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FTR #919 The Trumpenkampfverbande, Part 2: German Ostpolitik, Part 2

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This broadcast was recorded in one, 60-minute segment.

MeinKampf

Waffen SS-clad World War II reenactors, in original photo used by Trump

Waffen SS-clad World War II reenactors, in original photo used by Trump

Introduction: This program continues analysis from FTR #918.

Whereas GOP Presidential nominee Donald Trump’s pronouncements about Russia and Ukraine, in combination with his former campaign manager Paul Manafort’s work for the Russian-allied Yanukovich government, have fed talk of Trump as a “Russian/Kremlin/Putin” dupe/agent, available evidence suggests that “The Donald” is a cat’s paw for powerful German/Underground Reich elements, who are manifesting traditional German Ostpolitik.

Beginning with discussion of Manafort, the evidence weighs overwhelmingly against the prevailing theory that Manafort is a Russian puppet, therefore Trump is a Russian puppet, etc.

Manafort worked for Ferdinand Marcos when Marcos was helping himself to a large amount of  Golden Lily loot in the Philippines. The U.S. wanted to use more of the gold for their own purposes, and Marcos was ultimately removed in the “people power” coup/covert operation. Ultimately, Corazon Aquino, the widow of Benigno Aquino, a long-time CIA agent and protege of Edward Lansdale replaced him. (Lansdale was one of the main U.S. agents involved with the Golden Lily recovery program.) Interestingly and significantly, Aquino’s vice-presidential candidate was Salvador Laurel, the son of Jose Laurel, the puppet ruler of the Philippines for the Japanese occupation government during World War II.

Manafort appears to be something of an advance agent/fixer. In all probability he was helping to pave the way for the Maidan coup. Remember: the cardinal rule for a good double agent–“make yourself indispensable to the effort.”

IlDuceIlDoucheBy the twisted rationale presented by our media establishment, we could come up with this: Petro Poroshenko, the current head of state of Ukraine, was Yanukovich’s finance minister, presiding over the former’s ineffective and corrupt government. The West, including the U.S., backs Poroshenko. Therefore, the West, including the U.S.

Martin Bormann (right) with Himmler

Martin Bormann (right) with Himmler

Fundamental to the analysis presented here is corporate Germany, its relationship to the Bormann capital network and, in turn, Donald Trump and people connected with him. The Bormann network dominates corporate Germany: ” . . . Atop an organizational pyramid that dominates the industry of West Germany through banks, voting rights enjoyed by majority shareholders in significant cartels, and the professional input of a relatively young leadership group of lawyers, investment specialists, bankers, and industrialists, he [Bormann] is satisfied that he achieved his aim of helping the Fatherland back on its feet. To ensure continuity of purpose and direction, a close watch is maintained on the profit statements and management reports of corporations under its control elsewhere. This leadership group of twenty, which is in fact a board of directors, is chaired by Bormann, but power has shifted to the younger men who will carry on the initiative that grew from that historic meeting in Strasbourg on August 10, 1944. Old Heinrich Mueller, chief of security for the NSDAP in South America, is the most feared of all, having the power of life and death over those deemed not to be acting in the best interests of the organization. Some still envision a Fourth Reich. . . What will not pass is the economic influences of the Bormann organization, whose commercial directives are obeyed almost without question by the highest echelons of West German finance and industry. ‘All orders come from the shareholders in South America,’ I have been told by a spokesman for Martin Bormann. . . .

Before returning to the subject of Joseph E. Schmitz and highlighting the complex, opaque Trump real estate dealings with prominent Germans and corporate interests, the program reviews some of the essential elements of analysis from FTR #918.

In our previous program, we presented a 1949  “Open Letter to Stalin” published in the Buerger Zeitung, a leading German-language paper in the United States. Noteworthy for our purposes here is the fact that the paper is the de-facto outlet for the Steuben Society, the top pan-German organization in the United States. As will be seen below, the Steuben Society was part of the Nazi Fifth Column in the U.S. before World War II and part of the Underground Reich infrastructure in this country after the war. In the latter capacity, it advocated for the release and rehabilitation of Nazis, including war criminals.

Also of significance is the fact that the author, Bruno Fricke, was an associate of Otto Strasser. Strasser, along with his brother Gregor, was part of Ernst Rohm’s SA. Rohm was liquidated in the Night of the Long Knives, along with Gregor Strasser. Otto escaped to Czechoslavakia.

Tthe Buerger Zeitung was very anti-Communist and strongly supportive of Joseph McCarthy’s witch hunts. Donald Trump’s lawyer for years was Roy Cohn, McCarthy’s top aide.

Waffen SS-clad World War II reenactors, in original photo used by Trump

Waffen SS-clad World War II reenactors, in original photo used by Trump

Three years after that letter was published in the Buerger Zeitung, the Soviet Union responded with its Soviet Note of 3/10/1952. One of the most important aspect of the analysis of this event is the German plan to achieve a united Europe under German domination, which has, of course, been achieved. ” . . . In the pro-Adenauer press, including the The Frankfurter Allgemeine Zeitung, Christ und Welt, The Deutsche Zeitung of Stuttgart, editorials have been written assuring the Russians that Dr. Adenauer’s policy aims to create the security necessary for both the Germans and the Russians, and that this can only be brought about after Germany had become a third power factor which could employ its influence in such a way as to deter the United States “from starting a preventive war.” [The aggressive U.S./NATO stance toward Ukraine and Russia are impressing many around the world in a fashion that would be familiar to those in the early 1950’s–D.E.] Thus, while, in the short run, the Bonn Government aims to create a United Europe, it hopes ultimately to reach a solid understanding with the Soviets at the expense of the United States. . . .”

This “Europa Germanica”–the EU in the event–was, in turn, to become a Third Force. In exchange for moving away from the push for a Third World War and pulling Europe out of NATO, this Third Force would gain concessions from the Soviets. Also of note is the fact that a major feature of this United Europe would be an all-European army, also under German domination.

” . . . The German Chancellor’s plan is that the U.S.A. is now so deeply committed to her European defense pledge that she will readily sacrifice dozens of billions of dollars in the strengthening and the rearming of a German-dominated Europe. After is this accomplished, Dr. Adenauer’s grandiose concept envisions negotiations with Russia with the prospect of getting substantial territorial concessions from the Kremlin in Eastern Europe for which Germany in return will break away, with the whole of Western Europe, from the North Atlantic Treaty Organization. . . .” Trump’s pronouncements about NATO are to be seen in this context.

As we shall see in this broadcast, a major push is underway to establish a “Euro-corps”–precisely the sort of German-dominated European army that was envisioned in the early 1950s.

” . . . . The reaction of the German strategists to the Soviet Note of March 10, 1952, however, exposes their true designs. German geo-political journals speak of it as “the highest trump card in the hands of the Chancellor” which will enable him to mow down the resistance of France against Germany’s concept of a united Europe. The pro-Adenauer press interpreted the Russian Note as a tremendous asset in speeding up the timetable for the creation of a European army under German domination. . . .”

NOTE: It is our view that the Trump pronouncements serve a purpose similar to the “Open Letter to Stalin” published in the Buerger Zeitung–a communique designed to promote what the pro-Adenauer press characterized as: ” . . . the heated atmosphere of an auction room where two eager opponents outbid each other. . . .”

We feel that a vehicle for the communication of policy vis a vis Russia, Ukraine and NATO to Trump is Joseph E. Schmitz, an ultra-right wing Germanophile and Von Steuben-obsessed former Department of Defense Inspector General. In turn, we believe that German corporate and Underground Reich connections to both Trump and the Schmitz family underlie Trump’s public utterances.

The Trump pronouncements that have drawn so much media fire are, in our opinion, functioning in a manner analogous to the “Open Letter to Stalin” published by Nazi veterans Fricke and Otto Strasser in the Buerger Zeitungto signal a bidding war between the U.S. and Russia, to Germany’s ultimate benefit.

Joseph E. Schmitz’s brother John P. Schmitz represents powerful German corporations, helping them network with their American counterparts: ” . . . John’s clients have included the US Chamber of Commerce, General Electric, Bayer AG, Bertelsmann, Bosch GmbH, Deutsche Welle, Gillette, Pfizer, Microsoft, Verizon, Eli Lilly Co., Ford Motor Co., and Arkema., among others. . . .”

