Politico reports Canadian lawmakers called to explain return of Nord Stream turbines.
Two federal ministers and three ambassadors will be asked to appear before the House of Commons foreign affairs committee to discuss the Canadian government’s controversial decision to return six Nord Stream 1 turbines to Germany.
During a meeting Friday, the committee agreed to call on Foreign Affairs Minister Mélanie Joly and Natural Resources Minister Jonathan Wilkinson to explain why the government decided to waive sanctions on Russia and return the pipeline parts to Germany, where they will be used to help deliver natural gas from Russia. The ministers will be asked to appear by July 22, subject to their availability.
“The government’s decision to suspend their own sanctions is a slap in the face to the Ukrainian people in their darkest hour,” Conservative international development critic Garnett Genuis told the committee. “It’s important that we are firm in our resolve. If we aren’t, then Russia will simply continue to escalate their pressure.”
Putin is Acting Rationally
Eurointelligence accurately notes Putin, is a Rational Agent.
Olivier Blanchard got the Russian gas policies spot on with his comment that Russia is a gas monopolist who faces inelastic European demand, meaning that Europe is dependent on it and has no alternative suppliers. Blanchard goes on to say we are in the rare situation where the monopolist has a reason to raise the price of his commodity to near infinity. The reason is that we announced to the world our intention to get out of Russian gas permanently once we have found alternative energy sources. The only thing that keeps a monopolist sweet is the expectation of further business in the future. We have taken that expectation away. The rational agent from the economics textbook would thus behave like the meanest monopolist. Raise the price until the pips squeak.
A short while later, the Russia foreign ministry essentially followed up on Blanchard. It said that the further operation of the Nord Stream 1 pipeline will depend on economic sanctions. We expect the Germans to take Russia’s blackmail very seriously. Despite official denials, we believe that there is intense pressure within the government for a dirty deal with Putin: you, the Russians, keep the gas flowing. We, the Germans, commit to buying your gas at least 10 years. But we won’t tell anyone now. Nobody will care anymore when this becomes clear in two years time.
This is not what the Germans will ever admit. Not even privately. We may be wrong on this. We may underestimate Olaf Scholz’ determination to make Germany, and his party, independent from Russia. The Germans won’t blame Scholz and his government for gas shortages. Everybody knows that the dependency on Russian gas was the work of Gerhard Schröder and Angela Merkel, not of Scholz, Robert Habeck or Christian Lindner.
We already saw that the Scholz administration was willing to break sanctions just for the sake of the gas. They put pressure on the Canadian government, presumably with some heavy pushing from the Biden administration, to send a turbine to Gazprom that was apparently needed for the maintenance work. The idea was, as Habeck said, not to give Putin an excuse to cut off the gas. It is rather naive, but very typical of the German discourse, to think that Putin needs excuses.
We look at Putin as that elusive rational agent from an mciroeconomics textbook. And he is confronted by customers who have never read economic textbooks. We are just adding one and one together.
Short Synopsis
- After Russia invaded Ukraine, Germany pledged to end dependence on Russian oil and natural gas.
- Putin responded by reducing the flow of natural gas to the EU.
- Putin is acting rationally in the short term by cutting supply to drive up the price. He is acting rationally in the long term by simultaneously working on new energy pipelines to China.
- There is no means for Germany to meet its current energy demands without Russia.
- Germany pressured Canada to break its sanctions and send parts to Germany. Don’t be surprised if those parts end up in Russia.
Saudi Arabia Buys Oil From Russia at a Discount Then Sells it to the EU
The world’s largest oil exporter is buying oil from Russia and reselling it.
For details, please see Saudi Arabia Buys Oil From Russia at a Discount Then Sells it to the EU
Sanction Madness
The entire madness of sanctions is in plain sight. Putin is making more on oil and gas, even with discounts on oil than he did before.
In the matter of German military pledges to Ukraine, guess why those deliveries never seem to make it.
No one knows what Putin might ask for next. But whatever it is, Germany is likely to deliver.
Eurointelligence came to this conclusion: “Despite official denials, we believe that there is intense pressure within the government for a dirty deal with Putin.”
