Tuesday, February 11, 2025

Polaris of Enlightenment

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European Central Bank President: “The sanctions failed”

The new cold war

Published 25 March 2023
– By Editorial Staff
ECB President Christine Lagarde also has a background as French Finance Minister.

When European Central Bank President Christine Lagarde thinks she is talking to Ukrainian President Volodymyr Zelenskyj, she talks openly about how European price inflation is expected to keep rising, about plans to introduce a digital euro, that sanctions against Russia have not had the desired effect and that the EU will do “everything in its power” to help Ukraine win the war against Russia.

She also finds time to praise the leadership of the Russian central bank, explaining how it has made it increasingly difficult for EU citizens to trade in cash, and expresses concern that private players such as Google, Meta and Amazon will create currencies that will displace the euro.

Russian comedians Vovan and Lexus have made a name for themselves by prank-calling government officials, often pretending to be real influential people of various kinds. Past pranks include Turkish President Recep Tayyip Erdogan, Republican politician John McCain, Britain’s Prince Harry and Polish President Andrzej Duda.

This time they pretend to be Ukrainian President Volodymyr Zelenskyj while phoning Christine Lagarde – former Director of the International Monetary Fund (IMF) and now President of the European Central Bank (ECB).

The “fake” Zelenskyj says he is worried about the economic situation in Europe and the ECB chief admits that the situation is undeniably dark.

We are seeing prices that have initially gone up only in the area of energy and then gradually through fertilizers, in particular, to food, and now on a much broader basis. So the inflation that we had hoped would be transitory has continued much longer than thought and at a much higher level than expected.

That’s why, says Lagarde, all central banks and the ECB have started raising the interest rate, which until recently was negative but now stands at around 2% by default.

– We have growth that is low, we have prices that are too high that we have to bring down.

Praises chairwoman of Russia’s central bank

Ms Lagarde goes on to praise Elvira Nabiullina, the head of the Russian Central Bank, saying she “very quickly understood what the situation was” and that her raising the interest rates prevented shocking Russian inflation and encouraged investors to keep their money in Russia.

– She did a magnificent job, I have no hesitation to say that.

However, Lagarde says that the West’s sanctions against Russia are “biting” but not as much as previously expected.

– They still manage to sell a lot of their energy, whether it is oil or it is gas, to other countries than those countries that apply the sanctions, and certainly outside of the European Union, she continues, identifying India and China as two important trading partners for Russia.

Mr Lagarde also welcomed the expansion of sanctions against Russia and said that the upcoming G20 meeting could be a good opportunity to remind non-Western leaders of their “duty to promote stability and peace”.

Inflation of seven per cent – or more

The ECB President further notes that the European countries closest to Russia geographically are also the ones most affected by the economic crisis – partly because of the threat to geopolitical stability, but also because they have a history of close trade cooperation with Russia.

As for price inflation in the Eurozone, Lagarde points out that official forecasts suggest it will be around seven per cent in 2023 and possibly even higher.

– What I do know is that interest rates will inevitably continue to rise, she points out, but cannot say by how much.

– The only thing I can tell you is that it needs to go higher than where we are at the moment, because otherwise we will not manage to tame inflation.

Christine Lagarde further declares that in a way she sees it as “irrelevant” who wins and loses from the economic crisis as long as Ukraine wins the war against Russia.

– I take the very simple view that those who have the biggest gun at the end of the day win. This is a very stupid basic wild-west cowboy principle. It is the case at the moment that the biggest military power in the world is the United States. So the United States is supplying the biggest shipments of weapons, is providing a very large amount of funding. And that’s the reality that we deal with.

– It’s you who have to win, and we have to make every effort we can to support you.

Explains how they have made the use of cash more difficult.

The former IMF chief also talks about plans to introduce a digital euro (CBDC), arguing that it would make Europe less dependent on the currencies of “hostile countries”, pointing in particular to Russia and China as countries to distance the EU from. She also expresses concern about private actors launching their own e-currencies, thereby reducing the EU’s economic control.

I don’t want Meta, Google or Amazon to suddenly come up with a currency that will take over the sovereingty of Europe. I don’t want a foreign currency to become the currency of trading within Europe. So we have to be ready.

Lagarde also explains how it has become more difficult for EU citizens to pay large sums in cash and says that the new system she envisages will have a “limited amount of control”, possibly opening the door to smaller purchases and transfers not being controlled and tracked by the central government.

