. Shower, cooking is limited (no stove, but a small sink. Comes with hotplate, I’ll probably buy an Instapot.)
Posting may be a bit scattered/slow this week as a result.
NL
Finally, as I also mentioned before, a country really needs dollar reserves to protect itself from a debt trap attack by the western financials via the country’s financial elite or from a psychological attack against its propertied classes, whereby a prospect of wealth expropriation is invoked to induce massive transfer of wealth abroad and emigration of the country’s wealthy (e.g., as when more social leaning leadership is elected). The West now refuses to lend to Russia, hence no possibility of the debt trap attack, and the west telegraphed that it will expropriate the wealth of the Russian oligarchy, hence the flows of money from Russia abroad have stopped and even reversed. This is the second major reason for the ruble appreciation. Overall, Russia need not dollar reserves anymore (but China does, cause watching their romantic TV dramas about private equity investors suggests to me that China will either travel along our historical path or have another cultural revolution/re-education moment in their history soon).
In effect, those countries that developed self-conscious ‘grand’ oligarchy (like Russia) have built up dollar reserves to protect themselves. While ‘petty’ oligarchies like those in most Latin American countries don’t bother and happily attach western debt to their state budgets and then move on to happily live the rest of their days in Florida. When that condominium building collapsed in — whatever it was, it turned out that ~2/3 of the owners there were relatives of the current and former Latin American so-called leadership…
Z
Janet Yellen was chirping out threats yesterday that countries that break with the current “international economic order” (((U.S. Dollar System and SWIFT))) will face serious consequences which I take as a warning primarily to the Global South in case they are thinking of reneging on their debts to the West and opt fully into the BRICS instead.
Someone in the State Department today “revealed” that Russia has plans on having referendums to annex their captured territory in Ukraine. Shocker! Then I read that the U.S. are sending even more HIMARS and also long-range missiles (300 kilometer range) that can hit Crimea and also reach deep into Russia. It looks like the U.S. plans on using the threat of U.S. weapons to get the best deal they can when and if Ukraine comes to sue for peace. I don’t think it will work.
The State Department official also mentioned in an ominous tone that even if Russia does get their referendums through and annex those territories that they “may” have a tough time controlling them and I’d imagine that the CIA will do their very best to fund terrorism and insurgencies in those territories. Which makes it imperative that Russia also gets regime change in whatever is left of Ukraine and get laws past to keep the U.S. out of Ukraine.
Our rulers never had a Plan B and won’t back down from their Plan A because they’ve been spoiled by their previous privileges to be the world’s banker, prosecutor, and judge.
The Europeans better try to bring an end to this for their own good and the rest of the world’s, but I suspect most, if not all, of them are compromised, particularly Scholz.
Z
Lex
All of the west’s plans are backfiring spectacularly, but nobody in charge is actually capable of rising to the moment of their own creation. So they just keep pulling the trigger.
Astrid
Is Ukraine the Amber Heard of countries?
Jorge
The only good thing about all this is the latest NeoCon war, that it may lead to the complete renunciation of the NeoCons.
Eric Anderson
A bunch of crabs in pot of water too focused on brawling to notice that the heat radiating from the brawl will cook us all to death before they can beat one another to death.
Prediction on the post? There’s too much bad blood b/t the Slavs and the Teutons. Germany will take it in the pants economically but ultimately be fine by resourcing supply. The world is going to split in two again and the entire economic deck is going to reshuffle. As such, it doesn’t matter what the current state of economics is. The economic arguments have always been a dog and pony show for elite power anyway — an answer always seeking a question. Bolton was actually in front of all this with his Monroe doctrine stance. The resources the west needs will be stolen from S. America when push comes to shove … which it will.
Unless of course a nuke touches off. In which case “I guess it doesn’t matter anymore.”
https://www.youtube.com/watch?v=fpKQOvlDr-s
Just walk me out in the morning dew.
Z
Another important flashpoint to the current geopolitical turmoil is that yesterday Russia, Iran, and Turkey agreed that the U.S. must leave Syria as soon as possible so it sounds like they are ready to give the U.S. the boot if they don’t. Russia is probably tired of the U.S. taking potshots at it through their proxy Ukraine and feels justified in taking some shots back at them.
