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Europe’s Sanctions against Russia coming to an End

Speeches and discussions by European politicians and businesspeople at SPIEF 2016 suggests an early end to sanctions.

Alexander Mercouris

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Earlier this month I wrote a piece for The Duran in which I said that the sanctions policy forced on the EU by Angela Merkel and the US is cracking.  At SPIEF 2016 the evidence of that was everywhere.

The Russians hosted at SPIEF 2016 three EU heavyweights: EU Commission President Jean-Claude Juncker, Nicolas Sarkozy- the past and possibly future President of France – and Matteo Renzi, the current Prime Minister of Italy.

Juncker had little to say in public though he held extensive discussions with the Russian leadership.  However Sarkozy and Renzi both made clear in their very different ways their utter exasperation with the sanctions policy.

The person who stole the show was Renzi, the most important politician present and the leader of what was by a fair distance the strongest European delegation at the Forum.  The Russians treated Renzi as the main guest and together with Putin and President Nazarbayev of Kazakhstan Renzi delivered one of the speeches at the plenary session.

MOSCOW, RUSSIA. MARCH 5, 2015. ITALY'S PRIME MINISTER MATTEO RENZI L AND RUSSIA'S PRESIDENT VLADIMIR PUTIN AT A MEETING, AT MOSCOW'S KREMLIN./TASS

Italian Prime Minister Matteo Renzi and Russian President Vladimir Putin meet at the Kremlin in Moscow on March 5, 2015.

This speech was a most peculiar affair.  Supposedly it was delivered impromptu, with Renzi claiming to have put aside his prepared text after being overwhelmed with emotion at hearing Putin speak.  What Putin and the grizzled veterans of Russian officialdom made of that I have no idea.

Perhaps not surprisingly it then took some time for Renzi to say anything meaningful but when he eventually did it was clear enough.  This was that though the lifting of the sanctions is linked to the full implementation of the Minsk II Agreement, it was incumbent on all parties to the agreement to implement it.  In order to reinforce the point Renzi returned to it several times, occasionally even breaking into Latin to give his point added emphasis.

The key point about this, as I discussed in my earlier article, is that as everyone knows it is the Ukrainians not the Russians who are failing to implement the Minsk II Agreement.  The Russians cannot by themselves implement the Minsk II Agreement because – as Renzi of course knows – technically they are not even parties to it. 

Renzi never referred to the Ukrainians in his whole speech.  However his meaning was clear enough.  His patience with them is wearing thin and he is not willing to have Italy and Europe held hostage indefinitely to their obsessions.

What was said in public by Renzi in the plenary was being repeated by European businesspeople throughout the Forum.  Even The Financial Times has admitted as much:

“European business leaders were also pressing for political détente. Stefan Schaible, deputy chief executive of consultancy Roland Berger, called for a modern-day Ostpolitik. “The business community is ready; politics has to go by a ‘change through rapprochement’ in high-speed mode. I hope my country will take a central role.””

The single most eloquent European voice I heard demanding the lifting of sanctions – which he criticised in the most scathing terms – was that of Jean-Pierre Thomas – an acknowledged friend of Russia’s, but someone who is also known to be close to Nicolas Sarkozy who was of course also present at the Forum.

Here I will record my view that the recent NATO exercises in the Baltic States and along the borders of Russia were a serious mistake.  Instead of reassuring Poland and the Baltic States – who had no need for such reassurance – they have caused widespread alarm in Germany, where memories are still fresh of battles fought with Russia in the two World Wars on precisely this ground.  For me one of the most striking – and moving – moments of the whole Forum came when a German businessman – an arch-typical owner of a Mittelstand business and certainly no radical – stood up at the end of one of the panels to demand an explanation of how the exercises could possibly be conducive to peace.  German Foreign Minister Frank-Walter Steinmeier’s now famous interview with Bild-Zeitung, in which he condemned the exercises as “warmongering”, followed directly after and reflect this alarm in Germany.

