Tuesday, August 12, 2014

Europe quiet desperation Update ( August 12 , 2014 ) Can Europe and more critically the Eurozone survive through the Winter of 2014 in one cohesive Union - without huge repercussions in the PIIGS and weak East European States ? The arrogance of Brussels and blindly following the US like lemmings will drive weak nations off the proverbial cliff !

Rather than look at how Sanctions impact Russia , let's consider if Europe makes it through a cold winter ?


Can Europe Survive Without Russian Gas?

Tyler Durden's picture

The western world has placed many sanctions on Russia and its economy. However, Russia holds major leverage over Europe; it has oil and Europe needs it (and may just do a 'deal').


Russian Food ban killing Europe.....


Austrian Gardeners Say Russian EU Food Import Ban ‘Catastrophe’ for Europe

Topic: Sanctions Against Russia

Austrian Gardeners Say Russian EU Food Import Ban ‘Catastrophe’ for Europe.
22:29 12/08/2014
Tags: Sectoral Sanctions Identification ListsanctionsbanAustriaEuropeRussia
MOSCOW, August 12 (RIA Novosti) – Russian restrictions on food imports from the European Union imposed as a countermeasure to European sanctions may turn into a catastrophe for Europe, the coordinator of the Austrian gardeners union, said on Tuesday.
“The Russian import ban is a catastrophe for all of Europe,” Rupert Gsols was quoted as saying by Austria’s Salzburger Nachrichten newspaper.
Gsols voiced concern that average fruit prices this year will drop to 0.20 euros ($0.27) per kilogram as opposed to last year’s sufficient level of 0.40 euros ($0.54). Additionally, according to the newspaper, a fruit producer can only afford to invest if they make more than 0.35 euros ($0.47) per kilogram.
On August 7, Russia introduced a one-year ban on food imports from the European Union, the United States, Canada, Australia and Norway. The decision was made as a countermeasure to the sanctions, imposed on Moscow over its alleged involvement in the crisis in Ukraine. The embargo may cost the European Union a whopping $16 billion in export losses.

We are going to see more Leaders in Europe tell the Troika and EU to get lost ! 


Young Italian Prime Minister Dares (!) to Defy Troika

By Don Quijones, freelance writer, translator in Barcelona, Spain. Raging Bull-Shitis his modest attempt to challenge the wishful thinking and scrub away the lathers of soft soap peddled by political and business leaders and their loyal mainstream media. This article is a Wolf Street exclusive.
“I’m not part of that system that has destroyed this country.”
It’s not easy being a national leader of a Eurozone country. What with all the unpopular new laws and legislation emanating from Brussels and Frankfurt and the financial markets poised on a knife edge, the pressure can sometimes be unbearable. Even a small misstep could have disastrous consequences.
For any national leader who wishes to cling to his or her job, there are four basic rules of survival:
  1. Always be nice to German Chancellor Angela Merkel.
  2. Never call – or even threaten to call – a national referendum on any issue.
  3. Never criticize or call into question the actions of the Troika, or any of its three constituent members, the European Commission, ECB, and IMF.
  4. Never mention – or even entertain – the idea of exiting the euro.
But today the Italian Prime Minister Matteo Renzi veered dangerously off-message: he broke rule number three. But wasn’t the first national leader to have broken the rules.


