Connect with us

Latest

News

Staff Picks

Russia cuts interest rates whilst maintaining tough monetary policy

As inflation falls, Russia’s Central Bank cuts key rate to 10% but insists its tight monetary policy intended to reduce inflation will continue.

Alexander Mercouris

Published

on

915 Views

The Russian Central Bank has, as predicted, cut its key rate from 10.5% to 10%.

This is consistent with the continuing rapid fall in inflation.  With inflation zero in the first two weeks of September after being zero in the last week of July and through most of August, its annualised rate is now just 6.6%.  The Central Bank has said that it intends to keep its key rate 3% above the annualised rate of inflation for the foreseeable future, so that with annualised inflation running at 6.7% it had the space to announce this rate cut.

However that is where the good news stops.  The Central Bank has signalled that it intends no more cuts to its key rate this year, meaning that the earliest possible date for a further rate cut will not be before January next year.  The Central Bank also says that it will maintain what it calls its “moderately tight monetary policy” – a policy which is in fact giving Russia the highest real interest rates of any major economy in the world – throughout 2017 and indeed beyond.

Here in its own words is the Central Bank’s guidance from its own press release

“On 16 September 2016, the Bank of Russia Board of Directors decided to reduce the key rate from 10.50 to 10.00% p.a. given the inflation slowdown, in line with the forecast, decrease in inflation expectations and unstable economic activity. However, for the trend towards sustainable decline in inflation to strengthen, according to the Bank of Russia’s estimates, the current value of the key rate needs to be maintained till end-2016 with its further possible cuts in 2017 Q1-Q2. Considering the decision made and persistent moderately tight monetary policy, the annual consumer price growth will stand at 4.5% in September 2017 and will then go down to the 4% target in late 2017. When making its key rate decisions in the coming months, the Bank of Russia will assess inflation risks alongside economy and inflation dynamics’ consistence with the baseline forecast.”

The Central Bank admits the market is expecting cuts in the key rate to take place faster, and it even brags that it intends to cut its key rate more slowly than the market expects. 

Its rationale is that the market still expects inflation at the end of next year to be higher than 4%, which is the Central Bank’s target.  However the Central Bank says it is determined, come what may, to achieve its target, which is why it is going to keep its key rate higher than the market expects

“The Bank of Russia expects that the decision made and maintenance of the key rate at the level it reached will bring down inflation expectations. At present, the structure of market interest rates by maturity and survey findings indicate that, in contrast to the Bank of Russia, market players forecast a faster drop in interest rates. Additionally, their end-2017 inflation forecasts exceed the 4% target of the central bank. In reality, the decrease of nominal rates has a limited capacity, and the economy will maintain moderately tight monetary conditions for quite a long period of time. This is implied by the need to keep positive real interest rates at the level supporting demand for credit that does not raise inflationary pressure and keeps incentives for saving.”

In what is the single most extraordinary paragraph in the entire press release, the Central Bank admits that Russia will only achieve 1% growth next year, but denies that this has anything to do with its “moderately tight monetary policy”

“Persistent revival in production activity is still unstable and patchy across industries and regions. According to Bank of Russia estimates, the moderately tight monetary conditions do not hamper recovery in economy, whereas the main obstacles are caused by structural effects. The labour market tries to adjust to new economic conditions, and the unemployment remains stable and low. Import substitution steps up and non-commodity exports expand for certain items. Industry, including technology-intensive production types, discovers new opportunities for growth. Nonetheless, they fail to ensure an overall robust positive production dynamics. At the same time, certain industries stagnate or show slowdown in output growth, while investment continues to contract. More time is needed for positive trends to develop and get rooted.”

(bold italics added)

This is a fantastic claim, and by making it the Central Bank undermines its own credibility.  Quite simply, it is absurd to say that high real interest rates – currently the highest real interest rates of any major economy in the world – are not going to impact on growth. 

Moreover the Guidelines the Central Bank published in November last year explaining its monetary policy shows that the Central Bank is fully aware of the fact.  As the Central Bank knows the reason output is struggling to rise is because of low rates of consumption and falling investment. 

