Europeans froze the largest trade deal with China

Brussels is looking for an alternative in the USA and India

Dmitry Migunov

The European Parliament on May 20 froze the ratification of the investment agreement between the EU and China. The reason was foreign policy friction between Brussels and Beijing. It is not yet clear whether the document will be returned to the vote. A split in relations between two of the three largest economies in the world may prompt the EU to seek other alliances, or perhaps to rely primarily on its own forces and active protectionism. Details – in the material “Izvestia”.

China-EU relations in recent years have been an almost equal combination of love and hate. For the European Union, China was the second most important export market (about € 250 billion a year). Especially for critical industries like mechanical engineering. In turn, the importance of the European market for China was no less important. Although it was inferior to the American one in terms of supply, it grew faster and more stable.

At the same time, Europe has become the most important target for the export of capital from China. Accumulated Chinese investment reached $ 350 billion by the end of 2019, again second only to the United States. Investments in European countries fit perfectly into the Belt and Road project, whose main task was to create in Eurasia a reliable alternative to the United States as a destination for Chinese exports. 

Within this framework, Chinese companies have actively invested in enterprises in Germany, Italy, France, Hungary and other countries. Manufacturers of car tires, household appliances, oil and gas companies, airports and football clubs – it will be difficult to name a field of activity in Europe, wherever a Chinese investor has penetrated, both private firms and corporations with state capital. 

Mutual rhetoric sometimes blunt

Despite this flourishing relationship, mutual rhetoric was sometimes blunt. In March 2019, the European Commission named China as its “systemic competitor.” Given that this happened in the midst of Donald Trump’s declared trade war, this was not good news for China. Later, the conflict was mitigated, among other things, due to the fact that Trump’s anger fell on Europe itself. Americans began to impose trade duties against European countries, threatening retaliation for the introduction of a “digital tax” and other actions in the economy that the previous US administration took as unfriendly.

In December last year, the EU and China signed the largest investment agreement in European history. Its essence boils down to facilitating the access of European companies to the Chinese market, which was able to withstand even the blow of the pandemic (the only large economy that avoided contraction in 2020). Companies that supply high-tech goods to the PRC have received especially favorable working conditions. China, in turn, received guarantees for its investments in the EU, as well as access to the renewable energy market, where the two sides are simultaneously the two largest players and strategic partners by a wide margin.

However, the signed treaty had to go through a difficult and lengthy ratification process. And something went wrong here. First of all, the power has changed in the United States. The new government, at least at the level of rhetoric (and in some places in fact, for example, on the issue of Nord Stream 2), made concessions to the European states. The transatlantic relationship again came to the fore, and China was no longer vital partner.

The diplomatic conflict turned into a reciprocal exchange of strikes when the sanctions imposed on China (not too significant) were followed by a similar targeted response from an Asian country. This is most often the end of the conflicts. This time everything went much further. The European parliamentarians with an overwhelming advantage – with 599 votes out of 687 possible – voted to freeze the ratification of the agreement.

This is not final decision though

Note that this vote is not a final decision and, in fact, has no legal force as such. But the ratification process may be slowed down for a long time. During this time, foreign policy and economic circumstances may well change. And the attitude of individual countries to the agreements.

I must say that the Europeans did not sit idly by all these months. In the course of the trade conflict with the United States, it seemed that the EU and China would inevitably move closer. Brussels is now considering other options for economic integration. The most obvious option is trade agreements with the United States. In early May, German Chancellor Angela Merkel called for the same deal with America that was agreed with Canada last year.… This agreement was already in the air in the middle of the last decade. The parties had already begun negotiations on a Transatlantic Trade Partnership, but in early 2017, the United States canceled a similar trade alliance with the countries of East Asia and Latin America. The last agreement was “killed” at the stage of full readiness. On both sides of the Atlantic they decided that the treaty had no chance at all.

