More Mindless Sanctions? Merkel a Liar or a Fool?

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Published : August 31st, 2014
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Category : Opinions and Analysis

As the tide in the Ukraine civil war turns, the EU threatens Russia with more mindless sanctions. Bloomberg reports EU Vows More Russia Sanctions If War in Ukraine Worsens.

European Union leaders agreed to impose tougher sanctions on Russia, possibly targeting energy and finance, if the war in Ukraine worsens.

Leaders early today gave the European Commission a week to deliver proposals for the penalties. The EU left open the precise trigger for further sanctions, contrasting with a four-point ultimatum issued to Russian President Vladimir Putin on June 27 that preceded the latest curbs.

“We are close to the point of no return,” Ukrainian President Petro Poroshenko told reporters at the EU summit. “Thousands of foreign troops and hundreds of foreign tanks are now on the territory of Ukraine.” 

Earlier, EU leaders selected Polish Prime Minister Donald Tusk as the bloc’s next president and Italian Foreign Minister Federica Mogherini as chief diplomat after a bitter contest that showed the 28-nation EU’s divisions on how to deal with the Kremlin. Tusk has pushed for tougher sanctions on Russia while Mogherini has favored diplomacy. Leaders also met with Poroshenko.

The EU and the U.S. have already slapped visa bans and asset freezes on Russian individuals and companies, and since July have imposed steadily tougher sanctions targeting the country’s energy, finance and defense industries.

Merkel said the EU is looking at more measures to target Russia’s energy and finance industry.

Leaders disagreed about possible military assistance to Ukraine, with Lithuanian President Dalia Grybauskaite telling reporters before the meeting: “We need militarily to support and send military materials to Ukraine.”
Disagreements Everywhere

The entire, yet unstated, gist of the above article is there are disagreements everywhere: On sanctions, on military aid, on diplomacy vs. sanctions, and on triggers.

If this is a bluff, it is easily transparent. If it's not a bluff, it's economically stupid.

Merkel a Liar or a Fool?

Who is fooling whom when it comes to Merkel's claims "the EU is looking at more measures to target Russia’s energy and finance industry."

Merkel is either a liar or a fool. I believe Merkel knows full well sanctions are a losing game.

Target Russian energy and Russia will likely shut off natural gas supplies to Europe.

It was reckless enough to suggest that possibility in April. This is September. Winter is on the horizon. Want to risk it now?

My guess is that Merkel is a liar. If you prefer, call it an "obvious bluff".

Politically, Merkel has played her hand very well at every turn, with countless lies, bluffs, reversals, and opportunistic moves along the way, on countless eurozone issues.

Why should this time be any different?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
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Not only is the EU and the USA engaging in economic idiocy over Ukraine, but they are supporting Poroshenko in his declaration of war against his own people.
This is the equivalent of central governments authorizing and sanctioning the establishment of a master-slave relationship between central government and its citizenry(?).

What rational reasoning individual will believe that peace will ever come to a united Ukraine at gunpoint ?
Look to the USA where there is still generational hard feelings in the south against the north after 150 years.
More evidence? What happened in the former Yugoslavia after a few hundred years of festering anger?

When central government decides "consent of the governed" is no longer required, needed or sought, trust fails.
When a party lacks the trust of another party, that is the definition of potential enemy.
All actions after that either proves they are enemy or slowly turn them into allies.
But central governments aren't known for wisdom, intelligence or economic sanity.
Just look at the employees (nee overseers), both hired and elected.
Latest comment posted for this article
Not only is the EU and the USA engaging in economic idiocy over Ukraine, but they are supporting Poroshenko in his declaration of war against his own people. This is the equivalent of central governments authorizing and sanctioning the establishment of  Read more
overtheedge - 8/31/2014 at 5:05 PM GMT
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