| Finland President Heads to Russia to Meet Putin; Phone Rings in Switzerland Over Cheese Posted: 14 Aug 2014 08:23 PM PDT In a welcome development (except for warmongers and sanction lovers) Kremlin news reports President of Finland to Visit Russia on a Working Visit. The Heads of State will discuss the state and prospects of bilateral cooperation between Russia and Finland. Have in mind to pay attention and international issues. Among the issues - promoting peaceful settlement of acute political crisis in Ukraine deal with the humanitarian disaster. Apparently Finland has decided its "small price" is too large. This is a step in the right direction. Hopefully all the sanctions collapse in a month or two with president Obama and senator McCain caught in the "fool's spotlight". Don't like the source? Hey, we all know Russia never tells the truth. So please instead consider this Finnish translation: Niinistö Will Meet PutinFinnish and Russian presidents will meet on Friday in Sochi in Russia. President of the Republic Niinistö says the press conference held today, Thursday, at 14. Statement From Warmongers UnitedReliable sources inform me that Warmongers United issued this statement: " It's obvious both sides are lying. There is no meeting. And we all know war is peace, sanctions are strength, and talk is ridiculous." Sorry. No link available. Phone Rings in Switzerland Over CheeseIn the sanctions winners and losers category, a clear winner has emerged. The Sydney Morning Herald reports Cheese-loving Russians turn to Emmental as Swiss dodge embargoAt Intercheese AG's headquarters in Switzerland, the phone barely stops ringing these days. A Russian voice is usually at the other end.
Since August 7, when Vladimir Putin's government banned many food imports from nations supporting sanctions due to Russia's role in the Ukraine crisis, at least 14 Russian importers have contacted Intercheese. The reason for the surge in business: Switzerland hasn't joined the European Union, the US, Canada, Australia and Norway in penalizing Russia.
"Russian importers are looking for the cheeses they can't get from the Europeans anymore -- Mozzarella, Gouda and Edam," said Daniel Daetwyler, managing director at Intercheese. The Swiss company sold as much as 20 tons of cheese to Russia in 2013 and will increase sales to the country of the varieties most affected by the EU embargo, even though it won't be able to meet the demand, Daetwyler said.
Border guards in Russia and Belarus turned back trucks loaded with cheese, yogurt and meat, officials from Lithuania and Estonia said last week. The euro area exported more than 292,000 tons of dairy products to Russia last year, with the Netherlands providing almost a quarter, followed by Germany and France, according to Eurostat.
"Swiss businesses are going to profit from the embargo," David Escher, director of Swiss Cheese Marketing, said in an interview. "If there is a new market and there is new demand, it could be interesting for Switzerland, which clearly has an advantage as it can continue to export. It will take some time to estimate to which extent."
For Andrey Danilenko, head of the National Milk Producers' Union in Moscow, Swiss cheese producers could become a stand-in for those in the European Union.
"Imports of Swiss cheese to Russia may rise manifold," Danilenko said. "Switzerland may replace exclusive cheeses earlier shipped from other EU countries. Previously, a lot of cheese was imported from the Baltic states and Poland, which it couldn't compete with due to higher logistics costs." Hopefully Finland sees the light just as Slovakia has. Earlier today the prime minister of Slovakia was fed up with " small prices" and issued this common-sense statement " We Can't Sacrifice Our Interests in the Name of Some Duel" All that needed now to defeat Warmongers United is a statement by Russia that natural gas will not be shut off, but rather prices will triple if sanctions are not removed in one week. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Rule of Small Prices; European Sanction Solidarity Goes Up in Flames: Slovakia "We Can’t Sacrifice Our Interests in the Name of Some Duel" Posted: 14 Aug 2014 12:57 PM PDT Tit-for-tat sanction cracks widened to the breaking point today following a report Ukraine Approves Law on Sanctions Against Russia. Europe is particularly concerned about a Ukraine statement that " European energy companies would have to agree major contract revisions when purchasing Russian natural gas if parliament approved sanctions on Gazprom." Slovakia prime minister Robert Fico was so concerned he made a few common sense, yet very pointed statements to reporters in Bratislava. - Sanctions imposed by European Union and Russia against one another are "senseless on both sides and will lead to a weaker EU."
