Translated from GegenStandpunkt 3-2018

Trump and Putin’s Russia

I. America gets serious

The Russian leadership bet on Trump with the expectation that it might be possible to moderate American policy with this president and return to a more amicable relationship. Instead, they are confronted with the fact that Trump, following various disputes with Congress and his cabinet officials and advisors, commits himself to a series of condemnations of Russia, including sanctions – resulting in an unambiguous confirmation that Russia’s definition as a foe to be fought is an indispensable part of the American raison d'être, even under this President’s governance.

In three major doctrines[1], the new American administration has written up for its friend Putin just how serious it is about this militant program: The accusation against the Kremlin of “revisionism,” i.e. of wanting to change the current world order in its favor, expresses in the most abstract and unambiguous way possible that Russian power interests will not be tolerated, but combated; that Russia is a single disruption to the modern family of nations.

This battle cry puts an end to the times when the only remaining superpower regarded the Kremlin as merely a potential enemy, one whose capabilities for anti-American feats were on the wane and which no longer showed the unconditional will to resist, so that it could perhaps even be instrumentalized for American world order interests; now there is talk that political “ambition” – instead of being modest as a regional power, it has world power ambitions! – and renewed military capabilities have led to an alliance that is sinister for America and must be countered at all costs.

“Russia is not the Soviet Union, and the Cold War is long over. Despite our efforts to maintain a positive relationship, however, Russia views the United States and NATO as its primary adversary and an obstacle to the realization of its destabilizing geopolitical goals in Eurasia.” (NPR, p. 30)

The fact that Russia regards NATO and the EU as a “threat” is proof that this state does not accept the status it has been assigned, but instead cultivates an attitude of entitlement and pursues corresponding ambitions which have not been conceded to it. The USA’s monopoly on the power to grant or deny status to other states is clearly not recognized when Russia grants itself rights on the basis of its own sovereignty and pushes to assert itself accordingly. Russia obviously wants to “weaken” America’s role as the undisputed power of the world order after the end of the Cold War and no longer wants to accept its own rollback and downgrading – this is the “revisionism” that the USA cannot let pass. If Russia wants to gain influence in Europe and seeks allies in order to somehow anchor its interests in a hostile environment, this is taken without question from the American perspective as a strategic attack on the USA and its alliance with the Europeans, and indeed as a deliberate attempt to undermine the credibility of World Power Number 1 in the eyes of the rest of the world. And finally, Russia is also making the renewed declaration of enmity because, unlike China, its weapons give it a hard core of strategic clout which actually deprives the USA of the illusion that its ‘homeland is an invulnerable refuge’.

In the opinion of American strategists, Russia is making a highly dangerous “misjudgment” with all of this, which consists of the idea that it can oppose or resist the special position of the USA as a controlling power over all the interests of others, which is based on towering military superiority. Precisely because Russia is no longer the equal opponent it was during the Cold War, its attempts to gain imperialist freedoms below the level of arms competition are “misjudgments” that cannot be tolerated. And conversely, the USA criticizes itself for having allowed such miscalculations: America’s enemies have exploited the obtuseness of US strategists caught up in old ways of thinking by deliberately blurring the line between war and peace:

“China, Russia, and other state and non-state actors recognize that the United States often views the world in binary terms, with states being either ‘at peace’ or ‘at war,’ when it is actually an arena of continuous competition.” (NSS, p. 28)

“Both revisionist powers and rogue regimes are competing across all dimensions of power. They have increased efforts short of armed conflict by expanding coercion to new fronts, violating principles of sovereignty, exploiting ambiguity, and deliberately blurring the lines between civil and military goals.” (NDS, p. 2)

From the point of view that the competition between states is aimed at weakening the USA in principle, it follows that everything that the aforementioned states do to increase their resources and power is in fact an act of war, so that the USA also has to wage and win a comprehensive war to restore its exceptional position – a war in which the distinction between war and peace can no longer play a role.

In order to wrestle Russia down, to break its disruptive state will, first an economic war is unleashed, and second the USA launches an arms program to restore its uncontested superiority that eclipses everything that has gone before and openly proclaims that the Russians are to be faced with an ‘arms race to the point of ruin’ on the basis of their economic inferiority:

“Where possible, we must improve existing systems to maximize returns on prior investments. In other areas we should seek new capabilities that create clear advantages for our military y while posing costly dilemmas for our adversaries.” (NSS, p. 29)

Using America’s economic superiority with destructive intent

It’s not for nothing that the instrument of economic warfare has been given the honor of figuring as part of a third “pillar,” the “Tools of Economic Diplomacy,” in the latest American National Security Strategy.[2] The use of peaceful trade as a weapon is thus assigned its place as a natural and useful instrument of American foreign policy, according to the logic of just retribution for the crimes of rivals who “blur the lines between civilian and military objectives.”

The motive behind sanctions policy: inadequate impact. An excursus

The American sanctions policy toward modern Russia has such a venerable tradition that its continuation is hardly perceived as a peculiarity in interstate relations. The fact that Russia has to be “punished” for this or that or, as US politicians like to put it: “Russia has to pay a price,” is to a certain extent a matter of course in the so-called order of values with which the West has legitimized itself as the guardian. And it is equally unsurprising that there are regular calls in American politics for the sanctions to be tightened because the previous sanctions have “failed” – which overlooks the real damage caused by the harassment and punitive measures against Russia, but also addresses their ambitious goal: nothing less than a correction of the Russian reason of state. The dissatisfaction accompanying the American sanctions policy is that this effect has failed to materialize. However, American policy has only “failed” in the sense that it must register certain successes by Putin in rebuilding his nation, a use of Russian power aimed at regaining its status as an autonomous power with an international presence, i.e. in rivalry with America. This persistent dissatisfaction has been reflected in the progress made over the years in American sanctions policy and its changed direction.

– With the Jackson-Vanik Amendment from the Cold War era, America at least retained an instrument until 2012 that ties the granting of trade policy advantages to human rights conditions,[3] thus perpetuating America’s role as a supervisory power over governance in Russia, regardless of the fact that Russia itself has since committed itself to the canon of democratic principles. This instrument has been replaced by the so-called Magnitsky Act, which in turn provides for sanctions based on human rights[4] and to a certain extent represents America’s objection to Putin’s success in consolidating Russian state power against the predatory capitalism that broke out under Yeltsin: namely, a comprehensive declaration of no confidence in the Russian judiciary whose activities it defines as the abuses of an unjust state.

– On the occasion of the reunification with Crimea – Russia’s manifest military objection to Ukraine’s transference into the Western camp – a transition to economically targeted punitive measures takes place. These affect important political officials and stop just short of members of the Russian government until further notice; they also include any companies that do any kind of business in Crimea; in addition, there are restrictions on borrowing by Russian banks abroad and sanctions against the supply of special oil and gas extraction technologies. This targets the Russian nation’s one crucial source of money, the export of energy sources.

In addition to this economic damage, political effects are also intended: on the one hand, to create discord between Putin and his oligarchs, to destroy the bond between Russian capital and his national rule. And on the other hand, the American punitive measures are aimed at inciting discontent among the people by denouncing this rule as a “kleptocracy.” When selecting the figures and companies to be sanctioned, care is taken to present an ‘inner circle’ in order to denounce Russian rule as a mere instrument for the enrichment of Putin’s friends. All this with a view to Russian election campaigns, for which Navalny, currently the main “Putin critic,” is being provided with the necessary material and international legitimacy to fight the head of state with the single, meagre but effective argument of “corruption!” The people should ultimately blame their government for the economic damage that has affected them, lose their trust in Putin’s reconstruction efforts and, on this basis, understand their international ostracism and moral discrimination as a just measure against bad rule, so that they finally do America the favor of voting his rule out of power.

– Then, on the occasion of Russia’s military successes in Syria, sanctions are imposed on individuals and companies that supply Assad with weapons – a blow to the other crucially important Russian export industry, the arms companies. And on the occasion of alleged Russian cyber activities and interference in the American election campaign, measures against the Russian secret services are set in motion, combined with restrictions on diplomacy. At the end of December 2016, President Barack Obama introduced the new custom of mass expulsions, starting with 35 Russian diplomats, and ordered the closure of two Russian residences that were allegedly used for intelligence purposes.

Under Trump, dissatisfaction with the fact that Russia has had to accept damage but is still sticking to its foreign policy line has of course not died out, but is causing a fierce dispute within America; in July 2017, Congress passed the “Countering America’s Adversaries Through Sanctions Act” (CAATSA), tightening the sanctions policy in order to commit Trump to the necessary hostility in opposition to his conviction that he can make good deals with Putin thanks to his skills, and securing the right to prevent the president from lifting existing measures.[5]

After Russia responds to CAATSA by ordering America to reduce the number of US embassy staff in Russia to 455, the US government responds by closing the Russian consulate in San Francisco and two offices in Washington and New York that were alleged to have been used for espionage purposes, criminalizing one of the ordinary functions of diplomatic missions, spying on the other country:

“Amid sharp protests from Moscow, the United States has taken control of the Russian consulate in San Francisco and two buildings in Washington and New York. American security forces searched the offices on Saturday after diplomatic immunity was declared lifted.” (FAZ, September 4, 2017)

These measures, which are generally classified as “merely symbolic” even if they represent tangible progress in the deterioration of relations, do not satisfy the American hardliners. They steadfastly argue for the need to finally “really hurt” Russia and repeatedly refer to the so-called “nuclear option,” the project to completely exclude Russia from the international financial market, not only to cut it off from foreign credit, but also generally from international payment flows and settlement procedures, especially the SWIFT payment system, thus blocking it from virtually any use of the global market.

The US Treasury Department is currently reviewing the extension of sanctions to Russian government bonds and warned in February 2018 of the likely impact on the international financial market and American financial capital. Ultimately, the contradictory ideal of the sanctions policy would be to ensure that the economic damage is borne by the opponent as unilaterally as possible, or that the negative effects on one’s own business world are at least kept under control:

“A Treasury report obtained by Bloomberg concluded that expanding sanctions to new Russian sovereign debt and derivatives could destabilize markets and spread beyond Russia to have ‘negative spillover effects into global financial markets and businesses.’ ...’Given the size of Russia’s economy, its interconnectedness and prevalence in global asset markets, and the likely over-compliance by global firms to U.S. sanctions, the magnitude and scope of consequences from expanding sanctions to sovereign debt and derivatives is uncertain and the effects could be borne by both the Russian Federation and U.S. investors and businesses,’ the report finds.” (Bloomberg, February 2, 2018)

However, such discussions of the problematic situation also serve as a clear warning to financial agencies to stay away from these trading and speculative objects defined as problematic or to remove such holdings from their portfolios.

In a new initiative, American senators are once again pushing for more comprehensive measures and demanding information from international banks on all Russian funds deposited with them; in addition, Russian real estate holdings in the USA are also coming under scrutiny.[6] The administration is not remaining inactive in this regard either, but is taking action against some European banking centers in line with the Democratic senators.[7] This is another way of making progress toward the so-called “nuclear option.” At the same time, the USA is stepping up its threats against Nord Stream 2.[8]

Contrary to the complaints of Trump’s critics who say that American measures are never tough enough, the use of sanctions as a tool is indeed quite systematic and effective, in a gradual escalation that leaves the object of these measures in a permanent state of uncertainty as to what blows can still be expected and fundamentally deprives it of the basis for calculating how much of its global market activities will be of use to it in the future.

On the occasion of the Skripal case, America, along with the EU, again organizes a large-scale expulsion of diplomats and subsequently imposes a series of sanctions as required by CAATSA at the beginning of April 2018.

The ‘Game Changer’

On the one hand, the US Treasury Secretary announces decisive progress with his justification: The new list of sanctions sums up the previous occasions for punitive measures under the general title of “malign activities,”[9] under which the list is then quasi-routinely supplemented with new persons and companies to be sanctioned, even without special cause. On the other hand, this time the decisive innovation of secondary sanctions – prescribed in CAATSA – is also applied, the extraordinarily effective extension to third parties who must also expect sanctions if they maintain business relationships with companies in which the sanctioned oligarchs hold more than 50% of shares.

