Russia And Germany Allegedly Working On Secret "Gas For Land" Deal

http://www.zerohedge.com/news/2014-07-31/molotov-ribbentrop-20-russia-and-germany-allegedly-working-secret-gas-land-deal

Russia And Germany Allegedly Working On Secret "Gas For Land" Deal
Submitted by Tyler Durden on 07/31/2014 14:50 -0400

While many were amused by this photo of Putin and Merkel during the world cup final showing Europe's two most important leaders siding side by side, some were more curious by just what the two were scheming:

Thanks to the Independent, we may know the answer, and it is a doozy, because according to some it is nothing shy of a sequel to the Molotov-Ribbentrop pact: allegedly Germany and Russia have been working on a secret plan to broker a peaceful solution to end international tensions over the Ukraine, one which would negotiate to trade Crimea's sovereignty for guarantees on energy security and trade. The Independent reveals that the peace plan, being worked on by both Angela Merkel and Vladimir Putin, "hinges on two main ambitions: stabilising the borders of Ukraine and providing the financially troubled country with a strong economic boost, particularly a new energy agreement ensuring security of gas supplies."

Amusingly, this comes on the day when the WSJ leads with "On Hold: Merkel Gives Putin a Blunt Message. Germany's Backing of Russia Sanctions Marks Breach in Pivotal European Relationship" in which we read that " Angela Merkel spoke to Russian President Vladimir Putin for at least the 30th time since the Ukraine crisis erupted. She had a blunt message, according to people briefed on the phone conversation: Call me if you have progress to report in defusing the conflict. That was July 20. The two leaders haven't spoken since."

They may or may not have spoken since, but it is not because Putin has "no progress to report" - it's because the two leaders have come to a secret agreement which will hardly make Ukraine, or most of Europe, not to mention the UN, happy as it requires that Crimea be permanently handed over to Russia in exchange for Russian gas, which has been cut off for a month now due to non-payment by Kiev.

Here is how the deal came to happen:

Sources close to the secret negotiations claim that the first part of the stabilisation plan requires Russia to withdraw its financial and military support for the various pro-separatist groups operating in eastern Ukraine. As part of any such agreement, the region would be allowed some devolved powers.

At the same time, the Ukrainian President would agree not to apply to join NATO. In return, President Putin would not seek to block or interfere with the Ukraine’s new trade relations with the European Union under a pact signed a few weeks ago.

Second, the Ukraine would be offered a new long-term agreement with Russia’s Gazprom, the giant gas supplier, for future gas supplies and pricing. At present, there is no gas deal in place; Ukraine’s gas supplies are running low and are likely to run out before this winter, which would spell economic and social ruin for the country.

As part of the deal, Russia would compensate Ukraine with a billion-dollar financial package for the loss of the rent it used to pay for stationing its fleets in the Crimea and at the port of Sevastopol on the Black Sea until Crimea voted for independence in March.



To be sure, in the aftermath of the MH-17 shooting, which in light of this revelation would clearly not benefit Russia, negotiations have stalled they are expected to restart once the investigation has taken place. “It is in everyone’s interests to do a deal. Hopefully, talks will be revived if a satisfactory outcome can be reached to investigations now taking place as to the causes of the MH17 catastrophe."

But while Germany can't wait to put the Ukraine conflict behind it and restore normal Russian relations (see Adidas' record plunge earlier today, blamed on the Ukraine conflict) others are far more eager to stir the pot some more: "A spokesman for the Foreign and Commonwealth Office said they had no knowledge of such negotiations taking place. However, the spokesman said he thought it highly unlikely that either the US or UK would agree to recognising Russian control over Crimea. There was no one available at the German embassy’s press office yesterday."

Which, of course, goes back to the fundamental question behind the Eurozone experiment: just who calls the shots. And despite what the UK (and certainly France) believe, that one person was and continues to be Merkel.  And at the end of the day, pragmatic Germany knows that for all the posturing and rhetoric, the biggest loser from a western embargo of Russia (which is now actively shifting its attention to China and now India) would be Germany itself.

[S]trong trade ties between the two countries have also served to strengthen Ms Merkel’s hand and the Russian speaker has emerged as the leading advocate of closer relations between the EU and Russia. “This is Merkel’s deal. She has been dealing direct with President Putin on this. She needs to solve the dispute because it’s in no one’s interest to have tension in the Ukraine or to have Russia out in the cold. No one wants another Cold War,” said one insider close to the negotiations.