- "I understand this is about principles, but I am far from believing in justice in international politics."
- "Isn't it strange that a country, which has signed an association agreement, a country, which we are all trying to help, is taking steps that jeopardize the interests of individual EU members?"
- "We don't want be held hostage by the Russian-Ukrainian conflict, we can't sacrifice our interests in the name of some duel."
I picked those statements up from ZeroHedge who cites Bloomberg, but I can find no other reference. Putin's Trade Blow Throws Finland's Exporters Into Shock One reader objected to my post 800 Finnish Dairy Workers Furloughed Due to Russia Sanctions, Others Fired; Brussels to Buy Fruit with Public Money because the source of the information was RT. OK. Instead, please consider the even more damning Bloomberg article Putin's Trade Blow Throws Finland's Exporters Into Shock Fallout Unfair Says Finland, Lithuania, PolandAlso consider Russia Isolation Fuels Finnish Dismay as Fallout Seen Unfair. After backing the European Union in expanding sanctions against Russia, Finland is now regrouping to consider what it describes as the disproportionate fallout of the crisis on its own economy.
No other euro nation is as exposed to the aftermath of the crisis in Ukraine as Finland, trade figures for the single currency bloc show. Prime Minister Alexander Stubb last week underscored the need for "solidarity" in the EU, making clear he expects any measures to "treat EU members similarly. If the impact isn't equal, we'll consider what kind of solutions we will seek."
The opposition euro-skeptic The Finns party, the third-biggest in the legislature, wants Stubb to compensate businesses by providing extra funds to the nation's export-guarantee programs, according to an Aug. 8 e-mail.
Yet Finland isn't alone in pointing to the uneven fallout of the sanctions against Russia. Poland needs to apply "as soon as possible" for EU compensation to local growers hurt by Russia's import ban on fruits and vegetables, Economy Minister Janusz Piechocinski said Aug. 5.
Lithuania will assess potential losses and may seek compensation from the EU, it said today. Rule of Small Prices I have talked about "small prices" on a number of occasions recently. August 8, 2014: " Small Price to Pay"August 9, 2014: Scathing Anti-West Editorial in German Handelsblatt; Reader Emails on "Small Price to Pay"Here is the formalized "Rule of Small Prices" People are willing to pay a "small price" as long as they are the ones not paying it. Those who have to pay the price inevitably consider it "unfair".Do Sanctions Ever Work?Iran faces some of the toughest sanctions in history. Is the policy a success? If so, for whom? Did Iran back down? Nope. And oil prices are at least 10% higher by some estimates. That's a small price to pay though, because people don't place cause and effect properly. And what about the Humanitarian Impact? Pharmaceuticals and medical equipments do not fall under international sanctions but the country is facing shortages of drugs for the treatment of 30 illnesses including cancer, heart and breathing problems, thalassemia and multiple sclerosis (MS) because Iran is not allowed to use the international payment systems.
A teenage boy died from hemophilia due to a shortage of medicine caused by the sanctions on Iran. Delivery of some agricultural products to Iran have also been affected for the same set of reasons.
In 2013, The Guardian reported that some 85,000 cancer patients require chemotherapy and radiotherapy which are now scarce. Iranians with serious illnesses have been put at imminent risk by the unintended consequences of international sanctions, which have led to dire shortages of life-saving medicines such as chemotherapy drugs for cancer and bloodclotting agents for haemophiliacs. Western governments have built waivers into the sanctions regime to ensure that essential medicines get through, but those waivers are not functioning, as they conflict with blanket restrictions on banking, as well as bans on "dual-use" chemicals which might have a military application. In addition, there are 40,000 haemophiliacs who can't get anti-clotting medicines. Operations on haemophiliacs have been virtually suspended because of the risks created by the shortages. An estimated 23,000 Iranians with HIV/AIDS have had their access to the drugs they need to keep them alive severely restricted. The society representing the 8,000 Iranians suffering from thalassaemia, an inherited blood disorder, has said its members are beginning to die because of a lack of an essential drug, deferoxamine, used to control the iron content in the blood. To make matters worse, Iran can no longer buy medical equipment such as autoclaves (sterilising machines), essential for the production of many drugs because some of the biggest western pharmaceutical companies refuse to have anything to do with Iran.