This gives a certain satisfaction to those who advocate a radicalization of the containment policy:

“... the new American sanctions on financial transactions are a real ‘game changer’, and there are four reasons for this. Firstly, Washington is now threatening anyone who ‘knowingly makes significant transactions’ for sanctioned parties. This not only prevents sanctioned parties from doing business, but also prevents agencies such as Clearstream and Euroclear from making payments for the companies and individuals concerned, thus cutting them off from the global economy. Secondly, the sanctions affect listed companies. Many oligarchs found loopholes by listing in London, New York and Hong Kong to protect assets from Western and Russian sanctions. These are now no longer safe. Thirdly, they lead to general uncertainty because no one knows exactly who will be next. Expectations of further American sanctions can now affect Russian economic performance just as much as the price of oil. And fourth, Washington is now prepared to bear its own costs in order to enforce the sanctions... American companies are now obliged, without exception, to divest all shares in sanctioned companies.” (Dr. Nigel Gould-Davies, Associate Fellow, Russia and Eurasia Programmer, Chatham House in: FAZ, May 7, 2018)

With the announcement of the security strategy –

“We will work with like-minded partners to build support for tools of economic diplomacy against shared threats. Multilateral economic pressure is often more effective because it limits the ability of targeted states to circumvent measures and conveys united resolve” (NSS, p. 34) –

things are getting serious: After all, the purpose of the procedure is not just exclusion from the American market, but from the world market – no way is this “isolationism”: the world market itself is being used as a lever for American security policy. And even if the “like-minded partners” do not yet know their position, America has the means to force them to take one: By imposing American law on the subjects of the world market, US sanctions are also extended to individuals and companies that are not directly subject to American sovereignty, so that ultimately the prospect of possible sanctions alone is already doing a good job preventing Russian activities on the world market: when using this means, American strategists are counting on over-compliance from the notoriously sensitive markets – past exemplary punishments have produced the desired effect.

1. The Deripaska/Rusal case

The Treasury dedicated a separate profile to each of the sanctioned oligarchs, since it is, after all, a constitutional state. In the case of Deripaska, his commitment to the Russian state and allegations of certain crimes in his past are listed side by side.[10].

But it is not so much Deripaska’s past crimes as the particular success of his company that predestines him to be made an example of by the Americans: The lever of dollar imperialism has a resounding effect on this company, which is fully “integrated” into the world market[11] through all its trading partners, customers and suppliers:

“The Swiss raw materials trader Glencore, previously one of Rusal's most important customers, has announced the suspension of the business relationship.” (Junge Welt, April 21, 2018) “The aluminum producer Rusal, which exports a large part of its products, was suddenly cut off from its customers. Long-term customer contracts were also terminated with reference to force majeure, and bank balances were frozen.” (FAZ, May 2, 2018)

The London Metal Exchange agrees:

“Things got worse for the company after London Metals Exchange (LME) said on April 10 it was halting all trading in commodities produced by Rusal. This could account for 10-20% of Rusal's sales.” (bne IntelliNews, April 27, 2018)

Above all, however, the market economy’s exemplary interdependence through credit does its work: after “Rusal’s stock market value has fallen to an eighth of its previous value in the two weeks since the sanctions were imposed,” (Junge Welt, April 21, 2018)[12] all loans based on this collateral are again due; but even the honest profits in the form of bank deposits are frozen, and all the agencies needed to process the group’s payments refuse to provide their services, so that the global corporation is rendered insolvent overnight. A clear demonstration of the efficiency of the credit superstructure – in a negative sense. In addition, the “over-compliance” has a resounding effect on other Russian commodity stocks and on the Russian stock exchange which is largely determined by it and on the value of the ruble.[13]

With the corporate empire under attack, not only considerable financial assets are at stake, but also the national importance of the corporation in its homeland: In addition to its role as a source of money, Deripaska’s companies act as the sole employer not only in the so-called “monotowns,” but also in some Russian regions:

“‘Basic Element’ employs more than 150,000 people worldwide, according to its own figures. More than 15 percent of the Russian population is ‘directly or indirectly’ dependent on the company, according to its website.” (DW, April 10, 2018)

The fact that the American economic war also damages the ‘human capital’ of the companies affected by them is part of the normality of a market economy. In Russia, however, this damage has even more far-reaching dimensions. In contrast to the Western enemy image of Russian oligarchic capitalism, according to which the state and oligarchs have joined forces for the purpose of mutual unrestrained corruption, the special role of these figures is somewhat different; as the few representatives of growth in Russia’s weak capitalism, the state has given them carte blanche to extraordinarily enrich themselves, but in return they are obliged to provide all kinds of regional political and welfare state services. In the aforementioned monotowns and beyond, the oligarchs function not only as employers, but also – partly by continuing the old real socialist mores with their social odds and ends around the companies – as a substitute for welfare state services for which the state budget is inadequate.[14] This function guarantees the generalization of the damage in Russia. There is therefore no question that the Russian state must rescue the group, so that the Russian budget now has to accept a new burden on the state funds instead of having a source of foreign currency. However, the other side will decide what good its rescue efforts are.

The poisoned American offer for a deal: expropriation

First of all, the expropriation of the oligarch takes place in the elementary form that, in order to save at least the remnants of his corporate empire, he has to sell shares to get below the 50 percent threshold – whereby not only is the capital loss due to the fall in the price of the shares certain, but it is also questionable whether buyers will even be interested in them. Secondly, however, he is forced to negotiate with the US Treasury what other rights he has to give up in his company and its subdivisions in order to open up the prospect of ending the sanctions:

“‘Rusal is now in a very close dialogue with OFAC (the Office of Foreign Assets Control of the U.S. Department of the Treasury). It is very important for the company to comply with all their instructions to get out of the sanctions,’ the source said. ‘The company is now working on changing the management team to an independent one and the board of directors to independent representatives who are not affiliated with shareholders.’” (Moscow Times, April 27, 2018)

Negotiations are therefore held about a new form of expropriation through the denationalization of the company: by replacing the management level – “the sale of Deripaska’s shares might not be easy, as the new owner must be approved by Washington. According to observers, the Americans will not tolerate a sale to family members or friends of Deripaska” (FAZ, May 2, 2018) – the US Treasury will take control of the company to a certain extent, which will ensure that the new company bosses are truly independent. This is to be demonstrated not least by the way Putin deals with the obligations he has imposed on his oligarchs as national services.

2. The Vekselberg case

This figure is also suitable for the American attack due to his successfully internationalized business[15], so that the blocking of American accounts, including a drop in the price of his shares in Rusal, is enough to make his company conglomerate insolvent.[16] Vekselberg’s solid investment policy – especially in Switzerland – is suitable for a devastating setback: After the Swiss business world has already been extensively confronted with American sanctions, it demonstrates particular zeal in kicking out the former majority shareholder and destroying his assets.[17] The second department was taken care of by the financial institutions; “apparently the banks (UBS, Credit Suisse, Deutsche Bank, J. P. Morgan, Natixis from France and ING from the Netherlands) have put a knife to Vekselberg’s throat and turned off the credit tap. The loans were terminated prematurely. The financial institutions did this for fear of being prosecuted for violating US sanctions against Vekselberg and Renova.” (Basler Zeitung, May 22, 2018) And once again, Russian credit has to be mobilized for the rescue operation.

3. The Kaspersky case

Although the company has not been sanctioned in the strict sense, it has come under suspicion of acting as an instrument of Russian state power precisely because of its extraordinary competitiveness in the IT sector in combination with the nationality of its owner. The ban on all American government agencies from using “Russian software” is enough to inflict massive economic damage on this company and cause it to leave its home country.[18]

Sanctioning the two key Russian business spheres: Energy and weapons

The sanctioning of individual oligarchs and their corporations, holding companies or groups of companies already affects considerable parts of the Russian economy; in addition, however, the American measures are generally aimed at the two sectors of energy and arms production[19] – i.e. at their ‘dual use’ for the Russian government: it is these two types of goods that represent the primary sources of income for the nation on the one hand and serve the Russian state as a lever for its influence in the world of states and its assertion as an independent power. On the other hand, these “strategic goods,” as they are not called for nothing, are also of outstanding importance for their respective customers, so that America can’t count on the otherwise effective “over-compliance” of non-Russian participants – neither in projects in the field of energy supply (see Nord Stream) nor in the arms trade.

The profile on the state-owned monopoly company for arms exports takes the supply of weapons to the Syrian government as an opportunity:

“Rosoboroneksport is a state-owned Russian weapons trading company with longstanding and ongoing ties to the Government of Syria, with billions of dollars’ worth of weapons sales over more than a decade. Rosoboroneksport is being designated under E.O. 13582 for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, the Government of Syria.” (home.treasury.gov, April 6, 2018)

However, the sanctioning of this company is a special kind of imperialist project: In this case, the business partners in question are states that America cannot sanction as easily as metal traders and lenders. The State Department is taking a slightly different approach in this area. It

“is already in talks with many countries about their relations with Russia. At the same time, US diplomats also tried to persuade countries to expand their defense ties with Washington to compensate for the loss of Russian supplies. These overtures suggest that CAATSA’s goal is not only to punish Russia for its bad behavior, but also to expand US arms sales wherever possible.” (Stratfor, May 28, 2018)

It may well be that Trump has come up with the ‘jobs’ he wants to delight his ‘fellow Americans’ with in this case too – in fact, America is attacking all those members of the world of states who, for good reasons, obtain their military means of force from Russia. And these reasons do not just consist of the price advantage, but above all in the fact that when states buy weapons, they always buy a certain degree of control and supremacy from the supplier. The friendly offer to base one’s own defense on relations with America would be tantamount to allowing oneself to be made a vassal of America, which is not a very tempting offer in view of the widespread anti-Americanism in the world of states.

The think tank Stratfor is already reviewing the entire world of states that should give up their Russian weapons in favor of America:

“According to the Stockholm International Peace Research Institute, Russia is the world's second-largest arms exporter. In 2013-2017, the country accounted for 22 percent of global arms exports, trailing only the United States at 34 percent... Russia's closest arms ties are with China, India, and Vietnam, which together account for 58 percent of Russian exports. China has recently received cutting-edge Russian equipment, including the S-400 air defense system and Su-35 aircraft... Russia has signed major arms deals with Indonesia and Turkey, and it is in talks with Saudi Arabia and Qatar to sell the S-400 system. The United Arab Emirates is also considering buying Su-35 aircraft. While these countries are some of Russia's largest customers - or future customers - they are not the only ones that could run afoul of CAATSA. Countries such as Algeria, Myanmar, Malaysia, Kazakhstan and Ethiopia could soon run into trouble because of their ‘significant’ arms deals with Russia… [China’s] ties with Russia are so close and of such strategic importance that China is unlikely to make more than symbolic concessions given the central importance of its arms purchases from Moscow… Russia also has close ties with China’s rival India. Moscow supplies most of the weapons for the Indian military, including fighter jets, naval destroyers, battle tanks and a nuclear submarine. The BrahMos missile – the product of Russian-Indian cooperation – is a significant success for New Delhi’s arms industry, which also has great export potential. In addition, Russian arms deals offer generous terms, such as technology transfer and joint production opportunities, which are important to India’s strategic autonomy doctrine.” (With CAATSA, the U.S. is Trying to Get Russia Hurt, Stratfor, May 28, 2018)

The effect of the American sanctions policy on third parties is therefore not only to divide or undermine the world market; with the “strategic” goods of energy and weapons, the Russian means of power that America wants to oust from the world market, it opens up a confrontation with all those states – and these are obviously not exactly few and not exactly insignificant either – that attach great importance to this trade for reasons of the highest state value, namely their sovereignty.

The fact that Trump with his “America first!” approach is destroying the established world order, the foundation on which the entire globalized world business is based, as well as the “West” as the relevant subject, is dividing the US political class. At the same time, however, Trump seems to be inclined to no longer automatically regard Russia as the main enemy – the establishment is standing firm and united against this and countering Trump’s revision of this old self-evident fact with his intensification of the declaration of enmity. The fact that this is also ultimately driving forward the disintegration of the old world order because today’s Russia with its remaining powers is proving to be an extremely useful trading and alliance partner for all kinds of sovereigns in the world – this is not receiving any further attention from the establishment. The American political class does not want to allow the supreme patriot in the presidency to make any concessions to the traditional enmity toward Russia, which has been revived after certain conjunctures. And Trump’s repeated defense that it is not a bad thing to have constructive relations with Russia simply runs up against this.

The reason to escalate another level becomes explicit: Trump

The latest batch of sanctions which were put on the agenda by the US State Department, on the one hand, and by some Democrats and Republicans, on the other, come under the motto: Punishment for Helsinki.[20] Because the American President stubbornly refuses to enforce the militant spirit of US policy towards Russia, the new united front of Democrats, Republicans, hawks in the State Department and Trump advisors is using its institutional means of power, alongside and against presidential powers, to force the President to toe their line.

“The new sanctions ... follow a certain internal automatism: By attributing responsibility for the Salisbury attack to Russia, the US government was obliged to take punitive measures within 60 days due to a 1991 law on the use of chemical weapons. At the same time, the US Congress is also trying to increase the pressure on Moscow.” (SZ, August 9, 2018)

What the Süddeutsche Zeitung describes as a “certain automatism” is the ingenious classification of the Skripal case: “The US State Department regards the case as a prohibited use of weapons of mass destruction.” (FAZ, August 10, 2018) The so-called “weapon of mass destruction” has so far claimed one victim, and the British government has not yet provided sufficient evidence that Russia carried out the attack, nor does it plan to. But this classification has the particular appeal that, after an initial salvo, the new penalties enacted in August, a “ban on the sale of American technology goods ... which can be used for both military and civilian purposes and have ‘potential significance for US national security’,” ignite a second stage on the basis of the aforementioned law:

“That is, if the Russian government does not give a ‘reliable assurance’ within three months that it will refrain from using chemical weapons in the future and allow inspections by the United Nations. In this case, the USA is threatening Russia with a further downgrade of diplomatic relations and further comprehensive trade restrictions on a wide range of goods. In addition, Russian airlines could be denied access to American airports. This would particularly affect the largest Russian airline, Aeroflot.” (Ibid.)