The Central Bank’s press statement actually refers to the fact that “investment continues to contract” (see above).  This is what the Central Bank said in its Guidelines about the effect of interest rates on levels of consumption, investment and inflation

“All things being equal, a downturn in interest rates stimulates lending, helps increase consumption, and leads to investment growth, but inflationary pressure can also increase. By contrast, high interest rates contribute to growth in savings and constrain lending and investment activity, but reduce inflationary pressure.”

(bold italics added)

Yet the Central Bank would have us believe that the high interest rates it is imposing, which in its Guidelines it admits “all things being equal” cause consumption and investment to fall, are not the reason why in Russia consumption and investment are continuing to fall!

What is little understood – and is scarcely ever said – about the present state of Russia’s economy is that though the underlying rate of inflation is now running at 5-6%, which is below its pre-devaluation level, interest rates are higher than they were before the devaluation, and that despite the recent cuts in the Central Bank’s key rate real interest rates in Russia are actually rising. 

This chart shows movements in the Central Bank’s key rate since 2013, the year in which Nabiullina was appointed Chairman of the Central Bank

russian-interest-rate-chart

In 2013, at the time Nabiullina took over as Chairman of the Central Bank, and before she started raising interest rates in 2014, the Central Bank’s key rate was below 6% in a year when annual inflation was 6.48%.  Today she intends to hold the key rate at 10% despite the government’s forecast that inflation this year will be 5.7-5.9%.

Annual inflation in Russia was in double figures in every single year post 1991 up to the crisis year of 2009 save for 2006, when it briefly dipped to 9.02%.  Inflation was in double figures throughout the period 1998 to 2008, when Russia was regularly achieving annual growth rates of 7% and more.

Inflation fell from double figures to single figures in 2009, and has been in single figures ever since save for the brief period of the inflation spike of 2014 to 2015, which was caused by the one-off factor of the devaluation of the rouble in 2014, which caused inflation to rise back into double figures in 2014 and 2015.

This period of single figure inflation since 2009 is the same period during which Russia’s growth rate has fallen from the annual rate of 7% it was achieving before the 2008 crisis to 4.3% in 2011, 3.5% in 2012, and 1.3% in 2013.

In other words there is a direct correlation between the decline in Russia’s growth rate post 2008, and the fall in inflation which has taken place since then – and the rise in interest rates which has happened to achieve it. 

To see how see this World Bank graph which shows movements of real as opposed to nominal interest rates in Russia since 1991.

Russia experienced negative real interest rates from the 1998 crisis until the 2008 crisis.  During the period of the 2008 crisis real interest rates briefly surged into high positive territory as part of the government’s anti-crisis measures.

They then fell back again into negative territory directly after the 2008 crisis was overcome as the Central Bank and the government looked for ways to support the recovery.  However since 2011, as the Central Bank and the government have become more focused on inflation reduction, they have been rising steadily, turning positive in 2012, and remaining positive ever since, even during the period of the 2014-2015 inflation spike when they might have been expected to go negative.

Since the end of the inflation spike in mid 2015, and despite the round of key rate cuts Nabiullina has announced since January 2015, they have been rising again.

Prior to 2008 high growth was the priority, causing the Central Bank to keep real interest rates negative and to increase the money supply in order to sustain growth and to prevent over-rapid appreciation of the rouble in conditions of rising oil prices.  The result was double digit inflation in every year between 1998 and 2008, apart from the brief dip in 2006. 

Since recovery from the 2008-2009 crisis the priority has been inflation reduction, with monetary policy being tightened steadily in order to choke off inflation.  The result is that inflation fell into single figures after 2009, and apart from the short period of the 2014-2015 inflation spike has remained so ever since, and is now falling further.   

Since Nabiullina became Chairman the Central Bank has taken the policy a whole step further, tightening monetary policy even more, so that it is now significantly tighter than it was even during the post-recovery period of 2011-2013 and before the 2014 devaluation, despite the fact that inflation is now actually below the level it was in that period.

In other words Nabiullina and the Central Bank – and indeed the whole government – are using the 2014-2015 inflation spike to give themselves political cover to carry out a policy of monetary tightening the likes of which post-Soviet Russia has not seen since Putin became President.  This objective is to bring inflation down to 4% by late 2017 in order to achieve the long term results I discussed in my previous article

As for the famous ‘structural factors’ about which we hear so much, the Central Bank’s latest press release shows what they really are: an alibi conjured up by the Central Bank and the government so they can pretend that the sharp fall in the economy’s growth rate caused by their own anti-inflation policy and the high real interest rates they are imposing has nothing to do with them. 

