VT: Should the US continue helping Turkey steal Syrian wheat to make up for probable shortfalls from Ukraine?
From Anti-Spiegel – February 28, 2022
In a report on Sunday, Russian television raised the question of whom the sanctions war that is now beginning will hurt more.
In this emotionally heated atmosphere, I must point out once again: I do not translate reports from the Russian media because I want to engage in Russian propaganda, but because I want to show how this or that topic is reported on in Russia. It often happens that I translate reports on which I completely or partially disagree. Therefore, I always mark these translated reports as translations, because I am not the author of the reports, I am only the messenger.
This note was necessary in view of the heated atmosphere, although I would like to add that I agree with almost all points of this report from Russian television on Sunday about the upcoming trade war.
The West makes no secret of its desire to destroy Russia
President Vladimir Putin met with businessmen on Thursday evening. Everyone is aware that Russia is facing difficult times. Businesses will have to operate under sanctions. On the other hand, regardless of the events in Ukraine, new anti-Russian sanctions would have been imposed in any case. After all, those who impose sanctions against us are not interested in Ukraine at all. For the Western countries, Ukraine has always been only a tool to contain Russia.
At the same time, unlike its Western partners, Russia has no intention of destroying its own economy or that of other countries.
“Russia remains part of the world economy. Therefore, we do not intend to harm the system of the world economy, of which we ourselves are a part. Therefore, I think that our partners understand this and should not set themselves the task of pushing us out of this system. Nevertheless, there will be restrictions, also for political reasons,” Vladimir Putin said.
What conditions will the business community have to work under? A report by our Germany correspondent.
In the second half of the week, Ukraine disappeared from the headlines only once, when Angela Merkel’s wallet was stolen in a store. She was the first of the German chancellors to have such a thing happen to her. Otherwise, the media knew only Ukraine and Russia. Aggression and war.
On Thursday, Chancellor Olaf Scholz – for the first time in the eight years of bloody conflict – made the following comments: “All this is happening not far away from us, but here in Europe. Just two hours away from Berlin by plane, families are sitting in air-raid shelters. Women, men and children fear for their lives.”
Recently, at the Munich Security Conference, he denied the genocide of Russians in the Donbass, calling it ridiculous. But if he himself or his aforementioned predecessor had just once shown so much compassion for the innocent residents of Donetsk or Lugansk, if Ms. Baerbock or the Maas or Steinmeier who preceded her at the helm of German diplomacy had at least once threatened Kiev with sanctions for not implementing the Minsk agreement instead of promoting its sabotage, there would be other news than this today.
“We already have a complete blockade of Russian banks. So business relations with Russia are practically over,” said German Finance Minister Christian Lindner.
“We will react very clearly: This will destroy Russia,” German Foreign Minister Annalena Baerbock stressed.
This week, the EU adopted two packages of anti-Russian sanctions from Tuesday to
Friday. For the first time, individual restrictions were imposed on Vladimir Putin and Sergei Lavrov – they will not be barred from entering the territory of the EU, but their assets will be frozen. However, all are aware of the symbolic nature of the action: Putin and Lavrov have no assets in the West. Neither does Sergei Shoigu – his name is also on the sanctions list. In the financial sector, Alfa, Otkritie, VTB, Sberbank, Rossiya and Promsvyazbank banks have been sanctioned Brussels today announced the freezing of euro-denominated assets of the Central Bank of Russia.
“As financial sanctions restrict Russia’s access to key capital markets, we are now targeting 70 percent of the Russian banking market. But also key state-owned enterprises, including the defense sector. And these sanctions will increase the cost of credit in Russia, raise inflation and gradually undermine Russia’s industrial base,” the head of the European Commission, Ursula von der Leyen, is confident.
In the industrial and transport sectors, the sanctions apply to Aeroflot, Russian Railways, Kamaz, Sovkomflot, Sevmash and Uralvagonzavod. Some 60 companies from the military-industrial complex are on the list. The European Commission plans to cut high-tech exports to Russia – from semiconductors to aerospace products – by more than half.
The British Foreign Office says London will not rest until Russia’s economy is destroyed. The British government was the first in Europe to close airspace to Russian aircraft, including private planes. Half of the NATO countries followed, including Germany, whose airspace was closed for three months, and Italy, as well as Sweden, Finland and Austria. As a countermeasure, airlines in these countries must now change their routes to Asia. They will be several thousand kilometers longer and will cost passengers a significant additional price in euros. But no one is thinking about that now, in the sanctions frenzy.
“We have to continue with this to strangle the Russian system,” said French Foreign Minister Jean-Yves Le Drian.
