Those Nord Stream leaks; "mobilisation"; nuclear threats etc UPDATE

Oh wow.   Both Nord Stream pipelines have apparently leaked their guts out in the last day or so.  Ol' Joe Biden always said he'd be making sure NS 2 never went into operation.  To be honest, I never really believed he'd resort to the Semtex Option, but who knows ...

Scope for a tremendous range of imaginative conspiracy theories here.  Cui bono?  Well probably not German industry.  Make of that what you will - and I'm sure some of you will.

Quiz:  who blew up NS1 and NS2?

• Ol' Joe Biden
• Li'l Volodya Putin
• The Poles
• The international commodities traders
• The Rand Corporation
• Defective Russian engineering
• That James Bond gadget
• George Soros
• "false flag"
• Greenpeace
• 'Buster Crabbe'
• German Green Party breakaway faction
• [.... your write-in answer here ....]

Incidentally, Putin's announcement of last week is really, errrr, stirring things up, isn't it?  Not sure that his "partial mobilisation, I stress, only partial" is entirely going to whatever plan he had in mind, unless you consider it was simply to give the Russian people to understand in a rather graphic way that they're all in it now, whether they thought of themselves as armchair spectators or not.  BTW, despite his and other Russian leaders' placatory TV language, the Executive Order he signed contained nothing that limits the mobilisation, and might almost amount to conscription - a very different concept indeed.

But putting guns into the hands of tens of thousands of morose, drunken and undisciplined Russians is something that ... well, let's just note it's something that Lenin went to great lengths to avoid, his first act on taking power being to dis-arm and disband the army and get them all out of Moscow. 

Finally, let's elaborate on the point I made last week, that his sinister (but technically nuanced) nuclear 'hint' leaves him awkwardly placed next month when he's annexed four new formerly-Ukrainian oblasts and they are all still under determined "NATO" attack.  OK, by the letter of his dictum, they'll be under conventional attack, so his nuclear threshold hasn't been crossed: but try telling that to the bellicose woman who fronts on Russian national TV.  She'll want retaliatory nukes - "this is not a bluff" - starting as soon as the next big town falls back into the hands of the Ukrainians.

And - and this is the Big One - if he really does annex the lot, it puts these new fully-under-seige territories in the same category as Crimea - or maybe the other way around.  Now he'd probably been enjoying a de facto pass from the world at large since 2014, on keeping Crimea in his poaching-pocket.  But maybe he's just jeopardised that: he's taking one helluva gamble as to how it falls.  

Or maybe he's just jeopardised the whole of Europe.  Did the man say Interesting Times?

ND

Moscow Compo: Must Close Soon!

OK folks, 9 May is shortly upon us so the chance to win a C@W special prize must be seized quickly!

Recall: Little Volodya has summoned the Leaders of the World to Moscow for his big show in celebration of the rather important 70th anniversary of Victory over Hitler.  But of course he's in the naughty corner just now, so who will represent the UK at this jamboree?  And never mind who will - who should?

Since we announced this compo there have been two developments, one helpful to his cause and one less so.  L'il Kim, it seems, is no longer attending.  Yes, Jong-un the Wrong'un won't be there to embarrass anyone: some say he fears a coup if he leaves home, others that he doesn't wish to be an exhibit in a freak show (too late for that, matey).

But what of others?  The Gruaniad says:

The leaders of China, India and Brazil are expected at the parade on 9 May, but there will be few western leaders, most of whom are boycotting the event. The German chancellor, Angela Merkel, will miss the parade but instead travel to Moscow a day later to lay a wreath at a war memorial. The UK Foreign Office says it is still deciding whether British officials or politicians will travel from London to attend the ceremony, which comes just two days after the general election.

The thing that makes it really awkward is that the Russians have signalled they will be fêting their recent exploits in Crimea and eastern Ukraine.  Who on earth can the UK send?  C@W readers and writers have so far nominated:

HMQ (conditional); Prince Charles (conditional); Prince Philip; William Hague; Tony Blair; Gorgeous George; Ed Balls; Russell Brand; Camilla; Princess Anne; Ant & Dec; Farage; Mandelson; Hammond; Owen Jones; Polly Toynbee; Len McCluskey; Caroline Ashton; Peter Hain.

The FO will have chosen by now and it more-or-less has to be either an aristo, and/or a minor politico whose status + availability won't be buggered by the election outcome.  Keep voting, folks!