In all fairness, Merkel’s approach is not shared everywhere on the continent. French President Emmanuel Macron has repeatedly stated that Europe should not rely on other superpowers and should show more independence. Questions can also arise overseas, where, despite all the rhetoric of multilateralism and free trade, slogans like “buy American” are gaining momentum. And the full employment promised by the new American administration is unlikely to be achieved if we give even more privileges to foreign manufacturers in their market.

Protectionism is gaining strength

It is possible that the EU will turn in a different direction. In April, it became known that Brussels is negotiating with India on a global infrastructure plan. That should become a competitor to the Belt and Road. It should include cooperation in third countries, the exchange of scientific and innovative ideas and the drafting of uniform standards, especially in the field of financial sustainability. All this should tie the third largest economy in Asia (and the second in terms of purchasing power parity) more closely to the European Union.

India is not yet a player capable of replacing China and the United States as an economic partner. Rather, an agreement with it could become a demonstration of a course that presupposes self-reliance in Europe. Such a line in the economy is becoming more and more popular, given that protectionism is gaining strength in all regions – and the European Union can in no way be an exception .

Germany and Russia to work on hydrogen

Russia and Germany will jointly implement projects in hydrogen energy. The corresponding agreement was reached by the Deputy Prime Minister of the Russian Federation Alexander Novak with the Minister of Economy and Energy of the Federal Republic of Germany Peter Altmeier

The meeting was also attended by the Minister of Industry and Trade of the Russian Federation Denis Manturov, the rector of the St. Petersburg Mining University Vladimir Litvinenko and the ex-Minister of the Federal Republic of Germany Klaus Toepfer, according to the website of the Cabinet of Ministers of the Russian Federation.

“We agreed that it is important to make joint projects in hydrogen energy. The Prime Minister of the Federal State of Saxony (FRG) Michael Kretschmer recently visited. He proposed joint projects in the field of hydrogen, ” Novak said at the meeting.

“I will give instructions to the Ministry of Energy of Russia so that we jointly propose one or two projects from which we would start,” added the Deputy Prime Minister, whose words are quoted in the release of the Cabinet. According to the Deputy Prime Minister, it is necessary to continue working on joint energy projects.

A German company is already working with Gazprom on this issue.

Meanwhile, Wintershall Dea and Gazprom are discussing the possibility of transporting hydrogen through the existing gas transmission system. The head of the German company, Mario Mehren, told about this in an interview with the corporate magazine of the Russian holding.

“As part of the Science and Technology Cooperation Program between Gazprom and Wintershall Dea, specialists from our companies and joint ventures are discussing current innovative projects in order to find ideas and jointly develop solutions,” Meren explained.

“This initiative has been around for almost 30 years. And it is one of the largest and most intensive exchange formats of this kind, ”said the head of Wintershall Dea. He stressed that during the pandemic, this work continued in an online format.

“For example, in recent months, there has been intense discussion of the possibility of adapting the existing pipeline infrastructure for the transportation of hydrogen. And the use of decarbonized solutions in our joint gas transportation business. Hopefully, soon we will be able to report on new projects in this area, ” Meren added .

In addition, Wintershall Dea and Gazprom are planning a campaign to measure methane emissions. The goal is to reduce the intensity of these emissions during gas production. The partners also plan to jointly develop measures to improve the energy efficiency of compressor stations.

“I am convinced that international partnership will continue to play an important role in the future. And thanks to joint efforts to decarbonize the energy sector, we will be able to further strengthen and expand the successful Russian-German cooperation, ”Meren concluded.

EU trade chief proposes mutual tariff freeze to Washington

Brussels suggested the EU and its major overseas partner suspend tariffs imposed on billions of dollars of imports for six months, EU trade chief Valdis Dombrovskis told Germany’s main news platform, Der Spiegel.

The measure would go beyond the latest four-month suspension of import duties that the parties agreed in March.