The EU has barely lifted a finger on anything and won’t, even if there is no dirty deal.
This post originated at MishTalk.Com.
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Mish
“We Americans have played a leading role in what is shaping up as a Second Cold War, more dangerous than the first.Over the last quarter-century, after Russia dissolved the Warsaw Pact and let the USSR break apart into 15 nations, we pushed NATO, created to corral and contain Russia, into Central and Eastern Europe. In 2008, neocons goaded Georgia into attacking South Ossetia, provoking Russian intervention and the rout of the Georgian army. In 2014, neocons goaded Ukrainians into overthrowing the elected pro-Russian regime in Kiev. When they succeeded, Putin seized Crimea and Sevastopol, for centuries the home base of Russia’s Black Sea fleet.”
“In 2022, Moscow asked the U.S. to pledge not to bring Ukraine into NATO. We refused. And Putin attacked. If Russians believe their country has been pushed against a wall by the West, can we blame them?”
“Americans appear dismissive of dark Russian warnings that rather than accept defeat in Ukraine, the humiliation of their nation, and their encirclement and isolation, they will resort to tactical nuclear weapons.”
The blame for that lies squarely with Xiden and the Germans.
Lol! You are a perfect example. Thanks!
Apparently, assessing a situation, and then making investment decisions as a result, does not interest very many commenters here. They would prefer to spend all their time telling you their pet theories about what is right or wrong with this situation or that situation. As if their opinion was somehow going to make a difference to the situation.
He has a point, by the way. There’s a lot of discursive yammering here, a fair amount of which is my own. Hell, I find myself getting tired of myself at times. It happens. Everyone here (or most) is trying to navigate a rushing and unpredictable river in a highly uncertain environment. He’s frustrated by the yammering. I am too at times. To call it out is not to want to censor it.
opinions” and “conspiracy theories” by people who have no say in the
decision making. Too bad no one who matters really cares about your
opinions. Blah blah blah.”
Russia now sits in the driver’s seat. If they choose, they can send Europe into a depression by keeping the gas pipeline closed. They can do the same to the world economy by shutting off their oil. Or they can play along and bide their time. I am intensely interested in what comes next. The idea that “the West” can use its money to bring Russia to its knees is a vivid example of hubris.
Yep, Putin is a thug. Since when has Russia been ruled by anything else? Still: Russia lost 26 million men between 1942 and 1945. If I had to bet on who has more staying power, I’ll bet on the Russians and not “the West.” It’s not a bet I’d want to have to make, but this is the price of stupidity, arrogance, and delusion.
Being a rational actor doesn’t mean that your analysis is
right. Being rational only means that you have arrived at a conclusion using
logic. It depends on having correct data inputs above all. Putin was told that
his armed forces were in great condition and that Ukraine would only put up limited
resistance. He was told that Germany would chose Russian gas over Nato
solidarity and would not sanction Russia. He was told that Nato countries would
only send limited amounts of arms to Ukraine. He was told that his foreign
reserves wouldn’t be frozen. The list of things he was told were true but weren’t
is long and although Putin is a rational thinker his inputs were false so his
actions although reached through logic proved to be completely wrong if his
goal is for Russia to regain great power status. To put it in a simpler way we
can say garbage in garbage out. It’s a common problem with countries run by one
man.
Germany’s military thanks to Merkle has very little
equipment to send. It has been starved of equipment for twenty years. Paradoxically
the German arms industry is very large, sophisticated and exports arms around
the world. Germany is the fourth largest
arms exporter after France. They just don’t sell much to the German military
because it isn’t a big market for them and consequently they don’t have much to
give now. In the future that will change because 100 billion Euros can buy you
a lot of equipment. Then we will see.
As far as I can tell the Russians recently said they don’t have the turbines yet, so I don’t know if they’re actually in Russia yet.
That’s not what the USD RUB chart says. Go take a look before at the chart continuing to spread that lie. The ruble is down 50% since march… Id anyone is even buying any.
I got the pairs transposed neeeeeever mind.