Even the Financial Times is now picking up on the growing demands in Germany for the sanctions to be lifted and on the increasing exasperation there at Ukraine’s foot-dragging:

“More than two years after the outbreak of the Ukraine crisis, and two weeks before a key Nato summit in Warsaw, the social democrats (in Germany) are seeking to ease tensions with Russian president Vladimir Putin — and are finding support in other western capitals, especially in southern Europe.

Mr Steinmeier has become frustrated with the slow progress in implementing Minsk, for which he blames Kiev at least as much Moscow. The party (Merkel’s coalition partner the social democratic SPD to which Steinmeier belongs – AM) is also responding to calls for an easing of sanctions from German business, which knows that it has a more sympathetic hearing from the SPD than Ms Merkel.

The Eastern Committee, industry’s main lobby group on Russia, this month renewed its call for lifting sanctions warning of the damage to the German economy. While Russia now accounts for less than 2 per cent of Germany’s total exports, companies that bet heavily on Russia are suffering badly following a one-third drop in exports to Russia.”

Meanwhile the Brexit referendum has removed from the European Council the one powerful voice – Britain’s – which could be relied upon to support Merkel’s hard line sanctions policy.  With the British gone and with opposition to the sanctions mounting in Germany and with southern Europe in open revolt, Merkel risks finding herself isolated both in Germany and in the European Council with only the Poles, the Swedes and the Baltic States supporting her.

It is known that Renzi and the southern Europeans made it a condition for the latest renewal of the sanctions that this would be the last occasion this would happen without a full and proper discussion of the subject at the European Council.  It looks like opposition within the EU to their further renewal may now be close to achieving critical mass.  At SPIEF 2016 I heard comments that the sanctions were unlikely to be extended beyond December 2016.  The Financial Times also reports such comments:

“Many international investors, Russian executives and government officials are more optimistic than at any time since western sanctions plunged Russia into isolation and economic crisis two years ago. “The forum is full of expectation. The expectation that the situation will be getting warmer,” said Andrei Guriev, chief executive of fertiliser producer Phosagro.  Kirill Dmitriev, chief executive of the $10bn state-run Russia Direct Investment Fund, said that he expected the EU and US sanctions to expire by the end of 2016. “It was just unrealistic to think that Russia would have been broken by sanctions, because it just wasn’t. Russia is an important player, it really cannot and should not be isolated, it has a certain point of view that needs to be understood.””

All the indications are that whilst the tipping point for the sanctions policy has not yet quite been reached, it is in sight and for the first time since they were imposed it is now possible to speak of a likely end to them.

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Foreign Banks Are Embracing Russia’s Alternative To SWIFT, Moscow Says

Given its status as a major energy exporter, Russia has leverage that could help attract partners to its new SWIFT alternative.

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Via Zerohedge


On Friday, one day after Russia and China pledged to reduce their reliance on the dollar by increasing the amount of bilateral trade conducted in rubles and yuan (a goal toward which much progress has already been made over the past three years), Russia’s Central Bank provided the latest update on Moscow’s alternative to US-dominated international payments network SWIFT.

Moscow started working on the project back in 2014, when international sanctions over Russia’s annexation of Crimea inspired fears that the country’s largest banks would soon be cut off from SWIFT which, though it’s based in Belgium and claims to be politically neutral, is effectively controlled by the US Treasury.

Today, the Russian alternative, known as the System for Transfer of Financial Messages, has attracted a modest amount of support within the Russian business community, with 416 Russian companies having joined as of September, including the Russian Federal Treasury and large state corporations likeGazprom Neft and Rosneft.

And now, eight months after a senior Russian official advised that “our banks are ready to turn off SWIFT,” it appears the system has reached another milestone in its development: It’s ready to take on international partners in the quest to de-dollarize and end the US’s leverage over the international financial system. A Russian official advised that non-residents will begin joining the system “this year,” according to RT.

“Non-residents will start connecting to us this year. People are already turning to us,”said First Deputy Governor of the Central Bank of Russia Olga Skorobogatova. Earlier, the official said that by using the alternative payment system foreign firms would be able to do business with sanctioned Russian companies.