“We have proposed suspending all mutual tariffs for six months in order to reach a negotiated solution. This would create a necessary breathing space for industries and workers on both sides of the Atlantic,” Dombrovskis said.

Last month, the two transatlantic partners agreed to suspend mutual tariffs that had covered $7.5 billion of EU imports of American goods and some $4 billion of US products shipped to the bloc. The freeze is set to expire in four months.

The bitter EU-US trade dispute over aerospace subsidies to plane makers Airbus and Boeing dates back to 2004. Then Washington challenged European subsidies of Airbus that reportedly had “adverse effects” on the US.

The EU filed a retaliatory complaint against the direct support given to Boeing in the form of regional tax breaks and government grants.

So far, tit-for-tat duties on various goods have affected nearly $50 billion in mutual trade. The list of EU products on which the US imposed taxes came in at $25 billion. $7.5 billion was authorized by the World Trade Organization (WTO). In comparison, the EU’s list totaled a mere $20 billion. WTO approved $3.99 billion.


US axes Trump-era Scotch whisky tariffs for four months in bid to resolve aircraft trade war with UK

The US said on Thursday it will suspend 25 percent tariffs on Scotch whisky and retaliatory import taxes on other UK products in a bid to resolve the two parties’ on-going transatlantic trade row due to aircraft subsidies.

Then-US President Donald Trump slapped the UK and other EU member states with tariffs on whisky, wine, cheese and other foodstuffs in 2019 in return for European plane maker Airbus being given illegal subsidies by the bloc. 

The World Trade Organization (WTO) ruled in 2018 that EU governments had failed to comply with US requests to stop funding Airbus, which had caused its American rival Boeing to lose $7.5 billion a year.

Airbus had already filed a similar complaint with the WTO against Boeing in a dispute between the two manufacturers stretching back to 2004.

On Thursday the US and the UK said in a joint statement that “the United States will now suspend retaliatory tariffs in the Airbus dispute from March 4, 2021, for four months.”

The move is the latest of Trump’s policies to be overturned by President Joe Biden, whose administration will now turn its focus toward rising civil aviation powers “such as China,” the statement says.

Reacting to the news, UK Prime Minister Boris Johnson hailed the tariff climbdown as “fantastic news” for the transatlantic trading relationship, as well as for Scotch whisky distillers and other businesses.

In December the UK International Trade Secretary Liz Truss announced Britain would suspend retaliatory tariffs against the US, ahead of Brexit and the expected new trading relationship with the US under Biden.

As well as whisky, Trump’s original tariffs in response to the WTO ruling targeted UK cashmere, German coffee and tools, Spanish olive oil, as well as cheese, meat and other products from various EU nations.

Akademik Chersky headed for Nord Stream 2

The Akademik Chersky pipe-layer headed towards Nord Stream 2. The Danish Energy Agency has reported, citing the operator’s schedule, that the vessel plans to begin completing the second string of the gas pipeline in Danish waters at the end of March

The pipe-layer Akademik Chersky left the area of ​​the Curonian Spit near Kaliningrad and headed towards Nord Stream 2. According to the Vesselfinder navigation portal, this afternoon, March 30, the vessel left the area where it was undergoing sea and pre-operational tests. It went along the route that it had previously taken to Germany.

Illustration: vesselfinder.com.
Illustration: vesselfinder.com.

The supply vessels Vengery and Ivan Sidorenko left the Curonian Spit before the pipe-layer in the direction of Nord Stream 2. “Akademik Chersky” has indicated since March 4 that he is at work at sea. Therefore, the exact direction of movement is unknown.

Also, something else is known. The Danish Energy Agency reported that completion of the second string of Nord Stream 2 in Danish waters will begin in March.

“I can confirm that we have received an updated timetable from Nord Stream AG 2 for branch A. It says that work on the pipeline will begin this month”. It is reported EADaily head of the press service of the Danish Energy Agency (DEA) Tour Falbi-Hansen .

