Self-correction two days after publication. The demand for payment in rubles could have led to a halt in gas supplies and the destructive economic and social effects mentioned below. However, Putin left himself a loophole (see footnote *0* below). Nevertheless, I am not deleting the article because it shows Europe’s fatal dependence on foreign resources and its possible consequences.
On March 28, Russian government spokesman Dmitry Peskov mockingly let it be known that Russia, unfortunately, could not give away its gas and oil to Europe on a charitable basis. If the states unfriendly to Russia – i.e. all those imposing sanctions against his country – do not pay in rubles for gas (and later, probably, for oil as well), the Russian Federation will be forced to turn off the gas tap by the first of April. Thus, in addition to the military war, the second front of a financial war has been opened. After all, Peskov only repeated what Vladimir Putin had already announced on March 23. The G7 countries immediately rejected this demand. They will continue to pay their bills only in dollars, they said, because this was stipulated in the existing treaties. The reason is probably different. Under no circumstances would the U.S. tolerate a weakening of the world’s reserve currency, the dollar. It would sooner terminate NATO protection for its allies.
Conclusion: unless one of the two partners backs down – and I do not see how that is possible – then in two days from now there will be no more Russian gas and soon probably no oil either. Of all what will then happen, the pandemic, which plagued us badly enough, has given us only a faint idea. This crisis will hit the whole of Europe much harder. Companies will go bankrupt in droves, unemployment will skyrocket. And no government aid program will be able to stop this disaster.
But Putin is only bluffing, we know that he is a notorious liar! Didn’t he together with his loyal Foreign Minister Lavrov and the streamlined Russian media lie to the whole world for more than a month when troops concentrated in Belarus and on the eastern border of Ukraine? Didn’t the Russians mockingly claim that this troop deployment was just a normal maneuver for training purposes and that Russia had no intentions to attack – and didn’t all those who pretend to understand Putin shake their heads at Western scaremongering? Then, only the US-Americans, who themselves have some practice in lying, knew the truth.*1* Yes, Putin lies unabashedly when this serves Russian interests, but he certainly does not lie when the truth turns out to be useful to those very interests and to his own position. In the West, people started laughing at the Russian Goliath, who wanted to overrun the Ukrainian David in just a couple of days, only to find out that the despised enemy had stopped his advance and was even starting to boast about victory. The world laughed, and Russia saw itself humiliated by a man who not so long ago had been derided as a clown in the presidential chair, but who in time of need had become, to everyone’s surprise, a great statesman and freedom fighter, a man who inspired ovations from parliaments around the world. Volodymyr Zelensky gave a face to his nation, an amazing, sympathetic, enthusiasm-generating face. Rarely has a politician, who only a year ago – if known at all – was at best laughed at as a former comedian, risen in such a short time to become a world-famous star, whom the whole world was ready to help against the Russian aggressor.
The West smiled and triumphed over Goliath’s stumbling, but Vladimir Putin may well be laughing last. To this day, governments and the media still seem blind to this possibility. In the German government, Chancellor Olaf Scholz and his Economics and Energy Minister Robert Habeck are thinking publicly that, for Ukraine’s sake, they would of course very much like to take the final step of dispensing with Russian oil and gas altogether. In doing so, they would, however, risk too much harm to themselves. Therefore, unfortunately, they must refrain from taking this step – at least for the time being! Well, these are very difficult considerations indeed, from which Putin is now freeing the German government and all of Europe by putting his foot down in dealing with the EU. Europe does not need to decide with a heavy heart on this renunciation; now Russia is taking the initiative on its own. Until now, nobody seems to understand what this means : a turning point in the history of post-war Europe.
Why are the media – in this case I use the term “mainstream media” for once, which I usually don’t like to do, because they are usually more serious and better informed than their opponents – why were and are the media still blind to the coming disaster? Because they apparently cannot imagine that the Russian state will cut its own flesh by giving up almost half of its revenues. But this betrays an astonishingly poor knowledge of the Russian psyche. The Russian people have always formed a community of sufferers, whereas the Europeans have developed into fun societies – that is a crucial difference. While the Russians are used to making the heaviest sacrifices, we are not even willing to reduce our car and air traffic. Even without European foreign exchange, the Russian economy will by no means collapse completely. Exports of gas and oil to India, China and “friendly” states will increase rapidly and bring greater prosperity to these countries; only Europe is sitting on its hands, the European economy is very likely to experience a collapse as only at the end of the twenties at the time of the Great Depression.