The demand that Russia must provide “reliable assurances” that it “will refrain” from using chemical weapons “in the future” is itself a pure provocation in that, firstly, it demands an admission of guilt from Russia that it has used these weapons previously. And secondly, the proceedings accuse Russia of violating the Chemical Weapons Convention under which the USA and Russia, among others, committed themselves in 1997 to destroying all chemical weapons under international supervision by 2012. It is hardly surprising that Russian diplomacy reacts to this step with unanimous indignation since Russia reported the complete fulfillment of its treaty obligations around a year ago –

“Russia has destroyed the last remnants of its former arsenal of 40,000 tons of chemical weapons. A large part of the stockpile dates back to Soviet times” (DW, September 27, 2017) –

with the participation of international inspectors and recognition from the responsible international regulatory body:

“From The Hague, the Organisation for the Prohibition of Chemical Weapons (OPCW) congratulated Russia on the latest step. Director General Ahmet Üzümcü spoke of a milestone on the way to a chemical weapons-free world.” (Ibid.)

Conversely, however, the US apparently considers the fulfillment of its contractual obligations to be rather unimportant, something which Putin repeatedly points out:

“‘They have already postponed the deadline for destruction three times, also under the pretext of the lack of the necessary funds in the budget, which, to be honest, sounds strange,’ said Russian President Vladimir Putin, addressing the US government.” (Ibid.)

In this respect, this American approach also provides information about the state of arms diplomacy between the powers: The American method of systematically accusing Russia of violating treaties in a wide variety of respects in order to justify its own arms measures, allegedly necessary as a “reaction,” and to absolve itself at will from previously signed treaties, has long since deprived Russia of respect as a contractual partner. Today’s America simply no longer considers it necessary, or at most only conditionally and one-sidedly useful, to invoke the inherited arms control provisions.

Finally, the grotesque use of the Skripal case also shows how the united front that the US political class has built up in the fight against the President’s suspicious friendliness toward Russia[21] is prepared to use any pretext, no matter how flimsy, to commit him to the enmity that America obviously cannot do without. The indignation over a president who is suspected of showing weakness toward the arch-enemy that is anchored in the American national consciousness, and who thus allegedly jeopardizes America’s security, acts like an accelerant on the already escalatingly bad relations.

*

The fact that Russian energy deals, along with the Kremlin’s political ambitions to establish special bilateral relations with other countries, are being strategically assessed by America, measured against its global claim to a monopoly on order and thus practically subsumed under it, is nothing new. Under the Trump administration, however, the blackmail power with which America torments states is being militantly extended: more and more deals that other states are able to get out of America’s imperialist competitive order for themselves on the basis of their resources are being declared inadmissible and must be stopped.[22] In relation to Russia, America is implementing a sanctions policy that is intended to damage the Russian nation with its current ambitions on the global market so enduringly that it loses the ability to pursue an independent great power policy. The fact that Russia earns the funds for its “revisionism” on the world market is unacceptable to America in this form and, in all its facets, constitutes a (belligerent) attack on the Pax Americana. From the fact that Russia is strengthening itself through its participation in the world market, the US administration has drawn the conclusion that the Kremlin is using peace for its “revisionism,” “blurring the boundaries between war and peace,” so that one must make it impossible for Russia to do this business and the Russian state must be deprived of these foundations of its power.

America’s economic warfare is targeting the discrepancy in modern Russia’s means of power: Putin’s nation is still the second most powerful nuclear power and a serious opponent, right down to its conventional inventory, not only because of its heritage, but also because of its newly acquired military capabilities. The economic basis, however, is still decisively determined by raw material exports, and “diversification” is still on the agenda, which means that Russia admits that it only plays a very modest role in global market competition.

An irony of history, or rather a triumph of imperialism, is that the method of advancing the nation that the gravediggers of real socialism had relied on, the integration and use of the world market, is now being used as a weapon against the nation. This is how the great turning point is being exploited by the imperialist enemy: Thanks to its integration into the world market, Russia is now vulnerable in a way that the Soviet Union never was. America is not allowing Russia the chance of capitalist reconstruction, but is mercilessly exploiting its weakness to make Obama’s slogan of “regional power” come true without any real war, for the audacious undertaking of forcing the world’s second most powerful military power, equipped with a destructive nuclear potential capable of wiping out civilization several times over, to capitulate and submit to American dictates by ruining its economic base.

II. Russia fights back

What America calls “revisionism” is a good Russian right

Whether its “partners” like it or not, Russia lays claim to recognition as an equal, important player in the world of states. It assumes that it has such a right, that the world order which it has joined owes it this:

“The return of Russia as an equal partner, which does not impose anything on anyone, but which also does not take dictates and ultimatums from its partners, is only accepted with great difficulty by our Western partners.” (Foreign Minister Sergei Lavrov, Moscow, March 15, 2018)

With its “return,” Russia wants to take up the status of the defunct Soviet Union. Putin certainly admits to the realism that its means of power are no longer available. His party, United Russia, is by no means thinking of revoking the farewell to the old system, but is very much claiming a leading role in the world order on the basis of its still enormous legacy – as an equal among equals; this is what should already be provided by the world order, which in Russia’s view is a system of rights and duties that organizes the coexistence of respectable sovereigns.

The Russian leadership has been gradually taught by the activities of its new partners that it cannot count on approval – quite the opposite: it has had to register the ongoing expansion of NATO and the EU, which are aimed at pushing back Russian influence on its own heartland: the progress in occupying its strategic frontier right up to its western border as a result of the coup in Ukraine, the new threat on its southern border as a result of NATO’s decision to admit Georgia into its military alliance, the stationing of NATO troops, including heavy equipment, in Eastern Europe and the Baltic states, etc. It has also had to take note of the militant maneuvers to overthrow traditionally friendly governments in the Middle East, Libya and Syria. In all these cases, Russia has learned the imperialist lesson that recognition of its vital interests by its partners does not come for free, that it must use all the means it has acquired to assert its interests and assert itself as a respectable power of greater caliber.

Russia therefore acts as an order establishing power on its own behalf and struggles worldwide for influence over third parties, with offers in the fields of energy and weapons; it offers itself as the first port of call for the (re)establishment of a just, multipolar world order in which the legitimate interests of every state are taken into account; and it has also been securing its rights with military force since the West’s war in Libya, which was waged against Russian objections: in Ukraine, in Syria. Integration into and subordination under the Pax Americana is out of the question; the American containment policy must be countered with all available means.[23]

This policy has brought upon itself the renewed and intensified declaration of hostility by the United States and the resulting economic war which takes advantage of the crucial weakness of modern Russia, its underdeveloped capitalism.

Putin prepares his people for a battle to assert the nation

In his speech to the Federal Assembly at the start of the presidential election, Putin announced to his people that they were once again facing a fateful question. However, he also wants to put them in the right mood by explaining to them their exceptional character as a people: They are characterized by the fact that they allow themselves to be attacked again and again by such existential challenges, only to emerge from them with greatness:

“It is at such turning points that Russia has proven, time and again, its ability to develop and renew itself, discover new territories, build cities, conquer space and make major discoveries. This unwavering forward-looking drive, coupled with traditions and values, ensured the continuity in the thousand-year-long history of our nation. We have gone through major challenging transformations, and were able to overcome new and extremely complex economic and social challenges.”[24]

And after this praise, with which Putin gives his people credit for their continued existence under rather uncomfortable conditions, he then comes to the current test of the durability of the unshakeable forward movement:

“All of us together must be able to see what is going on in the world, what is happening around us, and what challenges we are facing. The speed of technological progress is accelerating sharply. It is rising dramatically. Those who manage to ride this technological wave will surge far ahead. Those who fail to do this will be submerged and drown in this wave. Technological lag and dependence translate into reduced security and economic opportunities of the country and, ultimately, the loss of its sovereignty. This is the way things stand now. The lag inevitably weakens and erodes the human potential... It is high time we take a number of tough decisions that are long overdue. We need to get rid of anything that stands in the way of our development and prevents people from fully unleashing their potential. It is our obligation to focus all resources and summon all our strength and willpower in this daring effort that must yield results. Otherwise, there will be no future for us, our children or our country. It is not a question of someone conquering or devastating our land. No, that is not the danger. The main threat and our main enemy is the fact that we are falling behind. If we are unable to reverse this trend, we will fall even further behind. This is like a serious chronic disease that steadily saps the energy from the body and destroys it from within step by step. Quite often, this destructive process goes unnoticed by the body. We need to master creative power and boost development so that no obstacles prevent us from moving forward with confidence and independently. We must take ownership of our destiny.” (Ibid.)

Putin’s talk of “falling behind” is his way of describing the critical situation he sees his nation in, defined more precisely by the image of a “technological wave” that is confronting his people with the choice of victory or destruction. He explicitly does not locate the decisive danger on a military level – his people need not fear a new invasion, as their boss refers to all the new, brilliant means of war that he presents in the final part of the speech – but, significantly, on the level of the struggle for the competitive means of increasing capitalist productivity. With the image of the “technological wave,” he refers to the current competition between the leading nations for domination of the world market, for the monopolization of the decisive means of technical progress, information technologies, which are turning all conventional production processes upside down and setting in motion a huge devaluation of the previous productive forces.

In this area, Putin sees his nation facing the alternative: keep up or perish. According to Putin’s constantly repeated speech, Russia needs a “breakthrough” in “robotics, artificial intelligence, unmanned vehicles, e-commerce and big data processing technology.” Of course, this includes the enormous importance of these technologies for the military, because whoever loses out in this competition will have lost the status as a leading power once and for all:

“Russia must firmly assert itself among the five largest global economies, and its per-capita GDP must increase by 50 percent by the middle of the next decade. This is a very difficult task. I am confident that we are ready to accomplish it.” (Ibid.)

The message from Washington has therefore reached Moscow: The fact that Putin directly links the need to master technological progress with the threat of losing sovereignty is due to the escalation in America’s use of economic activity as a lever for attacking Russian sovereignty. The economic war through sanctions, combined with the offensive in the field of an arms buildup, which is also a kind of economic war, namely reviving the Reagan program of an ‘arms race to ruin Russia’ by overstretching its economic resources, is clearly and openly aimed at undermining Russia’s status as a power capable of acting autonomously. And the pathos with which Putin informs his nation that it is faced with the alternative of success or destruction, that it therefore must fight with the utmost urgency to assert its rights or, in the current escalation, to a certain extent for its existence, for its survival, contains the admission that Russia is being hit by the American economic war: lagging behind technologically, which has made Russia dependent on other nations, means a loss of “security” and even the threatened loss of state self-determination.

That’s why the people must once again take center stage

“Today, Russia ranks among the world’s leading nations with a powerful foreign economic and defense potential. But we have not yet reached the required level in the context of accomplishing our highly important task and guaranteeing people’s quality of life and prosperity. But we must do this, and we will do this. As I said in the past, the state’s role and positions in the modern world are not determined only or predominantly by natural resources or production capacities; the decisive role is played by the people, as well as conditions for every individual’s development, self-assertion and creativity. Therefore, everything hinges on efforts to preserve the people of Russia and to guarantee the prosperity of our citizens We must achieve a decisive breakthrough in this area.” (Ibid.)

On the one hand, the Russian state must pay particular attention “to people” and, above all, their “creativity” because of a subsection of global market competition, the so-called ‘brain drain’, the wave of emigration of the scientific and technical intelligentsia, which is robbing the nation of a great deal of human potential:

“Because new jobs, modern companies and an attractive life will develop in other, more successful countries where educated and talented young people will go, thereby draining the society’s vital powers and development energy.” (Ibid.)[25]

On the other hand, with the sanctions, which are now damaging Russian growth and thus also the living conditions of the people in general, the West is clearly targeting the dissatisfaction of the masses with the shabby living conditions in Russia and is trying to create, equip and ensure the success of an internal Russian opposition that is intended to incite the masses to revolt against Putin and his ‘inner circle’.