Branch A contains the longest unfinished section of Nord Stream 2. 68.5 kilometers in Danish waters and 16.5 kilometers in German waters. Earlier, in early March, the ship left the German port of Wismar and arrived at the Curonian Spit near Kaliningrad. Operator Nord Stream 2 AG announced that the pipe-layer will undergo sea trials and pre-operational tests and begin work in Danish waters.

Meanwhile, as reported by EADaily , the barge Fortuna has already covered half – 24.5 km – of the unfinished section of Line B in Danish waters.

In February, the Danish Maritime Office clarified in a warning to seamen that work on Nord Stream 2 (the second string) is planned to be carried out by the end of September and the pipelayer Akademik Chersky will participate in them.

USA continue pressure with illegal sanctions

The Akademik Chersky is a more technically suitable vessel for Nord Stream 2 and can lay up to two kilometers per day after retrofitting. Therefore, obviously, the deadline for completing the completion of branch A in Danish waters was taken with a gap, and the pipe-layer will be able to complete it at the same time as “Fortuna” – at the end of May – June. In this case, Nord Stream 2 may be ready to launch by autumn.

Recall that the United States has imposed sanctions against the vessels of the project and the vessels of Russian companies are used on it. In addition, Washington has banned companies involved in the retrofitting of ships, insurance, inspection, testing and certification of gas pipelines from participating in Nord Stream 2. It is not known whether Gazprom solved this problem. German media reported that Washington offered Berlin conditions under which it would not impose sanctions on project participants. 

Among them are guarantees that the gas pipeline will be cut off if Gazprom stops Ukrainian transit; an increase in Russian gas supplies through Ukraine; and investment in Ukrainian infrastructure for the production and transportation of hydrogen.

Alternative to Suez: The Northern Sea Route

Finnish designers have developed a container ship for the Northern Sea Route

Suez Canal was blocked for one week by the giant container ship Ever Given. Alternative routes from Europe to Asia are increasingly being discussed. The Northern Sea Route (NSR) is no exception.

On March 22, the day before the incident in the Suez Canal, the Finnish design bureau Aker Arctic , specializing in ice technology, presented a project of an Arctic container ship for the NSR. Detailed information is contained in the corporate publication of a Finnish company. 

Prototypes

The concept design of a container ship with a capacity of 8 thousand TEU for year-round operation on the NSR is based on previous developments by Aker Arctic for the region. A series of reinforced ice-class container ships of the Norilsk Nickel type and LNG carriers of the Arc7 class for the Yamal LNG project.

The container ship for the NSR will differ from other vessels of a similar type with an ice-reinforced hull. As well as icebreaker-type bow lines, and equipment for protecting cargo from the cold.

Two options

According to Luigi Portunato, shipbuilding engineer at Aker Arctic, the vessel can be built in two versions.

The first assumes the use of the “double acting ship” technology. It is due to the hull lines and the propulsion complex higher than the nose. In this case, the hybrid propulsion system consists of one shaft line with a central propeller and two rudder propellers along the sides.

The second , more traditional option, involves the use of two shafting with propellers and two rudders.

The container ship with rudder propellers will be able to operate on the NSR all year round. It would be moving stern ahead in difficult ice conditions. A container ship with propellers in difficult conditions will need the help of an icebreaker.

A special feature of the double-acting container ship will be an additional wheelhouse located in the aft part of the mooring deck. That will be used when moving aft forward. In addition, due to low operating temperatures, the bridge between the engine room and the wheelhouse with living quarters will be located below deck.

