Putin begins to pick apart the EU.

Posted by Pointman on July 29, 2022 · 13 Comments 

A few weeks back In a piece entitled the winners and losers after the sledgehammer strike, I wrote the following about probably the biggest casualty of the whole sanctions disaster, the EU.

“The obvious way for Russia to eliminate the EU as a threat is to destroy Germany. Kill Germany, the EU withers. It’s a matter of how you time it for lasting effect. Turn off all supplies of all commodities to Germany Monday night, Germany dies Tuesday morning and then the domino effect kicks in right across the EU, especially the already vulnerable southern members like Italy and Spain. A more useful strategy would be to let them bleed out. Keep supply significantly below minimum demand and keep them paying the “unfriendly” country premium. You destroy their economy but not so dramatically. A steadily shrinking GDP also destroys the capacity to maintain a large standing army.

At the same time, the resultant economic hardship will hasten regime changes to more Russian friendly ones. Once you’ve humbled Germany onto the breadline and the EU has started to disintegrate with the southern states defaulting on debt as they secede from it, you can start talking about not only leaving the EU but another organisation as well.”

With the notable exception of PM Viktor Orban of Hungary, the leaders of the most prominent EU countries are not only mediocrities but chronically incompetent when it comes to basic politics. The leadership in Brussels is actually totally unelected but rather appointed by various unelected committees which are infamous for their opaqueness. Yes, I know, there’s what’s called an EU parliament which is full of elected members but since it can’t legislate never mind veto the various EU directives, it’s a pseudo-democratic oddity.

The net result is the EU is run by diktat with all important decisions being made by faceless committees and unelected presidents (at last count seven of them). Their idea of politics is just telling the 27 member states to shut up and do as they’re told. While this works most of the time internally, it doesn’t work when dealing with states outside the EU orbit. That developed reflex is why they jumped instantly on Biden’s bandwagon and indeed started doing their very own sanction packages under the fanatically Russian hating leadership of a German maniac called Ursula von der Leyen, who has all the bad bullying instincts of a power-crazed bureaucrat.

There are two great mistakes at work here. The first and most basic was that it’s the EU that’s totally dependent on supplies of energy and commodities from Russia, not the other way around. A ten minute pause to think through the boomerang effect of such sanctions on the EU economies would have would have avoided the self-inflicted wound it’s currently trying to slap a pressure bandage on. It was always Russia that could destroy the economies of the EU, which never had the slimmest prospect of destroying the Russian economy since it was totally energy and food independent.

Second, Putin is a tough guy who barely notices the threats and hostile actions of comparative minnows like the EU, especially when supposedly backed up by a weak American administration that seems determined to blunder from one foreign policy disaster to another. His instincts on the latter proved to be accurate – the Biden administration is already dropping the whole mess in the EU’s lap while moving briskly on to another foreign relations disaster with China.

One of Ursula’s first typically excessive moves was an attempt to totally ban by sanctions Russian natural gas and oil purchases by member states. This diktat was never going to work if she’d taken the time to consult with someone who knew the basics about the energy market within the EU. It instantly ran into furious opposition from all directions for the simple reason that it would destroy most economies within Europe, most especially Germany’s which is the goose laying the golden eggs that actually keeps the EU solvent.

The opposition amongst the smaller states was led by Orban of Hungary who pointed out they get 90% of their energy needs imported from Russia. How could they replace that in the short term? The other smaller member states in basically a similar situation all rallied behind him, which is yet another reason why the EU and the US are currently engaged in an ongoing regime change effort in Hungary. After a lot of handbagging, the mandate became an optional sanction which very few members took the trouble to avail themselves of. At that time Orban pointedly took a flight to Moscow for direct talks with Putin, the exact details of which are not all known.

After that, fate intervened in the whole natural gas situation in the shape of one massive Siemens manufactured pump breaking down and instantly reducing the flow to Germany through the Nord Stream 1 pipeline from Russia to 40%. Fine, the EU could live with that (meaning Germany) for a week or so, but after the pump was sent to Canada for repairs, it got snared up in a sanctions interpretation squabble between German and Canada.

When it became clear that the pump would not be returned to Nord Stream 1 anytime soon, Ursula’s response was to demand 15% of every member state’s winter reserve. No way was the general response by most of them because by now they’d worked out the coming winter was going to be very tough not only on their citizens but them getting through it without their government being thrown out of power. Cold and hungry populations change governments very quickly.