Turkey, China, India and others are among the countries that might be interested in a SWIFT alternative, as Russian President Vladimir Putin pointed out in a speech earlier this month, the US’s willingness to blithely sanction countries from Iran to Venezuela and beyond will eventually rebound on the US economy by undermining the dollar’s status as the world’s reserve currency.

To be sure, the Russians aren’t the only ones building a SWIFT alternative to help avoid US sanctions. Russia and China, along with the European Union are launching an interbank payments network known as the Special Purpose Vehicle to help companies pursue “legitimate business with Iran” in defiance of US sanctions.

Given its status as a major energy exporter, Russia has leverage that could help attract partners to its new SWIFT alternative. For one, much of Europe is dependent on Russian natural gas and oil.

And as Russian trade with other US rivals increases, Moscow’s payments network will look increasingly attractive,particularly if buyers of Russian crude have no other alternatives to pay for their goods.

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US leaving INF will put nuclear non-proliferation at risk & may lead to ‘complete chaos’

The US is pulling out of a nuclear missile pact with Russia. The Intermediate-Range Nuclear Forces Treaty requires both countries to eliminate their short and medium-range atomic missiles.

The Duran

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Via RT


If the US ditches the Intermediate-Range Nuclear Forces Treaty (INF), it could collapse the entire nuclear non-proliferation system, and bring nuclear war even closer, Russian officials warn.

By ending the INF, Washington risks creating a domino effect which could endanger other landmark deals like the Strategic Arms Reduction Treaty (START) and collapse the existing non-proliferation mechanism as we know it, senior lawmaker Konstantin Kosachev said on Sunday.

The current iteration of the START treaty, which limits the deployment of all types of nuclear weapons, is due to expire in 2021. Kosachev, who chairs the Parliament’s Upper House Foreign Affairs Committee, warned that such an outcome pits mankind against “complete chaos in terms of nuclear weapons.”

“Now the US Western allies face a choice: either embarking on the same path, possibly leading to new war, or siding with common sense, at least for the sake of their self-preservation instinct.”

His remarks came after US President Donald Trump announced his intentions to “terminate” the INF, citing alleged violations of the deal by Russia.

Moscow has repeatedly denied undermining the treaty, pointing out that Trump has failed to produce any evidence of violations. Moreover, Russian officials insist that the deployment of US-made Mk 41 ground-based universal launching systems in Europe actually violates the agreement since the launchers are capable of firing mid-range cruise missiles.

Leonid Slutsky, who leads the Foreign Affairs Committee in parliament’s lower chamber, argued that Trump’s words are akin to placing “a huge mine under the whole disarmament process on the planet.”

The INF Treaty was signed in 1987 by then-President Ronald Reagan and Soviet leader Mikhail Gorbachev. The deal effectively bans the parties from having and developing short- and mid-range missiles of all types. According to the provisions, the US was obliged to destroy Pershing I and II launcher systems and BGM-109G Gryphon ground-launched cruise missiles. Moscow, meanwhile, pledged to remove the SS-20 and several other types of missiles from its nuclear arsenal.

Pershing missiles stationed in the US Army arsenal. © Hulton Archive / Getty Images ©

By scrapping the historic accord, Washington is trying to fulfill its “dream of a unipolar world,” a source within the Russian Foreign Ministry said.

“This decision fits into the US policy of ditching the international agreements which impose equal obligations on it and its partners, and render the ‘exceptionalism’ concept vulnerable.”

Deputy Foreign Minister Sergey Ryabkov denounced Trump’s threats as “blackmail” and said that Washington wants to dismantle the INF because it views the deal as a “problem” on its course for “total domination” in the military sphere.

The issue of nuclear arms treaties is too vital for national and global security to rush into hastily-made “emotional” decisions, the official explained. Russia is expecting to hear more on the US’ plans from Trump’s top security adviser, John Bolton, who is set to hold talks in Moscow tomorrow.

President Trump has been open about unilaterally pulling the US out of various international agreements if he deems them to be damaging to national interests. Earlier this year, Washington withdrew from the Joint Comprehensive Plan of Action (JCPOA) on the Iranian nuclear program. All other signatories to the landmark agreement, including Russia, China, and the EU, decided to stick to the deal, while blasting Trump for leaving.

