> Russian gas accounted for 55% of Germany's gas imports in 2021 and 40% of its gas imports in the first quarter of 2022, Reuters reported. The country has pledged to end the use of Russian gas by 2024, the Habeck said in a March 25 press release.
Some in this thread have asked how Germany could be so foolish to tie its economic destiny to such a problematic country as Russia.
The answer seems to be "one step at a time." And Germany is not unique.
Take the United States, for example, and its near total dependency on Chinese manufacturing for, well, just about everything. The US offshored manufacturing capacity hand-over-fist. In exchange the US got cheap goods (and low inflation), and continued supremacy of the dollar in world trade and as a reserve asset.
Both of those benefits are looking shakier by the week. Inflation is ripping higher, and the sanctions on Russia have prompted what some observers are calling Bretton Woods III, or a brand new economic order that minimizes the position of the US dollar.
But the worst part of all is the enormous leverage China has over the US. The US can protest human rights violations or even an attack on Taiwan, but any serious action taken against China will visit upon the US the same fate as Germany now faces. The brave threats can not be made good on because of an economic hole dug over the course of a generation or two.
The irony is that if you wind the clock back 25 years or so, this situation is the same in direction (although possibly not in magnitude) as policy makers wanted. Free trade was supposed to make conflicts more difficult because of mutual dependency. And it has worked. Just look at the disconnect between the saber-rattling German/US rhetoric and the tepid German/US actions.
Let's be fair: this was a massive, strategic aim of the Russian state. Germany didn't randomly fall into this situation, there has been decades of influence, bribery, and espionage in Germany to develop that dependency. Kids may need to be reminded that Germany has only been reunified for 32 years and Berlin was divided from the USSR controlled East Germany by a physical wall. Russia is is so motivated to expand its borders that they are invading Ukraine.
It can be really tempting to look at this as bad for the US, but this is really just catastrophic for Russia. Decades of investment blown up, with one of the only real non-kinetic weapons that they have.
I see a lot of poo-poohing of the influence aspect of this. The biggest example is the man at the top, Gerhard Schröder, the former Chancellor of Germany.
As Chancellor, he began the phaseout of nuclear energy and approved the Nord Stream gas pipeline directly from Russia to Germany.
Today he's:
1. The Chairman of Nord Stream, the company that owns the pipeline
2. The Chairman of Rosneft, the third largest company in Russia
3. A member of the board of directors of Gazprom, the largest company in Russia
There is no need for influence, bribery, or espionage. It was simply the cheapest, most reliable source of energy. Russian gas "won" on the market. Regardless of what route Germany takes from here, it's almost certain they'll be paying more in energy costs.
Nuclear might not have been competitive against gas or coal but nothing was. Funny how everybody is willing to pay extra and throw decades of support behind solar/wind but not nuclear.
And nuclear if you actually produce them in larger numbers it actually gets quite cheap.
Had Germany spend all the money they put into solar/wind into nuclear 20 years ago they would be finishing 1-2 nuclear reactor each year right now.
Yes, if you rule out nuclear, than Russian gas was maybe the cheapest. Energiewende fail. They are so addicted to it that they even wanted to brand natural gas as a non greenhouse energy source. This was a central point of German decarbonization prior to the Russian invasion of Ukraine. And the culprits are mainly the OPEC lobby and the Greens. With 70% electricity generated from nuclear, France does not have this problem. It's one of the things that de Gaulle got right. The others were vive la republique and fight the enemy at all costs instead of making concessions and armistices.
Suppose everyone was simple and conspiracies didn't exist. Where might Germany get its fossil fuels? Perhaps shipped across the entire Atlantic Ocean? Perhaps from Mars? Or perhaps from the major producer on its same continent?
The bottom line is that European integration is a natural phenomenon. It is natural to have strong economic ties within one's neighborhood. You don't need a decades long conspiracy to explain basic economic advantage.
However, European/Eurasian integration is an existential problem for the one superpower that isn't part of Eurasia. Therefore we get a lot of chaos, misinformation, and artificial divisions.
Germany does need energy, and I actually give German leadership the benefit of the doubt, that they sincerely believed rapproachment with Russia was possible and Nord Stream 2 was a good faith endeavor. Sadly Russia ruined that impression, it required no work on the part of the United States to do so.
> Sadly Russia ruined that impression, it required no work on the part of the United States to do so.
The State Department would strongly disagree with you. Victoria Nuland recently gloated that they have spent over $5,000,000,000 supporting anti-Russian movements in Ukraine in the post-Soviet era.
Actually you do not need nuclear for this. The problem is not nuclear here but to that Germany messed up setting up a fiscal mechanism trying to boost renewables (by introducing the so called EEG Umlage). The problem is that electricity (even green) was more expensive than it needs to be (particularly compared to gas) and the incentives were fading to invest into renewables. Nuclear power is no option in German simply because we could not reach any national consensus about the waste which would be a prerequisite.
Apparently Germans have no problem with huge quantities of unconfined waste from coal, but tiny quantities of confined waste from nuclear fission(which can be recycled) is the concern? This is not rational.
France uses a lot of electricity for heating and it’s not going great it would seem, since a lot of their nuclear power-plants are down for maintenance.
When you put it like that, one almost has to feel sorry for Germany, bravely fighting influence, bribery and espionage every step of the way only to fall prey in the end to the Russian state which maliciously supplied the German industry with gas.
But this is not at all bad for the US, it’s great! Russia is isolated and weakened and the EU is strangulated by yet another wave of refugees and weakened economically, becoming even more dependent on the US for security.
This is definitely a less than zero-sum environment. Russia would have been better off not invading Ukraine, along with Europe and the US. A peaceful and international law abiding Russia would be a stronger and richer Russia.
The US doesn't want to have a strong Europe Russia relationship. That's the whole reason behind this conflict. The US started to bribe everyone in Ukraine and even forced a coup in 2014.
History of the US destabilising regions is very evident. They are good at it.
That is a way of looking at it without nuance. Russia falsified the elections in the East in 2004 and tried to murder Yushchenko. They created a problem in western Ukraine by themselves, which precipitated the revolution in 2014. Since Russia is profoundly gifted at domestically blaming the west for their own problems, I can see how it would seem like the US forced a coup.
Perhaps Russia shouldn't invade their neighbors. It seems to make their neighbors not like them.
Now consider that Germany has a huge dependency not only on the supply side to China but also on the demand side for machinery equipment and vehicles. In addition, we have a huge dependency on the US for national security.
So we are dependent on Russia for Energy, on China for Manufacturing and industrial demand of our most important industrial sectors and are protected by the US from a National Security point of view.
The army is a national laughing stock, the car industry is begging to be disrupted, and chinese equipment and machinery companies have completed their IP theft programs and are now almost at par from an innovation level.
All while international media hailed Merkel and her useful idiots for their international leadership.
The problem with a country like Germany is that it's too big for Europe (as a continent), but too "small" for the world. Similar thing for France. Of course that the European Union was meant as a solution for this problem (and for the accompanying wars caused by it). I'd say that while the EU has been a great project from an economic pov from a political and geo-strategic pov this war in Ukraine is showing its huge weaknesses.
Imo only the US, China and partially Russia (and maybe India) can be really autarchic, all of these countries that span almost an entire continent (or a big part of it).
Not sure if there's a solution to all of this, from Europe's point of view. Ideally by this point we should have had a genuine political and societal union (I'm from Romania myself, another EU member), but that has failed, it is failing (of course that the powers that be refuse to acknowledge that). Without that genuine political and societal union one cannot have an autarchic Europe.
The current form of the EU is a stop-gap as long as not more power is transferred to the EU level. The EU is plagued by constant infighting and incoherent policies of the member states. But I think it's going better than some realise and a lot of the current projects of the EU are really firsts (a real industrial strategy with a focus on more autonomy in areas like chips and batteries). People except a lot from the EU and don't realise that in reality the legal bounds haven't really progressed since the 90s.
This conflict can again strengthen the european institutions and maybe result in some more reforms for the EU (and hopefully some democratic advances, although unlikely considering orban etc.).
Upvoting but Russia most definitely cannot be self-sufficient. Unless you mean in a theoretical or future sense. Most of it exports are energy, and their industry depends heavily on western and chinese machinery and components.
No, it's more logical to send all the smart people to Germany, let them work there and then sell your resources to Germany. You can then buy high quality products from Germany and thereby be completely independent from a properly functioning domestic economy.
That's a weird argument, you will essentially not find one country in the world that is autark from others. If they are building stuff they depend on raw products from other countries and other countries to buy their things. If they consume things they are dependent on others again. I mean even if you're the centre of semiconductor manufacturing in the world like Taiwan, you still depend on others to build your machinary (pretty much all the EUV systems are build by Asml a Dutch Company)
Wait what's the contradiction here? Merkel's and Germany's international leadership can be good at the same time as Germany's dependency on Russia and China is problematic from a national security perspective. Those two aren't mutually exclusive.
Maybe. I guess you can celebrate her for her "international leadership" (what are we exactly celebrating by the way?) and at the same time acknowledge that she completely missed the interests of her constituency.
I mean, "international leadership" are your words. I don't know what Merkel personally has done (or what her "useful idiots" have personally done, or even who those "useful idiots" are). But you are positing that there's a contradiction between Germany's dependency on China and Russia, and Merkel's perceived achievements in international leadership. I'm just saying that there's no contradiction or hypocrisy in being in an influential international leadership role, while being from a country with its own national security issues.
Essentially, I'm saying that the last part of your argument falls under the "vaguely gesturing at imagined hypocrisy" category.
Yeah I don't see how she made any strategic decisions that set up the long term success for Germany and EU. She's remembered bigly internationally for letting all the migrants in.
Bordering countries like Italy and Greece were becoming overwhelmed by migration wave. They were crying for help for quite some time til anyone even noticed the problem. So to ease the pressure there was plan to redistribute them in to EU. This was refused by several countries so 'Merkel' took some of them to Germany. It was not ideal but better then nothing.
That crisis was caused by instability in Middle East. Which was caused by several other factors like climate (farms without water in Syria) and international politics of Russia and USA. But like now everyone was blaming Germany.
She should have thrown money and equipment at the problem like the US does. That works most of the time. When it doesn't, let French diplomacy handle it. Or even better, just do both at the same time. Italy and Greece, just take this money and patrol ships and do coastal patrol. Hungary, just take this money and build a barbed wire fence, if you think it works. Border states were guarding the Schengen Area dreamland. Instead they paid Turkey tribute to allow it to blackmail and took the migrants in, assingned quotas which made everyone unhappy about it.
Building barbed wire and stronger coastal patrols doesn't help you take in more refugees. Getting more countries to accept refugees helps take in more refugees.
But I suppose you solution is to just kill all the refugees by letting them drown or whatever. Which, I suppose, is one way to solve a perceived "refugee crisis", but it wouldn't be my first choice.
Most of those were not war but economical refugees and they forced through EU borders, which the EU states at the periphery of the EU have to guard. Belarus used them to blackmail Poland and Lituania. Turkey used the refugees to blackmail the EU for more funds to essentially keep them out. The fences worked in fact, because the refugees changed their route. Other states have also built fences, but Hungary was the first to do so and it is by far the largest fence built during the refugee crisis.
The US has a 650 mile border wall with Mexico exactly for this reason. Most of this border barrier was actually built during the Obama administration, Trump just used it as a campaign objective to build a "big, beautiful wall" instead of a fence.
A fence does not necessarily bar a country from accepting refugees, but offers better border enforcement and so does an adequate coast guard. If a state can't even enforce its borders, there is no state to begin with. When human traffickers are discouraged, they'll look for other sources of income.
I'm not for building fences and walls, but I can't really imagine other alternatives that actually work at enforcing borders at least to some extent.
During the previous six years, it struck me as completely bizarre that there was any pushback for bringing manufacturing or energy production back locally. It doesn’t have to be nationalist, it’s just adding redundancy in case your trading partner realizes they have over powered leverage. No business wants to concede to a vendor that they are irreplaceable.
Edit: Likewise, watching Germany dismantle its nuclear infrastructure over the last several decades for… what reason exactly? Replacing a clean, cheap, on-demand energy source for dependence on foreign energy imports? Even if you think global trade is panacea, why throw out working critical infrastructure and replace it with something beyond control?
It's difficult to keep those local industries going when international competition can undercut them and WTO membership hampers your ability to compensate for this. Joining the WTO (and several other lesser-known organizations) is simply giving away part of your sovereignty and ability to react to domestic needs in favor of access to cheap goods and services.
Maybe. but existance of leaders like Gerhard Schröder displays a different story.
(he is sitting on russian gas companies’ boards, after heavily going against nuclear). No shit the leaders failed the country for their own gains, seems like.
I think you just made a statement that should be repeated often and attributed to you. Barrenko’s corallary or something. Somebody help me with the name. I want see this used and a Wikipedia entry on it
More to the point, Hanlon's Razor is usually an excuse to do nothing, which is a mistake.
It's better to assume that people intend the likely outcome of their actions. If they want to claim stupidity/incompetence as a defene, that's on them.
Energy politics in the public discourse was often dominated by environmental concerns, and there wasn't a singular focus on CO2 as we have now.
Gas has been a popular choice, because it is a lot cleaner than coal / light oil / wood from a local pollution perspective. It burns cleanly, so switching to gas heating significantly reduces pollution in cities.
