Juncker Backtracks on EU’s South Stream Ban

How do you get €300 billion in (probably largely useless) “infrastructure investment” in Europe? Banning a $40 billion project from going forward is probably not going to help, not to mention that this one would actually have been useful. After Gazprom announced last week that it has had enough and is ditching the South Stream pipeline project (see “South Stream Dies” for details) after having invested $5 billion and run into countless politically motivated obstacles, EU commissariat president Juncker engaged in a back-tracking exercise, garnished with some nonsense about “Russia holding Bulgaria to ransom”. Very likely he got an earful from Bulgarian prime minister Boiko Borisov about the EU’s sabotage of the project:

 

“European Commission President Jean-Claude Juncker has insisted the $40 billion South Stream natural gas pipeline can still go ahead and accused Russia of holding EU-member Bulgaria to ransom when it said it had abandoned the project.

Speaking after talks with Bulgarian Prime Minister Boiko Borisov, whose country South Stream would traverse making it a major beneficiary, Juncker rebutted Russia’s statement that EU competition rules had killed it. He told reporters issues relating to the pipeline were not insurmountable and he was working with Bulgaria to address them.

Russia said on Monday it had abandoned the pipeline, which would have bypassed Ukraine, Gazprom’s traditional transit route for Russian gas, citing EU competition requirements for a pipeline’s ownership to be divorced from its cargo. It said it was working on an alternative route via Turkey.

Juncker accused Moscow of blackmailing Bulgaria, which retains strong political and economic ties with Moscow and is almost entirely dependent on Russia for its gas. “I am not accepting the simple easy idea that Bulgaria can be blackmailed as far as these energy relations are concerned,” Juncker said.

“We’ll take … all the necessary steps to make sure that our relations with Russia will be improved, but it doesn’t depend only on the willingness of the EU, of the European Commission. To dance a tango … you need two dancers.”

Borisov also said South Stream could be built and agreed it had to comply with EU rules, including legislation known as the third energy package, which limits how much of a pipeline a company can own if it also controls its contents. Further efforts to bring the project in line will be made on Tuesday, when EU energy ministers meet for regular talks. “I hope that all these technical details will be solved at this meeting including the third energy package,” Borisov said. He added he had not received any official notice from Russia that South Stream was not going ahead.

EU sources, speaking on condition of anonymity, said Russia’s calculation could have been that its announcement of South Stream’s demise would place the Commission under pressure from some member states to soften its regulatory stance. At the same time, Russia has a struggle [sic, ed.] to find the cash for South Stream, given a falling oil price and economic sanctions.”

 

(emphasis added)

A few remarks to the above: yes, the Bulgarians are understandably up in arms, but had it been up to them, the construction activities would never have been interrupted in the first place. As things stand, the previous Bulgarian government was badgered by the EU and visited by John McCain, whose primary mission was apparently to stop the pipeline from being built. The government announced that all construction on the pipeline would be stopped two hours after McCain left.

 

Boiko and JCBoiko Borisovich, here pictured shortly before jumping down JC Juncker’s throat. We would recommend not angering him too much: he’s a former bodyguard with a black belt in karate. His nickname is “Batman” (no kidding!).

Photo by BGNES

 

Could it be that Gazprom announced the cancellation merely to put pressure on the EU Commission? It is certainly possible. Note, we doubt that lower oil prices are a “cause” of anything here. This is not an oil pipeline, it is a natural gas pipeline – which is a different, if related market. While bulk sales prices are not entirely independent of market prices, there are long term delivery contracts designed to give pricing and planning security to both consumers and producers.

However, Gazprom does have a financing problem – mainly due to EU sanctions. It can no longer refinance its short term foreign currency denominated debt in Western markets. Obviously this means the company will have to reassess some of its investment plans. And it should be clear that an investment that has so far run into nothing but obstacles from the EU bureaucracy is likely among those to be culled. In fact, even if the “competition” problems are sorted out (which we assume would be quite easy to do – key word: “North Stream”), Gazprom may decide not to go forward, because the financing issue could be seen as too risky.