Trump’s altogether opaque real estate projects have eluded even The New York Times’ investigative abilities. What the Times did manage to uncover are powerful relationships between the Byzantine Trump real estate empire and German interests that are almost certainly linked to the Bormann capital network and the Underground Reich: ” . . . In a typically complex deal, loan documents show that four lenders — German American Capital, a subsidiary of Deutsche Bank; UBS Real Estate Securities; Goldman Sachs Mortgage Company; and Bank of China — agreed in November 2012 to lend $950 million to the three companies that own the building. Those companies, obscurely named HWA 1290 III LLC, HWA 1290 IV LLC and HWA 1290 V LLC, are owned by three other companies in which Mr. Trump has stakes. . . . .  At 40 Wall Street, Mr. Trump does not own even a sliver of the actual land; his long-term ground lease gives him the right to improve and manage the building. The land is owned by two limited liability companies; Mr. Trump pays the two entities a total of $1.6 million a year for the ground lease, according to documents filed with the S.E.C.

The majority owner, 40 Wall Street Holdings Corporation, owns 80 percent of the land; New Scandic Wall Limited Partnership owns the rest, according to public documents. New Scandic Wall Limited Partnership’s chief executive is Joachim Ferdinand von Grumme-Douglas, a businessman based in Europe, according to these documents.

The people behind 40 Wall Street Holdings are harder to identify. For years, Germany’s Hinneberg family, which made its fortune in the shipping industry, controlled the property through a company called 40 Wall Limited Partnership. In late 2014, their interest in the land was transferred to a new company, 40 Wall Street Holdings. The Times was not able to identify the owner or owners of this company, and the Trump Organization declined to comment. . . .”

The complex, opaque nature of the Trump real estate holdings is characteristic of the Bormann capital network’s operating structure. Again, we are of the opinion that the presence of Joseph E. Schmitz as a key Trump foreign policy adviser, the Trump real estate operations’ apparent relationship with German corporate interests and John P. Schmitz’s German corporate links are central to Trump’s pronouncements about Russia, Ukraine and NATO.

At the same time as Trump is signaling German Ostpolitik, many of the key features of what Adenauer articulated in the early 1950s are being proposed and/or implemented by Germany at this time:

  • Germany is solidifying an EU-wide, German-dominated military union. ” . . . . Just a few days ago, Foreign Minister Steinmeier declared in the US journal Foreign Affairs that Germany has become ‘a major power’ and will ‘try its best’ on the world stage ‘to hold as much ground as possible.'[8] . . . Berlin sees an opportunity for reviving its efforts at restructuring the EU’s military and mobilizing as many member countries as possible for the EU’s future wars. . . .”
  • Corporate Germany is moving in the direction of lifting the sanctions on Russia, boosting lucrative German economic relationships with Russian commerce, interdicted to an an extent by the sanctions. ” . . . Similar views were recently expressed at the “East Forum Berlin,” convened by the German Committee on Eastern European Economic Relations (OA) together with the Metro Group and Italy’s UniCredit, for the fourth time in the German capital. More than 400 participants – including the recently fired Ukrainian Minister of Finances, Natalie Jaresko, and Russia’s First Deputy Minister of Economic Development, Alexey Likhachev – discussed the development of an ‘economic space extending from Lisbon to Vladivostok.’ . . .”
  • Polls in Germany are showing strong sentiment for moving closer to Russia and away from the U.S.: ” . . . . when asked which country Germany should work more closely with, 81% of those 1000 Germans, participating in the survey, opted for Russia – in second place behind France (89%) and far ahead of the USA (59%). In Russia, 62% of the respondents chose Germany as their favorite cooperation partner (ahead of China and France with 61% each). 69% of the Germans favor lifting the sanctions on Russia. And lastly, 95% believe that it is “important” or “very important” that Germany and Russia develop closer relations over the next few years.[7] . . . “
  • Germany is also implementing other national security structures such as a European-wide FBI and an EU equivalent of the NSA. This, again, as part of a German drive to become a Third Force/military power: ” . . . In Berlin, this is all being flanked by statements that cannot be otherwise interpreted as oblique war threats. ‘Although it is difficult for us to imagine,’ one should ‘never forget’ that ‘the idea of a united Europe, had been an idea of peace,’ claims the German Chancellor.[17] The allegation corresponds less to historical reality,[18] than to the EU’s self-promotion. Yet, Merkel declares that in Europe, ‘reconciliation and peace’ are both currently and in the future ‘anything other than self-evident.’ The chancellor has expressed this point of view in various EU crisis situations. (german-foreign-policy.com reported.[19]) According to this view, the potential of European countries settling their disputes militarily remains essentially unaltered and can be unleashed, should they no longer choose integration in a German-dominated EU. . . .”

The program concludes with a transitional element to our next program: Joseph E. Schmitz’s reported anti-Semitism and Holocaust revisionism: ” . . . Daniel Meyer, a senior official within the intelligence community, described Schmitz’s remarks in his complaint file. ‘His summary of his tenure’s achievement reported as ‘…I fired the Jews,’ ‘ wrote Meyer, a former official in the Pentagon inspector general’s office whose grievance was obtained by McClatchy. Meyer . . . cited in his complaint another former top Pentagon official, John Crane, as the source and witness to the remarks. Crane worked with Schmitz, who served as inspector general between April 2002 and September 2005. In his complaint, Meyer said Crane also said Schmitz played down the extent of the Holocaust. ‘In his final days, he allegedly lectured Mr. Crane on the details of concentration camps and how the ovens were too small to kill 6 million Jews,’ . . . “

Program Highlights Include:

  • Review of John P. Schmitz’s links with Bundestag member Matthias Wissman.
  • Review of the Bosch Foundation Fellowship that connected Schmitz with Wissman.
  • Review of the links between the Bosch Foundation Fellowship and the Carl Duisberg Society, through which Mohamed Atta infiltrated the United States.
  • Review of both Schmitz’s and Wissman’s work for Wilmer, Cutler and Pickering, when that firm was working on behalf of German and Swiss defendants in suits by Holocaust survivors.

1. Noting the background of Paul Manafort, the evidence weighs overwhelmingly against the prevailing theory that Manafort is a Russian puppet, therefore Trump is a Russian puppet, etc.

Manafort worked for Ferdinand Marcos when Marcos was helping himself to a large amount of  Golden Lily loot in the Philippines. The U.S. wanted to use more of the gold for their own purposes, and Marcos was ultimately removed in the “people power” coup/covert operation. Ultimately, Corazon Aquino, the widow of Benigno Aquino, a long-time CIA agent and protege of Edward Lansdale replaced him. (Lansdale was one of the main U.S. agents involved with the Golden Lily recovery program.) Interestingly and significantly, Aquino’s vice-presidential candidate was Salvador Laurel, the son of Jose Laurel, the puppet ruler of the Philippines for the Japanese occupation government during World War II.

Manafort appears to be something of an advance agent/fixer. In all probability he was helping to pave the way for the Maidan coup. Remember: the cardinal rule for a good double agent–“make yourself indispensable to the effort.”

By the twisted rationale presented by our media establishment, we could come up with this: Petro Poroshenko, the current head of state of Ukraine, was Yanukovich’s finance minister, presiding over the former’s ineffective and corrupt government. The West, including the U.S., backs Poroshenko. Therefore, the West, including the U.S.

“Secret Ledger in Ukraine Lists Cash for Donald Trump’s Campaign Chief” by Andrew E. Kramer, Mike McIntire and Barry Meier; The New York Times; 8/14/2016.

. . . . The developments in Ukraine underscore the risky nature of the international consulting that has been a staple of Mr. Manafort’s business since the 1980s, when he went to work for the Philippine dictator Ferdinand Marcos. Before joining Mr. Trump’s campaign this spring, Mr. Manafort’s most prominent recent client was Mr. Yanukovych, who — like Mr. Marcos — was deposed in a popular uprising. . . .

2. In our previous program, we presented a 1949  “Open Letter to Stalin” published in the Buerger Zeitung, a leading German-language paper in the United States. Noteworthy for our purposes here is the fact that the paper is the de-facto outlet for the Steuben Society, the top pan-German organization in the United States. As will be seen below, the Steuben Society was part of the Nazi Fifth Column in the U.S. before World War II and part of the Underground Reich infrastructure in this country after the war. In the latter capacity, it advocated for the release and rehabilitation of Nazis, including war criminals.

Also of significance is the fact that the author, Bruno Fricke, was an associate of Otto Strasser. Strasser, along with his brother Gregor, was part of Ernst Rohm’s SA. Rohm was liquidated in the Night of the Long Knives, along with Gregor Strasser. Otto escaped to Czechoslavakia.

Tthe Buerger Zeitung was very anti-Communist and strongly supportive of Joseph McCarthy’s witch hunts. Donald Trump’s lawyer for years was Roy Cohn, McCarthy’s top aide.