This concern is the reason for the peculiarity of Putin’s address to the nation – that literary genre currently used by many heads of state to make it emphatically clear to their people what is at stake. In contrast to Trump, who promises his ‘hard-working Americans’ a ruthless crackdown on foreign enemies, and in contrast to Macron with his fight against the welfare mentality of the poor, Putin makes the Russian state quite comprehensively responsible for the material living conditions of its people and promises them a huge boost in improvements in all areas. This is not so much because the old real socialist program of looking after the people has become appealing to him again, but rather for reasons of imperialist self-assertion. After all, the lack of mass prosperity in Russia is good agitation material and a target of attack for American policy to lure its base away from the Russian power, on the one hand by poaching its scientific and technological potential and on the other by inciting opposition within the country.

This is why the battle for the people’s morale is also part of the kind of national awakening that Putin is prescribing for his people: on the one hand, they are being enlightened about the rampant “Russophobia,” but on the other hand, praised for their ability to withstand all hostilities – this is what his government promises them, and it is guaranteed to help them develop this interesting ability in the future.

The loudly announced counter-sanctions are not really being implemented

In stark contrast to the USA, which, relying on its own strength, can afford to indulge in the contradictory sanctions policy and accepts that this will also damage its own economic interests, Russian policy-makers have clearly backtracked after initial statements about all the counter-attacks they could consider. On the one hand, Russia only has a few trade items whose withdrawal could damage America.[26]

Conversely, Russian politicians are certain that counter-sanctions in the form of import bans on American products would cause far greater damage to their own side.[27] And secondary sanctions, i.e. punishing foreign companies that submit to the American regime, are certainly not being considered, not least because of warnings from their own banks and business community:

“Herman Gref, head of the state-owned Sberbank, warned at the start of the economic forum against Russia following the US model and threatening penalties for companies that submit to US sanctions and therefore restrict their business in Russia. This threatens the foreign investment that Russia needs to modernize, said Gref.” (Junge Welt, May 26, 2018)

“‘It [the law] must be balanced and not harm our own economy or those of our partners working in Russia,’ Putin said at a press conference after talks with German Chancellor Angela Merkel.” (TASS, May 18, 2018)

Ultimately, Russian politicians are only too aware of the dilemma that their own growth program stands or falls with the benevolent treatment of the states that dominate the world market. The decision to establish a brilliant capitalism has by no means brought in the necessary masses of capital – quite the contrary. With its still modest capital resources – compared to powerful business locations – and its relatively limited market, the country has little to counter the sanctions which force all business activists to choose between doing business with the USA or Russia. Instead of effective counter-sanctions, Russian politicians are therefore focusing on a program to mobilize all resources within the country.

A struggle to rearm the national economic base – an involuntary assessment of the damage caused by the system change from the perspective of national self-assertion

The acknowledgement of the need to make Russia less vulnerable through internal development is identical with the admission of the economic emergency; Foreign Minister Lavrov invokes a spirit that must take hold of the nation,

“to build up our own capacity in key sectors of economy, security and other areas on which an independent state depends. In the recent years, we have learned a lot, including the fact that in these issues you cannot rely on the West. You cannot rely on Western technologies, because they can be abruptly stopped at any moment. You cannot rely on the items, which are essential for the day-to-day living of the population, coming from the West, because this could also be stopped. So, we are certainly drawing lessons.” (Foreign Minister Sergei Lavrov in an interview with Channel 4, Moscow, June 29, 2018)

Putin promises Russia a “groundbreaking development”

In presenting the program for his upcoming term in office, Putin goes through the complete list of state tasks in Russian: Major tasks are announced for the ideal total capitalist in a giant empire that has not fared well during the transformation: the whole country must be made usable for capitalism, zones that have long been left behind and neglected must be re-developed, which includes the complete renovation of the infrastructure: transport routes, energy, communication networks... The transition to Industry 4.0 must be managed with its own resources, with “mega science research facilities” to be created: World-class science and research along with a corresponding national education system. The people themselves represent a major task for the welfare state; it requires the maintenance of this most important growth condition, which has suffered considerably from the capitalist turnaround. “By the end of the next decade, Russia must confidently join the club of countries posting a life expectancy of 80-plus years, which includes Japan, France and Germany... For this purpose, the whole of Russia will have to make a quantum leap in its development.” (Address to the Federal Assembly, op. cit.) Health care, housing construction, competition for the best brains ... all this must be done in order to create a viable wage-earning class.

The program, a list of grandiose state promises for a great leap forward, thus presents a complete balance sheet of the national deficits, including in the form of the great nation’s actually existing, but idle, squandered resources.

Import substitution with some success

The so-called transformation has placed an almost self-sufficient national economy, committed to the production of use values, under the directive of profitable production, while at the same time exposing it to competition from capitals capable of operating on the world market and thus ruining it on a large scale.[28] Because imports have replaced national branches of production or technological potential, and with them a whole host of material dependencies[29] which American policy is now exploiting for its punitive measures, Russia is in need of a “re-industrialization.”[30]

The interests of EU capital can be relied on to some extent, as it will not allow its speculation on the large Russian market to be taken away so easily: One effect of the sanctions is an increase in the export of capital from the EU to Russia. Firstly, euro capital simply cannot and will not ignore such a large market; secondly, the fall in the ruble’s exchange rate has created favorable conditions for productive investments in Russia; thirdly, Putin has also created incentives for this, which not least the famous German mid-sized companies are very happy to take advantage of.[31]

Russian policy is also focusing on the damage America is causing in Europe and is trying to use the growing European anti-Americanism as a lever. Putin is repeatedly explaining to his European business partners what America is doing with its destruction, also in order to bring the political guardians of EU capital to his side:

“Until recently, global development was based on two most important, determining principles. The first is the freedom of business, trade and investment, which is recorded in the general rules adopted by the participants in international relations. The second is sustainability and predictability of these rules, which is guaranteed by clear-cut legal mechanisms. However, today we are witnessing not even erosion – and I say this with regret – but the undermining of these foundations. The system of multilateral cooperation that was built for decades is being crudely destroyed instead of undergoing natural and needed evolution. Violating rules is becoming a rule...
There are many businesspeople in the audience, and you know all too well that when one of the parties to a contract withdraws from the legal framework, the breakdown of agreements always creates substantial risks and losses. This is a fundamental truth for any business. On a global scale, when entire countries and centers of gravity act this way, this may pave the way to the most destructive consequences. This rings especially true today, when disregard for the existing norms and the loss of mutual trust may overlap with the unpredictable nature and turbulence of the ongoing radical technology transformation.
This combination of factors may trigger a system-wide crisis that the world has never faced or has not faced for a long time. It will affect all participants in the world economic relations without exception.... In effect, this may throw the global economy and trade far back into the past, into the era of subsistence farming when every household had to produce everything itself. This inevitably reduces economic efficiency, lowers labour productivity and wastes scientific and technological achievements that can change life for the better.” (St Petersburg International Economic Forum plenary session, May 25, 2018)

When he’s right, he’s right, and he also receives a lot of applause from this audience, including Macron and Abe. However, it is once again the US sanctions that are putting the business interests of these partners to the acid test of which damage they prefer: the loss of business with Russia or the loss of business with America.

The Russian financial system: The struggle to meet the criteria of sound money, which Russia still wants to prove itself by

As he goes through the list of tasks in the name of national self-assertion, the President finally comes to the critical point of the condition of possibility: what must and what can the state budget achieve, what is Russia’s economic power sufficient for in the competition imposed on it by America, and what is it not sufficient for? On this delicate question, the President is remarkably brief and slightly contradictory:

“Let me emphasize that we need such fiscal solutions that would ensure budget revenues at all levels and guarantee the implementation of all social commitments. Importantly, they should encourage rather than impede economic growth. It is the build-up of economic potential of the country and each of its regions that is the main source of additional resources. To achieve this, our economic growth rates should exceed those of the world’s. This is a difficult task but not instance case of wishful thinking.” (Address to the Federal Assembly, ibid.)

A somewhat revealing denial: the government spending required to generate such growth should firstly not “hinder” the same growth, but secondly should reach such dimensions that the world’s highest growth rate is achieved. It’s as if the current budget were not already burdened by all the repairs that the sanctions have made necessary.

The experts are reporting on the effects of sanctions on the Russian financial system with remarkable narrow-mindedness, insofar as they have discovered a number of Russian successes: for example, Russia has drastically reduced its foreign debt:

“The main effect of the sanctions at present is that Russian banks have to take over lending to the sectors to which the measures apply. But even that has not been bad for the country. Without the possibility of rolling over their external debt, many companies and government agencies paid it off more quickly as a (probably unintended) result. Russia’s external debt has fallen to $75 billion by the end of 2015, half the amount before the sanctions were imposed.” (Stratfor, June 1, 2017) [32]

The yardstick for this disgruntled success story is obviously the fact that Russia has not yet been forced to declare state bankruptcy, that with its extensive exports of raw materials and corresponding foreign exchange earnings it can’t be so easily driven into a “debt trap,” on the basis of which good behavior can then be dictated to the nation. However, this view ignores the fact that the alleged success is identical with the partial withdrawal from the international financial market, that Russia is thereby also cut off from access to the capitalist means of growth in general, international credit.

The programs to reduce the foreign debts of companies and regions, as well as the efforts of the National Bank to combat the decline of the ruble caused by sanctions and the fall in oil prices, have strained foreign exchange reserves and sovereign wealth funds accordingly. In the face of past, new and announced attacks, Russia continues to struggle to preserve and build up its financial reserves and “stabilize” its currency in order to present the ruble to the international business community as a – relatively – viable commodity; it is diligently trying to control the budget deficit and public debt and is drawing up a corresponding austerity budget which primarily tackles a major pension reform. The by far largest item in the budget is to be reduced by raising the retirement age. This measure – which by local standards is actually sensible and long overdue – has aroused great sympathy in the West for the afflicted Russian pensioners, as it rekindles certain hopes: despite the great national circus surrounding the World Cup, Putin is unable to prevent the population from protesting vigorously. His popularity ratings are plummeting, and Western speculation that his term of office will come to an end is once again gaining momentum.

This also helps to make the hard core of his message clear to the people: The bold announcements about a great leap forward in improving the general standard of living are reduced to the program that Russia and its inventory must be able to withstand the blows dealt to it by the American economic war.

A fight for continued use of a world market from which America wants to exclude Russia

Despite the severe sanctions, Russian diplomacy constantly emphasizes its willingness to cooperate in international business, and this is more than just a diplomatic phrase: against the American efforts to gradually squeeze Russian capital out of the world market, it insists on taking advantage of the world market – precisely because of the fundamental emergency into which the entire economic structure has fallen thanks to its integration into this beautiful institution.

The nation is fighting back with the means at its disposal. It is fighting to maintain its international solvency, is increasing its exports of oil and gas, is increasingly cooperating with OPEC and Saudi Arabia as one of the largest exporters in order to influence the oil price, and is even profiting from its rise once again after Trump announced his sanctions against Iran.

However, the fact that the overwhelming American power over the world of states circulates in the form of green slips of paper on which not only the entire oil business is based, but also the entire institution called the world market, has not gone unnoticed by Putin.

“We need to increase the level of our economic sovereignty, but this is not an easy matter to decide. Oil is traded in dollars. Of course, we are thinking about what to do to free ourselves from this burden... It is not just about separating from the dollar; it is also about the need to strengthen our economic sovereignty. Our gold and foreign exchange reserves are being diversified, and we will continue to do so.” (TASS, May 8, 2018)

Under the threat from America to ban all Russia from all trade with the dollar, the Russian National Bank is trying to save the value of its reserves by selling large parts of its dollar securities:

“Russia has apparently significantly reduced its holdings of US government bonds this spring... In April alone, the central bank sold US securities worth 47 billion dollars. That is about half of the holdings held in Moscow. At the same time, the Russian central bank continued to buy gold. In the second quarter of this year, the holdings rose from 1,857 to 1,909 tons. This means that Russia’s gold reserves are now the second highest in the world outside the USA, held under its own sovereignty. Just behind it among the gold-hoarding nations is China, with 1,843 tons of the precious metal in the National Bank’s safes. Both countries have systematically increased their gold holdings since the beginning of the global political confrontation – in Russia, for example, from 1,352 tons in the summer of 2015 by almost half within three years.” (Junge Welt, June 29, 2018)[33]

The National Bank is reacting to the ongoing threats to exclude Russia from the SWIFT payment system with a mixture of optimism, technical planning games and horror:

“According to Russian Deputy Prime Minister Arkady Dvorkovich, Russian banks and financial institutions are preparing to leave the SWIFT system... ‘Certainly, it is unpleasant because it will be a stumbling block for companies and banks and will slow down work. It will be inevitable to use some older technologies for information transfer and calculations... In general, Russia’s detachment from the SWIFT system would be an insane step from the point of view of our Western partners. It is obvious that this would be detrimental to companies working in Europe and the USA’...