Nuclear energy is NOT clean, because it has the huge unsolved problem of what to do with the radioactive waste. Nobody wants radioactive waste anywhere near them, and there just isn't any place where you can put radioactive waste where it will be safe for a few hundred years.
But the biggest reason for our fear of nuclear energy is Chernobyl. It's been 37 years, and Chernobyl is still a danger.
Nuclear fuel is recyclable. The safe place to put it is back in a reactor. There are political reasons that doesn’t happen, but not technical reasons.
Globally, nuclear has lower deaths per kWh than even wind, and significantly lower than natural gas or oil. From a US centric perspective, nuclear energy is by far the safest by an order of magnitude[0]. Even a catastrophe like Chernobyl resulted in the deaths of fewer people than a single year of oil and gas drilling.
In theory, to some extent. But it's mostly an academic argument. The power plants that are currently in use that people are protesting against do not recycle their waste.
This argument feels a lot like you are just passing the ball to the next generation. "Hey kids, we used up all the uranium for cheap power and left you with caves full of radioactive waste. But don't worry, you can recycle it!"
As for the dangers of nuclear vs. gas, the big difference is where the danger is. Nuclear power plants bring the danger close to the population, and people just don't want that.
And finally, another issue that noone appears to mention is that electric heating isn't very popular here. Most people heat their homes with gas furnaces, so even if we'd switch to nuclear power we would need to replace millions of furnaces and massively expand the electric grid. (This is slowly changing. Lots of new homes use good insulation and electric heat pumps for heating instead of gas, but it's not something that can be easily retrofitted in existing homes)
The danger is illusory. Natural gas is more actually dangerous - see periodic fires from using it to hear things. And the amount of nyckear waste produced in the whole world is so small is doesn’t even register on any kind of “future problem” scale
I think it's quite different. Gas can be understood as being sold by Country A to Country B (instead of business to business or business to consumer). Yes, there might be private firms involved, but Country A can stop the gas on a moment's notice if so desired. Also, there's likely no substitute for this gas in the midterm (months? years to get 3 new nuclear plants?). Finally, in terms of "responsibility", this was decided by the German government, not just by individual consumers / businesses that decided to buy more from Russia.
The commercial relationship between the USA and China is much different. First, it consists of thousands of businesses and millions of consumers: it's not so easy to stop the flow (you can ban some of it, but there are workarounds). For many of those goods, there will be substitutes. Finally, this wasn't something explicitly decided by the USA government.
The U.S. used Chinese factories because they were cheap. Emphasis on "were." Companies have been switching away from China en masse (to India, Vietnam, Thailand, etc.) for at least the past decade because China is no longer the cheap option. Frequently, including shipping costs (even before COVID) it was cheaper to just get stuff made in America if you could find a supplier. Hell, my last 3 years at a firm were devoted almost entirely to helping companies restructure their international operations out of China to cheaper countries.
The U.S. won't take serious action against China because China took Russia's place as the global counterweight to the U.S. But it has absolutely nothing to do with China's so-called economic leverage, because China doesn't have any over the U.S. anymore.
And when it started to rise up again just a little bit with Occupy Wall Street, we got identity politics to ensure workers would never have that opportunity ever again.
> In exchange the US got cheap goods (and low inflation)... Inflation is ripping higher
Part of the reason inflation is ripping higher (and this was beginning to happen even pre-pandemic) was because the previous administration began tradewars which began to rip up global supply chains. Yes, the bulk of our inflation currently is due to the pandemic, but a good chunk of it was going to start happening anyway even if the pandemic never happened because we began to disrupt global wage arbitrage. Bringing jobs back to America was always going to lead to a period of inflation.
The prevailing political view, was that strong economic ties would make war and violent conflict between Germany and Russia impossible. This is basically what happened intentionally and successfully between Germany and France after World War II first with European Coal and Steel Community and later the European Union.
> the sanctions on Russia have prompted what some observers are calling Bretton Woods III,
You know, if you go down that path it will never end. It's like the gold standard. It's going to fail every single time. Bretton Woods is doomed to fail. It was doomed to fail the day it was introduced.
I think the main key difference here, however, is that it is not the state (the US government) deciding to offshore any of this manufacturing. It is some rich fat cat American CEO who wanted a bigger paycheck.
Thankfully for some very key industries we still have onshore manufacturing and that is increasing in modern times.
They sold the company to new owners on Friday who then tried to liquidate it. Gazprom Germania is the counterpart to Gas dealers and utilities. It then has an intra-company agreement with Gazprom Russia.
If they had liquidated, those contracts would have been gone and the Gas dealers & utilities would have had to renegotiate new contracts with Gazprom Russia. This would have allowed them to require payments in Rubles instead of Euros.
From what I've read, the contracts between Gazprom Germany and Gazprom Export (on the Russian side) do not have a fixed settlement currency.
> This would have allowed them to require payments in Rubles instead of Euros
"allowed" is a funny word - this situation is way past a point where cross-border contracts on either side hold any legal value. How are you going to hold anyone accountable for breach of contract?
Can you back that up with a source? It's the opposite of what basically everyone has been saying and I can't find anything that even hints that there isn't a fixed settlement currency in their contracts. Russia has been trying to push this issue for weeks, while Germany and others are refusing to pay in anything but euros.
So most of this stuff is not public, so there is no single source to point you to, but from what people have puzzled together on various forums the structure is approximately this (corrections welcome):
ПАО Gazprom (the _actual_ Gazprom; ПАО is a Russian joint-stock company) owns another Russian company (Gazprom Export OOO; OOO is a Russian LLC), which in turn owned Gazprom Germania GmbH (GmbH is a German LLC).
ПАО Gazprom sold gas to Gazprom Export, which in turn sold gas to Gazprom Germania, which in turn sells the gas to the actual European companies.
The change in Russian law which switches the currency to rubles affects the transactions between Gazprom Export OOO and Gazprom Germania GmbH (which were previously both owned by Russia), which made the settlement an "internal" affair of Gazprom for German exports.
(This stuff is fairly well established and you can look at the German & Russian company registers, the legal text of the Russian decree etc. for more detailed information. The next part is less well understood)
Previously this settlement took place through Gazprom Germania sending money from its German account(s) to an account of held in Gazprombank Luxembourg (GPB International S.A., a Luxembourgian Public Limited Company). This account may be a correspondence account for a Gazprombank Russia account owned by Gazprom Export, it's unclear. These funds can be frozen by the EU (and I think are, leading to the Russian claim that they're currently supplying some gas for "free").
With the law change in Russia, this transfer must now happen to a new type of currency account established by Gazprombank Russia (though it's unclear / not publicly known how those are backed, e.g. whether it's also through correspondent accounts at GBP International S.A.) where it is automatically sold and converted into rubles, which are then transferred to Gazprom Export in Russia.
Now an important bit that most people don't seem to get is that none of this affects pricing, it's akin to a change in payment method. The supply contracts between e.g. the European gas purchasers and Gazprom Germania have complicated pricing schemes which are likely tied to one or more currencies (EUR & USD) and Russia is sticking to those pricing agremeents - but insisting on changing how the settlement happens.
What is kind of unclear at the moment is what Gazprom stands to gain from the sale (and subsequent (attempted?) liquidation of Gazprom Germania). There are a handful of theories about this, but in practice we probably won't know for a while.
The Luxembourg entities are not on the EU sanctions list[0]. That entity will essentially own Russia's Euro reserves from now on.
It's not as if this hasn't happened before. The 'EuroDollar' came about after the invasion of Hungary in 1956. Russia has just invented the 'RuskiEuro', which is how the Bank of Russia will hold Euros for the duration - probably in settlement accounts at the National Clearing Centre in Moscow.
> 'EuroDollar' came about after the invasion of Hungary in 1956
The first known eurodollar account was opened in France for China during the Korean War, in 1949 [1]. The phenomenon is a result of the Marshall Plan, which left lots of physical dollars overseas and thus outside U.S. jurisdiction.
I agree. And since the RuskiEuro will be backed by a massive amount of commodity it'll be fairly hard currency. Zoltan Poszar has been clear on this[0].
My gut feeling is, that the EU, without any commodities, has a single choice: kick the Russian gas habit immediately, and force Russia to kill their western gas fields. Then pray they collapse in the next few years.
If the EU keeps paying - Russia's new Gazprom central bank controlled RuskiEuro reserves will stabilize its economy and it will rise like a phoenix from the ashes. Even if we kick the gas habit, this might still happen if Putin keeps his thumb on public sentiment enough.
President Trump was right about the gas terminal, North Stream 2 and ≥2% GDP for NATO militaries. Of course it was coming from his advisors. But no, the EU leadership decided to live in fantasy land. Only Eastern European states, Poland and the Baltics understood.
I've wondered about that question. Germany is not at war with Russia, Gazprom is a publicly traded company, and there are international courts that arbitrate such matters and could yet find the German government at fault. My non-lawyerly gut feeling is that, for better or worse, the trend of the last 30 years has been that the international mechanisms for enforcing contracts and property rights are now the strongest force in the legal universe, stronger than sovereignty and in some cases even human rights.
There is a lae, ftom what I've read, that requires sqle fo certain companies running critical infrastructure to be communicated and approved. Gazprom didn't do so, the German subsidiary was put under government control (not legal ownership) because of that.
Honestly, I'm quite surprised how consistently and tough the new government plays the Ukraine crisis.
Doesn’t the ITO (International Trade Organization) regulate international contacts with allowed and non allowed sanctions? I think Western states are currently tied to it, they can’t just impose “whatever” sanctions, and if we don’t, it would be legal for Russia to impose sanctions upon us.
Currently Russia has no right to sanction us, so anything they do is a further breach of ITO, which further deepens their case.
Diplomacy is important. The good guy has to respect the rules, or at least write them so we pretend that there are rules we adhere to.
I'm concerned about the use of sanctions, and the individual targeting of wealthy individuals as being anathema to the Rule of Law, property rights, and free exchange.
The dollar is inflating at the same time the reserve currency status is threatened, and we Americans, via our allies, are appropriating the stuff of foreigners, seizing boats, currency, gold, and property. I think >400B has been seized at this point.
How long until we move from "Russia Bad!" to other groups, and start turning inward onto ourselves, seizing their property because they are politically unpopular?
Russia is also consistently referring to the asset freeze as the Western countries defaulting on their obligations, which will resonate with countries that are not in the closest circle of the US.
If this insane idea that the sovereign nations of Europe have no agency of their own comes from American "news"-branded edutainment, I dearly suggest you defenestrate your television set. It is clearly rotting minds.
It tends to come from russian propaganda efforts. They have to make this look like they're fighting the US and not a bunch of sovereign, not enemy nations.
Hardly any euro state has real power when it comes to real decisions. Most of the euro states are politically heavily influenced by financial injections from the US.
Military bases everywhere. US companies everywhere. All tech is dominated by the US.
Of course Russia sees the US as the master country and euro
countries as their puppets.
If you really want to go down that road, it's Russia's gas that runs eastern Europe, not US cash. Yet still, Germany tells Russia where to stick it. This is quite clearly not an economic decision.
> If you really want to go down that road, it's Russia's gas that runs eastern Europe, not US cash.
Imports of Russian gas (in billion cubic meters) as of 2020:
- Germany (42.6)
- Italy (29.2)
- Belarus (18.8)
- Turkey (16.2)
- Nertherlands (15.7)
- Hungary (11.6)
- Kazakhstan (10.2)
- Poland (9.6)
- China (9.2)
- Japan (8.8)
Oh how our East European borders have grown...
This is going to come off as agressive and whatever but I just really wish people like you that don't have any idea what they are talking about would just shut up already and stop polluting the internet with unfounded opinions.
This was a completely fraudulent construct. 100% of the voting rights were sold for the equivalent of 1 Euro to a single person with no serious business background (has dealt with cars and performed as a DJ). This is a company with billions of turnover. And 99.99999% of the ownership was bought back by the the company itself.
It's not a real exchange rate because there is no free exchange. Russian exporters forced to exchange 80% of hard currency to rubles. An individual can get maximum $10k in cash until at least 9th September: https://www.cbr.ru/eng/press/event/?id=12744 (and there are similar limits on international payments/transfers).
When there is no free exchange rate is not very meaningful.
More Background, why this is in fact important: Gazprom Germania is also a critical part of the german Gas-Market, because it owns the largest gas-Storage with 1/5 of total capacity in Germany, major Gas Pipelines and Platforms for trading the ressource. This is both through Sub-companies Wingas and Astora.
It also has contracts with Gazprom in Russia with guaranteed Prices and Deliveries.
> It also has contracts with Gazprom in Russia with guaranteed Prices and Deliveries.
Is anyone under an illusion that Gazprom in Russia will honor these contracts, now that their branch was seized? And if not, what methods are there to enforce these contracts?
The Russians seized the planes, which can fly but need spares and checks. The Germans seized the pipelines and the storage. Both have some utility in the interim, but both are ultimately useless.
> Is anyone under an illusion that Gazprom in Russia will honor these contracts, now that their branch was seized?
In this case because both parties need it (for now) even through currently neither of them wants it. (Russia needs the money, Germany the Gas, if Russia could afford it they would already have cut of Gas to destabilize Germany. If Germany could afford it they would already have cut payments to force Russia to stop the war.)
Also I think some people misunderstand what sizing means in this context it doesn't mean "hey this is now ours" but is much more subtle and complex, and most important temporary by nature.