Waffen SS-clad World War II reenactors, in original photo used by Trump

Waffen SS-clad World War II reenactors, in original photo used by Trump

Three years after that letter was published in the Buerger Zeitung, the Soviet Union responded with its Soviet Note of 3/10/1952. One of the most important aspect of the analysis of this event is the German plan to achieve a united Europe under German domination, which has, of course, been achieved. ” . . . In the pro-Adenauer press, including the The Frankfurter Allgemeine Zeitung, Christ und Welt, The Deutsche Zeitung of Stuttgart, editorials have been written assuring the Russians that Dr. Adenauer’s policy aims to create the security necessary for both the Germans and the Russians, and that this can only be brought about after Germany had become a third power factor which could employ its influence in such a way as to deter the United States “from starting a preventive war.” [The aggressive U.S./NATO stance toward Ukraine and Russia are impressing many around the world in a fashion that would be familiar to those in the early 1950’s–D.E.] Thus, while, in the short run, the Bonn Government aims to create a United Europe, it hopes ultimately to reach a solid understanding with the Soviets at the expense of the United States. . . .”

This “Europa Germanica”–the EU in the event–was, in turn, to become a Third Force. In exchange for moving away from the push for a Third World War and pulling Europe out of NATO, this Third Force would gain concessions from the Soviets. Also of note is the fact that a major feature of this United Europe would be an all-European army, also under German domination.

” . . . The German Chancellor’s plan is that the U.S.A. is now so deeply committed to her European defense pledge that she will readily sacrifice dozens of billions of dollars in the strengthening and the rearming of a German-dominated Europe. After is this accomplished, Dr. Adenauer’s grandiose concept envisions negotiations with Russia with the prospect of getting substantial territorial concessions from the Kremlin in Eastern Europe for which Germany in return will break away, with the whole of Western Europe, from the North Atlantic Treaty Organization. . . .” Trump’s pronouncements about NATO are to be seen in this context.

As we shall see in this broadcast, a major push is underway to establish a “Euro-corps”–precisely the sort of German-dominated European army that was envisioned in the early 1950s.

” . . . . The reaction of the German strategists to the Soviet Note of March 10, 1952, however, exposes their true designs. German geo-political journals speak of it as “the highest trump card in the hands of the Chancellor” which will enable him to mow down the resistance of France against Germany’s concept of a united Europe. The pro-Adenauer press interpreted the Russian Note as a tremendous asset in speeding up the timetable for the creation of a European army under German domination. . . .”

3a. We learned something more about Donald Trump’s intended foreign policy goals: he appears to be considering a US pull out of NATO. We ruminate about one of his foreign policy advisors, Joseph E. Schmitz, former inspector general of the Department of Defense.

“Donald Trump’s New Foreign Policy Advisers Are as Rotten as His Steaks” by Shane Harris; The Daily Beast; 3/21/2016.

. . . . These are the minds advising Republican presidential candidate Donald Trump on foreign policy and national security.Trump, who has been pressed for months to name his council of advisers, revealed five in a meeting with the Washington Post editorial board on Tuesday: Keith Kellogg, Carter Page, George Papadopoulos, Walid Phares, and Joseph E. Schmitz. . . .

. . . . Trump revealed little about what specific advice they’d given so far, or how any of them may have shaped Trump’s surprising new position that the U.S. should rethink whether it needs to remain in the seven-decades-old NATO alliance with Europe.

Sounding more like a CFO than a commander-in-chief, Trump said of the alliance, “We certainly can’t afford to do this anymore,” adding, “NATO is costing us a fortune and yes, we’re protecting Europe with NATO, but we’re spending a lot of money.”

U.S. officials, including former Defense Secretary Robert Gates, have said that European allies have to shoulder a bigger burden of NATO’s cost. But calling for the possible U.S. withdrawal from the treaty is a radical departure for a presidential candidate—even a candidate who has been endorsed by Russian President Vladimir Putin.

It also wasn’t clear how Trump’s arguably anti-interventionist position on the alliance squared with his choice of advisers.

Another Trump adviser, Schmitz, has served in government, as the Defense Department inspector general. Schmitz was brought in during the first term of President George W. Bush with a mandate to reform the watchdog office, but he eventually found himself the subject of scrutiny.

“Schmitz slowed or blocked investigations of senior Bush administration officials, spent taxpayer money on pet projects and accepted gifts that may have violated ethics guidelines,” according to an investigation by the Los Angeles Times in 2005. Current and former colleagues described him as “an intelligent but easily distracted leader who seemed to obsess over details,” including the hiring of a speechwriter and designs for a bathroom.

Schmitz also raised eyebrows for what the paper’s sources described as his “unusual” fascination with Baron Friedrich Von Steuben, a Revolutionary War hero who’s regarded as the military’s first inspector general. Schmitz reportedly replaced the Defense Department IG’s seal in its office across the country with a new one bearing the Von Steuben family motto, Sub Tutela Altissimi Semper, “under the protection of the Almighty always.”. . . .

3b. It’s also worth noting that Joseph’s brother, John P. Schmitz, is a lawyer who specializes in US/German regulatory issues who’s clients include Bayer AG, Bertelsmann, Bosch GmbH, Deutsche Welle.

Major German corporations might well benefit if the Schmitz’s once again return to influential positions in a US administration. Especially of Joseph ends up overseeing more investigations, since, as this 2005 LA Times article notes, Joseph didn’t just exhibit an obsession Baron Von Steuben while serving as the Defense Department’s Inspector General. He also had an obsession with preventing politically sensitive investigations:

“The Scrutinizer Finds Himself Under Scrutiny” by T. Christian Miller; The Los Angeles Times; 9/25/2005.

. . . . Schmitz slowed or blocked investigations of senior Bush administration officials, spent taxpayer money on pet projects and accepted gifts that may have violated ethics guidelines, according to interviews with current and former senior officials in the inspector general’s office, congressional investigators and a review of internal e-mail and other documents.Schmitz also drew scrutiny for his unusual fascination with Baron Friedrich Von Steuben, a Revolutionary War hero who is considered the military’s first true inspector general. Schmitz even replaced the official inspector general’s seal in offices nationwide with a new one bearing the Von Steuben family motto, according to the documents and interviews. . . .

. . . . His father was the ultraconservative Orange County congressman John G. Schmitz, who once ran for president but whose political career ended after he admitted having an affair with a German immigrant suspected of child abuse. Schmitz’s sister is Mary Kay Letourneau, the Washington state teacher who served more than seven years in prison after a 1997 conviction for rape after having sex with a sixth-grade pupil with whom she had two children. After Letourneau’s release from prison, she and the former pupil, now an adult, married each other.

Schmitz, who resigned on Sept. 10 to take a job with the parent company of defense contractor Blackwater USA, is now the target of a congressional inquiry and a review by the President’s Council on Integrity and Efficiency, the oversight body responsible for investigating inspectors general, according to the documents and interviews. . . .

. . . . Schmitz’s allies said he was being persecuted. One senior Pentagon official defended Schmitz by saying that he was concerned about protecting the reputation of senior officials in Washington, where political enemies can cause trouble with an anonymous hotline tip. . . .

. . . . He paid close attention, however, to the investigations of senior Bush administration appointees. At one point, investigators even stopped telling Schmitz who was under investigation, substituting letter codes for the names of individuals during weekly briefings for fear that Schmitz would leak the information to Pentagon superiors, according to a senior Pentagon official. “He became very involved in political investigations that he had no business getting involved in,” said another senior official in the inspector general’s office. . . .

. . . . Instead, the official said that Schmitz created a new policy that made it more difficult to get information by subpoena by requiring additional bureaucratic steps. During his tenure, Schmitz also made it harder to initiate an investigation of a political appointee, requiring high-ranking approval before investigators could proceed. . . .

. . . . Some of the more unusual complaints regarding Schmitz deal with what senior officials called an “obsession” with Von Steuben, the Revolutionary War hero who worked with George Washington to instill discipline in the military. Von Steuben reportedly fled Germany after learning that he was going to be tried for homosexual activities. Shortly after taking office, Schmitz made Von Steuben’s legacy a focus. He spent three months personally redesigning the inspector general’s seal to include the Von Steuben family motto, “Always under the protection of the Almighty.”

He dictated the number of stars, laurel leaves and colors of the seal. He also asked for a new eagle, saying that the one featured on the old seal “looked like a chicken,” current and former officials said.

In July 2004, he escorted Henning Von Steuben, a German journalist and head of the Von Steuben Family Assn., to a U.S. Marine Corps event. He also feted Von Steuben at an $800 meal allegedly paid for by public funds, according to Grassley, and hired Von Steuben’s son to work as an unpaid intern in the inspector general’s office, a former Defense official said.

He also called off a $200,000 trip to attend a ceremony at a Von Steuben statue earlier this year in Germany after Grassley questioned it.

Finally, Schmitz’s son, Phillip J. Schmitz, has a business relationship with a group tied to Von Steuben. Schmitz, who runs a technology firm, provides web-hosting services for the World Security Network, a nonprofit news service focused on peace and conflict issues. Von Steuben serves on the network’s advisory board.