This preceded the State Department’s revelation that Russia plans on annexing parts of Ukraine with referendums and then their add-ons about the dangers of trying to control those areas and the announcement of sending more HIMARS and longer range missiles for them.
–
Our rulers try to toss guilt and shame trips on Iran and China for even considering selling Russia weapons, but then they so heavily fortify the Ukrainians.
–
Then we got Speed Queen Nancy P insisting on her vanity trip to Taiwan.
–
Our rulers refuse to minimize the damage of their folly of tossing the U.S. dollar’s supremacy into the pot and now they plan on bullying and threatening their way through this mess even though it only increases the chances of darker consequences.
Z
Tallifer
Good to hear that finding an apartment is not impossible where you live, Ian. Even here in small-town New Brunswick, Canada, rents are ridiculous, mostly pushed upwards by out-of-province real-estate investment management firms. Perhaps we shall see a return to the multi-generational living that typified the days of my parents’ youth.
Z
Putin is constantly, and correctly, talking about the Fed’s and the EU Central Bank’s role in the economic mess the world is in:
https://twitter.com/imetatronink/status/1549762255134535681?cxt=HHwWgsDR-euj7oErAAAA
Z
Art
Germany went big for Russian fossil fuels because they bought into the, not entirely ridiculous, argument that trading between nations tends to harmonize relations and moderate extremes. That, and the stuff was reasonably priced and relatively convenient.
As with most things dealing with extremes it isn’t always clear which system is driving.
Germany has gone through worse and they were moving away from fossil fuels in a big way. Russia playing hardball is simply going to highlight the abuses that can be heaped on by suppliers on dependent nations. Sovereignty is going to be as big a factor as reliability and constancy. Global warming is still thought of as a tertiary issue. It has to do with insults to ego and short-term growth compared to an impersonal world-wide problem that doesn’t confer any personalized insult or reliably exploitable competitive advantage.
I think that’s a stupid way to think about it but pending my coronation as lord, high master of the universe I can’t do much about it.
As for Ukraine. Two pretty obvious points. Ending the war here is going to drive bigger conflicts. Everyone pays more. I say we give Ukraine anything, short of nukes, it wants. Take what they ask for and double it. $40B is a joke. Trump gave away many times that in tax cuts to billionaires. Musk could donate five times that and still be a billionaire.
Russia has already lost. If every pro-Ukrainian combatant surrendered today Russia is still in a pickle. Look up how many troops would be required to occupy Ukraine.
But assuming that goes swimmingly Russia has to make up what it spent conquering Ukraine. The path of conquest and exploitation are well known. Rebuild, put the population to work, plunder resources and tax the peasants.
Until you can get that system up and running Ukraine, remember we are talking about a nation larger than California but slightly smaller than Texas, all these upkeep and rebuilding costs will have to be paid for by Russia. Russia. With a GDP roughly the size of Italy. That’s going to be a heavy lift. Assuming no resistance.
Can we assume no resistance? Ukraine is awash in high explosives, and hands-on type creative people who know their science and engineering. They might cooperate with rebuilding but I can’t any pipelines, ports, or
chemical plants remaining unmolested for long.
It has been pointed out that Russia, relatively rich in natural resources and land, but with a small population (145M) wants Ukraine’s people. I’m not sure taking up housekeeping with 41M people who hate you is a wise move.
Of course the biggest blow to Russia is the truth of Obama’s statement that Russia is a ‘regional power’. Russia isn’t a major player. Every Russian tank destroyed, every Russian helicopter shot down, every Russian missile expended is one less that Russia can use as a threat. By some counts Russia has expended 40% of its conventional military power. Many of its best units are expended.
Russia has a limited ability to rebuild. The higher tech weapons systems are essentially irreplaceable without outside help. One credible explanation for why the Russian air force has been missing is a lack of ECM pods. Another is that Russia can’t produce the fan blades for the higher performance engines they depend on so they are husbanding their engine hours. By one source, even low tech rocket motors may be a problem. Seems there are only two factories and they are using them far faster than they can be replaced. Yes, there is a huge stockpile. Much of which is very old. Some of that improperly stored.