Making Dangerous Enemies
The target of Renzi’s criticism was ECB Chairman Mario Draghi, arguably the most untouchable of the Troika’s representatives (and Goldman Sachs’ senior representative in Europe).
Renzi’s out-of-turn talk was the latest escalation in a war of words that broke out with Draghi’s insinuation (read: threat) that Italy, after falling back into recession, had not done enough to reform its labor market, bureaucracy, or judicial system. The result, he said, is an “unfavorable climate for investment.” In other words, what Italy needs is a short, sharp dose of Troika-administered internal devaluation – an intervention that merely serves to accelerate a country’s debt spiral while enriching well-connected international investors.
Renzi seems to have other ideas. “Our model is not Spain, but Germany,” he told the FT.
He came to office in February promising to pull Italy out of a slump that has lasted more than a decade. Progress has been slow, however, and his signature achievement to date remains a tax break of €80 a month for low earners. It is hoped that the next few months will see the passage into legislation of far-reaching judicial reform, but there are no guarantees.
And with little to show in terms of fiscal or labor reform, business leaders are getting tetchy, the FT reports:
Italy’s business leaders, desperate for reform, have been big supporters of Mr Renzi, noting his energy and determination. But they have voiced fears that he is a micromanager who relies too much on a few trusted friends when he needs experienced advisers to match his political ability.
The IMF Mole
One such “experienced advisor” is Italy’s Independent Spending Review Tsar, Carlo Cottarelli, who spent most of his working life at the IMF. In his last role he served as the director of the Fund’s Fiscal Affairs Department – perfect preparation, one assumes, for his current position in charge of Italy’s public spending.
However, Cottarelli is meeting resistance, primarily from Renzi who intends to take control of the spending cuts himself. “It’s Renzi who’s going to decide where we are making cuts… not a technocrat,” Renzi told the FT in the third person form.
Renzi also threatened to take on Italy’s business lobbies:


Learning to live without Big Bad Uncle Sam or German Uncle Max....   ....

The Saker....

The birth of a new financial-economic system: the example of Russia and Argentina

Thanks to the lightening fast work of the Russian Team (thanks guys!!!) I can share with you a report from the Russian TV channel Rossia 1 which I find absolutely fascinating.  It shows how Russia and Argentina have been literally pushed by the USA into working with each other and the kind of results this collaboration is achieving.  Though this report focuses on Argentina, I am sure that the same phenomenon is taking place elsewhere, especially amongst the BRICS countries.

It is very hard to change a system which works, a system upon which people depend for their salaries, a system which has been stable for years and which, while not perfect, at least is understood by all parties.  This is why for all its imperfections, sometimes bordering on dysfunctions, what I would call the "Western financial-economic system" was so important and, frankly, so attractive: it was there and it worked.  But then the USA did somethingextremely dangerous: they began to use and abuse this system for their very narrow political goals: MasterCard, Visa and the rest of them suddenly dropped Wikileaks, Iran was excluded from SWIFT, the French were told to be billions to Uncle Sam because of the Mistral sales to Russia, the Russians were told to compensate Khodorkovsky, the Swiss were blackmailed into given up their traditional banking secrecy, etc.

Of course, the dollar and the western economic interests did not only attract with a tasty carrot.  They also came with a big stick: the US military.  But at the same time when the US began using and abusing the Western financial-economic system, they also began a long streak of lost wars.  In reality, one could make the case that the USA did not win a single war against a meaningful opponent since 1945 or Korea, but thanks to Hollywood and the Cold War the US still could maintain the illusion of being a military hyper-power.  But following 9/11 even that illusion began to go down the tubes following the disasters in Iraq and Afghanistan (and Israel's abject defeat against Hezbollah).

As a result of the double collapse of the appeal of the Western financial-economic system and of the deterrence of the US military power the rest of the planet began to realize that one could openly defy Uncle Sam and get away with it.  Oh sure, Bolivia alone could not do it.  Neither could Malaysia.  But, lead by the BRICS themselves probably inspired by the ALBA countries, more and more countries came to realize this basic truth: to be an ally of the USA might well be even worse then to openly defy them.

Of course, at this current moment in history, Russia and Argentina are, really, battling for their very survival so it is not surprising that they would be showing the most determination into setting up a new, USA & dollar free economic-financial system.  But the absolutely irresponsible and, frankly, crazy behavior of the USA in the past years is, I believe, also scaring the rest of the planet and there is no doubt in my mind that the example of Argentina and Russia is just the tip of a much bigger iceberg.  First and foremost, we have the de-facto alliance of China and Russia, the biggest economic power on the planet with the biggest military power.  They, in turn, as supported by the BRICS, CSTOEAECSCO, ALBA, Mercosur and many other regional organizations which, in one way or another, federate the 100 or so nations which did not vote with the AngloZionist Empire at the UN on the Ukrainian issue.