ND

Update: Duke of Gloucester; Miliband E; Will + Kate + New Princess; Andrew; Princess Michael of Kent (nice one); the Chelsea Team (sic);  KP(ieterson); KP(rice);  Michael Foot (corpse of);  Hon. David Henry Montgomery ... Fiona Bruce; Bob Crowe (ghost of) ...

Conspiracy Corner: the French in Russia

A ghastly but typical Russian tragedy - the death of Total's CEO in a 'drunken snowplough' incident, straight out of a Robert Harris novel.  But what was he doing there in the first place?

Total is a pretty good company in my experience - far superior to unlamented, scandal-ridden Elf-Aquitaine which it gobbled up in 2000.  (One of the dodgiest business meetings I ever attended was in the horrible Elf office in La Défense:  made my excuses and left, as they say.)  But like most big French concerns, part of its identity is that of an arm of the French state, much as BAe (or in former times BP) is of HMG.  Its operations in Algeria, for example, have never really skipped a beat through decades of turmoil in that country.

Here's a basic account of Total's activities in Russia, which also cites M. de Margerie as being outspokenly opposed to sanctions over Crimea / Ukraine.  No surprises there: Total has long been a go-to company whenever Russia needed some fancy oil & gas technology, and its Russian interests are significant.  So he'd every reason to be doing the rounds in Moscow.

But here's Ambrose EP telling us that Russia is being squeezed to a devastating degree by sanctions, not least of which he reckons relate to oil & gas technology.  We seem to be playing the game, in a passive sort of way.  It is to be imagined the Americans are.

We know, however, that German industry really hates this lark, having big capital interests as well as very large export flows in Russia.  We also know that sanctions never really stopped South Africa getting oil, or Iran plodding on with its quietly expansionist plans - it just costs more, that's all.  Several of the big commodity trading houses ensure the wheels of global trade keep turning...

This is quite a significant dividing line.  USA, UK and the eastern EU countries against France and Germany ?  Note that Barroso's rebuke to Cameron was couched in terms of 'losing friends in Eastern Europe'.

EU politics are always complex: is there any hope that Hammond is equal to the task ?  Have a nice weekend !

ND

Russia's day: All about the oil price?

So the day has ended with stocks down, nearly 1.5%  in the UK and also 11% down in the ever volatile Russian market.

A key point to remember is what Russia exports - mainly oil and gas. The key indicator for these are gas prices and the Brent crude benchmark. As can been seen from the chart - the price of oil has risen although not too much on the situation in Crimea.

Gold to had a little spike and Russia is a big net exporter of Gold. Finally European Gas prices increased 10% at one stage which was a much bigger drop.

However, often overlooked is the conspiracy theory view of events - ever popular, normally wrong. The thing here is Russian reliance on exports to pay for its budgets. It's all very well comparing Putin to Hitler or Stalin, but perhaps more prosaic action is necessary to explain his actions. yes, nationalism but also economic nationalism.

Russia's budget needs oil to hold firm above $98 a barrel to balance its budget according to Saudi Economists - this is pre-intervention costs. The price is now firmly set when in February before the crisis rose to prominence then oil was flirting with $100 and less.

No need to worry about budget crisis now; the deeper the crisis, the higher the oil price, the richer Russia gets.

Putin's hand is weaker than you think

The first cold war was won by the West without the need for a full on confrontation of opposing armies. Yes, sadly millions were killed in proxy sponsored wars - but the Cuban Missile Crisis apart there was little chance of actual engagement.

In the US and UK media today there is a feeling that Putin and Russia have all the cards and the West will stand around meekly with nothing to do but shout and huff. Journalists are keen to dust down 1938 accounts of appeasement of Hitler and so forth.

Of course there is no hope of the West militarily intervening in Ukraine but what we do have, as in the first cold war, is the power of business.

Russia's budget requires a high oil price, worse it is reliant on one or two state giants to provide it with funds. The US does not need Russian Gas or Oil and neither does the UK - even Germany has reduced its reliance in recent years.

Worse for Russia, look at the rouble - the currencies fall at the end of last week handily mirrors the economic prospects for Russia. Crimea as a nationalist use and its use as the base of the Black Sea Fleet and home to holiday Dacha's. Beyond that it is of little economic use.

The idea that threats about G8 status are effete and weak are wide of the mark. Russia's corrupt and disjointed economy could ill-afford to be cut off from world markets. Putin will not be popular with his fellow oligarchs if their businesses face severe sanctions. Russia is no economic superpower and cannot win a victory except by militarily bullying the weak neighbours on its borders.