That is unless inflation is the ‘structural factor’ which they see as limiting growth in the long term – something which it might be reasonable to say, but which for some reason no-one ever does.

In truth the wonder is that despite interest rates being so high there is any growth in the Russian economy at all, especially as there is no countervailing fiscal stimulus from the budget to offset Nabiullina’s “moderately tight monetary policy”. 

On the contrary – and though you would never know it from the way some people talk – since the start of the recession budget spending has actually been cut, so that coming out of recession Russia’s federal budget deficit in the first 8 months of this year was just 2.9% of GDP.

There are of course many people who find this policy approach commendable.  Reducing inflation to 4% is a worthy aim, and over time it may – and indeed probably will – achieve the good results people like Nabiullina and Kudrin say it will.  I must however say that I can think of no other Central Bank or government in any other G20 economy which in the same conditions would behave in this way. 

At a time when Russia has suffered a recession any other G20 Central Bank or government finding itself in such a position would surely focus on ending the recession, not on further reducing inflation from what is by Russian standards an already historically low level. 

This would be especially so given that the moderate loosening of monetary policy this would call for would be most unlikely to compromise the anti-inflation policy in any serious way.  At worst it might delay achievement of the 4% by a few months, or perhaps a year.

Russia however is different.  With unemployment very low at 5.7% at a time when the country’s labour force participation rate is at an unprecedentedly high 70%, and with political and macroeconomic conditions stable, the Central Bank and the government obviously feel they have the political and economic space to see the policy through, and it seems they are determined to see it through come what may.   Not for nothing is Nabiullina being called “the most orthodox Central Banker in Europe”. 

As for Putin, as I said in my previous article I have no doubt he supports the policy.  With the political situation in Russia stable and his popularity at stratospheric levels, he is moreover under no real pressure to change it.  If only for that reason I don’t expect the policy to change.

Advertisement
Comments

Latest

‘Treasonous’ Trump in the Conspirators’ Crosshairs

Every effort will continue to be made to ensure no concrete progress can be made on whatever was discussed in Helsinki while maintaining the 24/7 drumbeat of demonization.

Jim Jatras

Published

on

At least the White House can be happy that the resident Hitler-in-Chief’s inhuman separation of innocent migrant children from adults caught illegally crossing the US border with Mexico matters to nobody anymore.

Everyone’s moved on. “Children in cages” is yesterday’s news.

The issue now is treason, a crime carrying the death penalty.

On that score America and the entire world owe former CIA Director and onetime communist voter John Brennan a debt of gratitude for pointing out that President Donald Trump’s expressing the slightest hint of doubt about conclusions reached by the US Intelligence Community is both impeachable and treasonous.

Brennan didn’t just make that up, you know. It’s in the Constitution of the United States, right there in black and white:

Article II, Section 1: “The executive Power shall be vested in an Intelligence Community of the United States of America.”

Article III, Section 3: “Treason against the United States, shall consist in doubting the Intelligence Community in any way, shape, or form.”

There you have it, it’s an open and shut case of treason, committed in full view of the global public within feet of Russian President Vladimir Putin – who, as the crack journalists of our intrepid Fourth Estate have now revealed through their diligent investigative work, was once an officer in the Soviet  KGB!  Trump’s unmasking, through his very own perfidious words, now adds “traitor” to all the other terms of opprobrium already justly appertaining to him.

Support The Duran – Browse our Shop >>

We all know what happens to traitors, don’t we?

A day later Trump hastily sought to cover up his treachery with the lame suggestion that he had inadvertently dropped the semi-syllable “-n’t” during his Helsinki press conference with his Russian “handler.” (Actually, that “wouldn’t/would” dodge is pretty cute. Who thought it up – Steve Miller? Sarah Huckabee Sanders? Trump himself? Genius! One can almost hear them brainstorming over what explanation would most insult the limited intelligence of their critics.)