Last year, central bank head Elvira Nabiullina said that the banking sector had made all the necessary arrangements for the continued exchange of lenders and payment systems in the event of a SWIFT disconnection. According to the central bank, 90 percent of ATMs in Russia have been prepared to accept the Mir payment system, a domestic version of Visa and MasterCard. The Mir payment system was introduced in 2015 after customers of several Russian banks (SMP Bank, InvestCapitalBank, Russia Bank and Sobinbank) were unable to use Visa and MasterCard due to the sanctions.” (Deutsche Wirtschafts Nachrichten, Februart 15, 2018)

“Russia’s alternative to SWIFT ... The Russian Central Bank is considering the possibility of using the Ethereum blockchain technology Masterchain (a joint development of the FinTech Association, the authority and Russian banks) to create a single payment space in the Eurasian Economic Union (EAEU). The system for transmitting financial information based on blockchain technology is intended to take over financial communications from SWIFT. At the first stage, the platform will operate only in the country, while the authority plans to later use it as the basis for all financial transactions between EAEU members.” (TASS, April 18, 2018)

Contrary to the optimism that Russia also has its IT geniuses who have already created a blockchain that could possibly also work in the Euro-Asian economic alliance, the national bankers are obviously already somewhat aware of what it means to be excluded from the system for processing international payments: In this fundamental way, the nation is simply rendered internationally insolvent,[34] economically excommunicated as it were, excluded from the monetary transactions on which the nation lives. This is something that the USA has already practiced on Iran with resounding effect and is currently putting back on the agenda.

The effort to form alliances against America, which, however, has its price – see China

“In addition, our partners are helping us when they introduce all these illegal restrictions and violate the principles of global trade, because then the whole world sees that the dollar monopoly is unreliable; it is dangerous for many, not just for us.” (Putin, TASS, May 8, 2018)

It is certain that “our partners” are letting the whole world feel the destructive consequences that they are capable of by using the dollar, the unassailable world money and main source of credit, as a lever for their economic war. It is unlikely that this fact will “help” Russia because the non-American rest of the world will have to recognize the need to stand together and united against the USA.

Russia cannot count on any kind of help from one of its most important business partners, the EU. On the one hand, Europe is caught between a calculated compliance with the American sanctions policy, partly due to its own dealings with Russia – see, for example, the case of Ukraine – in which it “punishes” Russian resistance to its eastern expansion with its own reprisals. On the other hand, the EU, above all Germany with its Nord Stream 2 project, is suffering from the economic damage it has already suffered or is threatened with as a result of the secondary sanctions and is trying to defend its business with Russia against the USA with a mixture of subordination and insistence on its interests. In any case, there is not much left of the “strategic partnership” with Russia once hopefully announced under Chancellor Schröder other than Merkel’s stereotypical announcement of how important it is “to remain in contact” in order to save as much as possible of its own influence on Russia and its economic exploitation.

What Russia can at best achieve with its search for allies, e.g. with regard to Turkey, are approaches to a collection of states that have also been harmed by America, but also to a collection of states that are less suitable for providing effective aid, but more often actually cause burdens and costs – see Venezuela, Cuba, Iran and also Syria.

Russia is doing its best to compensate for the business damage caused by the sanctions by increasing its offers to alternative business partners,[35] but these segments of the global market are not suitable for a substantial replacement. The major exception in these attempts to form an alliance of victims, of those harmed by the USA, is China, which also ranks prominently in the identification of America’s main enemies and which is becoming, due to its economic power, increasingly indispensable for Russia’s struggle to assert itself. However, what Russia is buying into with this alliance has less to do with brotherly help and more to do with this great power pursuing its own calculations in this relationship in a very determined and systematic way.

China has proved itself both as an accomplice in circumventing sanctions and, above all, as a lender to Russia.[36] It is unlikely to have escaped the Russian government’s notice that Chinese aid is very clearly focused on which Russian potential is deemed useful for the Chinese world power project and which is not: China is exploiting Russia’s imperialist plight to increasingly transform it into a Chinese raw materials base.[37] In the arms trade, it has successfully blackmailed Russia into no longer just selling equipment, but also the licenses for China’s own production, i.e. into relativizing its own role as a military supplier and the associated position of power.

Nor are Putin and Co. likely to have overlooked how China is using its financial capitalist power to bind the participants of the Eurasian Economic Union to itself as part of the Silk Road project across the whole of Asia to Europe, thereby undermining Russia’s dominant position in the economic alliance with the former Soviet republics, i.e. using textbook imperialist logic to expand its power by capturing entire states through credit, even at the expense of its Russian alliance partner. Western competitors are spitting venom in face of the fact that China is successfully copying their own method of subordinating other states, namely driving entire countries into the debt trap with its masses of credit, i.e. “developing” them from a Chinese perspective, of course. Putin, on the other hand, has little choice but to thank China for its efforts for their mutual, but very different, benefit:

The Silk Road strategy with the Eurasian Economic Union “is vital for us, because China is our largest trade, economic and strategic partner in the broadest sense of the word. It is China with whom we trade most: over 63 billion...Now, as far as the idea of the Silk Road is concerned, I have repeatedly said that it is absolutely compatible with and matches the development of the Eurasian Economic Union and the broad partnership in Asia that we have proposed...China has joined our biggest projects, including in the Arctic. For example, we have recently launched phase one of the Yamal LNG plant...We have a wonderful high-speed rail project. That is what the Silk Road is actually about. We will gladly support high-speed traffic from China to Western Europe through Russia...We have large-scale projects in high-tech sectors, space, aviation and so on.” (Vladimir Putin's annual press conference, December 14, 2017)

In order to make its own foreign trade at least partially independent of the obligation to trade in dollars, Russia has also agreed to accept the yuan as a means of payment for its oil exports to China, making itself a servant to China’s emergence as a world power in this respect too.

After all, a common enemy is also the best reason and glue for friendship between states in the East, which is reflected not least in the growing military cooperation between the two powers with large-scale maneuvers. The question, however, is how united this enmity against the USA really is.

III. The US fight against Russian subversion on the Internet continues. Attention, the enemy is blogging!

Ever since Trump dared to meet with Putin in Helsinki, evocations of the acute danger of Russia undermining the upcoming ‘mid-term election’ campaigns in the fall have escalated in America. With this accusation, the charge of other Russian cyber crimes such as allegedly interfering in American energy networks, the exposure of a Russian spy who is said to have infiltrated the National Rifle Association (the only question is what do you use to infiltrate trigger-happy Americans), and the usual accusations directed at Putin, American politicians and the media are organizing a persecution mania that is gradually becoming quite similar to the spirit of the McCarthy era, even if there is no longer the slightest hint of communism in America.

The campaign uses the new danger diagnosis in the matter of ‘fake news’

The US Director of National Intelligence, Coats:

“Russia aims to ‘undermine our democratic values and drive a wedge between our allies... It is not just about the ongoing election campaign. It is an information war.’” (Ntv, August 8, 2018)

To ensure proper acknowledgement of the simple fact that Russia or Russian bloggers attempted to tap into national public opinion in order to provide election campaign support for Trump and the Republicans, this intention is being blown up into something even more fundamentally hostile, at the very least an attack on the institution of elections, if not – and this is obvious – an attack on democracy in general. As a result, interesting victims are incurred, “unsuspecting Americans” who roam the internet with their opinions and allow themselves to be seduced by their feelings in the face of social problems. Adam Schiff, the leading Democrat on the House Intelligence Committee:

“‘Foreign influence actors remain readily capable of manipulating raw emotion and societal divisions to prey on unsuspecting Americans who use these same social media tools for legitimate political expression, organization, and advocacy.’” (Quoted in: Anti-Racism Groups Feel Tarred by Facebook’s Fight Against Fake Accounts, Foreign Policy, July 1, 2018)

Politicians like Coats and Schiff consider it completely irrelevant what is correct or incorrect, intelligent or nonsensical about the messages the Russians are using to attack unsuspecting and gullible Americans; what false reports they are using to emotionally stir up and divide the good people (instead of modeling themselves on the love of truth and spirit of reconciliation broadcast on, for example, Radio Liberty and Radio Free Europe). But what the public can’t be told often enough to make them realize this is, firstly, that Russia has reprehensible intentions in principle and, secondly, that it is capable of carrying them out. In short: an enlightenment of the public that contrasts pleasantly to Russian manipulation!

When you then get to hear what the alleged Russian trolls are supposed to have launched in this way, you wonder to what extent this is supposed to be classified as a national threat at the highest level, namely as “information warfare,” as part of a “hybrid warfare.”

The character of the Russian attempts to impress a foreign public in the Russian interest

The Russian media that is calculated to make an external impact – see Russia Today, SputnikNews, etc. – obeys a simple principle, that of the political-moral tit-for-tat.

Russia has gone on the offensive in the field of international public opinion, following from the Russian complaint about Western anti-Russian propaganda, the complaint about the application of so-called “double standards.” This refers to the standards of Western values, the duality of market economy and democracy, on the basis of which Russia is increasingly being accused of violations and crimes. These accusations are being serially manufactured with great diligence according to the pattern that has been tried and tested over decades of anti-communism: that the descendants of the Tsar in the Kremlin systematically violate everything we hold sacred: autocracy, dictatorship, terrorizing opinions instead of granting them freedom; state economy and suppression of initiative instead of a free business system. In contrast to the former enemy image, the only thing that has really changed is the role of the accusation of “corruption,” which had rather less weight against the Soviet Union than it does today, where it is often claimed to be the real purpose of the Russian national economy.

The political class in Russia feels increasingly insulted by this agitation and the political treatment it is receiving – and with some justification: after all, its entire project of putting the nation on a new footing is based on the “insight” that the Western system is superior. Their struggle to reverse the devastating effects of the Yeltsin era on their economic foundations still obeys the program of converting the legacy of Soviet industry and agriculture into a collection of capitalist sources of money. And the establishment of a party competition with the corresponding elections and a democratic cult of personality, the establishment of a public sphere in which the nationwide discontent can be vented just as easily as it can be taught a lesson, copies nothing other than the great Western model.

It is also no wonder that the whole thing does not work nearly as smoothly as in the home countries of these standards – if there were a foolproof recipe for creating a successful capitalism, the world would not be full of ‘failed states’. After all, the Russian awakening took place in a world market that is already occupied by a host of powerful players and in which the principle of opening up is nothing more than proof of one’s own lack of competitiveness, of being ranked in the hierarchy of sovereigns as a state that actually has nothing to offer apart from raw materials and weapons – because everything else has been thoroughly destroyed by the directive from above to excel in profitability.

It is a sad joke that the anti-Russian furor in the Western camp draws its material from, of all things, Putin’s attempts to use every available power to make the post-Soviet disaster into a potent capitalist location; but why should one also take note of the extremely free-market purpose of rule in Russia if one wants to denounce Russia’s attempts to re-establish itself as a serious world power as a single violation of the sacred principles of Western governance?

In the face of this hostility, Russian politicians have decided to counter it. The Kremlin leadership has launched its counter-propaganda against the anti-Russian propaganda with organs such as Russia Today or SputnikNews: Russian public relations workers inspect conditions in the leading Western nations and the world they rule up and down, from America to Somalia, meticulously examining every phenomena that can be used to demonstrate to Western moral judges that they themselves are constantly and everywhere violating their own noble principles, i.e. applying double standards in a deceitful way. This is intended to prove that the Western authorities have no right to take on the role of supranational arbiters of good governance, or to constantly “teach lessons” to Russia. Using the yardstick of these fine “principles” and “standards,” whose appointed guardian the new Russia declares itself to be, the Russian educational campaign serves up to its addressees the moral stupidity that no one who has skeletons in their closet should presume the right to criticize.

The growing hostility from the West is presented to its own nation as increasing “Russophobia,” i.e. as a kind of viciousness for no reason. It is impossible to find any reasons for this bad habit of phobia; at best, the topos of the “old way of thinking” is invoked once again, which, puzzlingly, has still not died out in the West even after the system has been changed for 28 years ...

In this way, the new Russia is waging a public battle for recognition as an equal power, a power that does not have to put up with being lectured to and patronized by the West – and with this kind of propaganda is reaping the contemporary renewal of the accusation of subversion: namely, according to Adam Schiff’s accusation, the manipulation of “unsuspecting Americans” who, with their “simple feelings,” are apparently also often upset about social grievances in America.

After all, what Russia has done wrong with its counter-propaganda is to draw attention to itself in the American election campaign. The Russian state leadership was one of the few – if there are any others – that warmly welcomed Trump’s election and campaigned for it in the run-up, for the simple reason that it had already had its experiences with Hillary Clinton in Obama’s administration as an agitator against Russia. Advertising for Trump on the internet, combined with references to American grievances that need fixing, in order to mobilize American voters for a President Trump with a less pronounced hostility toward Russia – that is nothing less than, in Coats’ words, “undermining our democratic values.”

“Russiagate”

Ever since the Democratic Party decided to blame Russian actors and machinations for its loss of voters following revelations about its scheming against Bernie Sanders and the FBI’s renewed investigation into Hillary Clinton and her emails during the election campaign, the allegation that Russia’s aim is to undermine free elections has never disappeared from American politics.