Germany, and several other western nations, are in for a rough patch. They will back and fill as needed. There is even talk of restarting a couple of nuclear plants. Start of next year a LNG plant should be ready for tankers. These are resourceful people. On all sides. They will adapt.
Astrid
Shorter Art: Europeans freezing to death, global south starving to death, fighting to the last non-USian…totally worth it.
Astrid
(Just what is worth the blood and treasure of many nations remains unmentioned in Art’s narrative. Amazing!)
different clue
@Keith Newman,
Yes, the past and present sanctions ” against” Russia are demonstrating the superiority of Protectionism against Free Trade. These sanctions were based on the feeling that Russia and the Russians had/have such a deep cultural/economic inferiority complex that the prospect of not being permitted to buy various Western luxury goods and other inessentials would make them cry all day and all night and cry themselves into surrender.
In fact, they decided to treat the sanctions as a form of Protectionism imposed from without, and they have been diversifying, deepening, broadening their various industries behind the West-imposed Big Beautiful Wall of Protectionism. As the Free Trade Western countries freeze, starve, sicken and die over the next couple of years, the superiority of Protectionism over Free Trade will become more and more obvious. And the Western media will try to hide it more and more and more from the mediocre masses who settle for MSM input. But eventually the pain, hunger and frostbite will get so bad that even the mediocre masses of the inferior majority will start looking for reasons, answers, and a way out.
Ché Pasa
Pretty much says it all.
From the beginning of this escapade — poking the bear, shall we say, and continuing to poke it –it’s had the feeling of 1914 encore. Given the stupidity of the West and the intransigence of the Bear, this is nothing to cheer on.
As for Ukraine, the stupidity is breathtaking. Prior to the invasion, the situation for most was poor and getting worse. The invasion caused millions to flee (how many, exactly, is an open question.) They are being integrated into the rest of Europe (East and West) and they are unlikely to return. Why would they?The place is a shithole with or without Russians.
In effect, Ukraine is being depopulated, emptied, cities and industries destroyed, and if the conflict ever ends, there will be little need to rebuild after the demolitions are complete.
All military age (16-60?) Ukrainian males are theoretically conscripted to fight and die for Slava Ukrainia, and apparently they’re doing so in some considerable numbers. These lost men are not replaceable, at least not with so many Ukrainian women scattered across the West.
The plan, to the extent there is one, seems to be to make large portions of Ukraine uninhabitable for the short term, rearranged for the medium term, completely different in the long term. This is true for both the West and the Kremlin. Ultimately, it seems, the idea is to remake Europe in perpetual opposition to Russia, though as many have pointed out, the opposition makes no sense as there is a natural affinity.
Of course the underlying Western plan has long been to conquer and carve up Russia for the use and pleasure of the Overclass, and much of the bloodlust we’re seeing in the West has to do with that objective. The Kremlin knows these plans — they’re very much out in the open after all — but their choice to go all Mongo on Ukraine to throw a spanner in the works is likely self-defeating. There’s no winning in this kind of scenario.
Dig far enough below the surface, and it’s a clash of oligarchic egos just as WWI was a clash of squabbling royalty — all of them incestuously related. The troops and auxiliaries and mercs, are just meat fodder. The rush of weapons into the conflict fills the coffers of other oligarchs, so whatever happens is all-good from their point of view.
It’s all disheartening, unnecessary, and pathetic. Yes, we’ll adapt — those who survive — it’s what we do. But it didn’t have to be this way.
mago
Few commentators cite sources backing their assertions. It’s mostly opinion posing as fact.
Perhaps Art could provide substantiation for his claims, given overwhelming evidence contrary to his preconceptions.
Lex
@ Astrid, right!?