But try as he might, Trump can’t escape. His media pursuers have caught on to his Houdini routine:

‘President Donald Trump’s attempt on Tuesday to backpedal on his disastrous remarks siding with Russian President Vladimir Putin, in which the stone-faced president read from a monotone prepared statement but deviated several times from it, was eerily reminiscent of the way he handled his infamous false equivalence in response to the deadly white supremacist rally in Charlottesville, Virginia, last summer.

‘After accepting Putin’s denial instead of affirming U.S. intelligence agencies’ conclusion that Russia interfered in the 2016 election, Trump on Tuesday tried to reverse course. Reading from prepared remarks, he said that he accepts the intelligence agencies’ conclusion and claimed that he misspoke during Monday’s press conference. (He added ‘that perhaps “other people” were responsible, and reverted to his usual talking point that “there was no collusion” between his campaign and Russia, which appeared to be unscripted.) [ … ]

‘Many reporters, commentators and other political observers made similar observations, noting that Trump could quickly reverse himself again, just as he did in his response to the events in Charlottesville.’

Indeed, just the day after his “stone-faced,” “monotone” semi-contrition, Trump was right back at it, colluding with fellow Putin-puppet Tucker Carlson on Fox News. (Even worse, the Trump-Carlson duo even blasphemed against the holiest of holies of US national security, Americans’ willingness to risk nuclear annihilation in World War III over tiny, corrupt Montenegro.)

Not only did this two-man, latter-day analogue to the Gunpowder Plot belittle the supposedly proven fact of Russian hacking of the 2016 election (which nonetheless is still disbelieved by almost 40% of Americans!), they took the opportunity to inject a note of – you guessed it!  racism:

‘Carlson used literal white supremacy to defend Trump’s news conference.

‘“I mean I’m not a shrink, so I don’t fully understand it. I mean I don’t think Russia is our close friend or anything like that. I mean, of course, they tried to interfere in our affairs; they have for a long time. Many countries do. Some more successfully than Russia, like Mexico which is routinely interfering in our elections by packing our electorate,” Carlson said, suggesting Mexican immigrants who become naturalized citizens and vote are somehow illegitimate voters.

‘Former FBI Director James Comey criticized Trump for sitting down with Hannity and Carlson.

‘“Having sold out our nation on an international stage, Mr. Trump will now explain it all to Sean Hannity and Tucker Carlson? I’m guessing RT and [Sputnik] were unavailable.’

But aside from Carlson, virtually all of Trump’s supposed defenders (mostly on Fox News) agreed entirely with the President’s accusers that questioning the intelligence community was totally impermissible.

Indeed, both his defenders and even Trump himself have tried to deflect criticism by citing the myriad ways in which his Administration has been “tough” on the Russians: sanctions, expelling diplomats, striking Syria twice, and most of all reveling in the slaughter of Russian contractors in Syria.

This reflects a troubling fact that undermines optimism that the Helsinki summit will herald a change for the better in the US-Russia relationship. The fact is, Putin is master in his own house but Trump is not.

There is no order or instruction Trump can give that he can be sure will be carried out, either by the Pentagon or the intelligence community – and certainly not the Justice Department, which blatantly tried to sabotage the summit with Deputy Attorney General Rod Rosenstein’s issuance of avacuous indictment of 12 GRU officers. As described by former CIA intelligence officer Michael Scheuer:

‘Why should any American worry about the unending, manic claims that Russia interfered in the 2016 election? This story, after all, has been made up and perpetuated by aspiring traitors like Clapper, Hayden, Tapper, Acosta, Hillary Clinton, Comey, John Podesta, Maddow, McCabe, Brennan, Page, Strzok, Wray, the reporting staffs of the Washington Post and the New York Times, the Council on Foreign Relations, and most of all, by the foreign-born Obama.

To believe this crew’s statements about anything at all is to believe that John McCain and Lindsay Graham can open their mouths without lying us into yet another interventionist war. […]

‘In the face of what Jefferson surely would call a “long train” of perfidy, treason, obsessive avarice, and murder by the national government, one must ask why would any commonsensical American fail to see that the Russian-meddling narrative is transparently an attempt by Obama leftovers and the seething, quite mad Neocons to push the United States into a new Cold War with Russia, one that would lead to a hot war, as well as a means of keeping themselves out of the slammer and off the gallows.