The bottom line is this: very few nations are still attracted to the AngloZionist imperial model, and very few are still frightened by it.  The result is the kind of collaboration (never shown on the MSM, of course) which you can see in this report.  Enjoy!


And again from the Saker 

Did Europe think playing with the Bear - comes without consequences ? 


You wanna be Uncle Sam's bitch? Pay the price!

Dear friends,

I just took a short break from my life in "meatspace" to comment upon the great news of the day:  Russia is introducing a full 12 months embargo on the import of beef, pork, fruits and vegetables, poultry, fish, cheese, milk and dairy products from the European Union, the United States, Australia, Canada and the Kingdom of Norway.  Russia is also introducing an airspace ban against European and US airlines that fly over our airspace to Eastern Asia, namely, the Asia-Pacific Region and is considering changing the so-called Russian airspace entry and exit points for European scheduled and charter flights. Furthermore, Russia is ready to revise the rules of using the trans-Siberian routes, and will also discontinue talks with the US air authorities on the use of the trans-Siberian routes.  Finally, starting this winter, we may revoke the additional rights issued by the Russian air authorities beyond the previous agreements.  This is such an interesting and major development that it requires a much more subtle analysis than just the crude calculation of how much this might cost the EU or US.  I will attempt no such calculation, but instead I would point out the following elements:

First, this is a typically Russian response.  There is a basic rule which every Russian kid learns in school, in street fights, in the military or elsewhere: never promise and never threaten - just act.  Unlike western politicians who spent months threatening sanctions, the all the Russians did was to say, rather vaguely, that they reserve the right to reply.  And then, BANG!, this wide and far-reaching embargo which, unlike the western sanctions, will have a major impact on the West, but even much more so on Russia (more about that in an instant).  This "no words & only action" tactic is designed to maximize deterrence of hostile acts: since the Russians do not clearly spell out what they could do in retaliation, God only knows what they could do next! :-)  On top of that, to maximize insecurity, the Russians only said that these were the measures agreed upon, but not when they would be introduced, partially or fully, and against whom.  They also strongly implied that other measure were under consideration in the pipeline.

Second, the sanctions are wonderfully targeted.  The Europeans have acted like spineless and brainless prostitutes in this entire business, they were opposed to sanctions from day 1, but they did not have the courage to tell that to Uncle Sam, so each time they ended up caving in.  Russia's message to the EU is simple: you wanna be Uncle Sam's bitch?  Pay the price!  This embargo will especially hurt southern Europe (Spain, France, Italy, Greece) whose agricultural production will greatly suffer from it   These countries also happen to be the weakest in the EU.  By hitting them, Russia is maximizing the inevitable friction inside the EU over sanctions against Russia.

Third, not only will EU carriers suffer from much higher costs and flight times on the very important Europe to Asia route, but the Asian carriers will not, giving the latter a double competitive advantage.  How is that for a way to reward one side while hurting the other?  The EU got one Russian airline in trouble over its flights to Crimea (Dobrolet) and for that the entire EU airlines community could end being at a huge disadvantage vis-à-vis its Asian counterparts.

Fourth, Russia used these sanctions to do something vital for the Russian economy.  Let me explain: after the collapse of the USSR the Russian agriculture was in disarray, and the Eltsin only made things worse.  Russian farmers simply could not compete against advanced western agro-industrial concerns which benefited from huge economies of scale, from expensive and high-tech chemical and biological research, which had a full chain of production (often through large holdings), and a top quality marketing capability.  The Russian agricultural sector badly, desperately, needed barriers and tariffs to be protected form the western capitalist giants and, instead, Russia voluntarily abided by the terms of the WTO and then eventually became member.  Now Russia is using this total embargo to provide a crucially needed time for the Russian agriculture to invest and take up a much bigger share on the Russian market.  Also, keep in mind that Russian products are GMO-free, and that they have much less preservatives, antibiotics, colors, taste enhancers, or pesticides.  And since they are local, they don't need to be brought in by using the kind of refrigeration/preservation techniques which typically make products taste like cardboard.  In other words, Russian agricultural products taste much better, but that is not enough to complete.  This embargo now gives them a powerful boost to invest, develop and conquer market shares.