“We seized your property under exigent circumstances, but you better honor your contracts rather than cancel them under exigent circumstances!”
- NATO, apparently delusional
The idea people will “honor” contracts while you’re (illegally) seizing their property in effort to enact an economic siege of their nation is mental illness — either delusions or megalomania. That strategy doesn’t make sense.
I’m personally sad to see how deluded US and EU leaders are.
This is nonsense. Gazprom Germania attempted an illegal transfer of ownership. From what I can tell, Germany isn't appropriating anything. It's just seizing control in a regulatory measure.
I'm sorry, what did NATO seize again? It was Germany. Germany is not NATO. If you're going to participate in the discussion, at least keep your actors straight.
> Da die Gazprom Germania GmbH jedoch kritische Infrastruktur betreibe, müsse jeder Erwerb durch einen Nicht-EU-Investor vom Ministerium genehmigt werden. Unklar sei, wer wirtschaftlich und rechtlich hinter den beiden genannten Unternehmen stehe. Zudem habe der Erwerber "die Liquidierung der Gazprom Germania angeordnet, was, so lange der Erwerb nicht genehmigt ist, nicht rechtmäßig ist".
(Use Google Translate etc.)
So the sale had to be ratified by the ministry, which didn't happen. Gazprom ran afoul of the law, the government stepped in and took over temporarily.
But of course this is the internet, the more radical nonsense you spread, and the more emotional outrage your project, the more clicks you get...
Russia has just had its foreign reserves frozen. Those are debts too, which the West has repudiated. Why shouldn't Russia do the same in reverse?
Countries export solely to gain imports if they have any sense. If there are no imports to be had - due to sanctions - then there is no need to export. Far better, from Russia's point of view, that the oil is left in the ground, and the workers redeployed elsewhere. To the war effort for example.
If those workers are fine with a substantial fail in their QoL. It’s gonna be most painful for the oligarchs and people in their environment who are used to consuming massive amounts of foreign goods.
Btw even the USSR which was generally much more autarkic couldn’t survive without foreign currency for energy exports. What makes you think modern Russia could? Also it was illegal for workers to leave Russia back then, unlike now (so assuming there are countries willing to accept them they might be more likely to choose that over ‘being redirected to work in the war industry’.
"It’s gonna be most painful for the oligarchs and people in their environment who are used to consuming massive amounts of foreign goods."
If 'tax the rich' works and reduces the power of the rich, then hasn't the West just taxed the rich of Russia and reduced their power to remove Putin?
Democrats can't have it both ways. They propose a billionaire tax in the USA to reduce the power of the rich to interfere with people in charge, then actually implement a billionaire tax in Russia and expect it to increase their ability to interfere with people in charge. It's an illogical position to hold.
"Btw even the USSR which was generally much more autarkic couldn’t survive without foreign currency for energy exports. What makes you think modern Russia could?"
If there are sanctions in place, what are they going to spend the 'foreign currency' on?
You can't eat dollars.
"so assuming there are countries willing to accept them they might be more likely to choose that"
The 'leave for other countries' is a globalist position. Most ordinary people are rooted in social support constructs on the ground. They don't leave, and prefer their own country.
In fact the attitude to those who leave from those who remain is likely to be good riddance to bad rubbish.
Well supposedly over 200,000 left since the start of the war. If true, while it might not seems like a lot in relative terms, this is still a pretty huge deal. These people are likely generally more productive and educated than an average Russian and if this trends continues it does not bode well for the Russian economy. Of course politically this might benefit Putin since those people are very likely opposed to his regime. In any case Russia’s demographic situation is not great so an additional few million young people leaving might have huge negative consequences in the long term.
> West just taxed the rich of Russia and reduced their power to remove Putin?
Arguably no. They’ve lost access to some of their wealth in the west but their actual power relvant (in the form of companies they own in Russia is still in Russia). So the expectation is that loosing access to the west would incentivize them to use any power they still have to get rid of Putin. Considering how intertwined their sources of wealth and power are with current regime I’m not sure how likely is that. But basically the west wants to make it so that keeping Putin in power would seem more expensive than replacing him with something/someone else.
> You can't eat dollars.
Individuals still want to buy foreign good (while they might be harder to access or more expensive it’s still possible to acquire them).
Also most people would probably prefer to store their savings in USD/CHF/EUR rather than Ruble since it’s value is going to collapse the moment Russia lifts capital controls. This arguably only increases the demand for foreign currencies.
Main categories of goods imported by Russia in 2021 were: ‘Machinery & Equipment’ and ‘Medicine’ and it’s not like Russia can just stop importing these of they want to keep their pump jacks and hospital running.
"Also most people would probably prefer to store their savings in USD/CHF/EUR rather than Ruble"
Only globalist anywhere people. Ordinary Russians keep their savings in Roubles for the same reason I keep mine in GBP - because that's where we live and where we intend to continue to live, with everything around us priced in that currency.
I don't even care what the current GBP/USD exchange rate is. Why should I? Same with Russians with Roubles.
"Main categories of goods imported by Russia in 2021 were: ‘Machinery & Equipment’ and ‘Medicine’ and it’s not like Russia can just stop importing these of they want to keep their pump jacks and hospital running."
This idea that Russia is a backwater that can't make its own stuff is very peculiar.
We've just removed the cheaper competition. Russian producers can now expand, massify and gain economies of scale.
Hence they've confiscated a load of planes which they intend to make parts for themselves. Since IP rights have been suspended in Russia for foreign goods, they can make whatever they can physically make with nobody skimming off the top.
They _want_ to pay their debts, to preserve better borrowing terms in the future and to not look bad. If you research at all you'll see that they're actively trying to pay their debts to avoid default.
I guess the answer to that would be "and Germany can keep their cash and maybe have to burn it to heat homes or generate electricity"?
The war we're seeing (the economic war) is a point of mini-singularity, where a lot of we know to be true about the world is invalid. Such as an assumption that a state having debts will actually pay them.
the storage and the pipes are the most valuable thing, since gas is just a commodity.
Add another supplier, load it up, use pre-existing storage and distribution, Gazprom replaced.
This is also why this is so dangerous from a legal perspective. Gazprom probably spent a great deal building this network and storage. Only to have it seized....
That is a disadvantage, but pipelines are very valuable. For example, Russia would love to sell gas to China, which would love to buy it, but pipelines take a heck of a long time to build. And regional, lower volume pipelines can be a nightmare to build.
To me it seems that actually the reason for the seizure was that Gazprom did not store enough gas, while they have the biggest capacity:
> In Germany, a third of gas storage belongs to Russia's Gazprom (GAZP.MM), whose facilities in Germany had lower levels of stored gas this winter than those operated by other companies.
A plausible scenario but probably won’t happen in this case, Could be more like overseas subsidiaries of Bayer, seized by various allied countries in WWI and only reunited in 1994.
The reparations bill (both during and after the war) will be high and I assume various assets, including foreign currency reserves, will end up going to fund the reconstruction of Ukraine.
Apparently the company was sold or ownership restructured in march without prior notification of the regulatory body. The new owner is Gazprom Export LLC, of which ownership is unclear - it is suspected that Gazprom tries/tried to evade regulatory control over critical german infrastructure, thats why Minister Habeck has transferred control over to the Bundesnetzagentur as a trustee.
sized here means "put under control of a trustee until the situation is resolved"
it doesn't mean "take over ownership".
The reason that happens is because the persons(s) currently in control of Gazprom Germania did try to use that control to act against German law in a way which
threatens national security.
This is also more about Gas infrastructure then Gas as far as I can tell.
My guess is that some Russian oligarch tried to move ownership to one (or potentially
many) chains of "dummy" companies which obfuscate the actual owner and go through many
other non-Russian nationalities. This e.g. would make many legal actions against Gazprom Germania harder as the new (dumy) "owner(s)" would not be from Russia or any other sanctioned state.
To expand on this: much of the distribution infrastructure within Germany is owned by Gazprom. For example, there's a very large natural gas storage capacity within Germany, but a significant portion of that is owned by, you guessed it, Gazprom. There's broad consensus that, if all of the storage infrastructure were topped up, Germany would be able to make it through _next_ winter reasonably well, even if Russia stopped delivering gas. However, currently the storage capacity is at around 30%, which is insufficient. This move would imply that the German government is taking action to force the distribution infrastructure to be more resilient against the contingency that Russia (through one means or another) stops delivering gas.
It's also worth pointing out that there's been some evidence suggesting that, in the weeks and months leading up to the Russian invasion of the Ukraine, the "fill level" of the Russian-owned storage infrastructure within Germany was decreased, which would both be a way for Russia to attempt to leverage gas delivery against sanctions (in other words, blackmail), as well as yet another strong indication that the invasion was a deliberate Russian aggression planned well in advance.
> It's also worth pointing out that there's been some evidence suggesting that, in the weeks and months leading up to the Russian invasion of the Ukraine, the "fill level" of the Russian-owned storage infrastructure within Germany was decreased, which would both be a way for Russia to attempt to leverage gas delivery against sanctions (in other words, blackmail), as well as yet another strong indication that the invasion was a deliberate Russian aggression planned well in advance.
It's a bit more complex than that. Following the liberalization of the gas market, "discount providers" appeared who simply bought on the spot market because that is usually drastically cheaper than long-term contracts, and also the large utilities shifted parts of their purchase to spot market contracts for the same reason. For many years this worked just fine from an outside POV, and the margins on the retail gas price that the utilities made were usually large enough to account for short-term supply price hikes without having to raise new capital or retail prices. All seemed to be well.
Last year, people noticed that Gazprom's storage facilities were unusually low. Gazprom of course denied any wrongdoing, they claimed they are fulfilling their contractual obligations and that's it. Which is objectively true and as a result, no regulatory agency had any legal authority to step in.
And now, with the invasion ongoing (and for a few months prior), Gazprom still kept their long-term contracts but unlike all the prior times did not supply much on the spot market - which led to the well observed price hikes and utilities going bankrupt or out of business because their "old" strategy of simply buying on the spot market didn't work out.
The responsibility for the current situation rests to a large part on the utilities who forewent resilience (in form of more expensive long running contracts) in favor of short term profits. We dug our own and the Ukrainian's graves at the same time.
The nuances around spot pricing are testing the limits of my knowledge here, but my understanding (which might be wrong!) is that, in the context of gas storage infrastructure, spot prices have an indirect influence on the fill level, purely based on price speculation. In other words, the good-faith actors would respond to low spot prices by increasing the fill level in storage infrastructure, but because the prices are currently high, there's no incentive for that, and now the German government is trying to figure out a policy solution to increase storage fill level. Seizing control of Gazprom Germania would then play a part in that policy solution.
That being said, just to clarify: the discussions I was referencing in the GP comment suggest that Gazprom has not been acting as a good-faith rational actor, and has in fact been keeping their storage infrastructure even less full than you would expect due to high gas prices.
> That being said, just to clarify: the discussions I was referencing in the GP comment suggest that Gazprom has not been acting as a good-faith rational actor, and has in fact been keeping their storage infrastructure even less full than you would expect due to high gas prices.
Yes, I merely explained how they were able to deflect the accusations of acting in bad faith for so long.
Gazprom was leaving literal billions of dollars on the table by not offering any meaningful spot contracts for months now, until the invasion began - a fact that no one could explain with anything else but war preparations, and war was seen as a ridiculous idea almost everywhere, so public discussion was simply left at "we have no idea what they are doing in Moscow".
>Gazprom still kept their long-term contracts but unlike all the prior times did not supply much on the spot market - which led to the well observed price hikes and utilities going bankrupt or out of business because their "old" strategy of simply buying on the spot market didn't work out.
What do you expect to happen when long-term contracts get tied to spot prices? Why the hell would Gazprom willingly lower the spot prices when bulk of its sales will suffer from it?
> Why the hell would Gazprom willingly lower the spot prices when bulk of its sales will suffer from it?
Because that is what they have done for the last decades - the pipelines have more than enough capacity, even without NS2. They only stopped selling on the short-term market last year.
The only explanation why Gazprom was leaving that obscene mountain of money on the table is because they have been ordered to do so by Vladolf himself, so that he has leverage against Germany in the Ukraine invasion.
> yet another strong indication that the invasion was a deliberate Russian aggression planned well in advance.
Are there people out there who have doubts about this? Regardless of any opinions on the rationale behind it, it's very clearly something that was planned in advance. I didn't think that was something that was up for debate.
How could you not plan an invasion in advance? This is easily at least a year of planning just on the entirely practical side of things like how to get enough units and hardware there.
I dont know whether they believe it but I'm fairly sure I've seen people on HN claim that something or other that President Biden did a day or two before the invasion forced Russia to act.
Its a political push and pull about who defaults on the existing contracts on gas import, seeing as Russia wants to be payed in ruble now, while Germany would prefer the payments to be stuck on a EU bank account as a form of reparation payments to the Ukraine. To prevent this outcome, Russia in effect might be liquidating the Gazprom Germania. With Gazprom Germania being the ones doing the actual importing. Over the last weekend there was a change in ownership of the Gazprom Germania to new unknown owners. So they might be already bankrupt. To prevent this, Germany is now seizing control of Gazprom Germania and might be on the hook to prevent an insolvency to not default on the contracts with Russia.
In short, the German government fucked up majorly.
edit: Check "throwhow"s post in this thread for a longer summary
I completely agree with a part of the comment that DE gov't probably didn't consider a long war or a long bad relation with RU.