Container ship for work on the Northern Sea Route / Illustration: Aker Arctic

Specifications

At the moment, the following technical characteristics of the container ship from Aker Arctic are known:

  • container capacity – 8000 TEU;
  • length – about 300 m;
  • width – 46 m;
  • draft – 13 m;
  • power (option 1) – 56 MW (propeller 1×22 MW, rudder propellers 2×17 MW);
  • power (option 2) – 44 MW (propellers 2×22 MW);
  • icebreaking capacity (option 1) – 2.3 m (at 3 knots, nose forward);
  • icebreaking capacity (option 2) – 1.9 m (at 3 knots, nose forward)

Project economics

When developing the project of the container ship, two options for the use of Arctic container ships on the Northern Sea Route were calculated. From Asian ports to European ports. As well as only in the section between the supposed container hubs in Murmansk and Kamchatka.

As a result, the designers came to the conclusion that the cost of transportation of a conventional container decreases with an increase in the vessel’s capacity for all options. At the same time, it is difficult to pinpoint the point when the options for transportation along the NSR become more profitable than the route through the Suez Canal. This is influenced by many factors, including the cost and type of fuel, the degree of loading of the vessel, etc.

According to Luigi Fortunatto, in the current market conditions, using an Arctic container ship is slightly more expensive than crossing the Suez Canal. The economic efficiency of Arctic container ships could be increased by switching to liquefied natural gas (LNG). At the same time, the shorter route from Asia to Europe along the NSR gives a gain in time. If earlier the speed and adherence to the schedule could only be guaranteed in summer, then with the new container ship we can already talk about the winter-spring period.

It is worth noting that the Aker Arctic publication does not mention the customer for the new vessel. It can be assumed that it is a subsidiary of Rosatom, Rusatom Cargo, which is implementing a project to create the Northern Sea Transit Corridor (SMTK). Earlier it became known about the company plans to start pilot operation of Arctic container ships of the Arc7 class as early as 2024.

The EU wants to impose carbon tariffs on Australian exports

What Australian politicians call carbon tariffs, the European Union labels a carbon border adjustment mechanism.

While one sounds bad (the WTO has rules that restrict tariffs) the other sounds understandable. If the EU is imposing a carbon tax on its own products, surely it is reasonable to impose it on products from overseas.

The argument is that if a German steel manufacturer has to pay a tax of, say, $77 a tonne for the carbon it emits while making the steel, an Australian manufacturer should be charged the same when its product enters the country, unless it has already paid the same tax here.

To do otherwise would give the Australian product an unfair price advantage — it would create “carbon leakage” of the kind Australian businesses used to warn about in the leadup to Australia’s carbon price.

The European Union approved the idea in principle on March 10.

The details are less than clear. In part because it is possible that carbon tariffs are not permitted under the rules of the WTO.

WTO rules might help Australia…

The rules say taxes or “charges of any kind” can only be imposed on imported products the same way as they are domestically.

That appears to mean that they can be imposed on importers but not on producers. However it isn’t quite what the European Union has in mind.

Ideally the WTO would be able to provide guidance. However, (in part because of the actions of the US Trump administration) it isn’t really in a position to do.

…if only they were enforceable

The WTO has a new director general in Ngozi Okonjo-Iweala. He took office this month. However it will remain unable to make rulings for as long as its appellate body is unable to hear disputes.

Under Trump, the US kept vetoing appointments to the appellate body until the expiration of terms of its existing members meant it no longer had a quorum.

Disputes can still be initiated by countries such as Australia, forcing consultations. But without final determinations.

EU says it wants to ensure that its adjustment mechanism complies with the WTO’s rules. However, it hasn’t ruled out the possibility of relying on provisions that allow exceptions.

Both sides could make a case

Exceptions are allowed for the protection of human, animal or plant life or health or the protection of an exhaustible natural resource.

The catch is these exceptions are not allowed to discriminate between countries and must not be disguised restrictions on trade.

It is arguable that an adjustment mechanism designed to protect the competitiveness of European industries will breach these provisions.

Russia holds the key to German sovereignty

A more sovereign Germany closer to Russia and China may be the straw that breaks the US hegemon’s back

By PEPE ESCOBAR

In an interview with popular talk show host Vladimir Solovyov – with the full transcript published by the Russian Ministry of Foreign Affairs – Lavrov said Moscow “must be ready” for a possible “break with the European Union.”