Fifth, there are 100 countries which did not vote with the US on Crimea.  The Russians have already announced that these are the countries with which Russia will trade to get whatever products it cannot produce indigenously.  A nice reward for standing up to Uncle Sam.

Sixth, small but sweet: did you notice that EU sanctions were introduced for 3 months only, "to be reviewed" later?  By introducing a 12 months embargo Russia also sends a clear message: who do you think will benefit from this mess?

Seventh, it is plain wrong to calculate that EU country X was exporting for Y million dollars  to Russia and to then conclude that the Russian embargo will cost Y million dollars to EU country X.  Why is it wrong?  Because the non-sale of these product with create a surplus which will then adversely affect the demand or, if the production is decreased, this will affect production costs (economies of scale).  Conversely, for a hypothetical non-EU country Z a contract with Russia might mean enough cash to invest, modernize and become more competitive, not only in Russia, but on the world market, including the EU.

Eighth, the Baltic countries have played a particularly nasty role in the entire Ukrainian business and now some of their most profitable industries (such as fisheries), which were 90% dependent on Russia, will have to shut down.  These countries are already a mess, but now they will hurt even more.  Again, the message to them is simple: you wanna be Uncle Sam's bitch?  Pay the price!

Ninth, and this is really important, what is happening is a gradual decoupling of Russia from the western economies.  The West severed some of the financial, military and aerospace ties, Russia severed the monetary, agricultural and industrial ones.  Keep in mind that the US/EU market is a sinking one, affected by deep systemic problems and huge social issues.  In a way, the perfect comparison is the Titanic whose orchestra continued to play music while the sink was sinking.  Well, Russia is like a passenger who is told that the Titanic's authorities have decided to disembark him at the next port.  Well, gee, too bad, right?

'clock' by Josetxo Ezcurra
Last, but most definitely not least, this trade-war, combined with the West's hysterical russophobia, is doing for Putin a better PR campaign than anything the Kremlin could have dreamed of.  All his PR people need to tell the Russian population is the truth: "we did everything right, we played it exactly by the book, we did everything we could to deescalate this crisis and all we asked for was to please not allow the genocide of our people in Novorussia - and what was the West's response to that? An insane hate campaign, sanctions against us and unconditional support for thegenocidal Nazis in Kiev".  Furthermore, as somebody who carefully follows the Russian media, I can tell you that what is taking place today feels a lot like, paraphrasing Clausewitz, the "a continuation of WWII, but by other means", in other words a struggle to the end between two regimes, two civilizations, which cannot coexist on the same planet and who are locked in struggle to death.  In these circumstances, expect the Russian people to support Putin even more.

In other words, in a typical Judo move, Putin has used the momentum of the the West's Russia-basing and Putin-bashing campaign to his advantage across the board: Russia will benefit from this economically and politically.  Far from being threatened by some kind of "nationalistic Maidan" this winter, Putin's regime is being strengthened by his handling of the crisis (his ratings are higher than ever before).

Yes, of course, the USA have shown they they have a very wide array of capabilities to hurt Russia, especially through a court system (in the US and EU) which is as subservient to the US deep state as the courts in the DPRK are to their own "Dear Leader" in Pyongyang.  And the total loss of the Ukrainian market (for both imports and exports) will also hurt Russia.  Temporarily.  But in the long wrong, this situation is immensely profitable for Russia.

In the meantime, the Maidan is burning againAndriy Parubiy has resigned, a the Ukies are shelling hospital and churches in Novorussia.  What else is knew?

As for Europe, it is shell-shocked and furious.  Frankly, my own Schadenfreude knows no bounds this morning.  Let these arrogant non-entities like Van Rompuy, Catherine Ashton, Angela Merkel or José Manuel Barroso deal with the shitstorm their stupidity and spinelessness have created.

In the USA, Jen Psaki seems to be under the impression that the Astrakhan region is on the Ukrainian border, while the Russian Defense Ministry plans to "open special accounts in social networks and video hosting resources so that the US State Department and the Pentagon will be able to receive unbiased information about Russian army’s actions".

Will all that be enough to suggest to the EU leaders that they have put their money on the wrong horse?