If they did, there wouldn't have been blocking Spain's proposal to supply EU with Algerian and Moroccan gas. And they would have been looking into incentivizing solar, geothermal, etc. with immediate effect.
Since German heavy industry is very dependent on Russian gas, if it's not coming, it's almost guaranteed a global economic meltdown much like 2008. Since it's not coming from banks liquidity this time, we are unprepared for it.
I don't know where to add this question without it seeming off subject, but seeing as we're heading into spring, seeing Germany has quite a wealthy economy and QOL, that many if not most workers get 5 weeks of holiday, the chip shortage is leading to slowdowns in the automotive industry etc... why doesn't the government just go cold turkey, give people a month or 2 free holidays while drastically reducing public lighting, telling businesses to stop heating their premises at night etc etc... I mean we had a dress rehearsal 2 years ago with the onset of Covid, this would be better ,for a good cause, probably give a boost to domestic spending and send a f...U to the rest of the world saying we too can think outside of the box :-)
The author of this blog is Fefe who is known for his strong pro-Russian bias.
He told the world up until February 23rd that everybody was dumb to believe that Russia would invade. I would not believe anything Fefe says on his blog, ever. He dips into conspiracy theories time and time again and when he gets proven wrong he just says that it was meant to be "media competency training".
Its a readers comment. But either way, you not liking the author doesnt mean the summary of the situation is untrue.
In case somebody can refute the explanation (or give a better one) of the Gazprom structure and motivation, i would be happy to hear the problem with it. As i see it, despite the rambling its a short and concise explanation of who does what why.
Facts and opinion are rather easy to distinguish though. Its the shortest description i could find of the structure and mechanism in play. If there is a problem with that part, pls do share.
Gazprom attenpted to change owners and default the company. In that case the gas contracts would have been void including its negotiated prices (under currebt market value) and the currency in euro instead of rubbels.
> Gazprom attenpted to change owners and default the company.
Is that illegal?
I wonder about rule of law. We talk about this as sacrosanct here in the "West".
It is funny that when push comes to shove (in my perception at least), we're quick to break the rules to get the outcome we want.
When say a 3rd world country does something like this in response to a "Western" multinational's actions (perhaps a controversial example would be Mossadegh nationalizing APOC), then the response we take it is pretty severe (often involving significant amounts of violence) and we portray ourselves as being "morally" rightous, often with the very same "rule of law" claim.
Just something I like to think about in this scenario. Not trying to push any agenda.
> > Gazprom attenpted to change owners and default the company.
> Is that illegal? I wonder about rule of law. We talk about this as sacrosanct here in the "West".
Ignoring the geopolitical aspects and the “critical infrastructure” aspects: yes it’s illegal everywhere to unilaterally abrogate a contract or to use bankruptcy or such rules to evade contract.
Normally of course this would be handled through the courts, but the answer to your question is “yes”
That's correct, it depends a lot on the perspective. We justify this because it's critical infrastructure, which is a good enough reason to me, but if a 3rd world country would argue with critical infrastructure, the narrative in western countries would be very different (assuming it would lead to some conflict of interests - otherwise, sure fine!).
We definitely need to get rid of our double standards. All complaints about this from non-western countries are mostly correct.
"The German economy ministry said Gazprom Germania violated foreign trade law."
"Germany's economy ministry justified the takeover by saying it had not granted permission for the Gazprom Germania acquisition. Permission is required, the ministry said, if the investors are not from the European Union and "critical infrastructure" is involved."
> "The German economy ministry said Gazprom Germania violated foreign trade law."
And that's sufficient basis for a legal system to reassign ownership of assets?
Just for debate, lets say Google search is critical infrastructure and Google unilaterally took some action that upset the German economy ministry, would the legal system enable German authorities to take over assets that Google had within Germany and/or areas still under German control?
Broadly speaking, countries are sovereign and can do almost anything they’d like in this context. It is most of the time limited by treaties and trade agreements, so I suppose Russia could make a stink and complain with things like the WTO.
You’d have to dig into the specifics of German law in this case, but this is really unsurprising. Sales are routinely blocked and companies nationalised (with compensation, in civilised countries, though the fraud aspect could change this in this instance).
Gazprom Germania can believe the government is wrong and take it to the courts, but the legal argument seems sound.
There are additional rules for critical national infrastructure. The gas company didn't follow them and this gave the government the legal right to seize the business.
This is probably one of those circumstances where law gets so complicated that you are always in violation of something. That way, when the authority needs you in one way or the other the haul you in front of a judge for your "violation of the law" unless you cooperate with their demands.
You ask a question, then immediately assume the answer and draw conclusions based on that answer. I dispute that this is just something you like to think about ("Just asking questions here...") or that you are not pushing an agenda.
I beg forgiveness if my question and thoughts on the matter are somehow perceived as an agenda. I haven't studied the Gazprom case carefully, but after all, the title of OP's article is "Germany has seized control of Gazprom", not Germany has lawfully taken over management of Gazprom assets after a protracted court case establishing ownership and takeover processes, so am I really at fault for drawing conclusions based on that?
Perhaps I was too harsh, and you are not a native English speaker? "Seize" simply means to take control. The second definition in Miriam Webster is "to take control by legal means".
There is a huge difference between the rule of law in proper democracies ("Rechtsstaaten") and arbitrary political decisions in totalitarian states (such as Russia).
German ministers can implement some draconian decisions, but they are operating in a large system of checks and balances, including independent courts and required parliamentary support for passing legislation.
The two scenarios are therefore roughly as similar as the arbitrary power of the owner of a privately held firm and the constrained power of a CEO of a publicly traded company.
> There is a huge difference between the rule of law in proper democracies ("Rechtsstaaten") and arbitrary political decisions in totalitarian states (such as Russia).
I'm tempted to agree. However, I did raise a specific counter-example. In that case, a "proper democracy" (Mossadegh was democratically elected and presumably used entirely legal means to nationalize APOC assets), and then the long arms (CIA, MI6) of another set of "proper democracies?" undertook a violent coup to take back the assets. I'm not aware of how/whether those "long arms" interacted with the large system of checks and balances that you mentioned.
I don’t know where you are in “the West” but here (Western Europe), selling a company is often subject to some kind of oversight, particularly something as critical as energy or with large companies. And artificial bankruptcies to evade contracts are actually fraud.
Not making any point about your example, which was indeed despicable behaviour.
> In Germany, a third of gas storage belongs to Russia's Gazprom (GAZP.MM), whose facilities in Germany had lower levels of stored gas this winter than those operated by other companies.
In my opinion, Gazprom did so (last year) in order to strategically weaken Germany's position and strenghten Russia's position, by reducing the amount of gas that is stored in Germany.
Gazprom formally cease it's activity in Germany, and it's German branch operate North Stream gas terminals. "seized" is a bad term to say "the State substitute the local management to ensure terminals operations to been able to buy the gas they need.
If you really look for "sanctions" you'll see that there are some, but not really touching the energy sector since there is so far no viable alternative.
there's been talk of gazprom being a safe haven for higher placed people running from russia's recently tightened regime. think officials and/or FSB agents, etc. wanting to avoid sanctions by changing ownership structure of gazprom to western shell companies.
Only tangential to the article, but does anyone find risky that absolutely critical services depend on one or two foreign private companies?
And other than losing money, what would be the consequences of Gazprom pulling out of Germany completely? I’m guessing that Russia just doesn’t have enough economic leverage to do so.
The theory is that if the two countries depend on each other deeply they will avoid disputes that would disrupt that relationship. That hasn’t worked out so well in this case, but has worked well IMHO to break the cycle of warfare in Western Europe over the last 70 years or so, the longest stretch of peace in in that region for over a thousand years or longer. Under a rational actor/game theoretic model that is the most likely outcome.
Russia decided to use the gas as a weapon and germany decided to use its financial structure (I.e. its ties to many other countries) as a weapon back. In the medium and long term I think Russia needs germany more than the other way around.
More broadly: your business is in trouble if it only has a small number of customers or suppliers. That diversity provides resilience. In geopolitical terms, it’s it’s fine to have only overseas suppliers (and even good from a comparative advantage perspective) as long as they aren’t correlated. Germany’s bet (wrong) was that making an oversized commitment on Russia would provide a welcome guarantee to reduce the chance of isolationism, That didn’t work. But Russia made the opposite bet: that the commitment meant they had a stranglehold on Germany. But Germany is too rich and has too many friends for that to be any more than a transient threat.
Do you think it is fine for EDF to operate 8 nuclear plants of UK, “outside EU”? Do you think it is fine for Gmail to suppress email accounts of entire companies in Europe? Especially if they already did it for individuals and their work Gmail.
I think we live in a dangerously intertwined world, and a bit of email redundancy in each country would be quite important.
Currently it's probably the same stuff as the original McDonalds. Eventually the quality will deteriorate due to lack of supervision - unless Russians will do an equal job in supervising, which I doubt.
Russians are actually good at building restaurant business. It is one of the most competitive and difficult businesses there, so only the smartest survive. I’d rather go to Starbucks or McDonalds in Moscow than anywhere else in Europe (I’d prefer though a local chain). One of the fastfood chains even applied kaizen in their operations including kitchen.
The biggest problem will be the quality of supplies, as sanctions will damage the supply chain.
What quality? Even in Austria, at some really busy McD's I've been to like the train station or airport, their finished burgers looked nothing like the ones in the menu.
Often they had components like the cheese, lettuce and sauces missing and I got just a dry paddy between two barren pieces of bread as a burger lol. It was uneatable so I had to throw it away and buy a sandwich from the SPAR next door which has much better quality.
The McD's I've had in NY weren't much better either.
OTOH, McCafe's in Europe (the separate establishment, not to be confused with the coffee you can get from McD's) are amazing, coffee is always great, on par with even fancy hipster cafes and their pastry and cakes aren't bad either.
Sure, not looking exactly like the menu/ads is one thing, that's just marketing for you, but being served a patty in a bare bread bun, missing the cheese, lettuce and other parts of the product you ordered, is an outright scam in legal terms if we're being pedantic.
Sure, I get it, having underpaid and overworked people making your food is not a recipe for a great experience, but ultimately I paid in full, the company got their money and I didn't get the product I ordered, which is why I jusy stopped eating there, since I don't like being "THAT GUY" who ask for "the manager" in order to complain about overworked people on minimum wage that they got his order wrong and they need to redo the order while 10 more customers are waiting in line.
What likely happened in this case is they gave GP a burger intended for someone who ordered it 'plain'. The slips McDonalds uses to attach special order tags to the sandwich wrappers are prone to falling off or being overlooked.
N'ah, the employees were just overworked so made mistakes or cut corners. The amount of customers that come at an airport or a train station at rush hour is insane. Mistakes happen, or some employees cut corners to save time, knowing that the customers won't have time to notice the mistake and complain about it, since they have a train/flight to catch.
As we're not talking about small cuts of leaves but some highly industrialized component it is not so easy as counting leaves and mixing them together. You can certainly analyse the flavors, but that won't tell you much on the production process for creating this with all the artificial components.
However that could creates some creativity in place and create similar, but different (better? Worse? Who knows) products.
Compare this to Coca Cola in Germany during WW2. Due to the embargos they couldn't deliver the "secret syrup" so Coca Cola Germany used some "fantasy" and created (the predecessor of) Fanta, which nowadays is a brand of Coca Cola served in multiple countries (with differeing recipes)
Why would you even want to copy Coca-Cola's "super secret syrup" when we already have in Europe several local Cola drinks that are better, and sometimes even healthier?
Fanta is now nothing special either, just a sugary fizzy drink with orange flavoring that can be done better by other local companies.
Coca Cola is just a branding and marketing juggernaut at this point, but their drinks themselves are easily replaceable by better local alternatives at any time.
Come to think of it, banning Coca-Cola could actually be a health benefit for the population lol.
I remember that in Mexico there are poor villages addicted to Coca-Cola where the company uses local water to make the drinks and the villagers have no access to clean tap water and have obesity and diabetes from all the coke they drink, and all is sponsored buy the Coca-Cola and their lobbying. Absolutely disgusting.
That's orthogonal to the discussion. Fact is that local branches can survive with some form of pivot if their owner can deliver a core component for the product.
You can analyze components, but that doesn't give you a process to recreate in scale. Many aromas and stuff are remainders of some Enzym processing things or some chemical reaction where the initial ingredient is dissolved.
I myself spend some time in bread and a part of the taste of bread comes from my bacteria/yeast culture growing here at my place, feeding of stuff which is in the air at my place. If i go elsewhere that already changes to a small degree. If I vary temperature, humidity of air ... this has impact. On industrial scale the impacts are way more as they use processes to ensure the end product stays as much the same as possible independently from changes to ingredients (natural products change with each harvest ...) and where it is processed further (a Big Mac is, by McD, supposed to be as equal lgibally as possible) this is done by having Enzyms, chemicals and other comments doing their work.
Yes I agree living things like bacteria/yeast cultures are hard to get right. In regards to your previous example you can get the blend of leaves right, but if the plants aren't genetically identical or even aren't grown in the exact same climate the end product may taste very different. When it comes to completely artificial flavorings though it would seem to me that it would be much simpler. For example isoamyl acetate is isoamyl acetate regardless of where or how it is produced.
Of course! But if the government cared about quality of life of their citizens to that extent, it would be quite a different country, and the sanctions wouldn't be there.