Some of Germany’s biggest companies have big operations in Russia, which is now one of Europe’s biggest car markets, while many of its small to medium companies are also expanding into the country. Although Russia now provides EU countries with a third of their gas supplies through pipelines crossing the Ukraine, Germany has its own bilateral gas pipeline direct to Russia making it less vulnerable than other European countries.

However, Russia is still the EU’s third-biggest trading partner with cross-border trade of $460bn (£272bn) last year, and the latest sanctions being introduced by the EU towards Russian individuals and banks will hurt European countries more than any other – particularly Germany, but also the City of London.

Curiously, if there is one entity that could scuttle the deal it is, no surprise there, the US.

Central to the negotiations over any new gas deal with Gazprom is understood to be one of Ukraine’s wealthiest businessmen, the gas broker, Dmitry Firtash. Mr Firtash – who negotiated the first big gas deal between the Ukraine and Russia between 2006 and 2009 – is now living in Vienna fighting extradition charges from the Americans. But he has close relations with the Russian and Ukrainian leaders – he supported Mr Poroschenko – and has been acting as a go-between behind the scenes at the highest levels.

Incidentally, the same Americans which over the past 2 years has been desperate to start a regional war in any one part of the globe in order to break some more windows and boost GDP courtesy of the tried and true "Military Industrial Complex" GDP boost. Which is why if indeed the Ukraine peace process is in the arms of the US, then perhaps Putin's advisor was spot on when he said that "There is a war coming in Europe." Compliments of the United States?

Finally, for those wondering how much of the Independent's story is a fabrication, here is Germany denying it all:

GERMANY: REPORT OF SECRET DEAL ON UKRAINE `TOTALLY UNFOUNDED'

Which, if Jean-Claude Juncker is any indication, seals it.

US Set To Alienate Angry Germany Next, As Crackdown Shifts From BNP To Commerzbank, Deutsche Bank

US Set To Alienate Angry Germany Next, As Crackdown Shifts From BNP To Commerzbank, Deutsche Bank

Submitted by Tyler Durden on 07/08/2014 08:04 -0400

http://www.zerohedge.com/news/2014-07-08/us-set-alienate-angry-germany-next-crackdown-shifts-bnp-commerzbank-deutsche-bank

As we reported over the weekend in "By "Punishing" France, The US Just Accelerated The Demise Of The Dollar", following the record $9 billion fine against French BNP, the outcry has been fast and furious, with virtually everyone in the local chain of command, from Total CEO to the head of the Bank of France (and ECB member) Christian Noyer, all saying that the US is now clearly abusing the reserve power of the dollar and it is time to move away from a dollar-based reserve currency (how that jives with concurrent French demands for a lower EUR is a different, incomprehensible matter entirely).

It appears that having pushed France forcefully into the Russia-China Eurasian, and anti-US camp, the US will now do the same with Germany. Because after infuriating the German population by first refusing to return their gold contained (the legend goes) at the New York Fed, and then with scandal after spying scandal, most recently involving the CIA directly soliciting a German double agent, now the time has come to "punish" Germany's largest banks for the same kind of money laundering that BNP was engaged in. As the NYT and Reuters report, the time has come to shift away from the BNP scandal and focus on what will soon be the Commerzbank and Deutsche Bank fallout.


According to the NYT, the money laundering crackdown is "bound for another European financial center: Germany. State and federal authorities have begun settlement talks with Commerzbank, Germany’s second-largest lender, over the bank’s dealings with Iran and other countries blacklisted by the United States, according to people briefed on the matter. The bank, which is suspected of transferring money through its American operations on behalf of companies in Iran and Sudan, could strike a settlement deal with the state and federal authorities as soon as this summer, said the people briefed on the matter, who were not authorized to speak publicly.

The contours of a settlement, which the authorities have only begun to sketch out, are expected to include at least $500 million in penalties for Commerzbank, the people added. Although prosecutors were still weighing punishments, the people briefed on the matter said that the bank would most likely face a so-called deferred prosecution agreement, which would suspend criminal charges in exchange for the financial penalty and other concessions.

It's not just Commerzbank - a settlement with the smaller bank will merely pave the way for the punishment of the biggest bank of all (in terms of groiss derivative notional held): Deutsche Bank.

A potential deal with Commerzbank — which is expected to pave the way for a separate settlement with Deutsche Bank, Germany’s largest bank — would pale in comparison to the case announced last week against France’s biggest bank, BNP Paribas. The French bank agreed to pay a record $8.9 billion penalty and plead guilty to criminal charges for processing transactions on behalf of Sudan and other countries that America has hit with sanctions, a rare criminal action against a financial giant.