Everyone is now supposed to join the campaign against Russia; even the government of the unrecognized province of Kosovo has joined the general chorus in support of Ukraine’s territorial integrity. This was rejected by Serbian President Vucic, a country where, according to him, 85 percent of the population will support Russia under any circumstances. This is Vucic’s response to Ukrainian Ambassador Aleksandrović’s demand that he condemn Moscow’s actions:
“I ask you to call on the President of your country, Mr. Selensky, to publicly condemn the cruel and tragic aggression committed against Serbia by the US, the UK, Germany and some other countries. I am sure that he will do that. And when he does, I will gladly do what Mr. Aleksandrović has asked me to do. It is in our interest to stay on the European path without jeopardizing good relations with Russia and China,” Vucic stressed.
He is one of a few, the majority are burning bridges – enthusiastically, of course. There is already a third sanctions package on the table and a radical proposal: to disconnect Russia from the SWIFT interbank system.
“We are talking about the fact that through this system Russia pays for imports and receives money for all kinds of exports, including energy. SWIFT is not unique, there are alternatives, even several, but for European companies it is practically the only mechanism for interaction with business partners in Russia. So shutting down SWIFT means deploying ‘nuclear weapons’ on your own territory,” said Bruno Le Maire, French finance minister.
“Suspending SWIFT would be technically difficult to prepare for and would also have a huge impact on payment transactions in Germany,” said Steffen Hebestreit, a spokesman for the German government.
That would mean Germany, which is heavily dependent on Russian gas and coal, would lose the ability to pay its bills, meaning a complete break in energy cooperation with Russia and a crisis for everything. The Wood Mackenzie energy consulting group makes an apocalyptic prediction for this eventuality: the end of economic growth and the destruction of state budgets.
“If all Russian gas were cut off, Europe wouldn’t stand a chance. We would be faced with a catastrophic situation in which gas reserves would tend toward zero next winter. Prices would be exorbitantly high. Industry would have to shut down. Inflation would skyrocket. The European energy crisis could well trigger a global recession,” Ekaterina Filippenko, chief analyst for European gas research at Wood Mackenzie, told CNBC.
The apparent doubts of several countries’ governments, including Italy, about the need for such sacrifices have had a calming effect on the market, which was shaken earlier this week by news of the moratorium on Nord Stream 2 certification in response to Russia’s recognition of the People’s Republics in the Donbass. From $1,600 per thousand cubic meters, prices have fallen to around $1,100. However, the issue of commissioning the new pipeline seems to be off the table for the foreseeable future, which lowers the chances that gas prices will at least come close to pre-crisis prices. Especially since European gas reserves are already below 30 percent. The Americans will be happy to make profits – that’s what it’s all about – but neither they nor all the alternative suppliers combined will be able to make up for the gas shortage with liquefied gas supplies.
“Europe has been very active in using gas storage facilities during the winter period. They were filled at the old prices, including with Russian gas. But now they come out of the winter with empty storages. The price on the market is incredibly high. What to do? Continue to buy American liquefied gas and store it for the next winter and thank them? Have Europeans grown so fat in their years of happy living that they are willing to experiment in this way? Hardly,” says one expert.
But Germany is under pressure and can be crushed, just as arms deliveries to Ukraine were pushed through. The day before, it was announced that 400 German-made antitank systems would be delivered via the Netherlands. The U.S. wants to impose a war of attrition with Russia on Europe. Die Zeit” asks the right question: Who is better prepared for such a confrontation? And it is not only about energy sector revenues and foreign exchange reserves of $643 billion, but also about the fact that Russia has drawn conclusions from the sanctions wars.
“After the EU sanctions, Putin imposed a food embargo on the EU in 2014. Since then, Russian agriculture has thrived in isolation, and Russia is largely self-sufficient in many food products. Bread looks particularly good, as Russia is the world’s second largest wheat producer after India. Russia is the largest exporter, accounting for 20 percent of the global wheat trade,” writes Die Zeit.
In the worst-case scenario for Europe, if Ukraine were to leave the ranks of exporters, Russia would control up to a third of the wheat market. How much will a bread roll cost in Germany or a plate of spaghetti in Italy if the trade war goes into full swing? Isn’t it literally a question of who is willing to poke more holes in their belt?
“We are at the beginning of a real trade war that will be very unexpected for many. No one has calculated the consequences: How will Russia react, will it suddenly stop traffic through its territory, will energy become terribly expensive and the money raised to solve the problems and shocks of the pandemic will be needed to pay for it? A trade war would hit the Russian economy very hard, but many experts say that life in the West would become sensitively worse,” said political analyst Alexander Rahr.
On Saturday evening, the German government said that in principle it would not object to disconnecting Russia from SWIFT, but somehow sectorally, so as not to affect payments for energy. However, with sanctions, it often happens that the claw gets stuck and the whole bird is lost.
On Wednesday, Europe woke up to a new world and a new time. No one can say what will happen next, so this is by no means a prediction, just a thought starter: times have changed many times, all sorts of things have happened, but one thing has remained constant: When united Europe has set out to destroy Russia, it has always backfired in the end. End of translation