While Angela Merkel & Co., A.G. have been politely and quietly toeing the Washington party line – more or less – and sending noises about the Ukrainian crisis upsetting the world conference of G-8 nations, German businesmen have been expressing their growing concern over the noises on sanctions against Russia for its “meddling” in the Ukraine(not one, so far as I know, is talking about imposing sanctions on the USA and EU for their meddling in the Ukraine). But when German business speaks, Berlin listens, perhaps even more so than Washington, which apparently isn’t listening to much of anyone lately, unless of course one counts the NSA spying, in which case, it’s listening to everyone.
Zero Hedge is reporting the German businessmen’s concerns:
I want to draw your attention to these paragraphs:
“It isn’t just German exporters that are fretting, and lobbying with all their might. Russia, with an economy that is already stagnating, and dogged by vicious bouts of capital flight, has $732 billion in foreign debt. Relatively little of it is sovereign debt, but nearly $700 billion is owed by banks and corporations – most of them owned or controlled by the Kremlin. Oil major Rosneft and gas mastodon Gazprom owe $90 billion combined to foreign entities; the four state banks Sberbank, VTB, VEB, and Rosselkhozbank owe $60 billion. Some of this debt matures this year and next year.
“US banks are marginally involved. Between Bank of America, Citigroup, JPMorgan, and Wells Fargo, they have only $24 billion on the line. But European banks and insurance companies are up to their dirty ears in this suddenly iffy and potentially toxic Russian debt.
“When it comes due, it will have to be rolled over, and some of the companies will need to borrow more, simply to stay afloat. Alas, the current sanction regime of visa bans for the elite, asset freezes, and trade restrictions could make that difficult. Then there’s the threat, now more broadly but still unofficially bandied about, that Russian companies should simply default on this $700 billion in debt in retaliation for the sanctions.
“Some European banks, including some German banks, might crater. Even the possibility of a major loss would further rattle the confidence in these banks with their over-leveraged and inscrutable balance sheets and their assets that are still exuding whiffs of putrefaction. And this sort of fiasco, as the financial crisis has made clear, has an unpleasant way of snowballing – and taking down the already shaky global economy with it.
“During the financial crisis, German exports collapsed, banks toppled and got bailed out, and the economy experienced its two worst quarters in the history of the Federal Republic. No politician in Germany has any appetite to re-experience that. And the banking industry, with its powerful and long tentacles winding their way through the hallways and doors of the German government, has been assiduously at work, quietly and behind the scenes, to whittle any sanctions down to irrelevance.
“Washington’s defaulting on an agreement with Russia about Ukraine’s future, and the prospect of NATO troops in Ukraine, convinced Putin and much of the Russian elite that there’s no point in negotiating with the US.”
It’s that last statement – that the Russian elite is convinced there is no point in negotiating with the US – that concerns us. In my opinion, the USA has clearly embarked on a course of action designed to make Russia submit to Washington’s unipolar, New World Order will. But, as is pointed out, there are costs involved: major European, largely German, and American banks and corporations have major interest in Russia. A breach in relations now would endanger those interests for all three parties, Germany, the USA, and Russia. And such a breach would seriously cripple Germany’s economy, and hence, that of Europe.
This puts Germany in to a delicate diplomatic position, one fraught with opportunity, and danger, for Germany is positioned – again – to be a diplomatic go-between between Washington and Moscow. Failure of Berlin to communicate Russia’s legitimate interest to Washington would only fuel the growing opinion in Europe that their influence and voice count for nothing in Washington. And that would only serve, in the long term, to convince Europeans to increase their independence from Washington.
The more dangerous scenario – the high octane component – is this: the Ukrainian situation may have twin objectives, the obvious one being to open that country to Western(re. American) looting and dominance. But the more hidden objective would be to impose Washington’s will on a Germany that increasingly has acted with more independence. Insisting on sanctions could seriously cripple the German and hence EU economy, and in that weakened condition, Washington could step in and offer “trade agreements,” meaning a tighter grip by Washington on Europe.
In the short run, of course, it would work. But in the long run, it creates even more ill-will towards Washington as it extends the dictatus Americanae to Europe even more tightly.
Regardless of which route one envisions here, in my opinion, one thing seems evident, and that is unless the current insanity of covert operations led by NGOs, radical rebels in “liberation” efforts that have become Washington’s standard means of dealing both with friends and enemies, is changed, the only result will be the creation of a world-wide resentment and mistrust.
As for the USA, it bears repeating once again: drone strikes against leaders or other people a regime does not like, covert operations, assassinations, and proxies – the whole miserable game – are operational tactics not reserved to Washington’s exclusive use alone.
And ultimately, that is a game the Washington oligarchs cannot win.
See you on the flip side.