As NYT adds, correctly, "The Commerzbank investigation features an added twist: The bank is 17 percent owned by the German government. It is unclear whether — as in the BNP case, which led French authorities to intervene on the bank’s behalf — the settlement talks could inflame diplomatic tensions between Washington and Berlin."

Of course, since this is the ridiculous "scorched earth" diplomatic policy, if one may call it that, of the Obama administration, nobody is surprised any more that the US president is alienating one former ally after another.

As we first observed a few weeks ago when we revealed JPM's involvement in all of this money laundering, "some critics have questioned why American authorities have set their eye on European banks. The answer, authorities say, is that American banks by and large avoided processing transactions for Iran and Sudan. But American banks are not immune from touching dirty money. Citigroup’s Banamex unit is under investigation for processing money linked to a drug cartel. And in January, JPMorgan Chase reached a roughly $2 billion deal with the authorities over ignoring signs of the Ponzi scheme orchestrated by Bernard L. Madoff, who held accounts at the bank for over two decades."

Not only that but as we wrote over the weekend, the bank that was instrumental in facilitating BNP's money laundering for nearly a decade was none other than JPM. One wonders if JPM also "unwittingly" was the bank that made German money laundering around the globe possible. Did we mention unwittingly?

Still, while one can debate the idiocy of US foreign policy, eager to push European allies into the willing hands of Russia and China at the worst possible moment, when regional and civil wars and conflicts are suddenly breaking out across all key geopolitical hotspots, one wonders: in the case of BNP, the "fine" was as a result of French unwillingness to halt the Russian amphibious warship deal despite US demands. So it would be curious just what the US blackmail against German banks is for: one really does wonder just what punishment Angela Merkel deserves behind the scenes in the eyes of John Kerry et clueless al, to punish her and Germany so blatantly for the entire world to see.

One thing is clear: if the US thinks that Germany will continue to consider America its BFF and make zero contingency plans for when the alliance with the US finally crashes and burns, it will be truly surprised when the Eurasian alliance of Russia and China finally announces its final, all

France lashes out against US dollar, calls for ‘rebalancing’ of world currencies

http://rt.com/business/170864-france-balance-dollar-bnp/

France lashes out against US dollar, calls for ‘rebalancing’ of world currencies
Published time: July 07, 2014 10:24 Get short URL

French Finance Minister Michel Sapin (Reuters/Denis Balibouse)French Finance Minister Michel Sapin (Reuters/Denis Balibouse)

The French government wants to break the monopoly the dollar has on international transactions after the country’s largest bank, BNP Paribas, was slapped with a record $9 billion fine and a 1-year dollar trading ban.

Michel Sapin, the French finance minister, called for a “rebalancing” of the currencies used for global payments, saying the BNP Paribas case should “make us realize the necessity of using a variety of currencies” the Financial Times reports.

“We [Europeans] are selling to ourselves in dollars, for instance when we sell planes. Is that necessary? I don’t think so. I think a rebalancing is possible and necessary, not just regarding the euro, but also for the big currencies of the emerging countries, which account for more and more of global trade,” the finance minister told the FT at a conference over the weekend.

France wants to bring the euro to greater prominence in international trade. Sapin said he would raise the idea on Monday when he meets in Brussels with eurozone finance ministers.

BNP was punished for helping counties like Iran, Sudan, and Cuba process $30 billion in transactions which are illegal under US law, since they violate US sanctions. Starting on January 1, 2015, the bank will not be able to carry out dollar-based transactions for one year.

The French government has called the fine and 1-year ban unreasonable and unfair, as it blocks the country’s largest bank from handling dollars, which is the dominant currency in global trade. Nearly 90 percent of all deals in the $5 trillion a day foreign exchange market includes the US dollar.

Heavy-handed sanctions from the US and Europe have forced countries to also look towards other currency options. Russia, for example, is actively working to de-dollarize, and is starting to use the Chinese yuan and other Asian currencies in trading.

Dollars dominate most oil and gas pricing, another cycle France hopes to break.

Christophe de Margerie, the CEO of Total, France’s largest company, says other currencies can be used in oil purchases, even if the benchmark is left in dollars.

“The price of a barrel of oil is quoted in dollars,” de Margerie said. “A refinery can take that price and using the euro-dollar exchange rate on any given day, agree to make the payment in euro.”

The US and OPEC countries have traded oil exclusively in US dollars since 1971.

