Meeting in Berlin could signal a switch in strategy for Germany when it comes to the US dollar and energy security
By Pepe Escobar
August 28, 2018 "Information Clearing House" - It was supposed to be a low-key, traditional Austrian wedding until Vladimir Putin pulled up in a black limo. The bride was Austrian Foreign Minister Karin Kneissl, a top energy analyst and former professor at the Diplomatic Academy in Vienna and the European Business School in Frankfurt.
She knows all there is to know about multiple aspects of Eurasia integration, which is close to the Russian President’s heart. So close, in fact, that he stole the show by arriving in a convoy, bearing lavish flowers and the Kuban Cossack Choir.
After a swirl on the dance floor with the blond-haired, but not blushing, bride, he dashed off to Germany for the real business.
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This was a three-hour, multi-themed, face-to-face meeting north of Berlin with Chancellor Angela Merkel. There were no translators as both are fluent in Russian and German as I pointed out in Asia Times.
But it was Russian analyst Rostislav Ishchenko in a text featuring a Pushkin analogy – and beautifully translated into English – who unlocked these chain of events.
And that brings us to German Foreign Minister Heiko Maas, who wrote in the business paper Handelsblatt about the idea of a European Union payment system bypassing the US dollar, and ultimately, the Iran sanctions.
An alternative system is exactly what the BRICS, namely Brazil, Russia, of course, India, China and South Africa, as well as the China-Russia-Iran triumvirate, have been discussing, and slowly implementing for years.
Now, let us see if we can decode this brand new EU-wide controversy from three different angles. First up, is an aristocratic German financier now based in Switzerland, who insisted on anonymity.
He stressed: “Too many European [and Swiss] financial institutions [and regulators] are run by Americans. And they are extremely afraid of the American rhetoric of locking them out of Wall Street if they misbehave.”
But wait, there is a snag. Since the days of the Treaty of Rome, the EU has struggled to agree on “even a single important decision related to money, banking, taxes, subsidies … you name it,” he continued. “[Moreover,] the trust by other nations in an ‘EU-leadership’ is even lower than the feared, yet customarily obeyed, US global-leadership.”
“[And] even if they could have a vague attempt at such a large-scale revolution before the croissants are eaten, New York currency traders would have nuked the euro before Brussels had finished its after-lunch siesta,” he added.
Not exactly an EU independence manifesto. As for future prospects for the union, the financier warned: “In the economy of the future, Europe will be an also-ran. On a five-to-10-year horizon, I see Chinese monetary dominance as inevitable. Forget Europe.”
What the German elite really thinks
Now, compare it with a sharp, shorter-term view by German politico-economic analyst Peter Spengler. He correctly argues that SWIFT, the global banking payments system, is not the problem.
“SWIFT, the world’s largest cooperative payment network, operates under Belgian – that is EU law – which the US Treasury warriors, plus the British GCHQ and the NSA, have been breaking for more than 10 years now, despite protests from the European Parliament,” he said.
“Europe and associated countries and currencies do not need another system, but international law enforcement, and the elimination of the US dollar and hence the New York Fed from payment transactions for real neutral and multilateral clearing.”
It is no secret in Brussels that the EU has been excruciatingly slow in admitting its dependence on Washington. It will be a long and winding road towards “liberation,” even though it has already started.
Still, according to a newsletter circulating among select EU financial circles, German Foreign Minister Maas “did not launch this trial balloon without permission from Merkel.”
“Germany is in deep fear of the Strait of Hormuz being shut, stranding a major supply of her natural gas and oil, and placing her totally dependent on oil and natural gas from Russia,” the newsletter states. “That is why Germany has to hold up the Iranian nuclear deal against all costs.
“Hence, the meeting of Merkel and Putin and the floating of a new currency plan to break the control over Germany and the world of the SWIFT-CHIPS dollar system.”
In practice, “what is prompting Merkel to threaten to move away from the US dollar” is fear, according to the newsletter. There are serious concerns about losing energy shipments from Russia, some of the Central Asian ‘Stans’ and especially Strait of Hormuz-transited oil and natural gas.
Those nightmares could turn into reality if President Donald Trump’s administration succeeded in totally blocking Iran’s energy exports and Iran responded by blocking the Strait.
So, Berlin is now engaged in a wobbly “bend-not-break” strategy. Merkel has acknowledged that relations with Washington are fractious while emphasizing the importance of both trade with Iran and US security cooperation.
Nord Stream 2, which was extensively discussed with Putin in Berlin, is a done deal, no matter what Washington says. But that is still not enough for Germany’s domestic needs.
On Saturday, Merkel goes to Azerbaijan to check whether the Caspian-to-Europe Southern Gas Corridor requires further investment and whether it will start delivering energy before 2020.
Many in Germany believe that if ‘push comes to shove,’ the US would not have the military capability to keep the Strait of Hormuz open. And in this case, the EU’s biggest economy could face an energy crisis.
As the newsletter argues, that is why the dismantling of US dollar control of world finance is now being floated by Germany as a matter of safeguarding future growth.
Now, imagine all this being discussed in the open at the planned, one-off, Russia-Germany-France-Turkey summit. And all this because Putin went to a wedding.Pepe Escobar is correspondent-at-large at Asia Times
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