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Converting Khashoggi into Cash

After two weeks of denying any connection to Khashoggi’s disappearance, Riyadh has admitted that he was killed by Saudi operatives but it wasn’t really on purpose.

Jim Jatras

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Authored by James George Jatras via The Strategic Culture Foundation:


The hazard of writing about the Saudis’ absurd gyrations as they seek to avoid blame for the murder of the late, not notably great journalist and Muslim Brotherhood activist Jamal Khashoggi is that by the time a sentence is finished, the landscape may have changed again.

As though right on cue, the narrative has just taken another sharp turn.

After two weeks of denying any connection to Khashoggi’s disappearance, Riyadh has ‘fessed up (sorta) and admitted that he was killed by Saudi operatives but it wasn’t really on purpose:

Y’see, it was kinda’f an ‘accident.’

Oops…

Y’see the guys were arguing, and … uh … a fistfight broke out.

Yeah, that’s it … a ‘fistfight.’

And before you know it poor Jamal had gone all to pieces.

Y’see?

Must’ve been a helluva fistfight.

The figurative digital ink wasn’t even dry on that whopper before American politicos in both parties were calling it out:

  • “To say that I am skeptical of the new Saudi narrative about Mr. Khashoggi is an understatement,” tweeted Republican Sen. Lindsey Graham of South Carolina. “First we were told Mr. Khashoggi supposedly left the consulate and there was blanket denial of any Saudi involvement. Now, a fight breaks out and he’s killed in the consulate, all without knowledge of Crown Prince. It’s hard to find this latest ‘explanation‘ as credible.”
  • California Rep. Adam Schiff, the ranking Democrat on the House Intelligence Committee, said in a statement that the new Saudi explanation is “not credible.” “If Khashoggi was fighting inside the Saudi consulate in Istanbul, he was fighting for his life with people sent to capture or kill him,” Schiff said. “The kingdom and all involved in this brutal murder must be held accountable, and if the Trump administration will not take the lead, Congress must.”

Turkish President Recep Tayyip Erdogan must think he’s already died and gone to his eternal recreation in the amorous embraces of the dark-eyed houris. The acid test for the viability of Riyadh’s newest transparent lie is whether the Turks actually have, as they claim, live recordings of Khashoggi’s interrogation, torture, murder, and dismemberment (not necessarily in that order) – and if they do, when Erdogan decides it’s the right time to release them.

Erdogan has got the Saudis over a barrel and he’ll squeeze everything he can out of them.

From the beginning, the Khashoggi story wasn’t really about the fate of one man. The Saudis have been getting away with bloody murder, literally, for years. They’re daily slaughtering the civilian population of Yemen with American and British help, with barely a ho-hum from the sensitive consciences always ready to invoke the so-called “responsibility to protect” Muslims in Bosnia, Kosovo, Libya, Syria, Xinjiang, Rakhine, and so forth.

Where’s the responsibility not to help a crazed bunch of Wahhabist head-choppers kill people?

But now, just one guy meets a grisly end and suddenly it’s the most important homicide since the Lindbergh baby.

What gives?

Is it because Khashoggi was part of the MSM aristocracy, on account of his relationship with the Washington Post?

Was it because of his other, darker, connections? As related by Moon of Alabama: “Khashoggi was a rather shady guy. A ‘journalist’ who was also an operator for Saudi and U.S. intelligence services. He was an early recruit of the Muslim Brotherhood.” This relationship, writes MoA, touches on the interests of pretty much everyone in the region:

“The Ottoman empire ruled over much of the Arab world. The neo-Ottoman wannabe-Sultan Recep Tayyip Erdogan would like to regain that historic position for Turkey. His main competition in this are the al-Sauds. They have much more money and are strategically aligned with Israel and the United States, while Turkey under Erdogan is more or less isolated. The religious-political element of the competition is represented on one side by the Muslim Brotherhood, ‘democratic’ Islamists to which Erdogan belongs, and the Wahhabi absolutists on the other side.”