It's nice to see Germany start working towards energy independence. I think it's a crucial factor for both national security and a faster migration to more environmentally friendly energy sources.
It looks like the Green Party didn't have a single minister in 2016 when they turned off all the nuclear post-Fukushima - so why would the Green party be responsible?
Who has been in power for the last 20 years exactly that could have built renewable power instead of quadrupling down on Russian gas? It wasn't the Green party.
Sometimes I wonder if the Greens are actually funded by petrol companies because everything they do seems to benefit them in the end. In Switzerland the Greens are trying to be as dumb as the German ones.
Gazprom funds green NGOs in Europe. The dogmatic anti-nuclear energy minister in Belgium has ties to Gazprom.
Europe gets 40 % of their gas from Russia. In the 90s most of the gas came from Europe itself until all those wells shut down under Green pressure.
Jane Fonda is a sexy grandma who still got it, she stopped the war in Vietnam and got us in shape. With our powers combined, we are Captain Planet? We were elected to lead not to read!
Here is an additional thought: if you dedicate an entire party completely and totally to solving one problem, what happens to them if the problem actually gets solved?
Seems like a single issue politician is exclusively incentivized to shift blame in order to get re-elected rather than, you know, do anything constructive.
France is something like 70%+ nuclear powered, they got it all sorted for the rest of the century. Not much for the greenie weenies to do.
I'm old enough to remember when Chernobyl was on the news, not a fictionalised version. The initial "discard all milk production across Europe" phase lasted a few weeks, but the last restrictions in the UK took 26 years to lift: https://www.bbc.com/news/uk-england-cumbria-18299228
(it's also been in the news recently as it was right in the middle of the Russian assault on Kyiv!)
- a "black swan" low probability risk of something really bad happening, despite everyone saying it can't happen, and poisoning the surrounding area
- it's expensive, takes a long time to build, and can develop expensive problems. Many of the French reactors are approaching the end of their 50 year design life.
That said, it was definitely a mistake for Germany to close plants without a specific safety risk.
Germany is the 4th largest economy in the world with pretty regular budget surpluses. I think that's what you might call penny wise pound foolish, is there a saying like that in German?
Black swan events are nothing to make light of. I mean technically there's also a "black swan" risk of a meteor destroying the earth or monkeys flying out of my butt.
I guess they aren't that good at that whole engineering thing anymore and just can't handle this as well as the French. ;)
My argument for nuclear: the alternative low-carbon base load is grid-scale lithium ion batteries. That tech is ,(AFAIK) 10 years out from reaching both the scale and price point needed. Also note that solar and wind need enormous amounts of land.
That's not a green group, it's just a front for Gazprom.
Just like the fake "Whale conservation" group fighting wind power off Nantucket is a front.
If you want to criticize something as large as the Environmental movement, and you can't even find one real example to cite then maybe that means something.
If you can't criticize them, don't bring up people that are larping as them for their own ends.
But that is entirely the point - the environmentalists as a whole are not the problem, the problem is the groups that usurp the mantle and push for policy contrary to the wider group's agenda. I'm not criticizing people who fight against pollution, animal cruelty, and fossil fuel abuse; I'm criticizing people pretending to be environmentalists yet lobbying for fossil fuel increase and dismantling cleaner alternatives.
Even though it's very often stupidity instead of evilness, I really think that they are not stupid. They started as a pacifist party and now they passed the largest defence budget since WW2. You don't do that by accident. I think most of what they represent is just a fashionable front.
For Germany as a whole I cannot speak, but it is an extremely common thing, yes, whether they know it or not.
* Greenpeace Germany has a gas division. They've now split it off and officially only own 5 shares (while being headquartered in the exact same building, by the exact same Greenpeace members): https://en.wikipedia.org/wiki/Green_Planet_Energy
* Companies like Total have made use of their enormous war chest to take control of multiple organisations that push wind & solar power (https://www.theguardian.com/environment/2015/jan/22/fossil-f...), knowing full well it cannot cover all of our energy needs and knowing they will be here to sell natural gas, continuing the use of fossil fuels.
I've bought gas from various "green" energy suppliers over the years. Generally, they need to offer it for people that need both, even if their main aim is expanding solar or wind power.
Some, like this example, go a little further and try to mix in hydrogen or biogas to reduce carbon output, or offset the carbon in some way, but even when they didn't, it was still greener than the alternatives on the market and a profitable business advancing their professed agenda.
I wish nuclear fans would apply their ridiculously high standards for what they consider green energy to nuclear as well rather than just sabotage any attempt at advancing renewable energy with snide gotcha arguments.
Don't get me wrong: I am all for the presence of renewables in our energy mix. Solar at the individual house level is a great option, and making use of it in other spaces that are currently useless would be great. (Lining the top of parking lots to provide shade and electricity is a great option). Wind turbines are a bit more debatable, but as it stands, still provides a good option for some intermittent but good enough power.
But know that your mindless antinuclearism is going to be our downfall. Our only options for baseload generation as it stands are nuclear and gas. And by protesting nuclear, you are giving oil companies a large avenue to keep fucking us all over. Rejecting nuclear at all costs right now in an attempt to get some renewable only future is madness. It is only leading us further down the hole of global warming. The only sabotage happening here is organisations like greenpeace literally committing acts of terrorism against nuclear plants. No-one wants to go nuclear+gas.
Your mention of hydrogen makes you even more of a useful idiot for oil companies. Hydrogen does NOT work. We get 27% efficiency when it comes to storing it and using it as power. P2G2P is 50% at best. And while STEPs are a great solution for storage, we've used most of it. Unless you're looking to drown Bavaria to make a big lake.
Build a ton of nuclear plants. Move as many countries as possible away from gas and coal. Once that's done, I'm more than happy for all of us to think of alternatives for nuclear.
Why should we be dependent on France? Nuclear waste is a boogie man to scare hippies at night, almost 96% of fuel rods can be recycled and fuel rods have a life cycle of 5-10 years while not needing that many to run a reactor. We could be researching and investing in modern nuclear tech that solve these problems until fusion is viable. Also with petrol there was a lot of waste but we learned to process it and turn it into a valuable resource, maybe the same could happen for nuclear.
Hydro while interesting it is awful for the environment.
Because Switzerland is dependent on like everything? The same could be said about steel, food, chips, chemicals, minerals, fertilizer, oils, gas...just about everything, yes we produce stuff but nearly nothing from the ground up, with the exception of Alp-Cheese and Buendnerfleisch ;)
>Hydro while interesting it is awful for the environment.
Switzerland then must have terrible environmental problems.
Your plan is to sit in the dark while the radiation drifts across the imaginary line that is your border? Well, at least you're honest. Here I thought we were concerned about going green and the planet and such.
> Is the far right not happy making money?
You know Mr Putin could have just stayed on the throne collecting hundreds of billions a year doing nothing. Nord Stream 2 was weeks away from being flipped on, this was boom times for Russia.
> You know how small Switzerland is? One accident and whole Switzerland could be polluted at once.
Well precisely. And Bugey is so close might as well be in Switzerland, heh. Atoms don't know about our imaginary lines.
> And would have been probably flipped off, after what happened.
I'm saying instead of collecting riches he opted to invade. It is a bummer but sometimes people are not rational actors, even in Europe it turns out.
> Not sure how that has anything todo with a far right french politician.
Generally far right movements have an affinity with Russia/Putin. You don't need to believe some unproven (or in some cases proven) theory about them being bankrolled by him.
Le Pen happens to have known ties but you can disregard this completely if you prefer. What I think you would find very interesting and somewhat alarming is the attitudes and political winds currently blowing even in your civilized neighbor France. Ask a French person first hand to lay it out.
It is relevant to your interests, especially now that you depend on them for energy. I know, fortress Switzerland, not used to this, but it is an important lesson to learn right now. Please don't repeat the mistakes of Germans.
somebody convinced the Swiss that benefits are not worth the risk and/or costs; it's quite clear now that some of the risk of being reliant on gas was... understated. the greens, for all my love of the environment for the sake of my grandkids, are blind to geopolitics, and I used to think this is just naivety; I'm starting to doubt that considering the extent of FSB's and GRU's influence.
People can be easily scared into doing very stupid things long term. Fear is by far the easiest way to manipulate, look at brexit, Trump etc.
Swiss are generally quite smart but have emotions just like everybody else, even if it may not seem so upon first encounter. From what I recall they already buy LNG mainly from US so at least this part is not so bad re current situation.
There are dumb aspects about the German Greens ("Veggie Day") but they do a good job moving Germany into the right energy direction today. Your criticism is generally unwarranted and the data shows it.
I think we shouldn't use words like "dumb" at all because we are all trying to bring about the most sensible, safe and productive energy future for our nations. These nations have different circumstances and demands and some are more influenced by corrupt individuals than others.
With regard to the Greens, what exactly is dumb? It can't be the move away from nuclear because first of all, that was decided by Merkel's CDU long ago and second, it is economically the only sensible thing to do in 2022. It's what the MARKET dictates. Capitalism at work because no one will pay for the cost of building and running a nuclear plant while renewables are already working and massively cheaper to build, run and INSURE.
I'm not even talking about technology, safety or waste disposal at all. There is no reason to even go there because today NO energy provider in their right mind will build new nuclear plants today (and they won't matter anyway because building one takes 10+ years). The decision is a result of cost and not technological misunderstanding or ignorance.
On the other hand, France's electricity briefly cost more than >€2900/MWh yesterday (as opposed to €101/MWh in Germany) due to their reliance on few but old nuclear plants with high safety standards which go offline quite often. France's electricity shortly was the most expensive of all time in the world yesterday.
Anyone who actually supports new nuclear power plants today shamefully displays their utter ignorance of the modern energy market. It is COST that is prohibitive first and foremost. It will always be a LOSS operation. The market dictates the use of distributed renewable energy, which also prevents nearly all other issues associated with nuclear. Nice side effect.
In fact, Germany's real big issues are bureaucracy and NIMBYs but thanks to the current crisis those will hopefully be solved within the next years.
> I'm not even talking about technology, safety or waste disposal at all. There is no reason to even go there because today NO energy provider in their right mind will build new nuclear plants today (and they won't matter anyway because building one takes 10+ years). The decision is a result of cost and not technological misunderstanding or ignorance.
Yes, obviously.
German chocolate manufacturer Ritter Sport has decided to continue working in Russia. According to Ritter Sport, about 7% of its business is in the Russian market.
Money makes the world go around. You got in bed with Russia for cheap energy, which you enjoyed for a decade or two, and it cost you an increase in your defense spending and some dead Ukrainians.
Lets hope that's all it will cost you. Of course you had no choice, it is the invisible hand.
That market needs to be guided away from fossil fuels. How would such a market cover solar and wind when they dont make enough? Batteries? Huge hydro storage? That sounds more expensive than nuclear.
The lack of both LNG terminals and adequate connections to ones in other countries is a big part of what people mean when they say Germany went all in on Russian gas. They physically cannot import enough gas from other sources, as I understand it, and this was an intentional and knowing decision despite warnings from other counties.
.. after Fukushima. Trading one tail risk for another.
(Germany has oddly lagged in deploying renewables, though. Possibly due to lack of offshore sites, meaning that wind farms have to be deployed against the efforts of NIMBYs)
After Fukushima, nuclear was canceled by the conservatives (the Merkel II government), when the Green Party was not part of the government. The Green Party did cancel nuclear, but in the year 2000. Their timeline called for the shutdown of the last nuclear power plants in the 2020s, which would have been ample time to build up enough replacement capacity from renewables. But that plan was neutered by the Merkel governments crippling the buildup of renewables for 16 years.
Which is not to say there's not also NIMBYism. There is in fact a ton of opposition to buildup of renewables from both conservative-leaning citizens and left/green-leaning advocacy groups.
German Nuclear plants are usually on rivers, and as we’ve seen in the past year, those can have huge floods destroying everything around. You don’t want your nuclear plant’s backup generators to look like Ahrweiler.
If you think that tsunamis are funny you will love the concept of melting ice in the arctic messing with all the sea currents. That would be hilarious (except for the humans, of course).
The last German government before Merkel came to power, was a coalition between the Green party and the Social-Democrats (SPD), this government decided to phase-out nuclear power in Germany in favor of renewable energy by limiting the running time of existing nuclear power plants.
The next German government was a coalition between conservative CDU under Merkel and SPD, and the nuclear phase-out remained untouched.
But when Merkel won the federal elections a second time and was able to form a coalition with the Liberal-Democrats (FDP) replacing of the SPD as a coalition partner, who had voted in favor of the nuclear phase-out, they decided to cancel the nuclear phase-out.
This happened in the autumn of 2010 and was a controversial decision for the public opinion. When Fukushima happened half year later it was widely seen as a confirmation of the inherent risks of nuclear energy and thus the Green party’s energy politics, not because Germany is especially prone to Tsunamis, but because it showed that it's impossible to rule out and plan for every possible dangerous situation in advance, and that even a high-tech country like Japan, on a comparable technical level to Germany, was not able to stop the meltdowns.
Elections in federal states shortly after Fukushima resulted in a landslide loss for Merkel's CDU and big wins for the Green party, the CDU losing one of its stronghold states [1] it had before held constantly for 58 years.
As far as I remember Merkel foresaw the public reaction and almost immediately after Fukushima voiced out in favor of reversing the cancelation of the nuclear phase-out, but could only get a solid backing in her party, after the losses in the federal state elections.