‘Indeed, there is not a loyal American citizen who has a single credible reason to believe any intelligence-based claims made by the Obama administration, or the Obama leftovers in Trump’s administration, about Russian interference in the 2016 election.

The citizenry’s only fair-minded conclusion is that Obama ordered his intelligence and military lieutenants to stand down on responding to “Russian hacking” in summer, 2016, because no such hacking occurred.

Certainly, the two indictments of Russians – written by Obama acolytes led by Rosenstein, Strzok, and old-man, disgrace-to-the-Marines Mueller and his merry band of Trump-hating attorneys — are clearly dreamed-up travesties that would disgrace a first-year law-school student and get him the boot therefrom.’

The bottom line is that, even after Helsinki, Trump remains besieged inside his own Administration. It cannot be said with any assurance that there is a single high official, including Trump’s own appointees, who agrees with the President’s desire for rapprochement with Russia.

Congress is almost entirely against him, as evidenced by a virtually unanimous Senate vote on a nonbinding resolution against treaty-based law enforcement cooperation with Russia (as discussed by the two presidents) and talk of fast-tracking more sanctions legislation.

Even in areas theoretically under Trump’s full control, most importantly his constitutional command of the military, there is pushback. One early deliverable of the summit should be US-Russia cooperation in Syria to help wind down that war.

But General Joseph Votel, who leads U.S. Central Command, was quick to point out that he’s received no instructions and that under prohibitory legislation enacted in 2014 no such cooperation would be legal without Congressional action to create an exception – which will not be forthcoming.

In a rule of law state, law enforcement should be politically neutral. In most countries it’s not, with those in power using police, prosecutors, and courts as weapons against the opposition. Only in America, and only since Trump’s election, has anyone seen the bizarre phenomenon of election losers abusing law enforcement against the winner.

Even as Trump talks optimistically of a second summit with Putin in Washington in a few months, the criminal Deep State conspiracy against him rolls on with the complicity of top appointees like Rosenstein.

Every effort will continue to be made to ensure no concrete progress can be made on whatever was discussed in Helsinki while maintaining the 24/7 drumbeat of demonization. (There’s even an attempt to force Trump’s interpreter in Helsinki, Marina Gross, to divulge what transpired in private between the presidents. Gross herself may draw suspicion on account of an unconfirmed report that she may actually speak Russian…)

For his part, Trump must seek support from the only direction he can: the tens of millions of “Deplorables” who voted for him. The more the media, the Democrats, and the GOP establishment trash him, the more they are convinced he is on the right track. By doubting the truth of Russian hacking and our sacred NATO obligation to every insignificant country few ordinary Americans could find on a map, he has increasingly mainstreamed those notions with his base.

Trump’s only way forward is continuing to be the wrecking ball he was elected to be. Twitter and his ability to change the subject with outrageous and “impermissible” utterances and actions are his main weapons. In that vein, as long as he’s being accused of treason, he might as well make the most of it:

Mr. Trump, fire Rosenstein and let the chips fall where they may.

Continue Reading

Latest

James Clapper rats out his former boss Barack Obama (Video)

Trump-Russia witch hunt started with order from former US President Barack Obama.

Alex Christoforou

Published

on

All roads in the Trump-Russia witch hunt lead to Barack Obama…at least that is what his former intelligence czar James Clapper admitted to fake news, CNN’s Anderson Cooper.

Former Director of National Intelligence (DNI) James Clapper admitted in a CNN interview Saturday that former President Obama instigated the ongoing investigations into Donald Trump and his inner circle of advisors and staffer.

Speaking with Anderson Cooper, Clapper mad the stunning admission…

If it weren’t for President Obama we might not have done the intelligence community assessment that we did that set up a whole sequence of events which are still unfolding today including Special Counsel Mueller’s investigation. President Obama is responsible for that. It was he who tasked us to do that intelligence community assessment in the first place.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Via Zerohedge

Recall in May, Senate Judiciary Committee Chairman Chuck Grassley (R-IA) fired off a letter to the Department of Justice  demanding unredacted versions of text messages between FBI agent Peter Strzok and former bureau attorney Lisa Page, including one exchange which took place after Strzok had returned from London as part of the recently launched “Operation Crossfire Hurricane”  referring to the White House “running” an unknown investigation.