But that could be dangerous. The terrorist attacks on France back 10 years ago were entirely financed by those very small anonymous credit cards that you can recharge in total anonymity, she continues.

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Finnish security service: Severed sea cables likely accidental

The new cold war

Published 23 January 2025
– By Editorial Staff
The seized tanker Eagle S.

Finnish authorities are expected to conclude shortly the preliminary investigation against the tanker Eagle S, accused of causing damage to the Estlink 2 power cable between Finland and Estonia, as well as to several telecommunication cables in the Baltic Sea.

Suspicions were initially directed at the Eagle S, which was alleged to have deliberately dragged its anchor along the seabed, thereby damaging the cables.

Finnish authorities boarded the vessel and started questioning the crew. However, Customs announced that no criminal investigation will be opened against the crew, as they are not deemed to have willfully violated any sanctions.

So far, no other evidence has been presented to suggest that the crew intentionally caused the damage. The National Bureau of Investigation has stated that the active preliminary phase of the investigation will soon be completed, reports Helsingin Sanomat via TT.

Despite this, suspicions of gross sabotage against the Eagle S remain. The ship is still seized, and a Finnish court has rejected the owner’s request to release it.

Lack of evidence

Russia has consistently dismissed Western claims that Russian ships deliberately sabotaged the submarine cables as “baseless”. Russian Foreign Ministry spokesperson Maria Zakharova argues that the US-led NATO military pact is creating myths to justify an increased presence in the Baltic Sea and to limit Russian oil exports.

It should be noted that no concrete evidence linking Russia to the incident has been presented to date, according to Helsingin Sanomat, citing five sources familiar with the investigation. The information was also confirmed to Hufvudstadsbladet by a source in the Finnish state administration with insight into the case.

In the meantime, Finland and Estonia continue to work on repairs to the damaged cables. Fingrid, Finland’s national grid operator, has requested a court to seize the Eagle S to secure claims for damages related to Estlink 2.

Meanwhile, NATO has increased its presence in the Baltic Sea region in what it describes as “a precautionary measure against potential threats to critical infrastructure”. The other day, Operation Baltic Sentry was launched to patrol and protect important underwater structures such as gas pipelines and internet cables.

The Finnish authorities stress that the investigation into Eagle S is expected to be completed shortly.

Swedish MEP wants to “defeat” the Kremlin

The new cold war

Published 16 January 2025
– By Editorial Staff
Emma Wiesner is one of many Swedish leaders who have recently started using increasingly aggressive rhetoric.

In a short period of time, the rhetoric of Swedish leaders has become increasingly belligerent and aggressive, while diplomacy and dialogue are rarely put forward as a viable option.

Emma Wiesner, MEP for the Center Party, is one of those accused of fueling the conflict, openly posting on social media about how “we” should “defeat” the Kremlin.

The fact that Swedish politicians’ attitude towards Russia has become even more hostile in recent months was made abundantly clear at Folk och Försvar’s national conference in Sälen this past weekend. At the conference, Ulf Kristersson declared that Sweden is certainly not currently at war but emphasized that “there is no peace either”.

The Swedish Minister of Defense, Pål Jonson, gave a similar message, declaring that supporting Kiev in the war was no longer a “choice”  but a “duty”.

– This is a war with profound global consequences that further weakens the rules-based world order… We must assume that Russia will pose a very serious threat to us and our allies for the foreseeable future, he said.

Emma Wiesner of the Center Party is one of those who has joined the war rhetoric and believes that the Russian leadership must be defeated.

It is completely unreasonable that Russian ships transporting Putin’s gas through the Arctic are given maintenance in EU ports. It is high time to extend sanctions to Russian LNG – we cannot defeat the Kremlin regime until we cut off the flow of money to the war chest”, she writes on X.

“Ukraine’s cause is ours”

However, it is not clear how and at what cost the Kremlin will be defeated or what role Sweden will play in this, and critics point out that sanctions against Russia have so far not produced the desired results.

You seem angry, but it won’t help you ‘defeat the regime in the Kremlin’, the only thing that can happen with your advice is that we dig ourselves even deeper into economic misery in Europe. But of course, as an MEP, you’re not exactly in the same boat as the rest of us”, commented one annoyed user.

Wiesner has previously declared that “Ukraine’s cause is ours” and that a Russian victory on the battlefield cannot be accepted under any circumstances as it would lead to a “fundamentally different Europe” than today.