Her next proposal was that every state cut household supplies by 15% immediately, so they can collect the natural gas saved and distribute it evenly all over the EU ie to Germany to keep it afloat. Hungary and others said no and not only that, the latter sent their foreign minister to Moscow for direct discussions with Russian foreign minister Sergei Lavrov and even have another chat with Putin about securing a steady gas supply for Hungary. It’s an old-fashioned thing called diplomacy and it seems to be bearing fruit for them. I’ve no doubt other member states will soon be following suit at some time.

This proposal from Brussels was initially mandatory but in ran foul of political realities. Beginning August, the EU is now implementing a voluntary 15% reduction in member states’ gas usage but the reality is it’s the sort of porous agreement anyone can sign up to because there are so many concessions and special let out clauses like giving it their “best effort” in it that it’s essentially meaningless. Once the electorates of EU states start to complain of blackouts, power outs and no heating through winter, watch their local political leaders ignoring the EU’s “request” and instead concentrating on their own political survival.

Between Canada and Germany taking over two months to sort out a simple pump repair and the general reluctance of most EU PMs to take a domestic political bullet for Germany, I don’t think little Vladdi could believe his luck. They were actually using their own sanctions to hurt each other. I think it was at that point he decided he’d let Germany, and therefore the EU, bleed out. If they were going to be that stupid, he might as well begin bringing them to heel.

Magically, another pump on the Nord Stream 1 pipeline started to malfunction this week, so from from July 27th, Russia natural gas flow to Germany will be cut to 20%. That means their reserves to get them through winter won’t be filled and according to some analysts the result of selectively rationing gas supplies to some industries means about one fifth of German manufacturing firms will go bust. Call me cynical but I suspect there will be a steady supply of such niggling supply problems to Germany.

Whether the 15% reduction skim is still optional or now mandatory seems to change from day to day with all the dithering around the EU is doing but what is for sure is that there’s real opposition to it from countries like Spain, Greece, Poland, Slovakia, Slovenia, Portugal and others, some of whom get less than 15% of their gas from Russia anyway. They all know their gas would be going to Germany and there’s an element of payback to withholding it since Germany has been enforcing its own austerity regimes on other member states for the last decade. It’s high time they learnt for themselves how that feels.

The EU has no realistic solutions to the plethora of serious problems it faces, especially with the supply of natural gas this winter. Its best effort is to offer the latest in a long list of other countries that can supply the needed gas – Nigeria. The first was the US, then Azerbaijan and then Qatar. None of them can do it because they’re already at max production capacity and there aren’t enough LNG tankers in the world to move it to the EU anyway.

Short term there will be regime changes within the EU as we get deeper into winter. Olaf Scholz, the German chancellor, is almost certain to lose power. The EU president Ursula von der Leyen will have to be replaced with someone less virulently anti-Russian if there’s to be any hope of negotiating with them to walk back the sanctions and normalise supplies from Russia, but there are severe difficulties there.

First of all, Russia doesn’t have to supply the EU with anything since they’ve already found new markets eager to be supplied by them on the favourable basis of not being “unfriendly” countries. Second, the EU has pledged to supply forever an enemy on their border with an endless supply of weapons to attack Russia with, so it’s in Russia’s interest to crush the EU economically as it had tried to do to them. Last but not least, the pettiness and spite with which the EU has pursued sanctions against Russia has poisoned any relationship Russia ever had with western Europe. It’s now looking eastwards for its future.

Nothing lasts forever, not even seemingly huge powerful power blocks. Remember the USSR? It was gone within a year or two and it was the disastrous state of its economy that killed it off. A few more years of Russia keeping the EU on the rack and slowly ratcheting up the pressure will tear it apart.

©Pointman

Related articles by Pointman:

The winners and losers after the sledgehammer strike.

After the Ukraine, will Russia kiss and make up with the West?

Remind me again, which country’s economy was sanctions going to devastate?

The Ukraine war – the military realities.

The reaction to the sledgehammer by West block Europe.

 

All articles in the Sledgehammer series

All articles about the Ukraine situation

Click for a list of other articles.

Filed under Article · Tagged with EU, Hungary, Russia, sledgehammer, Ukraine