Topic: Economic sanctions are not a war declaration (Read 891 times)

European Parliament supports immediate imposition of embargo on oil and gas imports from Russia

The European Parliament supported a resolution calling for a full and immediate embargo on imports of Russian energy: oil, gas, coal and nuclear fuel. This was announced by MEP Guy Verhofstadt.

The document was supported by the vast majority of MEPs. 413 out of 552 parliamentarians voted for him. Abstentions - 46, against - 93.

I think if an embargo is imposed on Russia, then all previous sanctions will turn out to be simply ridiculous

Fiat money is not the best option for long-term investments due to inflation, I use rubles for current expenses and also I like bitcoin.

You have exchanged all your roubles to US or bitcoin haven't you?

Glad you're having fun.
What divorce process, what are you talking about? Europe has spent a week considering the possibilities and prospects of abandoning Russian gas, and now it looks like it will be happy to announce its victory, continuing to pay for gas in euros, bypassing its own sanctions. Europe cannot refuse Russian gas right now - this is an immediate economic disaster with the shutdown of large industrial enterprises. Europe cannot abandon Russian gas in a year or two - too much time and money will be spent on building a new infrastructure adapted for liquefied gas, and free liquefied gas simply does not exist on the market in sufficient volumes, and there is nowhere to take it from. Having mentally abandoned Russian gas, Europe realized the scale of its dependence on it, in general, on the supply of fertilizers, raw materials, natural resources and cheap energy from Russia, and I think it was a very educational experience.

In the meantime, here's a recent article in The Economist on the effects of economic sanctions on Russia.
In short, it looks like the Russians пoxyй about sanctions.

Russian sanctions lifted already. Not all but a start
https://home.treasury.gov/system/files/126/russia_gl6a.pdf

Lol. I am afraid, that train has left the station. The divorce proceedings are in progress.

If you think we will go back to the way things were even if Putin withdraws his army from Donbas and Crimea tomorrow, you are mistaken.

Your fuhrer is a war criminal, and nothing will change this fact. You guys are done.  All civilized world will not want to have anything to do with you.

No more Blancpain watches for you, Volodiya.

1. Starting today, Gazprom supplies gas to unfriendly countries for rubles (exceptions are possible through the decision of a government commission).

2. The mechanism is as transparent as possible for Western clients - they continue to receive gas under existing contracts, the conversion of euros into rubles for Gazprom through the Moscow Currency Exchange will be done by Gazprombank affiliated with Gazprom, which for the normal operation of the mechanism must be free from Western sanctions. This is just a working mechanism for circumventing sanctions, which your propaganda trumpeted as a win, giving European politicians a chance to save face. In the week of waiting for Putin's decree in Europe, they came up with everything, including scenarios that would be catastrophic for the economy of an immediate refusal of Russian gas, so the mere possibility of continuing to pay in euros under existing contracts is regarded by the European Union as its own victory. I said above that Putin's first offer is usually the best for partners - and here it is. Putin shows respect for the German industrial business by keeping their existing contracts almost unchanged, except for the bank details of the recipient of funds for a stable supply of Russian gas. Putin does not want to break mutually beneficial ties with Europe, because Moscow is also Europe. This is a strong move by Putin, showing him as a mature strategist. But you can keep shouting "Пepeмoгa", ok. 

I agree, there is a reputation come, but I think this is the right reputation actually. If you are willing to threaten and invade, you have no business here.



I am not surprised, in the places I live people talk, even if to disagree and tell others they are wrong (without killing them usually). There something about the Russian unwillingness to compromise, in general, that I find difficult to understand.

The companies with existing contracts pay in Euros. The new contracts, if any, will need to be negotiated in Rubles.

German gas suppliers continue to pay Gazprom in Euros, just like before the war/sanctions.

What Gazprom does with the Euros is their business.

Here is the "mechanism": Gazprom bank would open euro/dollar and ruble accounts for gas buyers; buyers are supposed to transfer euros/dollars; the bank then would convert those euros/dollars to rubles; Gazprom would take those rubles.

You are so funny when you squirt bile. Here is Putin's decree on the "gas for rubles" mechanism, which begins to operate from tomorrow.

That's why Russia with its "leaders" is in the shitter while the rest of the civilized world has realized that giving all power to one person is a bad idea and came up with various albeit imperfect ways of distributing that power.