@ Art, Russia has it’s fair share of issues but you’re way off base on a lot of that. Gas is imperfect, but gas was an important part of a European transition to greener energy because gas is a lot greener than coal. It also allows balancing the grid with renewable energy because of the short ramp up/down time of gas generation. Europe isn’t speeding the transition to renewables without Russian gas, it’s scrambling to secure more costly sources, restarting coal plants and talking about burning wood. And Russia wasn’t using it as a weapon. Russia wanted long term contracts, Russia was fulfilling all the contracts until quite recently and legally, they still are.
Here’s the thing, Art, Russians and Russia aren’t evil. They’re just people that make up a state. They don’t all agree. Putin isn’t anymore evil than any other world leader. In a lot of ways he’s less evil since he apparently actually cares about the people who live in Russia at least a little. Did you know that Russia’s first response to the sanctions was to increase the minimum wage, the living wage, pensions and welfare payments? As far as I can tell, Joe Biden still owes me $600 he promised. His promises to Ukraine will end the same as his promises to me.
You should get to know the Russian people better. You could use some of their cynicism because your idealism is callous to suffering.
Eric Anderson
As I was saying:
https://twitter.com/KawsachunNews/status/1549834456353185797
Watch it happen.
None of you play Risk, do you?
different clue
@Art,
Russia doesn’t have to occupy Ukraine. Russia just has to make a desert and call it peace. Russia just has to degrade Ukraine so badly that it can not function as a platform for NATO presence or operations.
Probably Russiakraine will be neutralized one way or another for several decades to come, and Galiciakraine will be turned into the True Nazi Banderazovistan of the EUropeans’ deepest not-to-be-spoken-aloud dreams. And True Nazi Banderazovistan will be used to advance Nazi movements all throughout EUrope over those same next few decades.
Marcus Gardner
Just an on the ground observation re: Germany. My wife is German and we just got back from visiting there. Her family is from a village on the outskirts of Cologne that was massively flooded last year. Had to rebuild everything on the bottom floor. In the process, they had the chance to install a heat pump, but opted not to, and are now regretting it. Apparently with the gas shortage, everyone’s buying heat pumps in Germany, and nobody can get them anymore. Her dad is not poor. Also, most people have wood burners in their house/apartment, but wood, also, is scarce. She told me how he drove like 160 Km for 2 x 1 meter squared (not cubed) of wood. Which is like enough for…a month maybe? Curious to see how it plays out.
Eric Anderson
So much fire in the comments and so little light.
I’ve been saying for some time we’re looking at a global hegemon whose slowly being backed into corner economically. We are in the opening stages of the resource war to end all resource wars.
There is virtually nothing, not a thing, (zip. zero. nada) that keeps the U.S. from taking everything from our southern neighbors. Hmmm, gee whiz, no nuclear powers down there. How perfectly convenient. Then, the U.S. controls two massive continents full of resources with two giant oceans in between that just happen to contain the Panama canal. Now who’s in control?
And all the babes that can’t take their eyes off the shiny object the press parades in front of them playing checkers while the MIC is playing global chess. This isn’t about Biden. You honestly think elected officials run this country still. Babes and shiny objects. Wake up. This is Real Politik.
Eric Anderson
P.S.
This is not an endorsement. It’s just clear eyed objective thinking. Read what Bolton wrote. Dude has no compunction. Think like a sociopath and you won’t be surprised.
Z
If Speed Queen Nancy P has already bought a new “super cute” outfit that she thinks would look great with the Taiwanese flag in the background, I’m not overly optimistic that dopamine fiend will call off her trip to Taiwan even if it significantly raises the risk of worldwide nuclear annihilation. She’ll likely take her, and our, chances on a hunch that it won’t happen. She’ll go with her gut.
Z
someofparts
Sooner rather than later, events will be proving people like Art wrong, along with so many others like him in our communities. When that happens, how hard will it be for the lizards who rule us to persuade him that the rest of us belong in labor camps?
bruce wilder
@ mago: “Few commentators cite sources backing their assertions. It’s mostly opinion posing as fact.”
I truly wish I had reliable sources to cite or facts against which to test a favored narrative, but I do not.
The floodtide of propaganda is overwhelming and jounalists do very little filtering out of disinformation these days.