The ominous break would be a direct result of new EU sanctions, particularly those “that create risks for our economy, including in the most sensitive areas.” And then, the Sun Tzu-style clincher: “If you want peace, prepare for war.”

Kremlin spokesperson Dmitri Peskov, afterwards, made sure to explain that Lavrov was taken out of context: the media, predictably, had seized on a “sensational” headline.

So Lavrov’s full, nuanced answer to a question about rocky EU-Russia relations must be carefully examined:    

“We believe we would be ready for this. We are neighbors. Speaking collectively, they are our largest trade and investment partner. Many EU companies operate here; there are hundreds or even thousands of joint ventures. When a business benefits both sides, we will continue. I am sure that we have become fully self-sufficient in the defense sphere. We must also attain the same position in the economy to be able to act accordingly if we see again (we have seen this more than once) that sanctions are imposed in a sphere where they can create risks for our economy, including in the most sensitive areas such as the supply of component parts. We don’t want to be isolated from the world, but we must be prepared for this. If you want peace, prepare for war.”

It’s quite clear that Lavrov is not stating that Russia will unilaterally cut off relations with the EU. The ball is actually in the EU’s court: Moscow is stating that it will not exercise a first-strike option to break relations with the Brussels eurocracy. And that in itself would also be quite different from breaking relations with any of the 27 EU member-states. 

The context Peskov referred to is also clear: EU envoy Josep Borrell, after his disastrous trip to Moscow, had raised the issue that Brussels was weighing the imposition of further sanctions. Lavrov’s response was clearly designed to drum some sense into the thick heads of the European Commission (EC), run by notoriously incompetent former German defense minister Ursula von der Leyen and her foreign policy “chief” Borrell.

Plenary session at the European Parliament. Brussels on 09/02/2021. Session pleniere au Parlement Europeen. Bruxelles le 09/02/2021.

Earlier this week, Peskov was forced to come back incisively to the volcanic saga: “Regrettably, Brussels keeps talking about sanctions, so does the United States with maniacal persistency. This is something we will never welcome. It is something that we do not like at all.”

Talk about diplomatic euphemism. 

So the stage is set for a raucous – to say the least – meeting of EU foreign ministers next Monday, where they will discuss – what else? – possible new sanctions. Those most probably would include travel bans and asset freezes on selected Russians, including people very close to the Kremlin, blamed by the EU to be responsible for the jailing earlier this month of right-wing blogger and convicted fraudster (a scam against Yves Rocher) Alexei Navalny.

The overwhelming majority of Russians see Navalny – with a popularity rate of 2% at best – as a lowly, expendable NATO asset. The meeting next week will pave the way for the summit of member state leaders at the end of March, where the EU could – and that’s the operative word – formally approve new sanctions. That would require a unanimous decision by the EU’s 27 member states.

As it stands, apart from the stridently Russophobic usual suspects – Poland and the Baltics – it doesn’t appear Brussels is aiming to shoot itself in the back.  

Remember Leibniz

EU observers obviously have not been observing how Moscow’s pragmatic view of Brussels has evolved in the past few years.

Russia-EU trade will continue, no matter what. The EU badly needs Russian energy; and Russia is willing to sell it, oil and gas, pipelines and all. That’s strictly business. If the EU doesn’t want it – for a basket of reasons – no problem: Russia is developing a steady stream of businesses, energy included, all across East Asia.

The always relevant Valdai Discussion Club, a Moscow-based think tank, for instance, is carefully tracking the trade aspect of the Russia-China strategic partnership:

“US policy will continue to seek a split between China and Russia. Europe remains an important partner for Moscow and Beijing. The situation in Central Asia is stable, but it requires the building up of Russian-Chinese cooperation.”