In recent reports, the development of a medicinal black market has come to the forefront of international news, a desperate population resorting to any means to obtain, at times life saving, medications. Though vital medicines are not affected by sanctions directly, the amount of hard currency being made available to the Minister of Health is what's causing a huge backlash on the amount of vital medicines being made available to the public. Iran's first female Minister Marziyeh Vahid Dastjerdi (since the Iranian Revolution) was dismissed in December for speaking out against the lack of support from the government in times of economic hardship. Furthermore, Iranian patients are at risk of amplified side effects and reduced effectiveness because Iran is forced to import more medicines, and chemical building blocks for other medicines, from India and China, thereby replacing the higher quality products from Western manufacturers. Imports from American and European drug makers were down by an estimated 30 percent in 2012 and falling. Given the nature of patents in the world of pharmaceuticals, substitutions for advanced medicines is often unattainable, particularly when it comes to diseases such as cancer and multiple sclerosis. Let the Bombing for Justice BeginDeath is a small price too, as long as it is someone else who is dead, and someone else who has their property and livelihood destroyed. So let the bombing of Donetsk begin. Actually, it already has. The Financial Times reports Bombs fall in centre of Donetsk. Not to worry. That is a small price to pay for peace. Lives destroyed, forever. That's a small price. European recession? Another small price. Has anyone added up these small prices? Good question. Here's a corollary to the Rule of Small Prices. Small Price Corollary 1 and 2 - Proponents of the "small price" never bother to total all the small prices.
- What matters is the principle: No price is too big, no destruction too great, no deaths too many to preserve the international policy of peace.
In contrast Slovakia prime minister Robert Fico believes - Sanctions are "senseless on both sides and will lead to a weaker EU."
- "I understand this is about principles, but I am far from believing in justice in international politics."
- "We can't sacrifice our interests in the name of some duel."
Take your side. I side with Fico. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| German Economy Contracts, France Stagnates, Italy in Recession; Time for a Rethink Posted: 14 Aug 2014 12:45 AM PDT The recovery in Europe, not that there was ever much of one, is now over. As expected in this corner, Germany Contracts and France Stagnates in Second Quarter. The data from the currency bloc's two largest economies came as the embattled French government said the disappointing growth meant it would miss its budget deficit this year and halved its gross domestic product forecast for 2014.
Germany's economy, which provides more than a quarter of the euro area's output, shrank 0.2 per cent between April and June, according to official figures.
Both figures missed forecasts and, with Italy back in recession, none of the region's three largest economies grew at all in the spring.
French finance minister Michel Sapin said that economic growth this year would now be 0.5 per cent, half of the previous official estimate of 1 per cent. That would also mean missing its budget-deficit target of 3.8 per cent of economic output this year, a level it had set as a necessary stepping stone to achieving the EU's ceiling of 3 per cent of output by 2015.
Teeing up what will doubtless turn into a feisty debate with Brussels in the coming weeks, Mr Sapin said that France would now cut its deficit "at an appropriate pace" given the bleaker outlook.
"The truth is that, as a direct consequence of sluggish growth and insufficient inflation, France will not meet its public deficit target this year," he wrote in the op-ed.
Stating that economic growth next year would not be much higher than 1 per cent compared with a previous forecast of 1.7 per cent, Mr Sapin said that the harder times called for a rethink of European targets. Time for a RethinkSapin wants a rethink. I certainly agree. It's time for France to - Rethink agricultural subsidies
- Rethink high tax rates
- Rethink work rules
- Rethink countless regulations
- Rethink government spending that accounts for 57% of GDP
- Rethink Hollande
- Rethink socialism
Actually, it's time for France to rethink everything that isn't working. In turn, that means France needs to rethink everything, because as best as I can tell, nothing is working properly. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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