Juncker says the EU will do whatever it can to improve relations with Russia and it is certainly true that if there are disagreements it always “takes two to tango”. However, let us stop to think for a moment what this means in unambiguous, clear language. From the perspective of the EU (and especially the US) leadership, it means that Russia’s government must accede 100% to every demand they make. We already pointed out that this is an essentially fascist foreign policy. Nothing but complete surrender is acceptable. We don’t think it would be impossible to come to an agreement regarding the Ukraine crisis that everybody could in theory live with (the über-hawks in both the US and Russia excepted – basically the neo-cons in the US and assorted nationalists in Russia. We do have a tad more understanding for the paranoia of former Eastern Bloc countries). By now it should be rather glaringly obvious though that economic sanctions and demonizing the Russian leadership at every opportunity won’t do the trick.

As an aside to all this, it certainly couldn’t possibly get more embarrassing. Only last Monday, the European State propaganda orga…sorry, the European mainstream press, printed triumphalist headlines like this one, which translated means “EU Victory Over Moscow’s Pipeline Policy” – below the headline we read “bureaucrats have brought Putin to his knees, not diplomats”. An appropriate comment on this would be a variation of a famous saying by King Pyrrhus of Epirus: “If we are victorious in one more battle with the Russians we shall be utterly ruined.”

 

Conclusion:

Although every bad thing that is not the fault of climate change is allegedly the fault of Putin, it seems the EU commissariat “didn’t really mean it” and wants to see South Stream built after all. Here is an idea: lock them all in a room with Borisov for an hour and let him use his special powers of persuasion on them; that should hasten the process.

 

boiko-karateBoiko “Batman” Borisov in action

Photo via glasove.com / Author unknown

 

boiko knee-punchThat looks like it may have hurt.

Photo: SILVIA GURMEVA

 


 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

2 Responses to “Dear Mr. Putin, We Were Only Playing Hard to Get”

  • JohnnyZ:

    Haha, utter embarrassment for the EU.

  • VB:

    Please. His name is “Boyko Borisov”, not “Boiko Borisovich”. “Borisov” is a Bulgarian family name. “Borisovich” is a Russism and it is a patronymic, to boot – not a family name.

    As much as I despise the man (he’s an uneducated bum), at least try to get his name right.