Putin, laterally, also weighed in on the EU-Russia saga, which is a subtext of that perennial battle between Russia and the West: “As soon as we began to stabilize, to get back to our feet – the policy of deterrence followed immediately… And as we grew stronger, this policy of deterrence was being conducted more and more intensely.”

I hinted last week at the intergalactic-distant possibility of a Berlin-Moscow-Beijing axis.
Media and telecoms analyst Peter G. Spengler in a lengthy email to me elegantly qualified it as belonging to Robert Musil’s sense of possibility, as described in his masterpiece The Man Without Qualities.

Peter Spengler also called attention to Leibniz’s Novissima Sinica, and particularly to an essay by Manfred von Boetticher on Leibniz and Russia, represented by Tsar Peter the Great, in which the role of Russia as a bridge between Europe and China is emphasized.

Even though Leibniz, in the end, never met Peter the Great, we learn that “it was always Leibniz’s goal to get practical application for his theoretical findings. Throughout his life, he was looking for a ‘great potentate’ who was open to modern ideas and with whose help he could realize his ideas of a better world. In the age of absolutism, this seemed to be the most promising perspective for a scholar for whom the progress of science and technology as well as the improvement of education and economic conditions were urgent goals.”

“Tsar Peter, who was as powerful as he was open to all new plans and whose personality fascinated him anyway, must therefore have been an extraordinarily interesting contact for Leibniz. Since Western Europe had come into closer contact with China through the Jesuit mission and Leibniz had recognized the importance of the millennia-old Chinese culture, he also saw in Russia the natural link between the European and Chinese cultural spheres, the center of a future synthesis between the Orient and the Occident. With the emerging upheavals in the Russian Empire, his hopes seemed to be fulfilled: Full of expectation, he followed the changes in Russia, as they were emerging under Peter I.”

Yet to evoke Leibniz at this stage is to dream of heavenly spheres. The pedestrian geopolitical reality is that the EU is an Atlanticist institution – de facto subordinated to NATO. Lavrov might want to behave like a Daoist monk, or even pull a Leibniz, but it’s hard when you’re forced to deal with a bunch of dummies. 

It’s all about sovereignty

Rabid Atlanticists argue that non-entity Navalny is directly related to Nord Stream 2. Nonsense: Navalny was built (italics mine) by the usual suspects as a battering ram to undermine Nord Stream 2.

The reason is that the pipeline will consolidate Berlin at the core of the EU’s energy policy. And that will be a major factor in the EU’s overall foreign policy – with Germany, at least in theory, exercising more autonomy in relation to the US.

So here’s the “dirty” secret: it’s all a matter of sovereignty. Every geopolitical and geoeconomic player knows who does not want a closer Germany-Russia entente.

Now imagine a hegemonic Germany in Europe forging closer trade and investment ties with not only Russia but also China (and that’s the other “secret” inbuilt in the EU-China trade-investment deal).

So whoever is lodged in the White House, there’s nothing else to expect from the US Deep State apart from the “maniacal” push towards perennial, accumulated sanctions. 

The ball is actually in Berlin’s court, much more than in the court of eurocratic nightmare Brussels, where everyone’s future priority amounts to receiving their full, fat retirement pensions tax-free.

Berlin’s strategic priority is more exports – within the EU and most of all to Asia. German industrialists and the business classes know exactly what Nord Stream 2 represents: increasingly assertive German sovereignty guiding the heart of the EU, which translates as increased EU sovereignty.

An immensely significant sign has been recently delivered by Berlin with the approval granted for imports of the Sputnik vaccine.

Is Musil’s sense of possibility already in play? It’s too early to tell. The hegemon has unleashed a no-holds-barred hybrid war against Russia since 2014. This war may not be kinetic; roughly, it’s 70% financial and 30% infowar.

A more sovereign Germany closer to Russia and China may be the straw that breaks the hegemon’s back.