Hubertus Hoffmann, a German businessman who founded the network, said Von Steuben played no role in assigning the contract to Phillip Schmitz, who is paid a “modest sum” for his work. Schmitz said he first made contact with Hoffmann through his father but that he had never met Von Steuben.

The relationships troubled many at the Pentagon.

“He was consumed with all things German and all things Von Steuben,” said the former Defense official, who did not want to be identified because of the ongoing inquiries. “He was obsessed.” . . . .

3c. Donald Trump, himself, is not stranger to the milieu of the Steuben Society:

“Donald Trump;”  wikipedia.

. . . . Trump has said that he is proud of his German heritage; he served as grand marshal of the 1999 German-American Steuben Parade in New York City.[12][nb 1]. . . . .

4. It’s also worth noting that Joseph’s brother, John P. Schmitz, is a lawyer who specializes in US/German regulatory issues who’s clients include Bayer AG, Bertelsmann, Bosch GmbH, Deutsche Welle.

Note that, as we spoke of in FTR #476,  Schmitz has a strong link with Bundestag member Matthias Wissman, with whom he worked as a Bosch Foundation scholar. Wissman and Schmitz worked for Wilmer, Cutler and Pickering, a firm that defended German and Swiss interests in suits by Holocaust survivors.

“John P. Schmitz”; Schmitz Global Partners LLP.

John Schmitz represents US and European companies in complex international transactions and regulatory matters, with a focus on antitrust, media and telecommunications, energy and environmental issues. He has special emphasis on US and German political regulatory concerns, and has experience with numerous high-profile business and regulatory matters involving both American and German public policy and legal activities. John’s clients have included the US Chamber of Commerce, General Electric, Bayer AG, Bertelsmann, Bosch GmbH, Deutsche Welle, Gillette, Pfizer, Microsoft, Verizon, Eli Lilly Co., Ford Motor Co., and Arkema., among others.

In September 2009, together with former Ambassador C. Boyden Gray, John established Gray & Schmitz LLP in September 2009 (renamed Schmitz Global Partners LLP in 2011). In 1993, John joined Mayer Brown as a partner to open its first German office in Berlin. From 1993 to 2009, John helped lead and develop a prominent and thriving German practice at Mayer Brown. Before joining Mayer Brown in 1993, John held a wide range of significant public policy positions. Between 1985 and 1993, he served as Deputy Counsel to George H. W. Bush in both the White House and the Office of the Vice President. . . .

. . . . John has also held a number of high-profile fellowships. In Germany, under a Robert Bosch Foundation Fellowship, he served at the Office of Bundestag Member Matthias Wissmann (Bonn), and the Office of General Counsel, Robert Bosch, GmbH (Stuttgart). . . .

5. Noting the “bidding war” alluded to in Germany Plots with the Kremlin: ” . . . He [Adenauer] assured his listeners that Russia’s conciliatory attitude was most helpful to Germany’s aspirations and that other Russian offers were to be expected in which even greater concessions would be made to Germany, especially on the territorial question of the Oder-Neisse Line. The Chancellor hinted in his talks that the Soviet Note had created the heated atmosphere of an auction room where two eager opponents outbid each other. . . .”

We note in that regard, that Trump’s obliquely conciliatory remarks about Putin and Ukraine are consistent with the attitudes of German corporations, many of which would like to see the sanctions lifted, so that they may regain lost economic leverage.

German corporate elements, in concert with other European companies, also envisage possible cooperation with Russia’s Eurasian Economic Union. With another trans-Atlantic trade agreement pending between the U.S. and EU/Germany, we may well be seeing another bidding war between Russia and the West.

German political and national security elements have been pursuing a hard line against Russia over Ukraine, at the same time that other political and economic elements have pursued a policy of detente.

The U.S., of course, is playing “bad cop” to Germany’s corporate/political “good cop.”

“Dispute over Sanctions on Russia (II);” german-foreign-policy.com; 5/03/2016.http://www.german-foreign-policy.com/en/fulltext/58936

German business circles and proxy foreign policy organizations are campaigning to have the sanctions against Russia lifted. More than two-thirds of the people in Germany are in favor of lifting sanctions, reports Koerber Foundation (Hamburg) based on a current opinion poll. More than four-fifths want close cooperation with Russia, and 95 percent consider a rapprochement in the next few years to either be “important” or “very important.” The Koerber Foundation, an influential organization in the field of foreign policy, has, for years, been engaged in developing cooperation between Germany and Russia. The hope of an early lifting of sanctions was also the subject of the 4th East Forum Berlin, an economic forum with top-rank participants, held in mid-April, at which a state secretary of the Ministry of Foreign Affairs spoke in favor of new contacts between the EU and the Moscow-initiated Eurasian Economic Union (EAEU). The objective is the creation of a common “economic space from Lisbon to Vladivostok.” The initiatives taken in Germany are being met with approval in several EU countries, including Italy and Austria.

Growing Discontent

Demands to abandon the sanctions policy against Moscow have been growing louder in various EU member countries, such as Italy, for which Russia is one of its most important business partners. Already in mid-March, the foreign ministers of Italy and Hungary had opposed an automatic prolongation of the sanctions without a debate. Following talks in Moscow in early April, the President of Austria, Heinz Fischer, announced he was also working toward halting the punitive measures.[1] Last week, France’s National Assembly passed a plea to end the sanctions.[2] Anger is also apparent in Greece. Moreover, resistance is growing within German business circles, who, if the sanctions are soon lifted, hope for a new start of their business with Eastern Europe. Exports to Russia have plummeted from an annual volume of 39 billion Euros to less that 22 billion, since 2012 alone. If sanctions are lifted, German companies are counting on being able to redeem at least part of these losses.

From Lisbon to Vladivostok

Similar views were recently expressed at the “East Forum Berlin,” convened by the German Committee on Eastern European Economic Relations (OA) together with the Metro Group and Italy’s UniCredit, for the fourth time in the German capital. More than 400 participants – including the recently fired Ukrainian Minister of Finances, Natalie Jaresko, and Russia’s First Deputy Minister of Economic Development, Alexey Likhachev – discussed the development of an “economic space extending from Lisbon to Vladivostok.” In a survey of 180 participants of this top-rank forum, more than 80 percent clearly favored negotiations between the EU and the Moscow-led Eurasian Economic Union (EAEU) on the establishment of a common “economic space.”[3] They found sympathetic listeners. In his “East Forum,” opening speech, State Secretary in Germany’s Ministry of Foreign Affairs, Stephan Steinlein, confirmed that the German government supports “contacts between the EU and the Eurasian Economic Union.” “Technical standards, trade rules, cross-border infrastructure and simplified exchange procedures” should be discussed.[4] Sanctions against Russia was another important issue discussed at the East Forum. Thirty five percent of those surveyed predicted an end to the sanctions in the course of this year, while 27 percent predicted 2017. Only slightly more than a third thought the sanctions would last longer than 2017.

A New Start Required

Last week, Hamburg’s Koerber Foundation, one of Germany’s foreign policy organizations, which has promoted closer cooperation between Germany and Russia for years, took a stand. “Dialogue and understanding” between the two countries have, “for decades, been an important element of our work,” declared the foundation. Currently, “with its focus on ‘Russia in Europe,’ the Koerber Foundation devotes itself to the rejuvenation of an open, critical, and constructive dialogue between Russia and its European neighbors.”[5] Within this framework, the organization convokes a “German-Russian International Dialogue” twice annually, in which experts and politicians of the two countries can discuss “questions of European security and EU-Russia relations in a confidential atmosphere” in Moscow or Berlin.”[6] The Koerber Foundation reached the conclusion after its most recent meeting, which took place December 5, 2015 in Moscow, that “the EU-Russian relations require a new start.” In this sense, “future dialogue should focus on interests and explore against this backdrop the possibilities for cooperation.” “Economic issues” are “an area of common interests that provide specific opportunities for cooperation.”

Desired Rapprochement

To underline its quest, the Koerber Foundation has just recently published the results of a representative survey conducted on its behalf in both Germany and Russia by TNS Infratest in late February and early March. The survey shows that two years after escalation of the Ukrainian conflict, a significant estrangement between the populations of the two countries can be noticed. 48% of the Germans perceive Russia as a “threat,” only 50% believe – emphatically – that Russia belongs to “Europe.” More than half of the German population considers the EU’s policy toward Russia as “appropriate.” However, when asked which country Germany should work more closely with, 81% of those 1000 Germans, participating in the survey, opted for Russia – in second place behind France (89%) and far ahead of the USA (59%). In Russia, 62% of the respondents chose Germany as their favorite cooperation partner (ahead of China and France with 61% each). 69% of the Germans favor lifting the sanctions on Russia. And lastly, 95% believe that it is “important” or “very important” that Germany and Russia develop closer relations over the next few years.[7]

The Benefit of Cooperation

A first step toward rapprochement was actually accomplished on April 20, with the NATO-Russia Council’s first meeting in two years – promoted particularly by the German government. After the meeting, NATO Secretary General Jens Stoltenberg spoke of “profound and persistent disagreements.” But he also confirmed that the dialog would be continued.[8] Berlin therefore succeeded in reviving the dialog between Moscow and the western war alliance. At the same time, the German chancellor has announced a de facto permanent deployment of German soldiers – as part of a NATO battalion – in Lithuania. This would be a breach of the NATO-Russia Founding Act and would further escalate the conflict between the West and Russia.[9] Russian protests against this deployment would, more than likely, be easier to placate within a NATO-Russia Council than in the absence of an established framework for dialog – a tactical advantage for a highly profitable economic cooperation.