Strzok had been in London to interview Australian ambassador Alexander Downer about a drunken conversation with Trump campaign aide George Papadopoulos, who – after reportedly being fed information – mentioned Russia having Hillary Clinton’s emails.

Strzok: And hi. Went well, best we could have expected. Other than [REDACTED] quote: “the White House is running this.” My answer, “well, maybe for you they are.” And of course, I was planning on telling this guy, thanks for coming, we’ve got an hour, but with Bill [Priestap] there, I’ve got no control….

Page: Yeah, whatever (re the WH comment). We’ve got the emails that say otherwise.

With Clapper’s admission that Obama was in the know the whole time, it looks like Peter Strzok’s text message stating “the White House is running this” was spot on.

House Judiciary Chair Bob Goodlatte (R-VA) told Fox’s Maria Bartiromo that the American public needs to see an unredacted version of the Carter Page FISA application.

Continue Reading

Latest

NATO’s eastward push clashes with Church Canons in the Ukraine

Amid other geopolitical machinations on the “Eastern front” there is one that has so far largely passed under the radar although its potential as a crisis detonator (or perhaps more properly, exacerbator) in the Ukraine and the surrounding Eastern Orthodox domains should not be underestimated.

Published

on

Petro Poroshenko meeting with Ecumenical Patriarch Bartholomew

Quite “spontaneously,” as these things are, won’t to happen, agitation at state and ecclesiastical levels in the Ukraine has been turned on to demand autocephaly, which in Orthodox church terminology is self-ruled status for the Orthodox religious community in the Ukraine.

But not for just any of the existing communities (there are at least two major ones, the Orthodox church in spiritual communion with the Russian Orthodox patriarchy in Moscow, and a breakaway group espousing all the politically correct Ukrainian nationalist and Russophobic views). Alert and politically savvy readers should have guessed that in this controversy center-stage is the breakaway, NATO-friendly group.

Support The Duran – Browse our Shop >>

The seemingly plausible argument is that since the Ukraine is an “independent” country, it is entitled also to have its own “independent” national Orthodox church to go along with that. That may or may not be so, depending on how church authorities in charge of these matters interpret and apply the relevant provisions of church law, or cannons. But before the issue was even presented to higher church councils for a ruling, the Ukrainian government itself avidly jumped into the fray to support its local Russophobic ecclesiastical proteges.

Needless to say, the Moscow Patriarchy affiliate in the Ukraine, which is followed by a majority of believers in that country, has taken a strong stand against the combined offensive against it of the NATO backed regime and its allies, anti-Russian zealots in cassocks. That means that now a new religious front also has been opened in the portion of Ukraine controlled by the Kiev regime.

It is an attempt to complete the process already begun in the spheres of language, culture, education, history, and a number of other key areas, in this case to extirpate the last vestiges of “malign” Russian spiritual influence by severing the last remaining ecclesiastical link to Moscow. Driving the point home are the fervent partisans of the “native” Ukrainian church, led by defrocked former bishop Philaret Denysenko, now styling himself the new Ukrainian patriarch.

The fact that in the early 90s the same Denysenko, who at that time was an Orthodox bishop, had no qualms about putting forward his candidacy for Patriarch of Russia, and that, although a Russian-speaker, he subsequently embraced Ukrainian nationalism and conveniently developed passionate anti-Russian sentiments only after failing to achieve that objective, is beside the point. What matters is that he has now become a willing tool and visible symbol of the hybrid war being waged by NATO against Russia in the region, a war which in this instance has also a vibrant religious component.

What must be making hybrid war experts at the headquarters in Mons and other centers which attend to such matters jubilant is that igniting a religious confrontation in the Ukraine holds for them much more than merely local benefits. It is equivalent to opening a Pandora’s Box in the most literally geopolitical, and not just purely religious sense of the expression. A dispute of this nature cannot be properly settled either within the Ukraine itself or by means of intra-church dialogue between Kiev and Moscow.