But, even worse, many policymakers entrusted with official authority seem to think their job begins and ends with managing the narrative, not controlling the real political conflict or the real pandemic or the real energy transition or the real processes of climate change or the real economy that is producing homelessness and destitution or health care system that doesn’t care.
I do not especially blame Art. His delusions were gifts from above. But none of us are getting much truth to work with.
Z
Eric,
I suspect this is not revelatory for most readers of this site.
Only the hundreds of millions of people who live in those countries …
Z
NL
I don’t get why people romanticize Russia and its oligarchy. The only thing that comes to mind is that some among us dislike our home oligarchy so much that they yearn to be ruled by the Russian oligarchy – the grass is greener on the other side. Seems to me both oligarchies aren’t good for the ruled. Of course Russia has already lost. Why did the Putin’s regime start the war in Ukraine specifically now? — various answers are offered, e.g., the Ukraine was going to attack the rebel territories — but Ukraine did the same in 2014 and that time Putin did not attack the rest of Ukraine and support for rebels was half-hearted. A more reasonable explanation is that the regime needs an issue specifically now to unify the population around itself in the face of deteriorating economic conditions and the inability to deal with the pandemic. That’s maybe the reason for the slow progress — i.e., the duration of the pandemic…
My view is that overall we seek a détente, but this love-hate relationship does not prevent us from nibbling on the opponent here and there and likewise from the opponent’s side. An interesting dynamic is evolving: why we may be willing to fight Russia to the last Ukrainian, the collective East is showing willingness to fight us to last Russian. Evidence — reported interest from Russia and offer of drones from Iran (Russian military is organizing now so-called military-humanitarian deliveries of, among other things, civilian purchased drones to the troops), a Russian ambassador boasting about North Koreans helping rebuild Ukraine, and of course the Chinese assisting Russia economically. That is a potential worry – why we are weakening Russian and the East may get the idea of weakening us — those guns we send to Ukraine are one fewer gones we could use in the East.
someofparts
I’ve been wondering about South America too. Not entirely inclined to assume it is a fait accompli just because of proximity, although clearly that very proximity is a factor against it when it comes to being safe from the U.S.
I assume the approach would have to be devastation at the level we visited on places like Libya and Iraq. Diplomacy would not be an option, because nobody takes us seriously anymore on that front. Coups and sanctions and debt traps would also not be enough, because we are already doing all of that and those nations are still standing. So we would need to do a Libya on most of South America if we wish to plunder at will. I’m sure our misleaders would be fine with doing that and have no problem persuading the U.S. public to cheer them on.
The question would be how would the declining power of the U.S. stack up against the growing power of Eurasia? The U.S. rules by visiting destruction everywhere. Eurasia rules by building networks of cooperation. After we turn the entire western hemisphere into Libya on Steroids, how wealthy and powerful will we be? Meanwhile, as Eurasia becomes more powerful, what kind of capacities will they have that we can’t even anticipate, much less match?
rkka
“I don’t get why people romanticize Russia and its oligarchy.”
Russian oligarchs no longer dictate Russian internal policy, like they did under Yeltsin. Russia’s oligarchs, the only actual beneficiaries of the ’90s economic “reforms,” predate Putin, but no longer dictate policy to their advantage, the way, say, Berezovsky did.
“The only thing that comes to mind is that some among us dislike our home oligarchy so much that they yearn to be ruled by the Russian oligarchy ”
Again, Russians are no longer ruled by their oligarchs, though they certainly were under Yeltsin, and back then, Russia was helpless, bankrupt, and unstoppably descending into social catastrophe & strategic irrelevance due to their untrammelled looting & offshoring. Western demographers in the mid-90s were predicting a Russian population of 131m by 2005.
Still not there!
Astrid
NL,
Perhaps I’m being naive but I don’t think the Chinese and Iranians are using Russians as canon fodder. Sure, they’re happy to see the West exhaust itself in the Ukraine and see Russians discover effective counters to Western weapons systems, but the Chinese MOF and media are not cheerleading the Russian SMO. Every step of the way, the Chinese are scrupulously maintaining neutrality on the matter. What you’re reporting are offers of support from countries whose interests align with Russia and who see a cooperative future with Russia. They didn’t dictate anything to Russia or call for more belligerence. This is nothing like what we see on the Western side towards Ukraine.