For more information on the subject of sanctions against Russian see: Dispute over Sanctions on Russia (I).

[1] Russland-Sanktionen: Fischer “loyal” zu EU-Linie. diepresse.com 06.04.2016.
[2] L’Assemblée nationale demande la levée des sanctions contre la Russie. www.latribune.fr 28.04.2016.
[3] 4. east forum Berlin mit Rekordbeteiligung. www.ost-ausschuss.de 19.04.2016.
[4] Keynote von Staatssekretär Stephan Steinlein bei der Eröffnung des 4. east forum Berlin am 18.04.2016.
[5] Annäherung oder Abschottung? Ergebnisse einer repräsentativen Umfrage von TNS Infratest. Hamburg 2016.
[6] Russland und die EU: Zusammenarbeit in Zeiten der Krise. Körber-Stiftung Internationale Politik, März 2016.
[7] Annäherung oder Abschottung? Ergebnisse einer repräsentativen Umfrage von TNS Infratest. Hamburg 2016.
[8] “Tiefgreifende und andauernde Differenzen”. Frankfurter Allgemeine Zeitung 21.04.2016.
[9] See Dispute over Sanctions on Russia (I).

6. At the same time that Trump is casting a jaundiced rhetorical on NATO, Germany and the EU are looking to fulfill the development of a “Euro-Corps”

“The European War Union”; german-foreign-policy.com; 6/28/2016.

Together with his French counterpart, the German foreign minister has announced the EU’s transformation to become a “political union” and its resolute militarization for global military operations. In a joint position paper, Frank-Walter Steinmeier (SPD) and Jean-Marc Ayrault (PS) are calling for the EU’s comprehensive military buildup, based on a division of labor, to enable future global military operations. Following the Brexit, the EU should, step-by-step, become an “independent” and “global” actor. All forces must be mobilized and all “of the EU’s political instruments” must be consolidated into an “integrated” EU foreign and military policy. Steinmeier and Ayrault are therefore pushing for a “European Security Compact,” which calls for maintaining “employable high-readiness forces” and establishing “standing maritime forces.” The European Council should meet once a year as “European Security Council.” Before this paper was made public, Germany’s foreign minister and chancellor had made comments also promoting a German global policy and massive rearmament, possibly also with EU-support.

The EU’s Global Mission

In a joint position paper propagated by the German foreign ministry yesterday, German Foreign Minister Frank-Walter Steinmeier (SPD) along with his French counterpart, Jean-Marc Ayrault (PS) announced steps toward a political union. They noted that Britain’s withdrawal from the EU has created “a new situation” with consequences “for the entire EU.”[1] Berlin and Paris “firmly believe” that the EU provides “a historically unique and indispensable framework” not only for “the pursuit of freedom, prosperity, and security in Europe,” but also “for contributing to peace and stability in the world.” Therefore, further steps will be made “towards a political union in Europe” and “other European states” are invited “to join us in this endeavor.” The EU should become “more coherent and more assertive on the world stage.” It is not only an actor “in its direct neighborhood” but also on “a global scale.” In their paper, Steinmeier and Ayrault wrote, “on a more contested and competitive international scene, France and Germany will promote the EU as an independent [!] and global [!] actor.”

European Security Compact

To implement the EU policies of global power, Steinmeier and his French counterpart drew up elements for a “European Security Compact.” “External crises” have become “more numerous” and have moved geographically “closer to Europe both east and south of its borders.” There is no mention that the EU and its major powers have significantly contributed to the fomenting war and civil war – euphemized by Steinmeier and Ayrault as “crises”: In Ukraine, by seeking, through the Association Agreement, to fully integrate the country into its sphere of hegemony;[2] in Libya, through its aggression, ousting the Gaddafi government;[3] or in Syria, through its political and low-intensity military support of an increasingly jihadist-controlled insurgency.[4] Nevertheless, the German foreign minister and his French counterpart announce that they not only support “the emerging government of national accord in Libya,” but that they are also “convinced that Africa needs a continuous commitment, being a continent of great challenges and opportunities.”

Maximum of Insecurity

According to Steinmeier and Ayrault, the “European Security Compact” will be comprehensive and include “all aspects of security and defense dealt with at the European level.” The foreign ministers write that the EU must “ensure the security of our citizens.” However, the concrete demands indicate that the “European Security Compact” will, of course, not bring greater security, but rather the contrary, a maximum of insecurity – an increase in EU-provoked wars and the inevitable effects, they will have on the centers of European prosperity.[5]

Everything for Policies of Global Power

As a first step, the paper written by France and Germany’s foreign ministers proposes that “a common analysis of our strategic environment” be made. These reviews will be regularly prepared “by an independent situation assessment capability, based on the EU intelligence and situation centre” and submitted and discussed at the “Foreign Affairs Council and at the European Council.” On the basis of this common “understanding,” the EU should “establish agreed strategic priorities for its foreign and security policy.” It is political experience that reaching an “understanding” in the process of foreign and military policy standardization, the standpoint of the strongest member-state – Germany – will be taken particularly into consideration. The results should then be “more effectively” than ever, implemented “as real policy,” according to the paper. The objective is an “integrated EU foreign and security policy bringing together all [!] EU policy instruments.”

Arms, Arms, Arms

Steinmeier and Ayrault write in detail that to “plan and conduct civil and military operations more effectively,” the EU should institute a “permanent civil-military chain of command.” In addition, it must “be able to rely on employable high-readiness forces.” In order to “live up to the growing security challenges,” Europeans need “to step up their defense efforts.” For this, the European member states should “reaffirm and abide by the commitments made collectively on defense budgets and the portion of spending dedicated to the procurement of equipment and to research and technology (R and T).” A few days ago, Chancellor Angela Merkel had already taken the first step in this direction, when she declared that Germany’s defense budget should now begin to converge with that of the United States, in terms of their respective GDP percentages – Germany spends 1.2 percent of its GDP on military, while the US spends 3.4 percent.[6] Next, Steinmeier and Ayrault explain that a “European semester” should support the coordination of the individual member countries’ future military planning. “Synergism” is the objective. Throughout the EU, an arms buildup must be as coordinated and efficient as possible. The EU should provide common financing for its operations. “Member states” could establish permanent structured cooperation in the field of defense “or push ahead to launch operations.” Particularly important is “establishing standing maritime forces” or acquiring “EU-owned capabilities in other key areas.”

More Domestic Repression

The Social Democrat Steinmeier and the Socialist Ayrault write that to ensure “internal security,” the “operational capacity” must be enhanced at the EU level. This includes making the best use of “retention of flight passenger data (PNR)” – the “data exchange within the EU” must be “improved” – but also “making the best use of Europol and its counterterrorism centre.” “In the medium term,” there should otherwise be the “creation of a European platform for intelligence cooperation.” Last weekend, SPD Chair, Sigmar Gabriel and the President of the European Parliament, Martin Schulz (SPD) called for the extension of domestic repression as well as the creation of a “European FBI.”[7]

Seize the Opportunity

Just a few days ago, Foreign Minister Steinmeier declared in the US journal “Foreign Affairs” that Germany has become “a major power” and will “try its best” on the world stage “to hold as much ground as possible.”[8] With Britain, which had always adamantly opposed an integrated EU military policy, leaving the EU, Berlin sees an opportunity for reviving its efforts at restructuring the EU’s military and mobilizing as many member countries as possible for the EU’s future wars.

[1] This and the following quotes are taken from “A strong Europe in a World of Uncertainties” – Joint contribution by the French Foreign Minister Jean-Marc Ayrault and Federal Foreign Minister Frank-Walter Steinmeier. www.auswaertiges-amt.de.
[2] See Expansive Ambitions and Die Verantwortung Berlins.
[3] See Vom Westen befreit (II).
[4] See Forced to Flee (I).
[5] Zu den Rückwirkungen der von europäischen Staaten geführten Kriege s. etwa Der Krieg kehrt heim, Der Krieg kehrt heim (II) and Der Krieg kehrt heim (III).
[6] See Auf Weltmachtniveau.
[7] See Flexible Union with a European FBI.
[8] See Auf Weltmachtniveau.

