[translated by Eric Zuesse, from German Economic News:]
Financial War: US wants to trigger wave of Russian bankruptcies
German Economic News | Published: 02/23/15 12:55 clock | 42 Comments
The US government insists on a tightening of sanctions against Russia, and demands that the EU follow suit. Washington now wants sanctions that will have a “devastating” effect, which Russia must “suffer.” Financial measures are planned to trigger a wave of bankruptcies in Russia.
British Foreign Secretary Philip Hammond over the weekend had a visit by US Secretary of State John Kerry, concerning the US plan. Washington expects the EU to cooperate to force the Russian economy to its knees.
The US will drastically tighten sanctions against Russia: US Secretary of State John Kerry said this weekend in London that Russia was “guilty of gravely violating the Minsk truce.” Kerry said Russia had the city Debalzewo attacked, and supported paramilitary warriors in the region, and contracted new troops near Mariupol. Kerry said: “This is a violation of the ceasefire. We are serious: there will be more actions that cause additional pain in the Russian economy.”
He went on: “There is a serious discussion between us and our European allies, as to what sanctions we will bring next and when they are due to come into force. I am confident that there will be additional measures in response to Russia’s violations of the ceasefire.”
British Foreign Secretary Philip Hammond fully backed the remarks by Kerry. A few months ago American Vice President Joe Biden explained how the US created the EU’s role in the strategy directed against Russia. The collaboration now appears to function somewhat smoother than it did at first.
At the EU level, politicians can apparently no longer resist America’s pressure. Thus, the EU observer reported several unnamed permanent EU officials saying that further sanctions are inevitable. The EU Observer also quoted a senior US official, explaining America’s strategy. Whether this official is Daniel Fried, who coordinates the sanctions between the US and the EU, is unknown.
The Americans hope that the next step will have “devastating” impact on the Russian economy. Thus, there could be a wave of bankruptcies among Russian companies, because many companies risk bankruptcy if loans due in dollars during the coming year cannot be rolled over. [Bankruptcy would be expected because the value of the ruble has plunged and many more of them will thus be needed in order to pay the balance due.]
To achieve this goal and take advantage of the plunged ruble, the US government intends to resort to a technical trick to shorten the duration of existing loans and credits, which Russian banks, energy companies and arms companies have in European and American banks. US officials told the EU observer: “If we want, we can make sure that they are really suffering. The inability to raise new capital hurts most — there is no alternative to US and European financial markets.” [Thus, there will be bankruptcy.]
Another US contact said in Brussels, that the exclusion of Russia from the SWIFT payments system [the ability to transact business electronically instead of via paper records] would again be discussed and again reinforced. The Americans had tried this step, which is particularly feared by the Russians, a few months ago, by direct pressure, but failed because the independent SWIFT organization refused to obey Washington. However, when America succeeds on this, the cash flow to Russian companies will be suppressed. Russia is therefore rushing to install an alternative to the SWIFT system, hoping to reduce the impact on the Russian domestic payments when America pulls the plug and disconnects Russia from SWIFT.
The American rating agencies have already strengthened sanctions by classifying Russian government bonds as junk. This downgrade means that some large US pension funds are legally obliged to withdraw from their Russian government bonds. [That forces the ruble’s value down even further.]
EU observer also reports that the Americans intend to deliver weapons soon to Ukraine. This is the next step [in America’s war against Russia], which is set in a recently adopted US law.
The Russian violations of the ceasefire, that are alleged by the Americans, line up with the previously existing [dubious American] argument, as follows:
a: It is completely unclear who shot at Maidan [the coup in February 2014].
b: The shooting down of passenger flight MH17 is also not even beginning to be elucidated.
c: The killers of civilians in Odessa [in a massacre of pro-Russian demonstrators by burning them in the Trade Unions Building on 2 May 2014] are also unclear.
d: Who is shelling Mariupol is likewise unclear.
e: Who was behind the rocket attack on the bus in Donetsk is also unknown.
Each one of these events had been taken by the Americans as an opportunity to impose tougher sanctions against Russia. [Each one of these excuses by America for economic sanctions against Russia was dubious, but the EU went along anyway.]
It is not known whether there will be any response by the West to the actions of Ukraine’s Right Sector and other anti-Russian Ukrainian extremists: The right-wing paramilitary militias have informed that they’ll not even adhere to the Minsk agreements [but Kerry ignores that]. They also have established their own general staff, and refuse to follow orders from the official Ukrainian army regarding their military operations against the pro-Russian rebels.
On the behavior of the extreme right in Ukraine, the opinion of the EU and of the Americans is not known. [Publicly, there is no opinion on that, but only on attacking Russia.]
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.
Because Zuesse has found German Economic News to be the world’s most reliable general-news source, especially on matters pertaining to international relations, he frequently cites it as a source, and this is also why he translates some of its articles into English, so as to make them available in the English-speaking world as well.