Whatever Russia and China and Iran is or is not, it’s hard to imagine that their governments are more oligarchic or less responsive than what the West has been suffering under. After the last two years of US insanity, I would move to China (terrible weather and air, terrible contemporary cultural output with a few exceptions, terribly expensive in tier 1 and even tier 2 cities) in a heartbeat. 10 or 15 years ago, I used to feel a sense of unreality when talking to my Mainlander friends in China. These days, that unreality is far more apparent with my American PMC friends than the Chinese ones (though still plenty of magical thinking there, especially on real estate and childrearing).
Astrid
PS-hope Ian’s move went well and he’s more comfortable settled into his new and improved digs.
Astrid
Thinking about NL’s comment some more, I think Iranian and North Korean actions are more because Western sanctions on Russia has now freed Russia to do business with pariahs without fear of Western reprisals. So it’s not about these countries prodding SMO onwards, just new opportunities for mutually beneficial arrangements between various pariah states.
By bigly sanctioning Russia, the West has essentially nullified all its sanctions against Iran, North Korea, Syria, Venezuela, etc.
Trinity
“why people romanticize Russia and its oligarchy”
I’m not sure who is romanticizing Russia, but what I do know is that any opposition to the planned global empire is a good thing. Meanwhile, Brittney Griner (WNBA basketball star) remains in jail in Russia. If anyone is romanticizing Russia, they aren’t doing their homework.
“My view is that overall we seek a détente”
By “we” if you mean the West, I would not suggest putting any money down on this bet. But it wouldn’t surprise me if Vegas has a line or two in this regard.
@Bruce, the only thing we can do is watch what they actually do, putting pen to paper, traveling to foreign countries, etc., and almost never what they say. Their actions speak louder than their words. “And sometimes inaction speaks louder than both of them.” — Matthew Good.
bruce wilder
I agree with Trinity about
three1.2 cheers for resisting the decadent neoliberal American imperium. Beyond that I cannot muster much partisan “romance” for a war of brutal, murderous destruction.What I cannot stomach is the righteous ignorance behind “the narrative” that insists Putin cannot have reasons beyond his evil nature as Hitler of the Week and Ukraine cannot in many respects be in the wrong, both in its failure to try equitably and realistically to resolve the civil war ongoing since 2014 thru negotiation and in its conduct of the war with Russia. Yes, Ukraine may have countenanced egregious war crimes.
I would not personally argue that Russia’s turn to the arbitration of armed conflict is “justified” but the failure to even acknowledge Putin’s fears and grievances as real is not helping any in the West to assess or manage the situation. Zelensky made a series of aggressive moves against Russia’s interests in Ukraine, from denying Crimea water to talking up acquiring nuclear weapons to use against Russia, while failing to respect or implement the Minsk II accords. If a detached observer looks carefully, I think there are many reasons Putin may have felt he should roll the dice at this moment and it may be worthwhile to explore those. The experience of Armenia with Azerbaijan’s Turkish-drone equipped forces, for example, may have triggered alarms for the Kremlin. That is just one example of a factor not much considered because the mainstream media features only Kagans, neoliberals and fairytales.
I am not much impressed by the political & military analysis I have seen from either the mainstream (lots of disinformation, like “Putin has cancer”) or the various YouTube generals who try to make something of Ukraine forces “trained to NATO standards” or the supposed quality of Russia’s hodgepodge force of contract regulars, mercenaries and local militia.
NL
“Russian oligarchs no longer dictate Russian internal policy” – evidence please. My evidence to the contrary is that many of Yeltsin’s cronies and the shock therapy masterminds are still in power in Russia, starting with the one and only Mr. Putin. The Yeltsin’s privatizer in chief Mr. Chubais had headed Rossnano until 2020. Then when this war began he departed for Cyprus, where he is sitting and waiting to return and assume leadership of some other Russian state-private enterprise. This guy is the strangler of Russia and Russians — how many people have died because of his policies? Millions. The same people who became rich under Yeltsin by robbing the state and people are still rich today! Example in chief — Mr. Roman Abramovich.