7. The development of an EU “security establishment” would include the creation of a European-wide FBI. In past discussions of L’Affaire Snowden, we noted that the EU was also working toward an EU-wide equivalent of the NSA.

“Flexible Union with a European FBI”; german-foreign-policy.com; 6/27/2016.

Berlin is applying intense pressure in the aftermath of the Brexit, to reorganize the EU. Under the slogan, “flexible Union,” initial steps are being taken to establish a “core Europe.” This would mean an EU, led by a small, tight-knit core of countries, with the rest of the EU member countries being subordinated to second-class status. At the same time, the President of the European Parliament and Germany’s Minister of the Economy (both SPD) are calling for the communitarization of the EU’s foreign policy, reinforcement of its external borders, the enhancement of domestic repression and the creation of a “European FBI.” The German chancellor has invited France’s president and Italy’s prime minister to Berlin on Monday to stipulate in advance, measures to be taken at the EU-summit on Tuesday. German media commentators are speaking in terms of the EU’s “new directorate” under Berlin’s leadership. At the same time, Berlin is intensifying pressure on London. The chair of the Bundestag’s EU Commission predicts a new Scottish referendum on secession and calls for Scotland’s rapid integration into the EU. German politicians in the European Parliament are exerting pressure for rapidly implementing the Brexit and reorganizing the EU. Chancellor Merkel has reiterated her veiled threat that “reconciliation and peace” in Europe are “anything but self-evident,” should European countries choose to no longer be integrated in the EU.

Core Europe

Already earlier this year, Berlin had initiated preparations for transforming the EU into a “flexible Union” and creating a “core Europe.” On February 9, the foreign ministers of the six founding EU countries [1] held an exclusive meeting in Rome to discuss the EU’s various current crises. This unusual meeting format was also considered to be a counterpoint to the Visegrád-Group [2], which had been particularly critical of Berlin’s refugee policy. The discussion in Rome was focused not only on the refugee policy, but also included a possible Brexit.[3] In their Joint Communiqué, the six foreign ministers underlined the “different paths of integration,” provided for by the Lisbon Treaty – a hint at the option of a “flexible Union.”[4] The foreign ministers of the six founding countries again met on Mai 20, at the Val Duchesse Castle south of Brussels, this time explicitly to discuss the EU’s development in case of a Brexit. They met again last Saturday to discuss a paper jointly presented by the German and French foreign ministers, literally demanding a “flexible Union.”[5] The common declaration, agreed upon by the six ministers on Saturday, does not mention that polarizing term, while paraphrasing their aspired core Europe. There is a need to “recognize” that among the member countries there are “different levels of ambition towards European integration.”[6]

The Strong Man behind Juncker

Using this format of the founding countries, Berlin is pushing for a “flexible Union” that is particularly rejected by those member countries, to be relegated to second-class status. At the same time, Berlin is exerting pressure at other levels. Already on May 23, an initial official meeting within the framework of the EU Commission, was held, to make arrangements for a possible Brexit.[7] The invitation had been extended by the German jurist, Martin Selmayr, Chef de Cabinet of Jean-Claude Juncker, President of the European Commission. From 2001 to 2004, Selmayr managed the Bertelsman AG office in Brussels. He subsequently became spokesperson and then Chef de Cabinet for EU Commissioner Viviane Reding (Luxembourg). Observers, referring to his influence, noted that some considered Reding to be the “dummy of the ventriloquist, Selmayr.”[8] According to German media, Selmayr, the strong man behind Juncker,[9] had extended the invitation for the May 23 strategy meeting, not only to representatives of Slovakia and Malta – the two countries to assume EU presidency in July and January, respectively, but also to Uwe Corsepius, Merkel’s European policy advisor. Corsepius is considered one of Berlin’s most important European policy strategists.[10]

The New Directorate

Beyond such long-term agreements, Chancellor Angela Merkel has invited France’s President, François Hollande, Italy’s Prime Minister, Matteo Renzi and EU Council President Donald Tusk to Berlin, Monday to discuss the EU’s future, after Great Britain’s withdrawal. The objective is to agree upon important stipulations prior to the EU’s Tuesday summit – which is similar to the 2010 – 2011 meetings she had held with the French president at the time, Nicolas Sarkozy (“Merkozy”), to set the guidelines for the EU’s handling of the Euro crisis. Observes point to the fact that Merkel’s inviting Renzi along with Hollande has ostentatiously demoted France’s status. Simultaneously, German media are speaking in terms of the EU’s “new directorate.” Of course, there is no doubt that “Germany remains the most important EU nation, both politically as well as economically.”[11] In practice, the “directorate” serves the function – as in the previous cases of Merkel’s Sarkozy meetings – primarily of transmission of German specifications to the EU’s other member countries.

The Central Role

Berlin’s predominance within the EU is being, more or less, officially confirmed by the President of the European Commission, Jean-Claude Juncker. Also in the future, Germany will “continue to play a central role, if not an even more significant role, in the European Union,” Juncker declared.[12]

Supranational Repression

Parallel to preparations for the transformation of the European Union, leading German Social Democrats are calling for supplementary steps for the political-economic streamlining the EU or its core.[13] For example, in their position paper entitled “Re-Found Europe,” Germany’s Minister of the Economy, Sigmar Gabriel, and the President of the European Parliament, Martin Schulz, are calling for an expansion of the EU’s single market, under the topic an “economic Schengen.” In the process, across the board “central” job market reforms must be implemented. The masses in the French population are currently up in arms fighting the imposition of these job market reforms.[14] In addition, Gabriel and Schulz are calling on the EU to “more than ever” “act as a unified governing force,” which would signify that the “communitarization” of the EU’s foreign policy. The implementation of this communitarization, would mean Germany’s global interests being pursued via institutions in Brussels due, to a large extent, to Berlin’s predominance within the EU. Finally, the German social democrats are calling for the systematic creation and expansion of supra-national structures of repression. For example, institutions warding off refugees from the EU must be systematically reinforced (“effectively securing European external borders”) and cooperation between domestic repressive authorities intensified. The creation, for example, of a “European FBI” should be an objective.

Project Deterrence

To deter other EU countries from holding referendums, Berlin is massively intensifying pressure on London. To avoid needless dissention, the British government seeks to conscientiously prepare and carry out the negotiations. President of the European Parliament, Martin Schulz, declared in the form of an ultimatum, that he “expects” the British government to present its withdrawal application at the EU summit on Tuesday. Chair of the EPP parliamentary caucus, Manfred Weber (CSU) called on Britain to withdraw “within the planned two-year delay, and even better, within a year.”[15] Brussels has already created a “Brexit Task Force” and an “Article 50 Task Force” – the latter named after the respective article of the Lisbon Treaty regulating a member state’s withdrawal from the EU. Above all, leading German politicians are fanning Scottish secessionist plans. “The EU will continue to consist of 28 member countries,” declared Gunther Krichbaum (CDU), Chair of the EU Affairs Committee in the German Bundestag, “because I expect a renewed independence referendum in Scotland, which will be successful this time.” Krichbaum says, “we should promptly reply to this pro-EU country’s membership application.”[16] The German media is also energetically firing on Scottish separatism. Since 1945, the Federal Republic of Germany has possibly never engaged in such unabashed encouragement of the disintegration of a West European country.

War in Europe

In Berlin, this is all being flanked by statements that cannot be otherwise interpreted as oblique war threats. “Although it is difficult for us to imagine,” one should “never forget” that “the idea of a united Europe, had been an idea of peace,” claims the German Chancellor.[17] The allegation corresponds less to historical reality,[18] than to the EU’s self-promotion. Yet, Merkel declares that in Europe, “reconciliation and peace” are both currently and in the future “anything other than self-evident.” The chancellor has expressed this point of view in various EU crisis situations. (german-foreign-policy.com reported.[19]) According to this view, the potential of European countries settling their disputes militarily remains essentially unaltered and can be unleashed, should they no longer choose integration in a German-dominated EU.

For more on this theme: The First Exit.