Sounds like a 30-year old living in mom's basement. "I will move out tomorrow". "I actually meant that tomorrow I will announce a mechanism for moving out but if you object to my insane conditions I will gladly stay".

The energy system of Germany is focused on pipeline gas from Russia. In general, the current European strategy for the transition to carbon-free green energy relies on hydrogen, which is planned to be produced in Russia and delivered to Europe through the existing gas pipeline system with the addition of 20% natural gas (because pure hydrogen is a very volatile gas). All gas pipelines to Europe, including the non-certified Nord Stream 2, allow hybrid operation of a mixture of hydrogen and natural gas. Wind turbines and solar energy are too unstable to be a reliable main energy system, so Europe has bet on hydrogen in its future. Maybe Germany has a new energy strategy recently, I don't know anything about that.

I think the freezing of funds of the Central Bank of the Russian Federation is a serious reputational damage for the West. The USA, Great Britain, the European Union, Japan and even Switzerland have significantly discredited their own national currencies in the eyes of the entire world community - the US dollar, the pound sterling, the euro, the Japanese yen and the Swiss franc, these fiat currencies can no longer be considered reliable enough for long-term storage, because they can be easily frozen, just when you need them most. The value of fiat currencies rests on the trust in the issuer, and this trust no longer exists. In fact, this is the end of the Jamaican monetary system.

Europe is now puffing out its cheeks indignantly, but in European politics there is no leader with charisma like Che Guevara or Castro, who will set fire to the stadium with a fiery speech and the crowd in ecstasy will begin to chant "Freedom or death!" Talking heads speak in the media, but the real gas contracts are between commercial enterprises. The exchange rate of the ruble on Forex is growing, which means that non-residents are buying the ruble, preparing for the prospect of paying their gas contracts in rubles. Tomorrow the operating mechanism of gas payment for rubles will be made public. Yesterday, gas stopped flowing through Poland through a branch of the gas pipeline.

Usually, Putin's first offer is the most profitable for his partners - gas for rubles while maintaining the price of the contract. A little later there will be a new offer, less profitable, but still acceptable - gas for rubles with a revision of the price in the direction of the market.

Sometimes it seems that you and I generally live in some kind of parallel worlds. One and the same reality and we have such a different view of it. It's funny that we can still continue the dialogue.

The future is to get rid of gas altogether, perhaps this is going to accelerate that as COVID accelerated remote working. Germany and the EU in general have options, as I guess Putin has options on where to sell his gas... eventually the market will reconfigure, but what cannot be ever restored is reputation and confidence. Anyone buying from Putin knows that contracts are wet paper and that by connecting to his version of Russia they are becoming weaker.

Do you think that after changing the payment and eventually threatening to cut contractually signed gas supplies would any country invest ever in a gas pipe to connect to Putin's Russia? Do you dream of an Eastern alliance with such a reputation?

There will be hard times ahead, there is no winner to this stupid war, but if I had to choose where to live those times, I am certain it would not be in Putin's Russia. You will have gas and heating, but millions of people will not have money to pay for it. Germany will also loose in some of its industrial sectors, but still has marging.

BTW, I have a completely different version of the negotiations with Ukraine regarding the gas, as Putin needed the agreement of Ukraine to send gas to the EU. As we like to say in some of the places I live "donde tengas la olla no metas la polla".

Let's try to stick to the economic aspects of sanctions and counter-sanctions in this topic, without moralizing. I understand that in the West Putin is considered the personification of evil, and all Russians in the light of the Western media apparently look like wild barbarians and bloodthirsty orcs. But Europe is already beginning to understand that among the millions of refugees from Ukraine there are many Nazis who desecrate monuments to Soviet soldiers during the Second World War and behave defiantly and unceremoniously, demanding special treatment just because of their nationality and just because "Ukraine über alles". Over time, the veil of lies will fall from the eyes of ordinary Europeans once and for all, when they realize that they are suffering from their own sanctions more than Russia. But gas prices under long-term contracts will not be the same.

Germany may not freeze to death without Russian gas (wearing a warm sweater  ), but it was cheap Russian pipeline gas that gave Germany the competitive edge to remain a strong industrial nation. In 2021, the average price of gas supplies by Gazprom under long-term contracts was $270 per thousand cubic meters. Gazprom is not interested in short-term gas supplies at spot prices, it does not deal with this. Tankers with liquefied gas became interested in the European market and turned away from deliveries to Asia after the price of gas on the European exchange exceeded $2,000 per thousand cubic meters. This is the approximate price point at which Europe will be able to buy gas in the near future, if it can find sufficient volumes on the market to meet its needs.