What does Russia stand for? How is their worldview different from ours? I will give you this, there is a chance that the Yeltsin/Putin oligarchy will lose the power as a result of the war going badly. Beyond that, one needs to ware some rosy rosy glasses to like Russia and the Russian oligarchy.
NL
Astrid “I don’t think the Chinese and Iranians are using Russians as canon fodder. ”
And you answered your own question: “Sure, they’re happy to see the West exhaust itself in the Ukraine and see Russians discover effective counters to Western weapons systems,” and I wrote ’emerging dynamic”, the motivation is there, the full dynamic will emerge soon.
“but the Chinese MOF and media are not cheerleading the Russian SMO. Every step of the way, the Chinese are scrupulously maintaining neutrality on the matter. ” — The ‘neutrality’ is an illusion. One can’t be ‘neutral’ — the so-called neutrality is obviously playing to the Russian support, cause Russia remains not isolated and can rely on export of oil and gas to China and hence preserve its economy. My reading of the Chinese sources is that they understand their interests clearly — what have that Chinese guy say when hearing about the US position — help us to fight your friend, so that we could fight you better…
Don’t feel sorry for Russia or Ukraine, they have brought it on themselves…
Astrid
Interests are interests. But that’s very far from saying the Chinese or Iranians are prodding or can prod the Russians to the SMO, which is how I read your statement. My impression is that the Chinese would be happy to wait another 5 years to ween themselves off of the dollar and build out their Belt and Road further.
More to the point, unlike the always confident West, the Russians and Chinese know there are no guarantees in war (Sino-Vietnamese war and the first Chechen war were sure things until they weren’t). The West was confident that they could lure Russia into a quagmire in Ukraine and destroy the Russian economy and then Russian state. So I think the SMO was considered with appropriate gravity (and Russia spent 8 years trying to avoid it). It was crossing there Rubicon, no going back win or lose
Obviously, the Chinese neutrality is also because they don’t want to be seen supporting separatism, since they care about messaging consistency on Xinjiang, Tibet, and Taiwan. If Russia had failed in Ukraine, Russia/China/Iran and their allies/clients would all have the Western boot on their necks for the foreseeable future, after spending decades of resistance. They saw what the West did to Iraq, Syria, Yemen, Libya…
I don’t think I romanticize war, especially brutal modern industrial warfare, but Russian conduct so far seems to me much more justified, methodical, and lawful than anything the West has attempted since…Korea? There’s a very sound argument that the Ukrainian regime has been waging genocidal war against ethnic Russians in Donbass and Lugansk for 8 years, contravening their Minsk II commitments. Russia did stop in 2014 to give peace a chance and West/Ukraine kept waging war on a largely civilian population. If this isn’t a reasonable justification for war, are you saying that no “offensive” war is ever justified so the Russians of Donbass and Lugansk should just die if they can’t fight off the Ukrainian Banderites by themselves? I guess the few westerners who know if their plight might murmur a few useless condemnations against the Banderite regime and maybe even their Anglo backers, but the Russians in eastern Ukraine would still be dead or ethically cleansed. Sure, Russia acted now in this risky venture because their core interests are being threatened, but that doesn’t remove the preconditions of eastern Ukraine or the realness of the suffering of the people there.
NL
Astrid, you are denying but then abundantly confirming my point. I don’t know whether this kind of strategic ambiguity is intentional. The following screams “when the need be, China will nudge Russia to fight to the last”:
“If Russia had failed in Ukraine, Russia/China/Iran and their allies/clients would all have the Western boot on their necks for the foreseeable future, after spending decades of resistance. They saw what the West did to Iraq, Syria, Yemen, Libya…”
“here’s a very sound argument that the Ukrainian regime has been waging genocidal war against ethnic Russians in Donbass and Lugansk for 8 years” — No, the Ukrainian regimes have wage war on the Russian-identifying population for 30 years!! since Ukraine declared independence in 1992. Right after that, Nazi-leaning Ukrainians from the west of country began arriving to the center and east areas and teach Russian hatred. Things like “what is better than a dead Russian? — A fresh dead Russian everyday”, “we will never be free until we kill all the Russians”. When this was ongoing and many in Russia were horrified, the Yeltsin/Putin oligarchy was too busy stealing public property. My view is Chinese philosopher-rulers understand what Russia is and what it is useful for.