[1] Bundesrepublik Deutschland, Frankreich, Italien, Belgien, Niederlande, Luxemburg.
[2] Der Visegrád-Gruppe gehören Polen, Tschechien, die Slowakei und Ungarn an.
[3] EU-Gründerstaaten: “Europäische Dreifachkrise” und “Herausfordernde Zeiten”. de.euronews.com 10.02.2016.
[4] Joint Communiqué. Charting the way ahead. An EU Founding Members’ initiative on strengthening Cohesion in the European Union. www.esteri.it 09.02.2016.
[5] Berlin und Paris schlagen “flexible EU” vor. www.handelsblatt.com 24.06.2016.
[6] Gemeinsame Erklärung der Außenminister Belgiens, Deutschlands, Frankreichs, Italiens, Luxemburgs und der Niederlande am 25. Juni 2016.
[7] EU rüstet sich für Brexit-Ernstfall. www.spiegel.de 27.05.2016.
[8] Hendrick Kafsack, Werner Mussler: Die EU spricht deutsch. www.faz.net 26.06.2014. See Particularly Close to Germany.
[9] Hendrick Kafsack: Der starke Mann hinter Juncker. www.faz.net 10.09.2014.
[10] See Under the German Whip (I).
[11] Nikolas Busse: Das neue Direktorium. Frankfurter Allgemeine Zeitung 25.06.2016.
[12] Juncker sieht starke Rolle für Deutschland. www.handelsblatt.com 25.06.2016.
[13] Sigmar Gabriel, Martin Schulz: Europa neu gründen. www.spd.de.
[14] See The Price of Deregulation.
[15] EU-Parlamentspräsident Schulz fordert Austrittsantrag der Briten bis Dienstag. www.sueddeutsche.de 25.06.2016.
[16] Jacques Schuster, Daniel Friedrich Sturm: Und zurück bleiben die verwirrten Staaten von Europa. www.welt.de 26.06.2016.
[17] Pressestatement von Bundeskanzlerin Merkel zum Ausgang des Referendums über den Verbleib Großbritanniens in der Europäischen Union am 24. Juni 2016 in Berlin.
[18] Die “Einigung” des europäischen Kontinents unter deutscher Dominanz gehörte bereits zu den deutschen Kriegszielen im Ersten Weltkrieg; damals sprach beispielsweise Reichskanzler Theobald von Bethmann Hollweg von der Gründung eines “mitteleuropäischen Wirtschaftsverbands”. Auch im NS-Staat wurden entsprechende “Einigungs”-Strategien vertreten. Mehr dazu: Europas Einiger.
[19] See A Question of Peace or War in Europe, Management with a Crowbar and Vom Krieg in Europa.

8a. We have noted Trump’s real estate dealings in the past, and the opaque nature of his relationships. Organized crime elements are one of the elements for which Trump’s real estate empire apparently “fronts.”

A New York Times investigation revealed that German corporate elements are another major player in the complex Trump real estate dealings. The nature of the relationships is so complex that not even The Times could unravel some of the relationships.

Deutsche Bank and the Union Bank of Switzerland are major Bormann capital network players. The Hineberg company, as a dominant international shipping concern and a major German corporation is almost certainly a major Bormann capital network player.

“Trump’s Empire: A Maze of Debts and Opaque Ties” by Susanne Craig; The New York Times; 8/21/2016.

. . . .Yet The Times’s examination underscored how much of Mr. Trump’s business remains shrouded in mystery. He has declined to disclose his tax returns or allow an independent valuation of his assets.

Earlier in the campaign, Mr. Trump submitted a 104-page federal financial disclosure form. It said his businesses owed at least $315 million to a relatively small group of lenders and listed ties to more than 500 limited liability companies. Though he answered the questions, the form appears to have been designed for candidates with simpler finances than his, and did not require disclosure of portions of his business activities. . . .

. . . .The Times found three other instances in which Mr. Trump had an ownership interest in a building but did not disclose the debt associated with it. In all three cases, Mr. Trump had passive investments in limited liability companies that had borrowed significant amounts of money.

One of these investments involves an office tower at 1290 Avenue of Americas, near Rockefeller Center. In a typically complex deal, loan documents show that four lenders — German American Capital, a subsidiary of Deutsche Bank; UBS Real Estate Securities; Goldman Sachs Mortgage Company; and Bank of China — agreed in November 2012 to lend $950 million to the three companies that own the building. Those companies, obscurely named HWA 1290 III LLC, HWA 1290 IV LLC and HWA 1290 V LLC, are owned by three other companies in which Mr. Trump has stakes. . . . .

. . . .At 40 Wall Street in Manhattan, a limited liability company, or L.L.C., controlled by Mr. Trump holds the ground lease — the lease for the land on which the building stands. In 2015, Mr. Trump borrowed $160 million from Ladder Capital, a small New York firm, using that long-term lease as collateral. On his financial disclosure form that debt is listed as valued at more than $50 million. . . .

. . . .Tracing the ownership of many of Mr. Trump’s buildings can be a complicated task. Sometimes he owns a building and the land underneath it; sometimes, he holds a partial interest or just the commercial portion of a property.

And in some cases, the identities of his business partners are obscured behind limited liability companies — raising the prospect of a president with unknown business ties.

At 40 Wall Street, Mr. Trump does not own even a sliver of the actual land; his long-term ground lease gives him the right to improve and manage the building. The land is owned by two limited liability companies; Mr. Trump pays the two entities a total of $1.6 million a year for the ground lease, according to documents filed with the S.E.C.

The majority owner, 40 Wall Street Holdings Corporation, owns 80 percent of the land; New Scandic Wall Limited Partnership owns the rest, according to public documents. New Scandic Wall Limited Partnership’s chief executive is Joachim Ferdinand von Grumme-Douglas, a businessman based in Europe, according to these documents.

The people behind 40 Wall Street Holdings are harder to identify. For years, Germany’s Hinneberg family, which made its fortune in the shipping industry, controlled the property through a company called 40 Wall Limited Partnership. In late 2014, their interest in the land was transferred to a new company, 40 Wall Street Holdings. The Times was not able to identify the owner or owners of this company, and the Trump Organization declined to comment. . . .

8b. In connection both with Trump’s real estate holdings and John P. Schmitz’s corporate work, we review the control of German industry and finance by the Bormann network.

Martin Bormann: Nazi in Exile by Paul Manning; Copyright 1981 by Paul Manning; Lyle Stuart Inc. [HC]; ISBN 0-8184-0309-B; pp. 284-285.

. . . Atop an organizational pyramid that dominates the industry of West Germany through banks, voting rights enjoyed by majority shareholders in significant cartels, and the professional input of a relatively young leadership group of lawyers, investment specialists, bankers, and industrialists, he [Bormann] is satisfied that he achieved his aim of helping the Fatherland back on its feet. To ensure continuity of purpose and direction, a close watch is maintained on the profit statements and management reports of corporations under its control elsewhere. This leadership group of twenty, which is in fact a board of directors, is chaired by Bormann, but power has shifted to the younger men who will carry on the initiative that grew from that historic meeting in Strasbourg on August 10, 1944. Old Heinrich Mueller, chief of security for the NSDAP in South America, is the most feared of all, having the power of life and death over those deemed not to be acting in the best interests of the organization. Some still envision a Fourth Reich. . . What will not pass is the economic influences of the Bormann organization, whose commercial directives are obeyed almost without question by the highest echelons of West German finance and industry. ‘All orders come from the shareholders in South America,’ I have been told by a spokesman for Martin Bormann. . . . 

9. Coming on the heels of the Trump campaign’s latest public embrace of the “Alt Right”, news that one of Trump’s advisors has been accused of enthusiastically firing Jews and Holocaust denialism while he was the DoD’s Inspector General almost qualifies as ‘dog bites man’ news at this point. Still, it’s news. Very ominous ‘dog bites man’ news:

“Trump Adviser Accused of Making Anti-Semitic Remarks” by Marisa Taylor and William Douglas; McClatchy News Bureau; 8/18/2016.

Allegations of anti-Semitism have surfaced against one of Donald Trump’s foreign policy advisers, raising further questions about the guidance the Republican presidential nominee is receiving.

Joseph Schmitz, named as one of five advisers by the Trump campaign in March, is accused of bragging when he was Defense Department inspector general a decade ago that he pushed out Jewish employees.

The revelations feed two themes that his opponent Hillary Clinton has used to erode Trump’s credibility: That he is a foreign policy neophyte, and that his campaign, at times, has offended Jews and other minorities.

Schmitz, who is a lawyer in private practice in Washington, says the allegations against him are lies. All three people who have cited the remarks, including one who testified under oath about them, have pending employment grievances with the federal government.

Daniel Meyer, a senior official within the intelligence community, described Schmitz’s remarks in his complaint file.

“His summary of his tenure’s achievement reported as ‘…I fired the Jews,’ ” wrote Meyer, a former official in the Pentagon inspector general’s office whose grievance was obtained by McClatchy.

Meyer, who declined to comment about the matter, cited in his complaint another former top Pentagon official, John Crane, as the source and witness to the remarks. Crane worked with Schmitz, who served as inspector general between April 2002 and September 2005.

In his complaint, Meyer said Crane also said Schmitz played down the extent of the Holocaust.

“In his final days, he allegedly lectured Mr. Crane on the details of concentration camps and how the ovens were too small to kill 6 million Jews,” wrote Meyer, whose complaint is before the Merit Systems Protection Board (MSPB).

Schmitz said that Crane was the source of other false accusations against him.