Rather, it has become a dominant theme because, firstly, this characterization of new types of Russian subversion in America represents the most attractive “argument” for all the opponents that Trump has acquired with his fight against the political establishment and its media and who want to get at him: a case of collaboration with the enemy – of whatever kind. And secondly, this weapon works so well because Russia simply does not feature prominently in Trump’s view that the world denies that America comes ‘first’. Instead, Trump’s various expressions of sympathy toward Putin as a strong leader of his ilk, a number of contacts between the Trump entourage and Russian diplomats or alleged Putin confidants are used as material for the suspicion that he might be a puppet of Putin.[38] This may be pretty bonkers for a protagonist who has nothing on his mind other than “America first!” but the campaign is in no way embarrassed by this; after all, when it comes to the venerable campaign tactic of damaging reputations, there is nothing more devastating in America than the suspicion of ‘un-American activities’. And in the internal American power struggle over Trump’s performance in office, these clues have long since become the basis and material for constitutional proceedings against him and his entourage – the Mueller Commission and its investigations, which the large team of Trump opponents is pursuing with the hope of a possible impeachment.

This campaign reaches a provisional climax after the summit in Helsinki, at which Trump does not make the slightest American concession to Putin in any area – apart from diplomatic recognition in the form of the summit, at which the two sides act as equals instead of Putin being treated like a delinquent who deserves nothing but a list of accusations and diplomatic snubs. This performance is bad enough in the eyes of Trump’s critics. But what then brings down the holy wrath of the entire political class on Trump is his refusal to face the provocative question from a US journalist about who he believes more: US intelligence services or Putin’s assurances that he did not manipulate the American election campaign. With reactions ranging from horrified to furious from the upper echelons of American politics, this is denounced as “a betrayal” of the national intelligence services, that bastion of objectivity (see, for example, their findings about Saddam’s weapons of mass destruction, which were later never found and served as the justification for the need to go to war with Iraq). With this patriotic tantrum, America’s political class puts on record that the nation’s highest representative, in exercising his freedom to revisit and redefine policy guidelines, has gone against one of the highest American values: the identification of Russia with absolute evil, as the abominable antithesis of the good America that must be fought and eliminated at all costs. Meanwhile, not only Trump’s traditional enemies in the Democratic Party and the established media, but also the majority of Republicans and even some in the circle of Trump advisors try to save this essential part of the American reason of state from the escapades of his “erratic” personality. America’s political representatives are almost unanimous in their view that any improvement in relations with Russia, even an atmospheric one, would be a betrayal of the nation’s security; they insist not only on continuing the containment policy of Obama and his predecessors, but are also determined to tighten it.

Back or forward to McCarthy: Criticizing America is subversion

In this sense, the alleged Russian manipulations in the current election campaign are being played up again, and the American social media giants are doing their best to fulfill their patriotic duties and expose whatever can be exposed in some way:

“In the past two weeks, the company has identified 17 questionable Facebook accounts, 8 Facebook pages and 7 Instagram accounts, has since investigated them more closely and finally taken them offline on Tuesday morning. The American law enforcement authorities, Congress and other technology companies have also been informed of the discovery.” (NZZ, July 31, 2018)

It doesn't matter that Russian interference in the true sense of the word has not been proven:

“It is still not clear who exactly is behind the false identities, Facebook writes in the blog post... However, the New York Times reports that Facebook employees have also informed members of Congress that Russia may be involved again... However, both Gleicher [Head of Cybersecurity Policy at Facebook] and Facebook’s security chief Alex Stamos avoided attributing the false accounts to specific actors – such as Russia – in their official statements. Attribution in the digital space is too difficult to draw hasty conclusions, wrote Stamos.” (NZZ, July 31, 2018)[39]

“Possibly,” “highly likely,” the formula invented in the Skripal case for absolute certainty of Russian responsibility, is based on the logic of suspicion as its guiding principle. And it operates by foisting the intention to divide the country onto various protest movements and then using this intention to draw conclusions about the – presumed, probable – puppet masters in hostile foreign countries:

“According to Facebook, the accounts and pages in question once again had the aim of fueling polarization in the country: Among other things, they called for a total of 30 protests for women’s rights, for the rights of people of color, against colonialism and against fascism. For example, a group called ‘Resisters’ planned a counter-demonstration to a rally of the right-wing nationalist ‘Unite the Right’ movement in the capital Washington on August 10; this has now been cancelled. 600 Facebook users had already announced that they would attend the event and another 2,600 had expressed interest. They have now been informed about what the rally is all about.” (NZZ, July 31, 2018)

The fact that the aforementioned conflicts all stem from American society and politics itself and that Russian propaganda can only have an effect if it falls on fertile ground among American citizens is of little concern to the prosecutors. In this modern hunt for foreign agents and subversives, it is inevitable that genuinely American protest groups will also come under fire, especially since their left-leaning concerns make them suspect in a completely different sense. Although they do not at all fit into the anti-Russian and anti-Trump-oriented predatory scheme of this public, they fall even more under the heading of ‘anti-American activities’:

“Anti-racism activists are complaining that Facebook’s decision to remove an event page announcing their upcoming rally in Washington, D.C., on the suspicion that the page was part of a Russian disinformation campaign, has created the false impression that their protest was a Kremlin operation.” (Anti-Racism Groups Feel Tarred by Facebook’s Fight Against Fake Accounts, Foreign Policy, July 1, 2018)

Anyone who is going to protest and thus merely denigrate America must put up with being scrutinized whether they are not a fifth column for the Russians.

*

The efforts of the political superstructure to nail Trump down to hostility to Russia as America’s indispensable task are of course not limited to sounding the alarm about the new, monstrous danger of Russia undermining American freedom of opinion and choice.[40] At the same time, various initiatives are being launched in Congress calling for a tightening of the sanctions policy toward Russia in order to prevent the President from taking unilateral pro-Russia actions. As before, the initiators know that they have an overwhelming majority behind them when it comes to pushing ahead with sanctions against Russia in order to render a presidential veto ineffective. In any case, this is convincing proof of the effectiveness of American democracy and its checks and balances: the people’s representatives are saving the nation from losing its primordial American right to keep and treat Russia as an enemy. The fact that this enemy has long since lost the stature of the Cold War-era adversary and, according to Obama, is now only a “regional power,” that its capabilities – with the exception of its weapons potential – in no way come close to America’s imperialist powers, obviously does not diminish the American need for such enmity in the slightest, but rather increases it.

---

[1] National Security Strategy (December 18, 2017), NSS in the following; National Defense Strategy (January 19, 2018), NDS; Nuclear Posture Review (February 2, 2018), NPR.

[2] “Economic tools – including sanctions, anti-money laundering and anti-corruption measures, and enforcement actions – can be important parts of comprehensive strategies to deter, coerce, and constrain adversaries.” (NSS)

[3] “The US sanctions are part of a long list of sanctions regimes against the Soviet Union and the Russian Federation. In 1948, the US began imposing sanctions against the USSR for the first time. Some sanctions, such as the Jackson-Vanik amendment, remained in effect until 2012. However, the Jackson-Vanik amendment was immediately abolished and replaced by the US Magnitsky Act. Thus, the various US governments have been imposing sanctions against the Soviet Union and Russia continuously for 66 years.” (dip21.bundestag.de)

“By denying the Soviet Union most-favored-nation status, the amendment blocked the Soviet Union (and later Russia) from permanent normal trade relations as long as it did not allow religious minorities, especially Soviet and Russian Jews, to emigrate. After the collapse of the Soviet Union in 1991, Russia allowed unrestricted emigration. The Clinton administration then found that Russia met the Jackson-Vanik conditions. The same was later true for the Bush and Obama administrations. However, a resolution by Congress was required to abolish the amendment’s application to Russia.” (ifsh.de)

[4] As part of Putin’s program to enforce his economic entities’ obligation to pay tribute to their state power, a dispute also arose with the largest foreign investor, the American Hermitage Fund, over illegal financial operations, in which its Russian lawyer accused Russian financial officials of corruption, was arrested and died in prison in 2009. On the basis of the aforementioned law, the USA imposes entry bans on the officials and political leaders in question and blocks their accounts in America.

[5] When introducing the new legislation, Trump complained about the attack on his presidential powers:

“Since this bill was first introduced, I have expressed my concerns to Congress about the many ways it improperly encroaches on Executive power, disadvantages American companies, and hurts the interests of our European allies. My Administration has attempted to work with Congress to make this bill better...Still, the bill remains seriously flawed – particularly because it encroaches on the executive branch’s authority to negotiate. ...Yet despite its problems, I am signing this bill for the sake of national unity.” Statement by President Donald J. Trump on Signing the “Countering America’s Adversaries Through Sanctions Act” (August 2, 2017)

[6] “Lawmakers in the United States have been pushing the Trump administration to crack down on Russia, and now they’re setting their sights on multinational banks to tighten the noose around Russian President Vladimir Putin’s vast financial empire.Democratic Sens. Jeanne Shaheen and Sheldon Whitehouse sent a letter to the CEOs of eight major banks – three from the United States and five from Europe – requesting details on the accounts and assets of Putin’s top allies, following the Treasury Department’s publication of a Russian ‘oligarch list’ that coincided with new sanctions. The letter, the first of what could be an opening salvo on banks amid Washington’s scurry to harden institutions against Russian influence, is designed to shine a light on potentially dirty Russian money in Western financial institutions...‘This is a very, very big problem, and quite frankly the only ones who can get close to illustrating the scope of the oligarchs’ reach in our financial system are the banks. We need them to help us with this,’ the aide adds....Whether the banks reply with the information the senators are after is still to be seen, but it may not even matter. Much of Russian money is kept in real estate, not in U.S. banks, which is in ‘Congress’s court rather than in the bank’s court,’ Peter Harrell, who formerly worked on sanctions at the State Department ...U.S. banks require some information and identifying information for those who open accounts. Real estate purchases, however, require much less. ‘Consequently, it has become much, much easier for Russian oligarchs to buy real estate in the US than to keep their money in the US financial system,’ Harrell adds. ‘When is Congress going to take this issue up?’” (Foreign Policy, April 26, 2018)

[7] “Washington is increasing pressure on EU tax havens in order to position Russian oligarchs against Moscow... According to Cypriot media reports, at the beginning of May a State Secretary from the US Treasury Department visited Nicosia and put a gun to the head of the local government. If it did not ‘cooperate’ in the fight against money laundering and terrorist financing, the country’s financial sector as a whole would come under increased surveillance by Washington. And so in the last days of May the Central Bank of Cyprus issued a circular to the country’s commercial banks. They were to demand detailed information from the letterbox companies in the country about their owners and beneficiaries, including tax assessments for several years retroactively, and in the case of natural persons, police clearance certificates and what not... In March, Washington had done this in Latvia. At that time, US accusations against the Baltic country’s third-largest bank that it was organizing money laundering for shadow companies from North Korea and Iran had driven it into bankruptcy within a week. Although or because the majority of their customers came from Russia. The government in Riga then hastily issued new regulations that were supposedly intended to increase transparency in the country’s banking system.” (Junge Welt, June 9, 2018)

[8] “The Trump administration is edging closer to imposing sanctions on energy companies from Germany and other European countries in a bid to scuttle the construction of a politically contentious Russian gas pipeline across the Baltic … ‘We have been clear that firms working in the Russian energy export pipeline sector are engaging in a line of business that carries sanctions risk,’ a State Department spokeswoman said. ...Trump has complained that Berlin is spending billions of dollars on the pipeline while refusing to earmark more money for defense...He has also criticized Germany repeatedly for its trade practices.” (Foreign Policy, June 1, 2018)

[9] “‘The Russian government operates for the disproportionate benefit of oligarchs and government elites,’ said Treasury Secretary Steven T. Mnuchin. ‘The Russian government engages in a range of malign activity around the globe, including continuing to occupy Crimea and instigate violence in eastern Ukraine, supplying the Assad regime with material and weaponry as they bomb their own civilians, attempting to subvert Western democracies, and malicious cyber activities. Russian oligarchs and elites who profit from this corrupt system will no longer be insulated from the consequences of their government’s destabilizing activities.’ ...All assets subject to U.S. jurisdiction of the designated individuals and entities, and of any other entities blocked by operation of law as a result of their ownership by a sanctioned party, are frozen, and U.S. persons are generally prohibited from dealings with them. Additionally, non-U.S. persons could face sanctions for knowingly facilitating significant transactions for or on behalf of the individuals or entities blocked today.” (home.treasury.gov, April 6, 2018)

[10] “Oleg Deripaska is being designated pursuant to E.O. 13661 for having acted or purported to act for or on behalf of, directly or indirectly, a senior official of the Government of the Russian Federation, as well as pursuant to E.O. 13662 for operating in the energy sector of the Russian Federation economy. Deripaska has said that he does not separate himself from the Russian state. He has also acknowledged possessing a Russian diplomatic passport, and claims to have represented the Russian government in other countries. Deripaska has been investigated for money laundering, and has been accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering. There are also allegations that Deripaska bribed a government official, ordered the murder of a businessman, and had links to a Russian organized crime group.” (home.treasury.gov, April 6, 2018)