Nicolas Sarkozy arrested over ‘influence peddling’

Former French President Nicolas Sarkozy was being held today for questioning
over suspected influence-peddling, a legal source said. 

http://www.irishtimes.com/news/world/europe/nicolas-sarkozy-arrested-over-influence-peddling-1.1851380

Nicolas Sarkozy arrested over ‘influence peddling’
Former French president allegedly kept tabs on inquiry into his links to Muammar Gadafy

Former French President Nicolas Sarkozy was being held today for questioning over suspected influence-peddling, a legal source said.

Département de Ville-de-Paris
Tue, Jul 1, 2014, 09:16
First published:
Tue, Jul 1, 2014, 08:05

Former French president Nicolas Sarkozy was held today for questioning over suspicions that a network of informers kept him abreast of a separate inquiry into alleged irregularities in his 2007 election campaign, a legal source said.

It was the first time a former head of state had been held for questioning in modern French history. The conservative politician denies wrongdoing in a string of investigations which could derail his hopes of a come-back after his 2012 presidential election defeat by Francois Hollande.

Mr Sarkozy arrived early today to be questioned by investigators at their offices in Nanterre, west of Paris, after his lawyer was held for questioning yesterday.

Asked about the matter, French government spokesman Stephane Le Foll said Mr Sarkozy was “subject to justice just like everyone else.”

“Justice authorities are investigating and have to go all the way,” he said.

The former leader is the focus of an investigation launched in February into whether he sought to use his influence to get information about a separate inquiry into allegations that late Libyan leader Muammar Gadafy funded his 2007 election campaign.

Investigators suspect Mr Sarkozy and his lawyer kept tabs on the case by using a network of well-connected informants, which only came to light following phone taps.

Mr Sarkozy has likened the magistrates behind the phone-tapping to the “Stasi” police of former Communist East Germany.

Two legal officers with prosecutor roles, Gilbert Azibert and Patrick Sassoust, are also being held for questioning. Investigators suspect Mr Sarkozy had sought to get Mr Azibert a promotion to Monaco in exchange for information.

The case is one of six legal investigations involving Mr Sarkozy, including a new one this year into separate irregularities in his unsuccessful 2012 election campaign.

France mulls new internet spying powers

France mulls new internet spying powers
Published time: December 03, 2013 14:13
Edited time: December 04, 2013 08:19 Get short URL
RIA Novosti/Vadim ZhernovRIA Novosti/Vadim Zhernov
http://rt.com/news/france-warrantless-internet-spying-644/


The French National Assembly has adopted a bill allowing the authorities to access and gather internet user data without judicial approval. The bill has been slammed by activists as going “against the principles of democracy.”

The legislation is part of the 2014-2019 Defense Appropriation Legislatures. Article 13 of the bill expands French powers to monitor and collect internet user data in real time without judicial oversight. It requires internet services providers (ISPs) and content hosting companies such as Dailymotion and YouTube to feed lawmakers with details of user activities.

French socialist parties and the radical left voted for the proposed legislature. The environmentalist groups and the Left Front voted against the proposal. Tuesday’s draft, presented by Jean-Yves Le Drian, the Minister of Defense, is an extension of the White Paper on French Defense and National Security that the country’s Senate passed on 21 October.

The Senate could consider the second reading of the bill in mid-December, while the Assembly have its second reading in January.

Currently in France, authorities are required to apply for a warrant to access this information – a process that usually takes several months.

Under the new legislation, access to data would be approved by an appointee of the prime minister for periods of up to 30 days, and would be renewable.

The legislation has attracted the ire of civil rights groups, who have slammed it as an affront to civil liberties. French think tank Renaissance Numerique condemned Article 13 of the bill in a statement on its website.

“Relaxing the conditions of access to personal user data on the internet goes against individual freedoms,” Etienne Drouard, a lawyer specializing in communications law, told Renaissance Numerique.

As well as being a victim of the NSA’s spying programs, the French government also collaborated with the American spy agency, handing over data gathered abroad.  Whistleblower Edward Snowden’s leaks revealed that the NSA had gathered unprecedented amounted of metadata in France, recording around 70 million phone calls between December 2012 and January 2013.

President of Renaissance Numerique Guillaume Buffet issued a statement saying that in light of Snowden’s massive spy revelations measures must be taken to safeguard privacy on the net.

“A number of actors are attempting to turn the internet into something it is not – a tool to violate personal liberties,” Buffet said. “The internet is an extraordinary social, political and economic accelerator, in spite of what some may try and make us believe.”