> But with nuclear with go with knee-jerk reaction for some reason
That reason is propaganda. The anti-nuclear people use anything they can to whip people up into an irrational frenzy whenever anything happens, and it has worked pretty well.
As a German who loves hiking, let me tell you that you can not go more than 5kms without hitting a village, town or highway anywhere in this country. I am truly envious of having wilderness around like in the US or northern Scandinavia.
>.. after Fukushima. Trading one tail risk for another.
The statistical risks from nuclear actually causing a disaster are absolutely tiny in comparison, especially considering the upsides, but the Germans and Austrians want to be EU's nuclear doomers for shits and giggles just because Chernobyl and Fukushima happened, even though so many nuclear plants worldwide have run for decades without issue.
But sucking on the sweeet teat of Putin's gas for decades and burning it was the "greener" alternative for them instead.
Uranium is also imported. Overall the EU gets 20% of its uranium from Russia and another 20% from Kazakhstan, which is economically deeply tied with Russia.
This is irrelevant. Uranium, being unbelievably energy dense, is truly trivial to ship in meaningful quantities from anywhere in the world. Australia has the world's biggest reserves for example. Plenty of ways to acquire uranium without relying (and financially benefiting) from putler or order nondemocratic regimes.
I would suppose so, if you see a relatively big organization promoting things that you want to happen why wouldn't you finance them?
That Russia would finance the Greens doesn't automatically what the Greens advocate for wrong, or that the Greens are actually traitors, what it does is twofold - start a process whereby the Greens can over time be corrupted (via the money spout), and indicate that whatever the Greens are doing there may be unintended side effects which would be of benefit to Russia.
anti-nuclear is pro-fossil. I'm saying that russian psy-ops organize both sides of protesting factions in e.g. Qanon, yellow vests in France, etc. - why wouldn't they covertly finance anti-nuclear if they overtly finance pro-fossil? Greens are pro-environment, but don't offer substitute energy sources (because it isn't possible to offer them, a different discussion) - exactly the kind of turmoil Russia thrives in. but then, maybe the FSB's just lucky here.
Wrong and baseless. It is possible to simultaneously reduce nuclear and fossil components in the energy balance and this is exactly what is happening.
> why wouldn't they covertly finance anti-nuclear if they overtly finance pro-fossil?
Greens in Germany are established political party with clear anti-Putin positioning. Financing of political parties in Germany is transparent and has sufficient oversight, so there’s neither possibility nor any sense to covertly finance them.
> Greens are pro-environment, but don't offer substitute energy sources
We use LPG gas (from a tank buried at the bottom of the garden) feeding a gas boiler to heat our house.
I'm all for energy independence, and would love to switch to a more environmentally-friendly energy source, but I'm deeply concerned about how much this will cost me, and even if I did have the money, based on reports in local media, getting a heating engineer in would take many months.
Half a continent wants to switch energy supply "now" and the world was already suffering a serious supply chain crisis. Changing quickly may simply not be possible, never mind affordable.
We are in Germany and switched to a heatpump system 4 years ago through incentives over the "Marktanreizprogramm" we got over 45% of the costs reimbursed. It's not even only on the supply chain crisis it's simply ramping up production and training installers because everyone was totally fine with just doing oil and gas for a long time but now everyone scrambles. Shortsightness not only from the state but everyday people and businesses. Thank god for being Links-Grün versifft.
For our detached house the price of a heatpump setup is about 40.000 euros. We decided to stick with gass for a while.
At some point a electrical heat unit would be better. Very inefficient, but with solar and batteries a lot cheaper than a heatpump. About 15.000 euros.
That's interesting, so the tank is permanent and you refill it somehow? If yes, how often? Can you do the same thing with natural gas? Does the place you live in have natural gas?
Not your parent poster, but the tanks are commonly installed above-ground in the rural USA. It is propane (C3H8), which is liquid under pressure. Tanks are refilled as needed depending on usage via a tanker truck. I assume this is monthly but I don't personally have one.
In the US, natural gas normally refers to methane (CH4) heating, attached to a city methane heating grid. I pay a monthly bill per cubic foot of methane burned. Currently my water heater and furnace are methane. I live near Kansas City.
As residential development continues to expand and natural gas delivery systems do not to match in many areas the use of propane has moved beyond the rural US. I have a house in a suburban neighborhood developed in the last 10 years and all the houses have buried propane tanks instead of natural gas hookups. The propane fuels heating systems, hot water heaters and stove tops. Most have grills and fire pits also attached. I have all those plus the propane fuels an emergency whole house generator.
How often tanks are refilled depends upon your particular usage pattern and the time of year. Refills can occur on demand, on an automatic basis determined by looking at your past usage patterns or as in my case triggered by an IoT connected meter which notifies my propane supplier when my tanks fall below a pre-determined level. Depending on the time of year it can be 3 months or 6 months between fills.
> the tank is permanent and you refill it somehow? If yes, how often?
Yup, dug into the ground when the house was built, and refilled basically once every two years ever since.
Given I used to be a lab chemist, it's oddly fascinating watching the tanker drive up and then the best part of 1000kg of propane is pumped into a tank under part of your garden...
We were told "no naked flames within 3m of the tank" - we BBQ at the other end of the garden :)
Start? They have been spending ~$30 billions a year on green energy subsidies for the last 20 years, and a little less than double that for the total energy subsidies. It should be well over a trillion dollars in tax money going into the energy sector this century, which is by far more than any other country in EU.
The energy sector get almost as much subsidies as the total funding of the Germany military, 1.5% vs 2% of BNP.
It would be interesting to know how much more tax money is needed for an independent and environmentally friendly energy grid if they just continue as they done in the past.
Angela Merkel is squarely to blame here. She was warned about he dangers for the 16 years she was chancellor of Germany, and instead of diversifying, doubled down on Russian oil and gas, and ordered the closure of the remaining nuclear plants. So be it. The people voted for her, and apparently Germans in general are rather anti-nuclear.
perhaps she didn't properly explain that Putin can and will shut off the supply... or maybe she herself couldn't believe that he's that much of a thug.
OP's "the people wanted this" hints at a complicated background. Getting out of nuclear is a long-running social movement in Germany, with Chernobyl as a decisive event. There's a caste of of politicians and private individuals for whom this is generation-defining/a founding myth. It's the kind of thing that arthouse movies (e.g. "Das Ding am Deich") and social documentaries are made about. Discussing, for example, the particular issues of adolescents raised by parents who used to live at the protests parties in the 80s.
It bubbled over with Fukushima, the a roiling and boiling mid-life crisis for an entire subculture. Consequences or the Russia variable provided little resistance to the Zeitgeist - the biggest "I told you so" in decades. There was no planning to be done.
Where “energy independence” means that Germany becomes dependent on much more expensive LGN from the US. This may still be better than what Germany has now but it’s not independence.
It's a step in the right direction, isn't it? LNG can also be imported from other countries and, in the long run, gas dependence should be massively reduced once gas-powered heating is replaced by electronic heading via heat pumps or something like that.
It’s a classic fraudulent conveyance case. Normally it would simply work its way through the courts, but due to exigent circumstance and geopolitical circumstance they seized it. But the point of law is the same.
Expensive gas also costs human life, and a national shortage over winter could easily kill hundreds, and ruin many more lives.
That said, sometimes you do need to make tough geo-political decisions, where every option has a horrible cost. While the primary blame falls on the aggressor nation, it doesn't make those decisions easier.
Reminds me of the ending of Three days of the Condor. A great film, while it doesn't touch on the exact issue happening today w/ Russia, the ending has quite an emotional tinge about the ends justifying the means.
> Germany has seized control of a local unit of Russian natural-gas giant Gazprom, saying it will do 'what is necessary' to maintain energy supply in the country
this action doesn't make much sense then, does it?
> Germany's economy minister announced the seizure in a statement on Monday. The move came after the ministry of economic affairs learned that Gazprom Germania had been acquired by JSC Palmary and Gazprom export business services LLC — but it wasn't clear who the owners behind the two companies were, per the statement.
> Germany's economy ministry justified the takeover by saying it had not granted permission for the Gazprom Germania acquisition. Permission is required, the ministry said, if the investors are not from the European Union and "critical infrastructure" is involved.
GAZPROM mother sells gas to the Russian GAZPROM EXPORT OOO (the Russian version of a GmbH) in Petersburg. This sells the gas to GAZPROM Germania in Berlin. This in turn sells the gas to a large number of smaller subsidiaries with their various customers. So far, this strong division has served to minimize risks and taxes.
Customers pay the gas to the subsidiaries of GAZPROM Germania in EUR/USD. These are the much-cited “supply contracts”. GAZPROM Germania aggregates these payments and transfers them via Luxembourg (GAZPROM Bank) to the Russian GAZPROM EXPORT.
Therefore, only GAZPROM Germania (for Germany) is affected by the conversion of payments to GAZPROM EXPORT from EUR/USD to rubles. After all, end consumers in Germany do not buy from GAZPROM AG in SPB or from GAZPROM EXPORT in SPB, but from the subsidiaries of GAZPROM Germania. The new legal situation in the RF will not change anything for these end users with their EUR/USD contracts.
Instead of transferring the EUR/USD to Luxembourg, where these funds can be "frozen" at any time, GAZPROM Germania is now transferring the aggregated payments from its subsidiaries to Moscow, where they are forcibly converted and effectively revalue the ruble. To a certain extent, these funds are thus withdrawn from the EU's options for sanctions. And Habeck and Co. can (almost) do nothing about it.
But the west doesn't want that. The idea of the western values is that GAZPROM Germania receives payments from the subsidiaries, but cannot pass these funds on. At the given moment GAZPROM Germania can then be confiscated as part of a further level of sanctions together with its considerable account balances. The RF would then have supplied gas without receiving any payment. The moral justification for such an expropriation would then be “reparations to Ukraine”. The USA in particular has experience in this. Private German companies were selectively expropriated after 1918 in order to "pay" for war damage by the German Reich.
What is the counter-strategy of the RF?
GAZPROM (mother) instructs GAZPROM EXPORT to liquidate GAZPROM Germania. This eliminates the commercially necessary intermediate step for gas trading, the trading chain is interrupted and the supply comes to a standstill. Not because someone turned off the tap, but because the importer is "bankrupt". However, since this would be a quasi-hostile act by the RF (specifically planned insolvency of a strategic utility company), they do it more skilfully: GAZPROM Germania is sold. To shady offshore companies whose owners nobody knows and whose cash flows are as yet unknown. And these offshore companies first withdraw the capital from Luxembourg, leaving behind a GAZPROM Germania as an empty shell, which is then sent into insolvency.
Habeck wants to forestall this scenario. The BMWi places GAZPROM Germania under receivership in order to prevent GAZPROM Germania's assets from flowing out to the new owners. And to prevent GAZPROM Germania from transferring the capital collected from the subsidiaries to Moscow for compulsory exchange.
Only GAZPROM EXPORT could now stop selling to GAZPROM Germania if GAZPROM Germany does not pay in rubles.
The only question now is how quick the "new owners" were over the weekend. Because GAZPROM Germania was supposedly sold on April 1, 2022. So now, four days later, it is unclear whether GAZPROM Germania is already insolvent. If so, then Habeck and Co. would have a problem. On the one hand, they would have to save the company with significant financial contributions, if necessary, and on the other hand, they would then have the buck in their hands. Because if you now instruct the management of GAZPROM Germania not to bill in RUB, as requested by GAZPROM EXPORT, then you are breaking the contracts, not RF. After all, GAZPROM Germania and GAZPROM EXPORT can specify any currency for internal settlement, and these are in rubles for GAZPROM EXPORT by law.
Second to last paragraph (not copy/pasted in the parent comment) shows that the person who wrote this note knows about this stuff. I have customers scrambling right now because if this really big problem.
"Germany's economy minister announced the seizure in a statement on Monday. The move came after the ministry of economic affairs learned that Gazprom Germania had been acquired by JSC Palmary and Gazprom export business services LLC — but it wasn't clear who the owners behind the two companies were, per the statement."
> Germany is now in the "early warning phase" of its energy emergency plan,
I’m not sure what the levels are, seems like they’d be at a higher level since the flows could stop at literally any time since they refused Putin’s decree to pay in rubles.
No, Putin backed down on that one. It's not over yet but Russia doesn't want to turn the taps off by itself. It needs the money too badly (what do you think is propping up the Ruble) and also they need some deniability, some excuse, because if they turn it off unilaterally, it's hard to see it coming back on, at least not under the same circumstances
I am so pissed off on russians and putin for all this, I wouldn't care if they turned this off immediately. Europe will handle the shock, few rough months, at least heating season is finishing fast it won't affect civilians.
I know it would be probably very hard for businesses dependent on LNG but we need to move from russian gas fast, not have 10 year plan that will take 30 in reality.
Every euro/USD paid will be mostly siphoned to re-building dictator's army. As much as they fucked up and still are fucking up now in Ukraine, next russian invasion may be much better executed. Let's not pay with our money for it, since his ultimate ambitions cover as much Europe as he will be allowed to grab and subjugate.
I think you forget that Ukraine has the right of agency and has the right to choose to join a defensive union. I'm also finding it hard to get any concrete examples of offensive actions by NATO. So far every single one seems to be okay with Russia (given they didn't veto it in the UN security council).
- An Orange Revolution happens in Canada in 2014, backed by KGB neocon equivalents of Nuland/Graham.