With the noose tightening around Saudi Crown Prince Mohammad bin Salman (MbS), the risible fistfight cock-and-bull story is likely to be the best they can come up with. US President Donald Trump’s having offered his “rogue killers” opening suggests he’s willing to play along. Nobody will really be fooled, but MbS will hope he can persuade important people to pretend they are fooled.

That will mean spreading around a lot of cash. The new alchemy of converting Khashoggi dead into financial gain for the living is just one part of an obvious scheme to pull off what Libya’s Muammar Kaddafi managed after the 1988 Lockerbie bombing: offer up some underlings as the fall guys and let the top man evade responsibility. (KARMA ALERT: That didn’t do Kaddafi any good in the long run.)

In the Saudi case the Lockerbie dodge will be harder, as there are already pictures of men at the Istanbul Consulate General identified as close associates of MbS. But they’ll give it the old madrasa try anyway since it’s all they’ve got.Firings and arrests have started and one suspect has already died in a suspicious automobile “accident.” Heads will roll!

Saving MbS’s skin and his succession to the throne of his doddering father may depend on how many of the usual recipients of Saudi – let’s be honest – bribery and influence peddling will find sufficient pecuniary reason to go along. Saudi Arabia’s unofficial motto with respect to the US establishment might as well be: “The green poultice heals all wounds.”

Anyway, that’s been their experience up to now, but it also in part reflects the same arrogance that made MbS think he could continue to get away with anything. (It’s not shooting someone in the middle of Fifth Avenue, but it’s close.) Whether spreading cash around will continue to have the same salubrious effect it always has had in the past remains to be seen.

To be sure, Trump may succeed in shaking the Saudi date palm for additional billions for arms sales. That won’t necessarily turn around an image problem that may not have a remedy. But still, count on more cash going to high-price lobbying and image-control shops eager to make obscene money working for their obscene client. Some big American names are dropping are dropping Riyadh in a sudden fit of fastidiousness, but you can bet others will be eager to step into their Guccis, both in the US and in the United Kingdom. (It should never be forgotten how closely linked the US and UK establishments are in the Middle East, and to the Saudis in particular.)

It still might not work though. No matter how much expensive PR lipstick the spinmeisters put on this pig, that won’t make it kissable. It’s still a pig.

Others benefitting from hanging Khashoggi’s death around MbS’s neck are:

  • Qatar (after last year’s invasion scare, there’s no doubt a bit of Schadenfreude and (figurative) champagne corks popping in Doha over MbS’s discomfiture. As one source close to the ruling al-Thani family relates, “The Qataris are stunned speechless at Saudi incompetence!” You just can’t get good help these days).

Among the losers one must count Israel and especially Prime Minister Bibi Netanyahu. MbS, with his contrived image as the reformer, was the Sunni “beard” he needed to get the US to assemble an “Arab NATO” (as though one NATO weren’t bad enough!) and eliminate Iran for him. It remains to be seen how far that agenda has been set back.

Whether or not MbS survives or is removed – perhaps with extreme prejudice – there’s no doubt Saudi Arabia is the big loser. Question are being asked that should have been asked years ago. As Srdja Trifkovic comments in Chronicles magazine:

“The crown prince’s recklessness in ordering the murder of Khashoggi has demonstrated that he is just a standard despot, a Mafia don with oil presiding over an extended cleptocracy of inbred parasites. The KSA will not be reformed because it is structurally not capable of reform. The regime in Riyadh which stops being a playground of great wealth, protected by a large investment in theocratic excess, would not be ‘Saudi’ any longer. Saudia delenda est.”

The first Saudi state, the Emirate of Diriyah, went belly up in 1818, with the death of head of the house of al-Saud, Abdullah bin Saud – actually, literally with his head hung on a gate in Constantinople by Erdogan’s Ottoman predecessor, Sultan Mahmud II.

The second Saudi state, Emirate of Nejd, likewise folded in 1891.

It’s long past time this third and current abomination joined its antecedents on the ash heap of history.

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