In the Orthodox world it is possible for a national church to gain self-rule, or autocephaly, but only under strictly prescribed conditions designed to preserve church unity and harmony. That means, at a minimum, that the consent of the Mother Church (in this case the Moscow Patriarchate) is required, as well as the approval of all the other churches around the world which form the Orthodox communion. And on top of that, to greatly complicate matters, there is also the ambiguous role in this process of the Orthodox Ecumenical Patriarchy in Constantinople (Istanbul).

That see traditionally enjoys the position of “first among equals,” and it is not expected to act unilaterally but in consultation with other churches in resolving important issues. In the last couple of decades, however, it has notably tried to shake off those institutional constraints and has sought to turn itself into the Orthodox equivalent of the Roman Catholic Vatican.

The precarious position of the Ecumenical Patriarchy in Turkey, where it has very few, mostly ethnic Greek, followers remaining and is under heavy, and frankly unreasonable pressure from the essentially hostile Turkish government, since about the middle of the last century has motivated its patriarchs to seek the friendship and protection of Western NATO powers, simply to survive. That protection, however, did not come free of charge. Increasingly, and in particular during the Cold War period, the Ecumenical patriarch has been obligated to actively support various Western political initiatives. The increasingly Islamist complexion of the Turkish regime has now made toeing the Western line an existential necessity to an even greater degree.

Hence the unprecedented move by Poroshenko, during his visit to Turkey in April, taking a practical shortcut to resolve the Ukrainian situation without waiting first for a broad Orthodox Church consensus on the issue to emerge. Instead, Poroshenko urged directly the trapped  Ecumenical Patriarch Bartholomew to personally, and without bothering to consult peers, issue to Denysenko and his Kiev flock a grant of self-rule, in the requested form as patriarch of the NATO-invented and anointed “Ukrainian Orthodox Church.”

To sweeten the deal, Poroshenko was supposed to bring in his coffers $25 million collected by devout Ukrainian oligarchs in the US, as a humble offering to patriarch Bartholomew to take a benevolent view of the fervent plea delivered to him on behalf of the Ukrainian faithful. Remarkably, the delivery of only a $10 million gift to the Patriarchy was recorded by the time the pious emoluments actually reached their destination in Istanbul. Where the missing $15 million might have evaporated can only be guessed, but given the Ukrainians’ sticky fingers when handling cash it does not require a long stretch of the imagination.

Predictably, the Russian Orthodox Patriarchy took a very dim view of such back-door church politicking lubricated with plenty of cash, even if one considers only the diminished sum that actually reached the designated recipients. Its foreign relations spokesman, Metropolitan Hilarion, warned the patriarch in Istanbul that he was playing with fire by turning a receptive ear to Kiev’s entreaties because, in his view, granting Ukrainian church self-rule (autocephaly) in disregard of canonical regulations would be “to cause a Great Schism equivalent to the one that occurred a thousand years ago”.

It should not be forgotten that this is no idle threat because the Russian church is the most numerous among Orthodox nations and a split between it and the Ecumenical see in Istanbul would plunge the entire Orthodox world into disarray. But that is just what the NATO doctors ordered, isn’t it?

It is, of course, quite normal for officials of the Russian church to seek to protect their faithful and safeguard their status in the Ukraine. But the impending, NATO-engineered convulsion, using the alleged spiritual needs of its Ukrainian colony as a hollow pretext, unleashed within the Orthodox religious community which sits astride the arc of geopolitical competition stretching from the Balkans to Russia, and from the Black Sea basin into the Caucasus, with a significant historical presence throughout the Middle East, is fraught with serious implications.

For one thing, its clear purpose is to add another layer to the campaign to “isolate Russia,” this time around by disrupting Russia’s spiritual and cultural ties to other kindred Orthodox lands, which may soon face a contrived “religious” choice between Moscow and Istanbul. The fact that the “choice” is couched in seemingly canonical rather than unapologetically and crudely political terms, makes it no less political.

Via Strategic Culture

Continue Reading

JOIN OUR YOUTUBE CHANNEL

Advertisement

Your donations make all the difference. Together we can expose fake news lies and deliver truth.

Amount to donate in USD$:

5 100

Waiting for PayPal...
Validating payment information...
Waiting for PayPal...
Advertisement
Advertisements
Advertisement
Advertisements

Quick Donate

The Duran
EURO
DONATE
Donate a quick 10 spot!

The Duran Newsletter

Trending