And Vladimir Putin, the cynic, will then be the last to laugh and pour his ridicule on Europe. Didn’t you want to save the climate – preferably yesterday instead of today? Your Friday children will certainly praise me for helping them a lot better than the foot-dragging European Commission. Admittedly, many of these children will now come from unemployed families and will no longer have a future. But since I will no longer bother you with my gas and oil deliveries, your CO2-emissions will be reduced to almost zero! Thanks to Vladimir Putin you have become an example for the whole world!
Will Ukraine and its heroes then still be remembered? When only the rich upper class is still driving cars on our roads, will Europeans still sacrifice the rest of their scarce and many times more expensive oil for vehicles to Ukraine to supply them with much needed weapons? I fear that all help will then quickly fade away. But without these supplies, Ukraine will hold out for another month at best, after which it will capitulate, and on Russia’s terms. The Russian bear, or let’s better say the Goliath-Hitler who has risen to power in Russia, will “liberate” the Ukrainian brother nation, after it has been “de-nazified”, i.e. purified from the influences of the “collective West”, which, as asserted in unison on Russian television, has adopted the Nazi doctrine of annihilation directed against the Russian people. While I hear in our news that Russia is apparently ready to make concessions after the last round of negotiations in Istanbul, I hear the exact opposite on Russian state television. There is talk – as in Hitler’s time – only of уничтожа́ть or “wiping out”. Nothing less than the complete surrender of Ukraine and its criminal regime is acceptable to Russia. With the announced freezing of all oil and gas supplies (if not paid in rubles), this perspective suddenly turns out to be very real. This is all the more true since Ukraine’s oil depots and the factories for the production of weapons have been almost completely destroyed by Russian missiles. Without further supplies from Europe even the most convinced freedom fighters have no chance. You cannot fight a bear with bare hands. In other words, the unconditional surrender of the heroes of Kiev is only a matter of time.
And the triumphantly invoked unity of the West? Will it still exist when the European economy, including Germany’s industrial power, is fighting for its survival? In the short term – i.e., within the next three years – neither the Americans nor the rest of the world can replace the Russian energy shortfall. I dare not think so, but I think it likely that Ukraine will soon be abandoned and quickly forgotten. But before that, the Russians will taunt the West with the appearance of generosity (Putin knows how to play this role, too). As soon as Ukraine surrenders unconditionally, he will probably not swallow it whole, but divide it down the middle: into a western part, from which he will retreat, and an eastern part, which he will annex to the Russian territory. And we, in the West, will end up giving a meek nod to the annexation, just so that Russian oil and gas will flow again, because otherwise it will be over with our fun and our prosperity – and probably also with the internal cohesion of the EU. Why am I writing these lines even though I rarely comment on current events? Because I fervently hope that all this will not happen!
*0* The requirement for payment in Russian rubles allows for a strict and a soft variant. The soft variant simply requires that the buyer of gas redeem euros or dollars for rubles at the Russian central bank in order to pay for gas supplies. For the European countries, this amounts to a continuation of their previous transactions, since instead of transferring the euro amount to Gazprom, the supplier, they now transfer it to the Russian central bank, which then converts the foreign currency into rubles and forwards the amount to Gazprom. In this way, the ruble is supported and for the Europeans it is business as usual. With about a billion a day for the purchase of gas and oil, Europe is thus subsidizing the war in Ukraine.
The hard option, which the Russian state could decide to adopt at any time, goes a decisive step further. It prohibits the purchase of rubles from the Russian central bank. A Western state wishing to purchase gas from Russia would have to have earned sufficient rubles by exporting its goods to Russia in order to be able to continue to purchase gas. This would effectively undermine all sanctions against Russia, and the ruble would become an important means of payment. Since exports to Russia are largely blocken due to the sanctions, European countries would hardly have the necessary volume of rubles at their disposal. In my article, I assumed that this, the hard, option would come to pass. Then, but only then, the predicted consequences would have occurred.
*1* The Americans took over the Soviet chemical weapons laboratories in Ukraine, as Vice Secretary of State Victoria Nuland herself admitted. After that, however, this fact was concealed against all evidence.