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!

It is that time of the year again – our semi-annual funding drive begins today. Give us a little hand in offsetting the costs of running this blog, as advertising revenue alone is insufficient. You can help us reach our modest funding goal by donating either via paypal or bitcoin. Those of you who have made a ton of money based on some of the things we have said in these pages (we actually made a few good calls lately!), please feel free to up your donations accordingly (we are sorry if you have followed one of our bad calls. This is of course your own fault). Other than that, we can only repeat that donations to this site are apt to secure many benefits. These range from sound sleep, to children including you in their songs, to the potential of obtaining privileges in the afterlife (the latter cannot be guaranteed, but it seems highly likely). As always, we are greatly honored by your readership and hope that our special mixture of entertainment and education is adding 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:

  • snake-charmerGold Price Skyrockets in India after Currency Ban – Part III
      When Money Dies In part-I of the dispatch we talked about what happened during the first two days after Indian Prime Minister, Narendra Modi banned Rs 500 and Rs 1000 banknotes, comprising of 88% of the monetary value of cash in circulation. In part-II, we talked about the scenes, chaos, desperation, and massive loss of productive capacity that this ban had led to over the next few days.   Indian prime minister Narendra Modi – another finger-wagger, as can be seen in this...
  • wads-of-cashGold Price Skyrockets in India after Currency Ban – Part II
      Chaos in the Wake of the Ban Here is a link to Part 1, about what happened in the first two days after India's government made Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes illegal. They can now only be converted to Rs 100 (~$1.50) or lower denomination notes, at bank branches or post offices. Banks were closed the first day after the decision. What follows is the crux of what has happened over the subsequent four days.     India's prime minister Nahendra Modi, author of the...
  • shopGold Price Skyrockets in India after Currency Ban – Part IV
      A Market Gripped by Fear The Indian Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes would no longer be legal tender. Linked are Part-I, Part-II and Part-III updates on the rapidly encroaching police state. The economic and social mess that Modi has created is unprecedented. It will go down in history as an epitome of naivety and arrogance due to Modi’s self-centered desire to increase tax-collection at any cost.   Indian jewelry...
  • very-bad-boyA Note on Gold and India – What is Driving the Gold Price?
      Hidden Motives It is well-known that India's government wants to coerce its population into “modernizing” its financial behavior and abandoning its traditions. The recent ban on large-denomination banknotes was not only meant to fight corruption.   Obviously, this very bad Indian has way too much cash. Just look at him, he looks suspicious! Photo via thenewsminute.com   In fact, as our friend Jayant Bhandari has pointed out, fresh avenues for corruption ...
  • gold-pm-fixIndia's Currency Debacle – An Interview with Jayant Bhandari
      A Major Crisis Last week Jayant Bhandari related the story of the overnight ban of certain banknotes in India under cover of “stamping out corruption” (see Gold Price Skyrockets In India after Currency Ban Part 1 and Part 2 for the details).   Banned 500 rupee banknotes   The problem is inter alia that the sudden ban of these banknotes has hit the Indian economy quite hard, given that 97% of all transactions in the country are cash-based. Not only that, it has...
  • vigilantesWill the Swamp Swallow Trump?
      Permanently Skewed TRUMP HOTEL, New York – Trump’s rambling army – professionals, amateurs, camp followers, and profiteers – is marching south, down the I-95 corridor. There, on the banks of the Potomac, it will fight its next big battle.   Lieutenants in Trump's army: Bannon, Flynn & Sessions Photo credit: Drew Angerer / AFP   Here at the Diary, we do not like to get involved in politics. But this is a special time in the history of our planet – a...
  • santorinigreeceThere Are Two Types of Credit — One of Them Leads to Booms and Busts
      Stumped by the Bust In the slump of a cycle, businesses that were thriving begin to experience difficulties or go under. They do so not because of firm-specific entrepreneurial errors but rather in tandem with whole sectors of the economy. People who were wealthy yesterday have become poor today. Factories that were busy yesterday are shut down today, and workers are out of jobs.   What has caused the bust? The modern-day economic orthodoxy continues to be unable to provide...
  • train-to-hellAll Aboard! Trump’s Express Train to the Future
      Free Money! BALTIMORE – Last week, the Dow punched up above 19,000 – a new all-time record. And on Monday, the Dow, the S&P 500, the Nasdaq, and the small-cap Russell 2000 each hit new all-time highs. The last time that happened was on the last day of December 1999.   Ironically, two events that were almost universally expected to trigger large stock market declines were followed by quite rapid and strong gains. Would the market have fallen if Hillary Clinton had won...
  • jumpAttaining Self-Destruct Velocity
      Bad Monday Some Monday mornings are better than others.  Others are worse than some.  For one Amazon employee, this past Monday morning was particularly bad. No doubt, the poor fellow would have been better off he’d called in sick to work.  Such a simple decision would have saved him from extreme agony.  But, unfortunately, he showed up at Amazon’s Seattle headquarters and put on a public and painful display of madness.   Good-bye cruel world! On this our planet,...
  • yellen_duct_tape_7-16-2014_largeGold Bull Market Remains Intact – Long Term Fundamentals Outweigh Short Term Market Gyrations
      A Strong First Half of the Year, Followed by Another Retreat In early 2016 gold had a big bull run. The precious metal rose close to 25% this year, pushed higher in a summer rally that peaked on July 10th. Gold experienced a bumpy ride over the remainder of the summer though, as investors became increasingly concerned about a potential rate hike by the Federal Reserve. Uncertainty returned to gold market and has intensified further since then.   Initially, gold rallied sharply...
  • david_stockman_0Too Early for “Inflation Bets”?
      The Trump Trade After 35 years of waiting... so many false signals... so often deceived... so often disappointed... bond bears gathered on rooftops as though awaiting the Second Coming. Many times, investors have said to themselves, “This is it! This is the end of the Great Bull Market in Bonds!”   The long bond's long cycle – red rectangles indicate when the post 1980 bull market was held to be “over” or “over for sure” or “100% over”, etc.  We have...
  • workers-powerAbout that Economic Inequality
      Illusory Riches, Obvious Impoverishment I address this essay to two groups. One group is those among the liberty movement, who believe that there’s nothing wrong with inequality. These are often Objectivists, who unknowingly defend a regime that artificially suppresses working people.   And suddenly, you feel much lighter...   The other group is those among the Left who still call themselves liberals. They say they don’t like inequality, but nevertheless...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

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]

 

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

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com