Swedish Armed Forces unveil drone swarms: “Can be as many as needed”

The new cold war

Published 15 January 2025
– By Editorial Staff
The drones are described as "trucks" that can carry both weapons and cameras.

The Swedish Armed Forces have been working on a new drone project over the past year, under great secrecy, together with weapons manufacturer Saab, where large swarms of unmanned aerial vehicles will be used in military operations.

–They can be as many as needed – thousands, if desired, says Saab CEO Micael Johansson

The main focus has been on developing new software that is said to enable the drones to form swarms and perform tasks almost automatically, without any operator having to control each individual aircraft in detail.

It’s not about piloting drones, you give them a mission on an iPad or mobile phone, then the drone swarm goes out and does this, the Saab top executive told TT during a press conference, explaining that a soldier can learn the system in a few days.

A possible drone mission could be to monitor a road by flying over it and transmitting images or video from the site, while scouting for enemies that the drones can also identify. By using hundreds or thousands of drones, very large areas can be monitored in this way, and if a few drones are disrupted, this also has little impact.

Although this has not been part of the project so far, it is also possible that in the future the drones will be armed and used to attack enemy forces.

You can update this software and do amazing things in the long run, says Micael Johansson.

Should not make their own decisions

According to Army Chief of Staff Jonny Lindfors, the drones should be considered “trucks” and it is up to the decision-makers to decide what cargo they should carry.

– But the basic principle that still applies is that in an armed operation there should be a human being making the decisions, he says.

Swedish soldiers have already started training with the new system and it will also be used in the NATO exercise Arctic Strike in March. The Swedish Armed Forces are also in the process of acquiring tens of thousands of drones, but they won’t say how much the new system will cost.

Sweden’s Minister of Defense Pål Jonson (M) is careful to point out, however, that a project of this kind usually takes about five years to complete and that it is “uniquely fast” that the software has been developed in just one year.

EU imports of Russian liquefied natural gas reach record levels

The new cold war

Published 14 January 2025
– By Editorial Staff
Russian LNG tanker Christophe de Margerie.

Despite EU sanctions and stated ambitions to sharply reduce imports of Russian fossil fuels, Europe still imported record amounts of liquefied natural gas (LNG) from Russia in 2024.

According to experts, there is a logical reason for the increase Russian gas is simply much cheaper than its competitors.

Data from Rystad Energy shows that 17.8 million tons of Russian LNG were delivered to European ports last year, an increase of over 2 million tons compared to the previous year.

Despite a significant drop in piped gas imports from Russia due to the conflict in Ukraine and the terrorist attack on the Nord Stream pipelines in September 2022, the EU continued to purchase record amounts of the country’s LNG. This has been possible as the chilled fuel has been only partially covered by the sanctions imposed by Union member states.

The energy analyst firm released the data shortly after Ukraine halted the transit of Russian gas through its territory to the EU. Kiev opted to scrap a five-year transit agreement with Russian energy giant Gazprom at the end of 2024, halting the flow of natural gas from Russia to Romania, Poland, Hungary, Slovakia, Austria, Italy and Moldova.

Russian LNG deliveries to the EU not only increased but reached “record levels”, according to Jan-Eric Fahnrich, gas analyst at Rystad Energy. He states that Russia surpassed Qatar as the bloc’s second-largest supplier of LNG in 2024, after the United States.

According to Fahnrich, the EU bought 49.5 billion cubic meters of Russian gas through pipelines last year, and another 24.2 billion cubic meters of LNG, some of which was re-exported to other countries.

“Fairly simple”

Data from the Center for Research on Energy and Clean Air (Crea) show slightly lower figures, but even these reflect an overall trend of sharply increasing Russian LNG exports. According to Crea, EU imports of Russian LNG increased by 14% year-on-year in 2024 to 17.5 million tons and were worth €7.32 billion.

– The reason for the rise is fairly simple. Russian LNG is offered at a discount to alternative suppliers. With no sanctions imposed on the commodity, companies are operating in their own self-interest and buying increasing quantities of gas from the cheapest supplier, explains Crea’s Russia analyst Vaibhav Raghunandan.

The latest estimates significantly outpace recent projections by Bloomberg, which earlier this week said LNG deliveries from Russia to the EU had risen to 15.5 million tons by 2024 compared to 2020, when the EU imported about 10.5 million tons of the fuel.