- A Russia friendly regime is installed in Canada in 2014.
- Canada has regions with large U.S. populations.
- Canada keeps pushing for Warsaw Pact membership.
- At a security conference in Munich in 2022, Canada's Russia friendly prime minister mentions that he could acquire nuclear weapons.
Would you say that the U.S. would likely invade according to the Monroe doctrine? Or would you say that Canada has the right of agency?
None of this is excusing Russia, but disregarding these issues leads to escalation. I'm astonished that the NATO hardliners apparently think that their policies have been a success (they are of course a success if the goal was a proxy war that tests the strength of Russia's military in the first place).
You over-simplify things quite a bit. Just because people in given country want freedom and not have as rulers constant puppets of russia doesn't mean they became US lapdogs. Its russia's fault that they globally represent oppression, corruption, incompetence, war crimes and now even genocide of their closest neighbors. Nobody normal would want to align with that voluntarily, only other bullies and murderers (which is exactly whats happening if you look at ie UN voting re Ukraine).
Don't forget that Ukraine during ruling of all those russian puppets became country so desperately poor that even such a place like russia was rich by comparison. I don't find it strange at all that people just wanted to get rid of this constant negative drag on their very existence.
In this analogy the US also agreed to protect Canada’s security for denuclearization, which they would have done (I.e. defanged threat).
Russia ignoring the Budapest memorandum will be the most damning long term consequence since it teaches everyone that you will be attacked if you denuclearize.
These kinds of comments are a waste of time, some people are simply only capable of seeing their side as the good guys, and/or everything that happens as mono-causal.
Why do these analogies always leave out the part where the US commits genocide time and time again against Canada so that Canada sees such pacts as the only way to survive against renewed US calls for genocide in Canada?
Ukraine wasn’t armed with hi-tech weaponry until Russia started invading in 2014 and then continued being a bad actor which culminated in January/February 2022 delivery of said weapons at the last second.
NATO expansion is a convenient excuse but fails for two reasons:
1. Baltics are closer to Moscow than Ukraine and right on the border.
2. It is widely acknowledged that the primary driver for Putin is not NATO expansion but actually historical “reasons” he has drummed up. His “histories” are titled things like “On the Historical Unity of Russians and Ukrainians”, not “On the Historical Animosity of Russia and NATO” for a reason.
Yeah, this argument about the NATO threat is repeated ad nauseam because it superficially sounds like a reasonable justification: "they just had to defend themselves".
But even if that was true, Otto von Bismarck said it well: "Preventive war is like committing suicide out of fear of death".
Imagine an alternate universe where Ukraine joins EU and NATO and now russia faces a NATO "wall" on the west. In this alternate universe where Russia didn't initiate an aggression, the public opinion of most european countries is not particularly interested in military spending.
Compare that with this universe; the city I live in in Italy is going to build a new military base and while some people will certainly complain, the backlash won't come close to a pre-war scenario. Now even the population feel it that the rules have changed.
Effectively Putin has armed Europe to their teeth. What a perfect 4D chess move to protect Russian safety.
And seriously, I yet have to understand what is the threat that "NATO" would pose to Russia. What should they be worried about? Are they afraid that one morning NATO will invade Russia? What for? This part of the scenario is so embarrassingly hand-wavy, seemingly imbued only of reverberance of a distant past.
Or is it that Russia be afraid of Western values infecting Russia? In that case, what difference does it make how many neighbouring countries are NATO members? You can just decide to make your laws and your policies and live your life according to your chosen lifestyle (if your citizens so wish)
Or is it perhaps that Russia used to be a super power and now it isn't anymore. The greatness past now must live again. Let's reclaim our destiny and all this bullshit. This not how civilised nations should be run. This is barbaric and should stop and sadly the only reason humanity has to put up with it is the nuclear arsenal.
But NATO is already at russian border. Estonia, Latvia and Lithuania are NATO members since 2004.
Also, if russia annexes Ukraine (because, remember "Ukraine doesn't exist, they all just russians") then suddenly the number of NATO members that would share the border with Russia will include Poland and Hungary (members since 1999), Slovakia and Romania (members since 2004).
Well USSR is as dead as russian soldier somewhere in muddy Ukraine. There were good reasons why it broke down, and those reasons are still present. Its plain simple - nobody sane, moral and free wants to be in pact with russia. Who remains are dictators, bullies and murderers.
Thank god Trump didn't succeed in effectively disbanding Nato. Imagine what Europe would look like now if that happened (as Bolton mentioned in cca 2018).
> Thank god Trump didn't succeed in effectively disbanding Nato. Imagine what Europe would look like now if that happened (as Bolton mentioned in cca 2018).
This take bothers me, it's a sound bite repeated at nauseam with no backing what so ever. As a Romanian, I kept a close watch on US politics in Eastern Europe. Nothing that Trump did was pointing to disbanding NATO, on the contrary, he increased the US presence in Eastern Europe and was tougher on Putin than Obama was. Why do you think Russia-haters Poland began to like the US so much under Trump?
I feel like this is like a propaganda take: he forced countries to increase NATO spending, but somehow he wanted to weaken NATO?
He wanted Germany and Europe off of Russian gas, even blocking Nord Stream2 (upsetting the Germans), but somehow he was working for Putin? Btw, Biden unblocked NS2 in his first week in office, for no good reason.
Truth is somewhere around here, I'm not sure where exactly:
"Senior administration officials told The New York Times that several times over the course of 2018, Mr. Trump privately said he wanted to withdraw from the North Atlantic Treaty Organization. Current and former officials who support the alliance said they feared Mr. Trump could return to his threat as allied military spending continued to lag behind the goals the president had set.
In the days around a tumultuous NATO summit meeting last summer, they said, Mr. Trump told his top national security officials that he did not see the point of the military alliance, which he presented as a drain on the United States"
I'd say ultimately whether this was some sort of good-natured negotiating tactic with European allies or not, Trump lost enough credibility that his motives are/were seriously concerning and questionable. This didn't come from nowhere.
> He wanted Germany and Europe off of Russian gas
Maybe but again I think the motives are questionable. Did he want this because he spent years antagonizing Europe and decided that it made sense for oil and natural gas companies who donated to his campaign to get in on the fun by selling American gas to Europe, or because he had a genuine concern for geopolitical interests and saw how Putin was acting? I'm sure you can understand that many don't really trust Trump or his motivations to do anything. For example, was he advocating for getting Germany and Europe off of Russian gas and on to American gas, or did he also advocate for nuclear power and renewables (both, not just one of those)?
That "tumultuous meeting last summer" was the one from which I shared the youtube video?
That's how it got to the press: Trump is against NATO. When you watch the video you see it's more about the US is being upset that they pay for Europe's security while Germany pumps billions into Russia's gas every year.
He was right. And btw, he was not the first US president to try this (and they all failed).
But to base the whole "Trump wanted out of NATO" on some leaks from unnamed aids, while all his actions and policies were opposed to that, it just shows you want to hate Trump no matter what.
He was in power for 4 years, he didn't do 1 step to remove US from NATO, he made NATO stronger. He deployed more troops and bases in Eastern Europe, and conducted more exercises than ever before.
Which we know, but apparently Putin doesn't. I think in one of his writings or a public speaking engagement he said "They're (Ukrainians) Russian even if they don't know it".
I read an article recently—which I'm afraid I can't find anymore—that posited that part of what's going on is that Putin, and some of the rest of Russia, has a rather surprisingly expansive view of what it means to be "Russian", combined with the belief that if one is, by that definition, Russian, it is good and right to be part of Mother Russia.
It also pointed out that by extension, this means that anyone in Ukraine who does not believe that they are Russian (and thus does not want to be part of Russia) is either effectively insane, or some kind of seditious traitor (I don't remember the exact way that logic went in the article at this point).
I don't know to what extent what it described is true (my guess is "somewhat, but not necessarily absolutely"), but it does seem to help explain some of what's going on.
I agree and this is what I've read and listened to as well. (1) Putin tell us this is the case in his spoken words and in his written words and actions.
From an economic standpoint, or the standpoint that war is bad and should be avoided this obviously looks insane to you and I. But if you have different motivations, such as you and others described, it could look perfectly rational. It's all about the parameter space you operate in that determines your actions.
(1) Ezra Klein has some fantastic podcast episodes about this - let me know if you'd like a suggestion or two
From a purely geographical perspective, Ukraine is far more strategically important than the Baltics, due to its access to key rivers that flow into Belarus and Russia and due to its Black Sea coastline. I am sure if the U.S. tried to place missile systems in the Baltics it would trigger a Cuban missile-crisis like situation.
1. The Baltics joined NATO when Russia was still in disarray and aren't as important strategically. Russia tried to join NATO itself after that but was rebuffed.
2. This was primarily for domestic consumption and the West picked it up in February/March together with the notion that Putin had gone mad. Hardly anyone talks about either of these theories any longer.
> Russia tried to join NATO itself after that but was rebuffed.
Yes but it's not that simple. First, do you trust Russia in NATO? Given the nefarious things Russia has done over the last 30 years, you can't trust this on the face of it. It would be a very Russian thing to do. By accounts that I've read (open to other readings here) Russia wanted to join in a privileged position as well, versus as "just another country" and wanted to be fast-tracked and so forth.
> The Baltics joined NATO when Russia was still in disarray and aren't as important strategically.
I don't find any sympathy with the disarray argument. That just says "these countries joined NATO when Russia couldn't do anything about it". Your point about strategic importance, though, is well taken. Ukraine is strategically important for many reasons. Some/one of which is that it can undermine Russia's stranglehold on European gas imports.
> This was primarily for domestic consumption and the West picked it up in February/March together with the notion that Putin had gone mad. Hardly anyone talks about either of these theories any longer.
Agreed. I think the simple case is simply that Putin believe(s)(d) that he had enough negotiating power against NATO countries to be able to stop them from inflicting serious damage on Russia after invading Ukraine, and also that because Ukraine (in Putin's words) isn't a state, the fiction would simply collapse once Russia arrived. We don't do a great job and assume that our incentives are the same as someone else's. In this case Putin couldn't give a crap less about dead people and economic destruction. He cares about The Historical Unity of Russians and Ukraine. Perhaps at a much higher cost than we are willing to endure.
What did Biden/Scholz do on this front? I did see earlier that Merkel had opposed Ukraine in NATO, but I'm not familiar with Scholz's policy on it, or Biden's.
Is there some memory loss at work here? Because when Russia marched straight into Crimea and started this war eight years ago I distinctly remember Merkel being in office. We even rewarded Putin with NS II for it.
And what about Crimea and previous Russian aggression against Ukraine in 2014 when Merkel was in power?
Calling this a “left” thing is really asinine when that’s just who happens to be in power at the time. Do I get to blame terrorism, record debt, and COVID-19 on the U.S. and European “right”?
I’m constantly surprised at the lack of critical reasoning skills when it comes to government or world events. Otherwise intelligent people just absolutely turn off their brain when it comes to this stuff.
You are probably correct that the war would not have happened. Merkel’s Germany would have stood by and refused even more adamantly the right of Ukraine to exist as a sovereign country. Likely it would just be part of Russia now with no war at all. In fact, that’s what Russia counted on while Putin has for years cozied up to Germany and convinced them to strategically rely on Russia to supply them with natural gas, so then they could hang a sword over the head of Germany while they start snapping up the territory and lives of other people.
How many years has Merkel remained in power? This awkward situation is all her doing, but still nobody will mention her name. How can one country willingly put its entire energy sector in the hands of a terrorist state, which has been showing signs since 1999 when bombing its own citizens.
The Soviet Union was a reliable energy supplier to (West) Germany even at the height of the Cold War. Ostpolitik was the dominant mode of thinking across party lines. The West has never had any qualms about buying oil and gas from the worst regimes in the world. This outrage over buying from Russia while turning a blind eye to Arab monarchies seems rather perfomative.
> outrage over buying from Russia while turning a blind eye to Arab monarchies seems rather perfomative
The Arab monarchies largely keep their messes in their own backyards. When there has been leakage, it has been limited. Russia rolling tanks into Europe is so harebrained it creates a new category of security risk we haven’t had close to home in a while: that of a madman.
I wouldn't call 9/11 "limited". Nor is Yemen, or, earlier, Syria, Iraq, Lebanon, Iran etc.
The fundamental of all of these is oil and now, gas. Removing the demand for these will remove the necessity of engaging with these propped up monarchies and autocracies.
Relative to what's going on in Ukraine, it is. 9/11 was a massive terrorist attack. Next to the scale of state-on-state warfare (a category it does not belong in), it was a rounding error.
Agree that de-carbonising our economy will remove our need to support these regimes.
Lots of reasons. It was at the time the least authoritarian regime. The alternatives are Saudi-Arabia, where as I understand the gas is harvested with the help of human rights violations, and other nearby suppliers like Norway were already and still are at capacity.
At the same time, gas is a relatively enviromentally safe, when compared to others, and since the relations to Russia were mostly friendly, the slight problems in the regime were ignored.
Now germany is reliant on them, and that was a mistake they are realizing. But if germany stops accepting gas today, the germans will freeze in the winter when the gas runs out, so its a complicated situation.
The issue is not people freezing. Wear a sweater and suck it up. Buy an electric heater. There are ways to hack your way through it.
The much larger problem is industrial manufacturing, in clusters like Ludwigshafen, where you have companies like BASF and Benckiser that rely on Russian gas for their refinery operations.
