Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Here’s Why The US Sanctions Against Russia Threaten Germany’s Interests

Politics / GeoPolitics Aug 03, 2017 - 05:41 AM GMT

By: John_Mauldin

Politics

By Antonia Colibasanu : The US House of Representatives has passed a bill to renew and expand sanctions against Russia that were imposed after Russia’s annexation of Crimea. The bill, however, could also have a negative impact on some European energy projects that are linked to Russian companies.

Since the initial bill was first approved by the Senate on June 15, the European Union has been lobbying US lawmakers to revise the proposed legislation and reduce its effects on third-party countries.


But lobbying is essentially all the EU can do at this point; it can’t hit back against the US because such a move would require approval from all member states, which is unlikely.

A Heavy Blow to EU Companies Involved in Russian Energy Projects

The initial version of the bill would have imposed sanctions against any foreign person or entity that has significant investments in certain Russian energy projects.

This means that even non-US companies involved with Russian businesses could be targeted.

It is this part of the bill that has drawn criticism from the EU, particularly Germany, because European companies are involved in several energy projects with Russian businesses.

EU efforts to convince US lawmakers to revise the bill have had limited results. According to media reports, they did manage to increase the percentage of Russian participation required in an energy project to qualify for sanctions from 10 to 30 percent.

But this still means that the sanctions could affect some functioning infrastructure projects like the Baltic LNG project (run by Shell and Gazprom), the Blue Stream pipeline (run by Italy’s Eni and Gazprom), CPC pipeline (run by Shell, Eni and Rosneft), and Nord Stream 1 (run by various European firms and Gazprom).

If these European companies decide to increase their level of investment in these projects, they can be penalized under the US sanctions bill.

The bill could also penalize companies involved in Nord Stream 2, a joint project between German and Austrian companies and Russia’s Gazprom. Nord Stream 2 will enable Russian gas to be delivered to Germany without using the existing pipeline that runs through Ukraine.

This project has been the subject of US criticism before. It would make it easier for Russia to cut off gas supplies to Ukraine—without any subsequent effect on other European consumers—and allow Moscow to use energy as a tool to influence Kiev.

But Germany has a different perspective; it sees the project as another way to secure its energy needs, and it wants to protect the interests of German companies.

So, while the EU and Germany both oppose the US sanctions bill, they do so for different reasons. Germany has a direct interest in some of the projects that could be affected by the bill, while the EU just doesn’t want the US meddling in European affairs.

The EU Is Paralyzed

Imposing any measures that could penalize US businesses operating in the EU would be difficult—all initiatives proposed by the commission need to be approved by the EU Council, which would require agreement from all member states, and this is unlikely.

So ultimately, the EU can do little to retaliate at this point. The bloc’s decision-making process and the level of bureaucracy involved prevent it from amassing a coherent response. And the ability of individual member states to respond independent of Brussels is restricted—as members of the common market, they can’t take action on a bilateral level against a third party.

Thus, agreement on how to proceed is required from across the bloc. But considering that European states can’t agree on much these days, let alone their views on Moscow, it’s unlikely that they will come to an agreement on how to respond to the sanctions bill.

Grab George Friedman's Exclusive eBook, The World Explained in Maps

The World Explained in Maps reveals the panorama of geopolitical landscapes influencing today's governments and global financial systems. Don't miss this chance to prepare for the year ahead with the straight facts about every major country’s and region's current geopolitical climate. You won't find political rhetoric or media hype here.

The World Explained in Maps is an essential guide for every investor as 2017 takes shape. Get your copy now—free!

John Mauldin Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in