“Deripaska is the sole owner and chairman of the board of directors of Basic Element, a diversified investment group founded in 1997... Its major assets include United Company Rusal, the producer of aluminum and alumina; the GAZ Group, an automobile group; Ingosstrakh, the country's oldest insurance company; Bank SOYUZ; Aviakor aircraft manufacturer; EuroSibEnergo, an investment and energy company; Glavmosstroy, a construction company; Kuban Agroholding, an agricultural company; and Basel Aero, an aviation company consisting of the four largest airports in the Krasnodar Territory...
Basic Element also owns companies and subsidiaries in Russia, the CIS countries, Africa, Australia, Asia, Europe, and Latin America. The group employed around 200,000 people worldwide in 2015... Rusal is the second largest aluminum company in the world...
Russian Machines ... consists of engineering and industrial plants in the following sectors: automotive OEM (GAZ Group), automotive parts (RM-Systems), railway industry (RM Rail), aircraft OEM (Aviakor), road construction (RM-Terex) and agricultural machinery (AGCO-RM). Russian Machines operates 24 production facilities spread across 12 regions in Russia...
The Russian automotive conglomerate GAZ Group operates 18 manufacturing facilities in eight regions of Russia, as well as sales and service organizations. The GAZ Group produces light and medium commercial vehicles, heavy commercial vehicles, buses, vehicles and equipment for road construction, aggregates and vehicle components.” (Wikipedia, Oleg Vladimirovich Deripaska)

[11] “Over 80 percent of Rusal’s business takes place outside Russia.” (Stratfor, May 29, 2018)

[12] It did little to help Deripaska’s earlier attempts to shift all payments and loan obligations from dollars to euros and pounds, because no non-American bank would agree to continue trading in the shares of En+, the parent company of all the companies in Deripaska’s conglomerate.

“In a previously unreported move, En+ had by March switched most of its dollar payments and loans into euros and pounds, according to a person familiar with En+ preparations... [An insider] cited a failed pre-sanctions attempt to find a non-U.S. bank to act as a depositary for En+'s London-listed shares, known as Global Depository Receipts or GDRs, a role then held by Citigroup Inc. ‘We tried EU banks, Hong Kong banks, even an Israeli bank – but as soon as we mentioned possible sanctions, it wasn’t going anywhere,” the person familiar with En+ preparations said, without naming the banks. ‘All transactions are done through the dollar and no one wanted to take the risk of being cut off from dollar clearing.’” (Moscow Times, April 24, 2018)

And if a bank is found that would conditionally resume trading in the shares, the clearing agency responsible for the technical settlement of securities transactions refuses: “Citigroup informed En+ that it had begun facilitating transactions again with its GDRs ...But, according to the person familiar with En+ preparations, holders of En+ GDRs have not been able to sell because the designated clearing house Euroclear is not settling the trades, the stage at which cash and securities trade hands.” (Ibid.)

[13] “The USA has put Russian oligarchs on a blacklist – and thereby triggered a mass exodus from the Russian stock market among investors... The Russian stock index RTS temporarily went into free fall and fell by more than twelve percent. This is the biggest daily loss on the Russian stock market for about four years... Russia’s largest bank, the state-owned Sberbank, was particularly hard hit. Its share price plummeted by almost 20 percent. The metallurgical conglomerates NorNickel (-16.8 percent) and Mechel (-15.5 percent) were also among the biggest losers... According to calculations by the Russian business newspaper, the Russian oligarchs on the US list lost more than three billion of their assets within one day... The Russian currency also came under massive pressure: the ruble lost around five percent against the dollar.” (Spiegel Online, April 9, 2018)

The American measure is also causing a general shake-up of the aluminum market: “Russian sanctions are throwing the global aluminum industry into chaos... While [the multinational mining company] Rio is the main producer of bauxite, the raw material from which aluminum is extracted, it itself relies on Rusal for a key intermediate step in the process – the conversion of bauxite into alumina. Rusal’s processing operations, in factories from the Aughinish plant in Ireland to its operations in Jamaica, form an important element in a global, interlocking supply chain that has now been thrown into chaos. With producers like Rio still having to find new buyers for their bauxite and new sources of alumina to feed their smelters, the global bottleneck created by the sanctions means that many of the mining companies, refineries and smelters that should be benefiting from rising prices are actually facing the challenge of maintaining their operations. For aluminum smelters, the interruption of operations is a worst-case scenario, and restarting is very expensive.” (Bloomberg, April 17, 2018)

A considerable amount of capital destruction is therefore also taking place in non-Russian portfolios: “‘That’s the paradox of the sanctions: you want to punish Russia, but Western creditors are the first to suffer losses,’ said Antonio Agresta, a bond trader at City & Continental in London. The owners of the shares want to sell, but they are left with the securities... Rusal is embedded in the Western capital markets. Just this year it sold shares for $500 million to international investors. Rusal has a total of $8.5 billion in debt, including the $1.6 billion bonds.” (Bloomberg, April 12, 2018)

[14] “In 1998, Deripaska founded Volnoe Delo, Russia’s largest private charitable foundation. The foundation supports over 400 initiatives across Russia for education and science, the preservation of the intellectual and cultural national heritage and the improvement of public health standards. It helps children, the elderly, talented young people, teachers, outstanding scientists and other participants in the program. Since 1998, Oleg Deripaska has invested more than 10.6 billion rubles in more than 500 charitable programs in 50 Russian regions.” (Wikipedia, Oleg Vladimirovich Deripaska)

The direct use of Russian companies to finance and take on state tasks goes well beyond the narrowly social-political sense, especially in the case of state-owned companies:

“The large state-owned companies... only pay part of their profits into the budget and in return directly take on political tasks at home and abroad.” (p. 6) “The three companies Gazprom, Rosneft and Transneft have fulfilled a variety of political functions for the Kremlin in the past, for example in the construction of oil and gas pipelines and the management of energy exports, in the nationalization of the media landscape (here primarily through Gazprom Media) or in the financial support of public infrastructure projects or foreign allies.” (p. 39) “‘For those things for which there is no money after all the squabbles and wrangling in the government but which require financing, we will use funds from Rosneftegaz.’ According to Putin, Rosneftegaz finances priority research projects and the construction of aircraft and engines. In addition, the holding company bears the costs of the Rosneft shipyard ‘Zvezda’ near Vladivostok and the construction of four power plants in Kaliningrad.” (p. 40) “The Russian president has access to Rosneftegaz’s funds through Igor Sechin to resolve the economic and social problems that the Kremlin sees as pressing.” (p. 41) (Janis Kluge: Russlands Staatshaushalt unter Druck. Finanzielle und politische Risiken der Stagnation. [Russia's state budget under pressure. Financial and political risks of stagnation] SWP-Studie 14, July 2018)

[15] “The Renova Group, with various headquarters and branches worldwide, includes oil, natural gas, mechanical engineering, chemical, telecommunications, real estate and utility companies, gold and platinum mines and a private equity fund... Renova also holds, from a Swiss perspective, significant stakes in successors to once famous Swiss corporations and other companies.” (Wikipedia, Viktor Feliksovich Vekselberg)

[16] “... he could no longer service his dollar-denominated loans because his accounts in the United States were blocked. For other loans totaling 800 million US dollars, the banks demanded additional collateral because the Rusal shares previously pledged for this purpose had lost so much value that they no longer covered the value of the loan.” (Junge Welt, April 21, 2018)

[17] “Sulzer is buying 15 percent of Renova’s own shares, so that Vekselberg only has a 48.8 percent stake in the company... ‘OFAC didn’t want to hit us. That was collateral damage,’ said Poux-Guillaume, referring to the foreign asset controllers’ quick reaction... The company can sell its own shares, worth 546 million francs, to whoever it pleases. If the price comes out lower than the 109.13 francs per share agreed with Renova, the difference will be at the expense of the Russians... Sulzer will keep the 80 million francs dividend due to Renova for 2017 in its own coffers as long as the sanctions are not lifted. This also applies to future dividends to which the major shareholder is entitled... The purchase price for the Sulzer shares will not go to Renova either, but into a blocked account.” (FAZ, April 20, 2018)

[18] “Last year, American federal authorities banned the popular antivirus program, which runs on around 400 million computers around the world, from their IT devices. And the Dutch government now also wants to do without Kaspersky products – in order to ‘ensure national security’. The company is ultimately accused of helping the Kremlin spy by programming backdoors. It doesn’t help much that Kaspersky always claims the opposite. Now the Russians are trying to flee to neutral Switzerland. By the end of the year, the production of the antivirus software and the storage of customer data are to move to Zurich. There, the company plans to have its own activities monitored by an independent authority in the country.” (FAZ, May 16, 2018)

[19] “Section 231 of CAATSA imposes a penalty on any third-country company or individual that engages in a ‘significant transaction’ with the Russian defense or intelligence sector…Section 232, in turn, targets the energy sector and targets investments of $1 million or more in Russian pipelines or support for the construction or operation of pipelines – with goods, services, technology and information – valued at least $5 million per year. Unlike the sanctions prescribed in Section 231, the sanctions under Section 232 are discretionary and not prescribed by law.” (Stratfor, May 28, 2018)

[20] “At the summit with Russian President Vladimir Putin three weeks ago in Helsinki, Trump then drew cross-party criticism for disavowing his own security authorities in Putin’s presence. On Wednesday, the newspaper Kommersant published details of a new sanctions law that was introduced into the American Congress at the beginning of the month. The proposal, which is supported by Republican and Democratic politicians, is a tough one. The signatories want to stop trading in Russian foreign bonds and prevent major Russian banks from carrying out dollar transactions. Analysts therefore describe the proposal as a ‘destroyer’... After the Salisbury attack in March, the American government had promised to implement the now announced sanctions within 60 days. When the deadline passed, Republican Ed Royce, Chairman of the Foreign Affairs Committee in the House of Representatives, wrote a warning letter to the White House that set things in motion.” (FAZ, August 10, 2018)

In addition to all sorts of other tightening of the existing sanctions, which hardly differ from the so-called ‘nuclear option’ – sanctions to be imposed on trading in all new Russian government securities as well as all swap agreements with the Russian state bank and transactions with the eight major Russian banks that exceed a period of 14 days – the initiators of the bill venture a little further in defining the degree of hostility and would like the administration to have already reviewed “whether the Russian Federation meets the criteria for being defined as a state sponsor of terrorism” (congress.gov).

[21] “Is Trump Russia’s Useful Idiot, or Has He Been Irreparably Compromised?” asks the magazine Foreign Policy (August 3, 2018).

[22] The US has been using sanctions at a record pace: “The Treasury last year added 944 people and entities to its sanctions list — the highest number since 2001... Adam Smith ... a former senior sanctions official at the US Treasury, said it was on track to add a further 1,000 names this year.” (Financial Times Online, August 12, 2018)

[23] “WALLACE: But do you see … an end of the effort by the West in recent years to isolate Russia?
PUTIN: I think you will see for yourself that this effort failed and they were never bound to succeed. I mean take a look at the scale, the sheer size of it, the importance of it in terms of international security and the economy, its contribution to the global energy market. It’s too big to be sanctioned and isolated.” Chris Wallace (Fox News) interviews Russian President Vladimir Putin, Helsinki, Finland, July 16, 2018)

[24] Vladimir Putin, Address to the Federal Assembly, March 1, 2018.