Fertilizers, chemicals, lubricants, etc.
You turn off Russian gas, you turn off the German industrial complex. Literally over night.
And that’s the reason why the German is so cagey about stopping the import of Russian gas. They can’t, because they don’t have an alternative.
Yeah, it is surreal to see many of the predictions from the US state department and the DOD come true. As an American who lived in Germany, I wish the Germans would have been correct, but I am happy to see our institutions have a few smart people remaining… sigh
And yet there are still people, in this very thread, that say that Merkel was always against German dependence on Russian gas but could not do anything about it. For 16 years!
>This awkward situation is all her doing, but still nobody will mention her name.
There is more "evidence" that Merkel is a long-term Russian intelligence asset, recruited from her youth in East Germany,[1] than that of Trump being the same. One guess on which claim is incessantly repeated by the bien-pensants of the chattering classes.
[1] Something else never talked about is how her parents moved from West to East Germany when she was a baby
Despite germany's strong dislike for east europeans I am glad to see they are taking measures to help their allies. This is a positive move in the right direction, I hope we figure a way to help germany solve it's dependency of russia in due time, as indeed their economy needs protection.
German here: We don't dislike eastern europeans at all, at least not on any society wide level. Of course, there are exceptions.
We do dislike backslides into authoritarianism in governance, like in Hungary (who's Victor Orban declared 'illiberal democracy' [1]).
Romanian ethnic here. There is no place in germany I can walk safely without feeling that if they hear me speak romanian I won't be verbally abused or looked down upon. Naturally there are exceptions, and there are many romanians in germany, but all of those I spoke with told me that at some point in time they have been racially profiled or outright abused. Their skill ranges from medical PhD, scientists, software developers, or workers, so status is not a factor. Furthermore there have been cases where hotels and resorts were asked to report all romanians to the police because apparently some dudes did some petty crime previous years and as such they had to "keep and eye on all" - and all was according to the german law. In Romania any time the government tries to raise the minimum wage, the german chamber of commerce tries to block it. All the while american, or british companies, have no issue paying a very decent salary - up to point where tech pay is rather high. Again, all those I spoke with told me that german and austrian companies outright insulted them with their pay offer because "romania is cheap". Again, there are exceptions to all this - see liverail, a partnership between german and romanian business people that was sold for 500mil to facebook. There are success stories, but much more horrible stories.
I'm sorry that you and your colleagues/friends were treated badly. I know that the pain is real and I can't do anything but apologize for it.
And I obviously won't defend German businesses (or for that matter businesses in general).
But believe me when I say that the average German has no problems with Eastern Europeans. Funny that you mention Romania, I work in a decent sized software company and my team lead is from Romania and beloved by us all and the company (and, as a team lead, better payed than most German engineers in the company).
However, even among normal citizens, stereotypes and a sense of superiority can be found in certain circles. But I gurantee you it is a (vocal) minority.
Salary for tech workers is generally low in Germany (and maybe the EU as a whole?) especially compared to the UK or US.
Racial profiling of the kind you describe is definitely not "according to German law", we have several anti-discriminatory laws on the books. But, of course, reality can't live up the ideals.
If you need help regarding those clearly illegal circumstances or situations (especially regarding police and lodging) there is the Federal Anti-Discriminatory Agency [1], which has guidelines.
Even if we stop paying for gas and oil right now, that won't stop the Russian invasion. They have massive currency reserves, are relatively self sufficient etc.
Whereas if we do not receive gas anymore, it would wreck our own economies, which would lead to massive unemployment, social unrest and maybe going to the political extremes in the long run.
It would basically be European suicide. We need to be strong to help Ukraine.
That being said, the day we can stop paying for Russian gas is the day we will truly be free. Germany's liberatarian finance minster called renewables "freedom energy" and that could not be truer IMO.
There's a false assumption that stopping oil and gas imports will somehow stop the invasion and funding of Russian army. It will not, so it's better to focus on more practical and sustainable steps.
During the war with IS there were constantly talk about how funding terrorism goes directly into funding the wars, be that people who directly gave them money or people who bought their drugs. I also often see the police say things like "don't buy things from criminals, it directly fund more criminal activities". We have international agreements against blood diamonds and conflict resource, all focusing on eliminating the finance of those conducing wars. It seems that in every possible way where people are funding war and conflict, the message has been in the past 20-50 years that this is actually a problem that need to addressed. While cutting the funding doesn't imminently stop conflicts, or prevent terrorists from making home made bombs, giving them money does prolong conflicts and gives the warring faction more options to continue doing horrible acts of violence. Cutting the money flow also provide pressure on the targeted population to stop their leaders and forcing them to the peace table.
This is just a theory that does not take into account the circumstances of the Russian invasion. In the long term, it does make sense to stop importing oil and gas from Russia to prevent the future aggression, because it will indeed weaken the regime. In the short term, if EU stops buying oil and gas immediately, Russia still has:
1) possibility to export to China and other non-aligned markets (many countries which abstained in UN vote, are the client states which will not support the embargo).
2) enough resources to continue funding military procurement for many months
3) semi-autonomous economy that will survive even total trade embargo with the West, albeit on a lower technology level
The effects of oil and gas embargo will be felt by Russian population earliest by the end of summer, effectively being a punishment rather than a deterrent. We should aim to end the war long before that and stop talking about this and other populist but unrealistic ideas like no-fly zone.
I am not convinced. It still mean people will have blood on their hands when they knowingly are providing the funds for a war. It is a very dangerous bet to hope that the Russians won't have enough time to use the money, that peace will arrive before that funds reaches the military operations. People should aim to end the war before this summer, but what if it doesn't happen? That gas, oil and coal are means for missiles and hired mercenaries. How happy should German citizen be if journalists later traces the money from a fossil fuel transaction to weapons used in a war crime where citizens were tortured and killed?
In the short term we are seeing employees at European harbors and other places being put to the moral dilemma of either refusing to work or continuing working with Russian transports, knowing that they are working directly with the economic side of the Russian military branch. Many do not want to have to look in the mirror in a few months, knowing what they did, knowing what they knew, feeling like they have blood on their hands. Saving jobs and saving the economy is a poor comfort when on the news they see ordinary citizens laying on the street with a bullet in the head.
Every nation hope that wars will end in just a few days, weeks or months. Blitzkrieg. It will be over by the weekend. The Russian thought so when they entered Ukraine and they were wrong. It a nice aim to hope that the war will be long gone before the summer, but realistic there is a high risk that it won't. The assumption when funding war should be that the war isn't going to end.
>That gas, oil and coal are means for missiles and hired mercenaries.
Russia is not a banana republic where you could possibly find the direct link between the export revenues and military expenses. This is not how Russian economy works, the picture is much more complicated.
First of all, the revenue from oil and gas sales is collected in foreign currency. Russian budget receives the money in taxes paid by exporters, but these money must be converted first to rouble.
The conversion rate can be regulated by the central bank through purchases and sales of the currency and they of course can print money when necessary. This means that this currency actually never reaches the recipients of the budget money and exchange rate can be adjusted to serve the needs of the economy.
Second, Russia produces nearly all of its military equipment and pays for it in rouble. There's almost no mercenaries in this conflict, it is mostly regular army, which also receives their salaries in rouble. They have very low exposure to external economic shocks and if necessary can switch to the war economy mode at the cost of the rest of Russian population.
Now, what happens if Russia stops exporting oil and gas to Europe? Just in the last year Russia collected 50% more money than it planned in the annual budget. The extra money are usually deposited in the Reserve Fund and National Wealth Fund and re-invested, but they can be used in crisis times. Basically, just in the last year Russia collected enough money to survive 6 months of oil and gas trade embargo (and this is 150% of its military budget). Let's say, some of these money are frozen on European and American bank accounts and cannot actually be used except for servicing the debt. Still plenty of these savings are still accessible. Besides that, Russian central bank can still print money to fund the war. This may result in even higher inflation, but the economic bloc of Russian government is extremely competent and can mitigate the impact on the population.
Ordinary Russian people will inevitably notice the economic downturn, but their mentality is the mentality of survival and mobilization, plus the state propaganda can justify the means very convincingly and repressive apparatus can silence those who disagree. We are talking about many years of attrition until the economic situation becomes untolerable. No sanctions in the world will force Russian people to overthrow the government in the next year or two, just like they did not work for North Korea, Venezuela or Iran.
> Russian budget receives the money in taxes paid by exporters
That is incorrect. The oil and gas companies is owned by a few oligarchies with direct ties to Putin and the Russian government. Based on what secret service and other agencies has leaked, there isn't a major difference between what is the Russian government, what is controlled by Putin, and what is owned by the owners of the oligarchies. To a degree they operate just like a banana republic in this aspect, although a better comparison is likely state owned Chinese companies that get funded, instructed, operated by government personal, given benefits by their secret service, and with party representatives being directly involved in the leader structure and ownership.
And it may indeed take years before the sanctions actually hurt enough for the Russian government to start move to the peace table. American war in Afghanistan took 20 years. Iraq started in 2003 and ended in fully in 2021. Their war in Pakistan took 14 years. Yemen is still ongoing, same in Somalia, and Syria.
6 months would be comparable short, and it is not out of the question that it may take many years. The more funds they get the easier they have in continuing operations. And while Russia produces nearly all of its military equipment, just like the US does, both require a lot of imports to actually do the production. Military equipment require a lot of electronics, much which isn't produced in Russia. Machines, vehicles, technology and tools all depend on international supply chains, and the more isolated the nation is the harder and more money they need to spend on maintaining those critical imports. All while the nations population suffer from the economic downturn. At some point reserves gets low and that is when peace is best pursuit.
>> Russian budget receives the money in taxes paid by exporters
>That is incorrect. The oil and gas companies is owned by a few oligarchies with direct ties to Putin and the Russian government… …To a degree they operate just like a banana republic in this aspect.
This is just generic description of corruption, but you forgot to explain where I was wrong. Take, for example, Novatek - if you think its profits are funding the war, how do you think this cash reaches the army?
If you remember the Panama Papers we had multiple major Nordic banks being involved in money laundering with sanctioned Russian oligarchs. The result was multiple CEO's being forced resign, cash flows worth many hundred billions, several employees arrested, some employees that fled their own country to avoid prosecution. After this leak we have multiple bank leaks with similar stories fraud, tax evasion, and evading of international sanctions.
We can put some wishful thinking that Novatek is the exception here and has no shell companies, no tax schemes, no avoidance of sanctions, no unaccounted money flow hopping around between banks in order to avoid insight. How likely is it, and how much more likely is it that with the right access to bank records or secret service files, some investigative journalist will have a field day describing just how much money ended up in the hands of the Russian government?
And what of the rest of the Western world's dependency on Middle Eastern oil? That was already weaponized in 1973 yet nobody seems to have learned from it.
> Despite germany's strong dislike for east europeans
It's news to me that we strongly dislike Eastern Europeans?!
Some folks definitely do, especially in logistics or people who live close to the border, mostly due to economic frustration regarding lost jobs and some amount of crime coming from Eastern Europe but Germany as a whole doesn't dislike Eastern Europe...
This is Germany doing something to not be seen doing anything. Doing something for lack of a plan is usually a mistake.
Everything of value of this subsidiary has (pipelines, stored gas, etc), is physically in Germany and already subject to German law. The stored gas wasn’t going anywhere without the German regulator’s permission and the regulator can always force Gazprom Germania to sell German stored gas to Germans.
Nor does seizing this magically solve the problem of lack of gas. The Germans either abide by Russian rules for gas, or pipelines coming in from Russia remain empty.
This was a boneheaded move. The Russians can now seize a comparable German asset in Russia
to recompense Gazprom; say a VW plant, a real asset that can continue to produce real things while the Germans are left with old laptops, empty pipes, a salt cavern and unheated offices in Berlin.
Well, Gazprom changed ownership of Gazprom Germania without any approval from German government. So, apparently, it's not impossible that they would be able to do other things as well.
changing company structure while the assets remain in Germany (in fact they are immobile) is peanuts. Pretend change.
If they (the Russians) had tried to vent Germany’s gas reserves (which wont happen because the employees are German) to kneecap them (the Germans), then you would have seen the German regulator do something.
Some in this thread have asked how Germany could be so foolish to tie its economic destiny to such a problematic country as Russia.
The answer seems to be "one step at a time." And Germany is not unique.
Take the United States, for example, and its near total dependency on Chinese manufacturing for, well, just about everything. The US offshored manufacturing capacity hand-over-fist. In exchange the US got cheap goods (and low inflation), and continued supremacy of the dollar in world trade and as a reserve asset.
Both of those benefits are looking shakier by the week. Inflation is ripping higher, and the sanctions on Russia have prompted what some observers are calling Bretton Woods III, or a brand new economic order that minimizes the position of the US dollar.
But the worst part of all is the enormous leverage China has over the US. The US can protest human rights violations or even an attack on Taiwan, but any serious action taken against China will visit upon the US the same fate as Germany now faces. The brave threats can not be made good on because of an economic hole dug over the course of a generation or two.
The irony is that if you wind the clock back 25 years or so, this situation is the same in direction (although possibly not in magnitude) as policy makers wanted. Free trade was supposed to make conflicts more difficult because of mutual dependency. And it has worked. Just look at the disconnect between the saber-rattling German/US rhetoric and the tepid German/US actions.