Russia already has experience cutting off gas to intractable partners. On January 1, 2009, Russia cut off gas to Ukraine. Nine days later, the Ukrainian delegation signed in Moscow a new contract for the supply of gas at a price several times higher. The lessons of history teach that they teach nothing. Well, as we like to say in Russia: "Moжeм пoвтopить".

I think Putin's Russia will be a very helpful partner, selling Europe everything they need to keep on producing the weapons to kill the young untrained Russian soldiers. Curiously, the bullets that kill them could be paid in rubles as per your theory.

This is sad, even my great sense of humour is not enough to laugh at this.

I think Europe will buy gas from Russia in a similar way with the help of a virtual reverse through Bulgaria or Turkey, additionally paying for their intermediary services, but doing it without pleasure. However, we will soon see everything for ourselves. It is not clear how Europe will get out of this delicate situation while trying to save face, but Russia's message to Europe does not allow for ambiguity and room for double interpretation: "No money - no honey".

I was wondering if they gonna stop the war because of these multiple sanctions since the day there invade Ukraine but guess what? they still going strong and wanted to take all the major cities as soon as possible. The Ukrainian army doesn't stop depending on their country which makes this war longer than speculated. just today, they regained back one city from the Russian troops. I don't know but I think sanctions are just for poor countries and a country like Russia is immune to this kind of counter against their country.

These are not my statistics, but from a specialized European site. This Statista picture apparently shows only direct gas purchases from Russia and doesn't take resales into account. Ukraine has not used Russian gas since 2015 only formally, but actually buys it through Hungary and Slovakia.

If we look at the absolute figures of Russian gas consumption by European countries, the picture will change. Germany consumes a lot of Russian gas because it has a developed industry and because Germany, under pressure from environmentalists, curtailed its nuclear energy, unlike, say, France - which also consumes a lot of Russian gas, but is much more protected from the problem of energy hunger.

ps According to your statistics, Ukraine depends on Russian gas by 0%, although Ukraine depends on the reverse of Russian gas from Slovenia.

---

a) This commission will buy all gas for the whole of Europe, so in all existing contracts for the supply of gas, at least the host will change. I think the contract currency will also change from dollar or euro to ruble.
b) Gas is not only heating houses in winter, but also a raw material for electricity generation and chemical industries (such as the production of fertilizers for agriculture). Gas stocks in Europe's storage facilities are at historically low levels after this winter and need to be replenished quickly to reach acceptable levels by next winter. This is a serious problem for Germany and all of Europe. Farmers in Italy and Spain are already rallying against the increase in the price of fertilizers, they are rallying instead of carrying out sowing work. By paralyzing its industry with the immediate rejection of Russian gas, Europe is turning itself into a concentration of acute political, economic and social problems.
c) Good luck.
d) The union of Russia with India and China is a terrible dream of the West. India and China have colossal human resources, and Russia has colossal natural resources. India and China have disagreements and mutual claims, but if Russia manages to balance them and settle them as an arbitrator, then this is a serious bid for dominance in the world.
e) Yes, Putin prepared this, a very well-planned special operation. Excellent strategy and decent implementation. The story is in full swing - you will see everything for yourself.
I have not read Gazprom's gas supply contracts. I know that all contracts concluded after 2014 provide for the possibility of payment in rubles. For example, Bulgaria has such a contract and sees no problem in paying for gas in rubles. In my opinion, the impossibility for Gazprom, due to the sanctions imposed on Russia, to freely dispose of its proceeds from the sale of gas in euros and dollars is a force majeure circumstance for Gazprom and a good reason for the immediate termination of contracts without any penalties. Europe seriously thinks that Russia should continue to supply gas for free and at the same time apologize for invading Ukraine? It doesn't work that way.

---

So far, it seems that it is the EU politicians who are in the clouds and make a lot of populist statements. On April 1, gas supplies to Europe are possible only for rubles, and this is not a joke on a fool's day. 

Moral aside, Putin's regime is very efficient. No one before Putin so consistently imposed such a high efficiency of the management system on the colossal excess of natural resources of such a geographically huge country. Europe listened poorly to Putin at the Munich security conference in 2007 and is reaping the rewards of its strategic myopia.

[moderator's note: consecutive posts merged]