[25] “As soon as our scientists or designers develop a breakthrough project, they immediately receive an offer to sell it to the West or to emigrate there with it – mainly to the USA.” (Retired Colonel General Leonid Ivashov, President of the Academy of Geopolitical Problems, RIA, January 28, 2011)

“Since the end of the Soviet Union, thousands of engineers and well-educated people have left the country... According to Russian scientists, the average monthly income is 580 dollars in the arms sector and 875 dollars in the field of military research.” (Vicken Cheterian: Colossus of scrap, Russia’s military-industrial complex 20 years after the end of the Soviet Union, in: Le Monde Diplomatique, November 10, 2011)

“For years, highly qualified people and those who want to become highly qualified have been emigrating from Russia. Mainly to the West. Now Moscow is once again trying to bring them back. The new argument: Russophobia. ‘Come back to Russia!’ This is the message that the Moscow authority for citizens living abroad, Rossotrudnichestvo, is sending to tens of thousands of citizens in the West. The appeal is aimed particularly at students in Great Britain, the USA and other ‘unfriendly states’: they should continue their studies at home... According to the Ministry of Education, around 60,000 Russian citizens attended foreign universities in 2014. Due to the deteriorating economic situation in Russia, the number is likely to be even higher... It is unknown exactly how many scientists have turned their backs on Russia. Estimates put the number at up to a million since the collapse of the Soviet Union. Viktor Kalinushkin of the Academy of Sciences in Moscow claimed a few years ago that Russian-speaking scientists were responsible for 30 percent of the development of Microsoft products.” (DW, April 19, 2018)

[26] “Trade between Russia and the USA is not particularly large. According to the state news agency RIA Novosti, Russia sold goods worth 17 billion US dollars in 2017, but only imported goods worth seven billion. Against this background, it is difficult for Moscow to hit Washington hard.” (DW, April 16, 2018)

“Russia would be shooting itself in the foot with Russian counter-sanctions, such as the repeatedly discussed stop to deliveries of rocket engines used in US space rockets. Russian deliveries are due to expire in 2020 anyway, when the USA wants to have its own model ready. Or an embargo on the light metal titanium. It would hit the US aviation industry in the short term; it currently sources a good third of its needs for this raw material from Russia. But it would just as quickly cause problems for the Russian company that exports the titanium. Because there are no alternative markets here, just as there are no alternative markets for rocket engines.” (Junge Welt, August 11, 2018)

[27] “Import bans on American software are already making things difficult. Despite years of appeals to switch to ‘national’ software, even strategic companies such as Rosneft and Gazprom continue to use programs from the US company Oracle. When Oracle announced a few months ago that it would no longer accept new orders from Russia and stop maintaining existing systems, Russian companies ran into difficulties. Changing software at short notice is difficult and expensive. The import of aircraft accessories for the part of Russian civil aviation that flies Boeing aircraft is also unlikely to be stopped in the short term.” (Junge Welt, April 14, 2018)

[28] What the so-called transformation in Russia has led to can be read about in GegenStandpunkt 4-13: “Die Kapitalisierung Russlands. Marktwirtschaft vom Feinsten” [The capitalization of Russia. Market economy at its finest. Not translated]

[29] “In an account of the defense and fuel-energy sectors, Fal’tsman describes Russia’s growing dependence on imported components for crucial areas of production. A large share of Russia’s innovation capacity is in the defense industrial sector, and the entire economy relies on the energy sector for its financial well-being. These two sectors are crucial to most of Russia’s economic activity. The sanctions affect 68 percent of the imports used in the oil and gas sector. Russia depends on South Korea for 90 percent of drilling platforms. Russia’s defense industry is more diverse, but in the crucial area of electronics, a persistent Russian bottleneck, the situation is quite tenuous. Data indicate that 65–79 percent of the electronics used in Russian missiles and space rockets are imported. Russia does not produce drones, and Fal’tsman notes that all of the piston motors used in these aircraft would need to be imported.” (Harley Balzer: Russia’s Knowledge Economy Decline: Views From Inside, jamestown.org, September 13, 2016)

In addition, the aircraft industry is dependent on supplies; the vast majority of civil aircraft now come from the West; the same is true in mechanical engineering: “Russia lost the knowledge to manufacture large turbines after the end of the Soviet Union.” (FAZ, August 3, 2017)

[30] “Even before the US sanctions, the loss of supply relations with Ukraine had presented the nation with this necessity: This does not only affect the arms sector, where Russian companies have to replace previous supplies from Ukraine. Just a few days ago, media reports said that ship turbines no longer have to be imported from Mykolaiv in Ukraine, where they had been exclusively produced since Soviet times... When it comes to replacing supplies of helicopter engines – previously a speciality of the Ukrainian company Motor-Sich in Zaporizhia – Russian production is being built up and is supposedly already in a position to cover the military’s entire need for replacement engines with 50 engines per year.” (Junge Welt, April 29, 2017)

“Between 2015 and 2016, the Kremlin pumped more than 5 billion dollars into 199 major sectors. The efforts have already paid off in the military-industrial complex and the agricultural sector, both of which grew in 2016. The auto, aircraft, transportation, and engineering sectors, which provide the bulk of transportation, infrastructure, and jobs and 20 percent of gross domestic product, are also expected to grow again this year. In addition to financial support, Moscow’s isolationist policies have helped revive its industries. Counter-sanctions on food imports from the EU helped Russian agriculture grow in 2016; grain production reached 119 million tons that year, making it the second-highest-yielding sector after energy. Today, Russia imports less than 20 percent of its food, compared to 70 percent 17 years ago when Putin took office. Import substitution for industrial and high-tech goods has also reduced Russia’s dependence on foreign products.” (Stratfor, June 1, 2017)

[31] “Due to the fall in the ruble exchange rate, the German parent companies would bear the currency losses if they transferred their profits made in Russia back. But if they use these to invest locally, they would benefit from the reduction in the costs incurred in rubles for labor, land and local supplies. If the products are then exported from Russia again, as the Claas company is aiming to do, the advantage would be twofold: in addition to serving the domestic market, the use of a cost-effective ‘extended workbench’. The second argument for localization is the status of a ‘domestic producer’ that can then be achieved. This in turn enables access to state orders, from desk lamps to locomotives.” (Junge Welt, April 29, 2017)

“Daimler benefits from a support instrument specially created for selected large and important investors, the special investment contract, which was introduced after the sanctions were imposed. The Russian government is thus granting foreign companies the same status as a domestic company, including tax breaks, subsidies and a stable legal framework. The prerequisite is that the company receiving support produces in Russia. Then it can also take part in state tenders, such as in the case of Daimler in the fleet business for the government, which only buys cars made in Russia.” (DW, July 3, 2017)

“The German economy is again expecting above-average export growth in trade with Russia this year. As paradoxical as that may sound, the sanctions are actually boosting some sectors. The Russian economy is forced to modernize. Demand for machinery and equipment, for example, has grown accordingly. ‘Russian investments in new production facilities are benefiting the German economy,’ says Wolfgang Büchele, Chairman of the German Economic Committee on Eastern European Affairs.” (DW, March 1, 2018)

[32] The fact that Russian companies can buy back their shares at bargain prices because of the collapse in value is another strange success story:

“Russia can weather a blow like that. It has $450bn in gross international reserves (GIR) and with oil at about $75 per barrel, after the deleveraging and cost cutting of the last three years Russia Inc is back in profit; the country can live without international financing and as such is sanction-proof. Indeed the irony is thanks to the sanctions the value of Russian debt has plummeted so Russian companies have started to buy back their bonds at bargain bucket prices, which makes them even more resilient to sanctions than before. This week oil major Lukoil announced it was buying back $1.5bn worth of its own bonds.” (intellinews.com, April 27, 2018)

However, one must ignore the rapid loss in value that Russian share capital suffered as a result and the renunciation of the means of the international money market that came with the buyback.

[33] Russia even goes so far as to make the following immoral offer to the EU Commission:

“On May 24, Russian Economics Minister Anton Siluanov made the EU a far-reaching offer. If it decides to withdraw from the US-led sanctions front, Russia will convert all of its foreign trade, including oil and gas exports, from dollars to euros... France or the Federal Republic of Germany could pay for their purchases of Russian oil and gas in their own currency and no longer by converting them into dollars. In other words: Siluanov’s statement – assuming it was made – is an attack on the petrodollar and thus on the position of the dollar as world money... According to this side, the Russian offer is an indirect indication that Moscow is now prepared to do something to break the unity of ‘the West’ on the sanctions issue.” (Junge Welt, June 7, 2018)

That is, to subordinate large parts of it’s own foreign trade to the need to earn euros.

[34] “Legally secured payment transactions across national borders are now practically only possible with SWIFT.” (Wikipedia, SWIFT)

[35] “As trade and investment relations with the West have declined since 2014, Russia has focused on developing economic and broader political ties – including sales of energy, agricultural goods, and weapons – eastward. This is especially true with China, which has become Russia’s largest trading partner, but Russia has also sought to expand economic ties with other countries in the Asia-Pacific region, such as Japan and South Korea... Russia is not only turning its attention eastward; it is also looking southward, to the Middle East. It has expanded its trade relations with countries such as Turkey and Egypt, is building on its economic ties with Iran, and is seeking greater investment and energy ties with Gulf Cooperation Council countries such as Saudi Arabia. It is trying to use the Moscow-led Eurasian Economic Union as a tool for expanded relations, and on May 17 signed trade agreements with both China and Iran. Still, Russia is unlikely to replace all of its economic ties with the West with ties with the East. Europe, for example, will remain its main market for energy exports for a long time to come, and the fact that the country is exposed to the US-dominated global financial system can never be fully dispelled. Nevertheless, the overall trade balance and the economic structure that Russia is working toward will gradually move the country away from the West. Moscow hopes that this move will better insulate it from US sanctions in the long term.” (Stratfor, May 29, 2018)

[36] “Russia is the Biggest Recipient of Chinese Foreign Aid... Between 2000 and 2014, Beijing provided Moscow with a total of $36.6 billion in loans, grants, and other agreements... The bulk of Chinese aid to Russia was a $25 billion loan package that China Development Bank provided to Russia’s Rosneft, a huge oil company, and Transneft, a pipeline builder, in 2009, as well as a $6 billion loan-for-coal program in 2010. The remainder of the financial flow during the 15-year period occurred between the Export-Import Bank of China or the China Development Bank and various Russian banks, including the Russian Development Bank, Sberbank, VTB Bank, and Vnesheconombank. Foreign aid comes in two flavors. Development assistance includes grants or loans at below market rates, while “other official flows” include loans at near market rates and that involve some commercial considerations. Chinese foreign aid to Russia is almost exclusively the latter category — and is mostly about getting the thirsty Chinese economy access to Russia’s huge reserves of oil.” (Foreign Policy, October 11, 2017)

In addition, China is also increasingly using Russia as a market and has already replaced the Federal Republic of Germany in the process: “The position of the Federal Republic of Germany as the most important country of origin for imported industrial goods in Russia has been declining in favor of China for some time. In the years since the sanctions began, this gap has widened even further. According to current figures, China accounts for almost 20 percent of Russian imports, while the Federal Republic accounts for just over ten percent.” (Junge Welt, April 29, 2017)

[37] “Russia’s relationship with Europe in the gas sector has been strained for at least ten years. But with the annexation of Crimea in 2014, the tensions turned into almost unbridgeable gaps. It is no coincidence that Moscow and Beijing agreed on gas supplies at exactly this moment. They had been negotiating for ten years without success... Observers had speculated at the time that China had kept Russia waiting for ten years, only to then use the moment of isolation from the West to dictate the terms of the contract to its own advantage... The fact that China could also do things differently with the Russians in the past, if it wanted to, was shown by the relatively quick entry of the Chinese into Russian LNG projects of Gazprom competitor Novatek or the fate of the Russian oil company Rosneft, which threw itself into the embrace of the rising dragon a decade and a half ago. Billions upon billions in Chinese advance payments for future oil deliveries enabled the Russian state-owned company to expand like crazy around the world. In 2013, Rosneft signed new 25-year contracts worth $270 billion, doubling deliveries to China. The Middle Kingdom has long been Rosneft's most important customer.” (Die Welt, April 7, 2018)

[38] The best possible unmasking: the “America First!” man on Putin’s strings – unlike in the film “The Manchurian Candidate,” has not been brainwashed, but is possibly, probably, blackmailable? Trump was “not only supported by Russian influence and the hacks in the election campaign, as the secret services have so far said without being able to really prove this, but he could also be blackmailable by scandalous stories.” (Like in the Cold War: Trump, the secret services, media, fake news, heise.de, January 12, 2017)

[39] It doesn't matter if the patriotic hysteria keeps producing false reports about new Russian attacks that have to be retracted:

“The suspected hacking attempt of the Democratic National Committee’s voter database this week was a false alarm, and the unusual activity that raised concern was merely a test, party officials said on Thursday....’There are constant attempts to hack the D.N.C. and our Democratic infrastructure, and while we are extremely relieved that this wasn’t an attempted intrusion by a foreign adversary, this incident is further proof that we need to continue to be vigilant in light of potential attacks,’ Mr. Lord [the D.N.C.’s chief security officer] said in a statement.” (Attempted Hacking of Voter Database Was a False Alarm, Democratic Party Says, August 23, 2018, nytimes.com)

The enemy image is firmly anchored and does not need any evidence. Therefore, it is also ideally suited to the business interests of the relevant companies. Microsoft is making a splash by blocking allegedly Russian websites, even if, as the small print says, this cannot be proven. But as advertising for a new security program that it is initially offered for free in order to make money from it later, public outrage is exactly the right means.

[40] It goes without saying that the United States must at least double its counter-propaganda in the face of Russian attempts to exert influence, and that this naturally means something completely different from disinformation. Under the title of “Public Diplomacy Modernization,” it is about such nice things as “Educational and Cultural Exchange Programs,” and various institutions, from embassies to broadcasting companies to Internet companies, being “entrusted with the task of increasing knowledge about, understanding of, and trust in the United States among the target audience considered relevant.” (congress.gov)