Further, I am beginning to think that Sun Tzu is an elaborate Chinese propaganda to put the West to sleep.
Finally, the Chinese TV show that glorifies private equity investment is is available on viki.com with English Translation where it is called “master of my own” and iqiyi.com where it is called “call me director” 请叫我总监 , a very interesting watch.
Astrid
NL,
Ethnic Russians suffered disadvantages in most former Soviet republics, but they still could vote and retain their culture in Ukraine until Maidan and there were strong ties between Russia and Ukraine. Russia had expectations of keeping things under control and above board with their economic levers. Banderites were not a popular option in all of Ukraine, not in 2014 or 2019, when Zelensky was overwhelming voted in as the peace candidate. I have a lot more sympathy for both Russians and Ukrainians in this conflict, they’re both suffering now because of a Western instigated coup supporting the worst elements of Ukrainian society. Left to themselves, things would be imperfect like Belarus but nothing like what’s happening now.
I think people have a tendency, after losing their initial idealism, of conflating realism with cynicism. That because Russians and the Chinese governments act realistically and not up to a purity standard demanded by Western liberals (who mouth condemnation of their governments occasionally but then reflectively support every misadventure as soon as a humanitarian pretext can be invented) and leftists, they overlook that these governments are still acting in a demonstrably better and more lawful way, and that this difference is noticed by people outside of the West.
Hard pass on modern Chinese soaps. They’re all terrible and usually very cringy to watch in Chinese. The scripting and overall level of acting is very poor. And they don’t necessarily reflect where Chinese society is heading (which changes every two years anyways). My impression is that the under-50s don’t consume much of tv anymore and has moved to online content. The Chinese do have some well presented prestige drama series, but I feel even those have declining in quality. I would rather watch 1980s TVB productions for (dumb but) fun, or read, or watch Solar Opposites or rewatch Hannibal. So much good stuff easily available right now, no reason to settle for so bad it’s almost good again Chinese tv.
NL
Astrid,
Voting is blah, which is exactly why the Ukrainian-Russian could vote even in the last election of 2019, and — as you write — overwhelming voted for Zelensky, who is figure-heading their extermination now – poor schlubs do not know any better. The issue has always been forced Ukranification, economic suppression (taking money from the East Ukraine to develop the West Ukraine, unwillingness to develop Crimea), prosecution of Russian language and culture and threats of genocide. And all of these things started in the 1990s.
Like I wrote before, no pity for either side, the so-called Western Ukrainians, who used to be called Ruthenians, took dissolution of the Soviet Union as an opportunity to apply the same genocidal approaches to drive Russians, Cossacks and people without identity from the East of Ukraine as they had used to drive Polish and Jewish people from the West Ukraine and to gain for themselves what the Nazi Germans called Lebensraum. The East Ukraine could have built a prosperous country — like South Korea — but lacked work ethics, were completely corrupt and would rather sell their inheritance than work and accumulate wealth. Some of the Eastern schlubs have bought into being superior to Russians and the rest of people. Instead of working, these Übermensches were marching with torches, enjoying their feeling of superiority. Now their meet is fertilizing the Eastern fields. Meanwhile the Russian oligarchy was too busy robbing their own country, building ginormous yachts, bribing English private school and lavishly living in London, the French Rivera, Switzerland, etc. No one comes out positively in this story.
Astrid
NL,
Yet somehow the Russian government is capable of doing things that their population wants and improving their common people’s lives year on year.
In any case, I suspect that Russian oligarchs in the West will not be much of a thing after 2022.