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • How to Survive the Winter
      A Flawless Flock of Scoundrels One of the fringe benefits of living in a country that’s in dire need of a political, financial, and cultural reset, is the twisted amusement that comes with bearing witness to its unraveling.  Day by day we’re greeted with escalating madness.  Indeed, the great fiasco must be taken lightly, so as not to be demoralized by its enormity.   Symphony grotesque in Washington [PT]   Of particular note is the present cast of characters. ...
  • The Strange Behavior of Gold Investors from Monday to Thursday
      Known and Unknown Anomalies Readers are undoubtedly aware of one or another stock market anomaly, such as e.g. the frequently observed weakness in stock markets in the summer months, which the well-known saying “sell in May and go away” refers to. Apart from such widely known anomalies, there are many others though, which most investors have never heard of. These anomalies can be particularly interesting and profitable for investors – and there are several in the precious metals...
  • Business Cycles and Inflation – Part I
      Incrementum Advisory Board Meeting Q4 2017 -  Special Guest Ben Hunt, Author and Editor of Epsilon Theory The quarterly meeting of the Incrementum Fund's Advisory Board took place on October 10 and we had the great pleasure to be joined by special guest Ben Hunt this time, who is probably known to many of our readers as the main author and editor of Epsilon Theory. He is also chief risk officer at investment management firm Salient Partners. As always, a transcript of the discussion is...
  • What President Trump and the West Can Learn from China
      Expensive Politics Instead of a demonstration of its overwhelming military might intended to intimidate tiny North Korea and pressure China to lean on its defiant communist neighbor, President Trump and the West should try to learn a few things from China.   President Trump meets President Xi. The POTUS reportedly had a very good time in China. [PT] Photo credit: AP   The President’s trip to the Far East came on the heels of the completion of China’s...
  • Business Cycles and Inflation, Part II
      Early Warning Signals in a Fragile System [ed note: here is Part 1; if you have missed it, best go there and start reading from the beginning] We recently received the following charts via email with a query whether they should worry stock market investors. They show two short term interest rates, namely the 2-year t-note yield and 3 month t-bill discount rate. Evidently the moves in short term rates over the past ~18 - 24 months were quite large, even if their absolute levels remain...
  • Is Fed Chair Nominee Jay Powell, Count Dracula?
      A Date with Dracula The gray hue of dawn quickly slipped to a bright clear sky as we set out last Saturday morning.  The season’s autumn tinge abounded around us as the distant mountain peaks, and their mighty rifts, grew closer.  The nighttime chill stubbornly lingered in the crisp air.   “Who lives in yonder castle?” Harker asked. “Pardon, Sire?” Up front in the driver's seat it was evidently hard to understand what was said over the racket made by the team of...
  • A Different Powelling - Precious Metals Supply and Demand Report
      New Chief Monetary Bureaucrat Goes from Good to Bad for Silver The prices of the metals ended all but unchanged last week, though they hit spike highs on Thursday. Particularly silver his $17.24 before falling back 43 cents, to close at $16.82.   Never drop silver carelessly, since it might land on your toes. If you are at loggerheads with gravity for some reason, only try to handle smaller-sized bars than the ones depicted above. The snapshot to the right shows the governor...
  • Heat Death of the Economic Universe
      Big Crunch or Big Chill Physicists say that the universe is expanding. However, they hotly debate (OK, pun intended as a foreshadowing device) if the rate of expansion is sufficient to overcome gravity—called escape velocity. It may seem like an arcane topic, but the consequences are dire either way.   OT – a little cosmology excursion from your editor: Observations so far suggest that the expansion of the universe is indeed accelerating – the “big crunch”, in...
  • Claudio Grass Interviews Mark Thornton
      Introduction Mark Thornton of the Mises Institute and our good friend Claudio Grass recently discussed a number of key issues, sharing their perspectives on important economic and geopolitical developments that are currently on the minds of many US and European citizens. A video of the interview can be found at the end of this post. Claudio provided us with a written summary of the interview which we present below – we have added a few remarks in brackets (we strongly recommend...
  • Inflation and Gold - Precious Metals Supply and Demand
      Reasons to Buy Gold The price of gold went up $19, and the price of silver 42 cents. The price action occurred on Monday, Wednesday and Friday though so far, only the first two price jumps reversed. We promise to take a look at the intraday action on Friday.   File under “reasons to buy gold”: A famous photograph by Henri Cartier-Bresson of a rather unruly queue in front of a bank in Shanghai in 1949 in the final days of Kuomintang rule. When it dawned on people that the...
  • Precious Metals Supply and Demand
      A Different Vantage Point The prices of the metals were up slightly this week. But in between, there was some exciting price action. Monday morning (as reckoned in Arizona), the prices of the metals spiked up, taking silver from under $16.90 to over $17.25. Then, in a series of waves, the price came back down to within pennies of last Friday’s close. The biggest occurred on Friday.   Silver ended slightly up on the week after a somewhat bigger rally was rudely interrupted...
  • How Uncle Sam Inflates Away Your Life
      Economic Nirvana “Inflation is always and everywhere a monetary phenomenon,” economist and Nobel Prize recipient Milton Friedman once remarked.  He likely meant that inflation is the more rapid increase in the supply of money relative to the output of goods and services which money is traded for.   Famous Monetarist School representative Milton Friedman thought the US should adopt a constitutional amendment limiting monetary inflation to 3% – 5% per year, putting...

Support Acting Man

Top10BestPro
j9TJzzN

Austrian Theory and Investment

Archive

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com