“The allegations are completely false and defamatory,” Schmitz said in an interview Tuesday.

“I do not recall ever even hearing of any ‘allegations of anti-Semitism against [me],’ which would be preposterously false and defamatory because, among other reason(s), I am quite proud of the Jewish heritage of my wife of 38 years,” he wrote in an email.

Later in a phone interview, he said his wife was not a practicing Jew but “ethnically Jewish” because her maternal grandmother was a Jew.

Meyer, who previously oversaw the Defense Department’s decisions on whistleblowing cases, said he could not comment because his case is still pending. Meyer is now the Obama administration’s top official overseeing how intelligence agencies handle whistleblower complaints.

Crane would not comment directly about his conversation with Schmitz but said, “if, when, I am required to testify under oath in a MSPB hearing, I would then comment on the statement attributed to me by Mr. Meyer.”

“Statements made under oath at the request of a judge in a formal proceeding would also remove my vulnerability to any potential civil litigation by any party involved in the filings by Mr. Meyer,” he added.

Crane’s lawyer, Andrew Bakaj, also refuted Schmitz’s charges about Crane. He said Crane “has had no association or involvement with any of the numerous news accounts challenging the actions or decisions made by Mr. Schmitz when he was Inspector General.”

The anti-Semitic allegations have also become part of another case.

David Tenenbaum, an Army engineer at the Tank Automotive Command (TACOM) in Warren, Michigan, is now citing the allegations in a letter this week to Acting Pentagon Inspector General Glenn Fine as new evidence that current and former Pentagon officials helped perpetrate an anti-Semitic culture within the military that left him vulnerable.

“The anti-Semitic environment began under a prior Inspector General, Mr. Joseph Schmitz,” the letter from Tenenbaum’s lawyer Mayer Morganroth of Birmingham, Mich., states.

Trump’s campaign did not return multiple calls and emails over a week about Schmitz.

The allegations against Schmitz are in Meyer’s employment grievance that was filed in June with the MSPB, which decides such cases filed by federal employees. In the complaint, Meyer alleges former and current Defense Department Inspector General officials discriminated against him as a gay man and retaliated against him for investigating and reporting misconduct by high-level Pentagon officials.

Crane, a former assistant Defense Department inspector general, resigned in 2013 when he learned he was going to be fired after an administrative inquiry. He filed a whistleblower disclosure saying retaliation had forced his resignation. The disclosure is still before the Office of Special Counsel, which investigates such complaints.

The letter from Tenenbaum’s lawyer Mayer Morganroth also alleges Schmitz made remarks about firing Jews and playing down the extent of the Holocaust, citing a “sworn statement” from an unnamed source with knowledge of the Tenenbaum case.

A federal official with knowledge of the matter told McClatchy that Crane testified, under oath, about anti-Semitic remarks Schmitz made to him. Crane was interviewed in at least two investigations involving Pentagon inspector general officials.

Schmitz was accused of shielding Bush administration officials from investigations, including an inquiry into a Boeing contract. He was cleared of the allegations.

Schmitz left the government to become general counsel of the parent company of the defense contractor then known as Blackwater.

A fellow Republican, Sen. Chuck Grassley of Iowa, was one of Schmitz’s biggest critics.

Grassley, for example, complained to the Pentagon about Schmitz’s plans to send Pentagon officials to an event in Germany honoring Baron Friedrich Von Steuben, a Prussian-born Army officer who served under George Washington during the Revolutionary War.

Schmitz, who speaks German, was described as fascinated with Von Steuben, who was known as the nation’s first U.S. inspector general.

Schmitz’s father, the late Republican Congressman John Schmitz who represented California, was a fervent anti-Communist and drew criticism in 1981 for remarks about Jews, including his press release that called the audience at abortion hearings “a sea of hard, Jewish and (arguably) female faces.”

Bart Buechner, Joseph Schmitz’s former military assistant at the inspector general’s office, said he had frequent contact with Schmitz and never witnessed any anti-Semitism.

“He would not say anything negative or pejorative about any ethnic group,” Buechner said.

Former Interior Department Inspector General Earl Devaney, who served during the Clinton, Bush and Obama administrations, said he was surprised to hear Trump picked Schmitz as his adviser.

“I was shocked,” Devaney said. “In fact, a bunch of us former inspectors general called each other when we saw the news, and we couldn’t stop laughing because it was so ridiculous that someone so odd and out of the mainstream would be selected, particularly for that position.”

Tenenbaum, who is alleging officials in the Pentagon inspector general’s office contributed to anti-Semitism against him, was targeted as an Israeli spy by the Army, which launched a criminal investigation of him.

Bridget Serchak, a Pentagon inspector general’s office spokeswoman, declined to comment on the case. Her office concluded in 2008 that Tenenbaum had been singled out for “unusual and unwelcome scrutiny because of his faith” as an Orthodox Jew.

His treatment from 1992 to 1997, the inspector general’s report concluded, amounted to discrimination.

Tenenbaum got his security clearance back and it was even increased to top secret. He was never charged with any wrongdoing. In his letter this week to Pentagon authorities, he asked the inspector general to review his case because he said the office never intervened on his behalf.

“… In light of the information recently obtained, (we) believe your office has and continues to engage in discriminatory behavior,” his lawyer wrote.

Though Schmitz left the government in 2005, he has inserted himself in public affairs often through writing editorials and giving speeches.

Schmitz spoke to law students in March 2015 at Southern Methodist University in Dallas in a forum about communism and its impact on society.

Renwei Chung, a student who took notes of Schmitz’s speech, said it appeared to him that Schmitz was calling Obama a communist. He described how Schmitz held up the book: “The Communist: Frank Marshall Davis – The Untold Story of Barack Obama’s Mentor” and said to the forum, “The Chinese worship Mao. They have pictures of Mao everywhere. Do you know who the second most popular person in China is? Obama. … Why is that?”

Jeffrey Kahn, a professor who also spoke at the forum, said the encounter with Schmitz left him “chilled.”

Kahn wrote in an opinion piece published in July in the Dallas Morning News that “I had witnessed a ghost from McCarthy’s staff,” a reference to former Sen. Joseph McCarthy, who was obsessed with exposing communists in the 1950s.

“What foreign policy advice will Schmitz whisper into Trump’s ear?” Kahn wrote. “I shudder to think what he might do in such a position of power.”

 

 

Discussion

10 comments for “FTR #919 The Trumpenkampfverbande, Part 2: German Ostpolitik, Part 2”

  1. Here’s an interesting emerging post-Brexit dynamic in the EU that should be considered withing the context of Trump’s questioning the need for NATO, something that would be useful for forming an EU army that’s been a goal of the European Right for a while: Some of the EU members that are currently most in favor creating a more decentralized EU (and are generally pro-Trump-ish EU governments), like Poland and Hungary, are calling for the creation of a joint EU army:

    TheLocal.de

    Eastern Europe pushes Germany for joint EU army

    Published: 26 Aug 2016 16:19 GMT+02:00

    Eastern EU countries on Friday pushed for the bloc to create a joint army as they met with Germany for talks on sketching Europe’s post-Brexit future.

    “We must prioritise security, and let’s start by building a common European army,” Hungary’s rightwing prime minister, Viktor Orban, said at talks with Czech, German, Polish and Slovak leaders.

    The five-nation gathering in Warsaw is part of a string of meetings among various groups of countries ahead of a summit on the EU’s future following the June 23 British referendum.

    Leftist Czech Premier Bohuslav Sobotka, for his part, said that “we should also begin a discussion about creating a common European army.”

    German Chancellor Angela Merkel also supported the idea of stronger security but urged caution on how plans were translated into acts.

    “Security is a fundamental issue… we can do more together in the areas of security and defence,” she said.

    “Brexit is not just any event, it’s a breaking point in the history of EU so we need to work out a very careful response,” Merkel added, according to the official English translation of her words.

    In an early response to Britain’s shock vote to exit the EU, Poland’s powerful rightwing leader Jaroslaw Kaczynski called for EU institutional reforms that would forge a confederation of nation states under a president in charge of a powerful common military.

    Challenge to EU

    However, the concept of a common army is a thorny issue within the European Union (EU).

    All five EU countries at Friday’s Warsaw talks are also members of the 28-member NATO Western defence alliance.

    But six of the EU’s 27 post-Brexit membership do not belong to NATO: Austria, Cyprus, Finland, Ireland, Malta and Sweden.

    EU and NATO ties with Russia plunged to their lowest point since the Cold War after Moscow’s 2014 annexation of the Crimean peninsula from Ukraine.

    The Kremlin’s sabre-rattling in the Baltic region has also spooked NATO and EU members there.

    EU leaders from 27 states meet on September 16 in the Slovak capital of Bratislava for an informal summit that will go ahead without Britain.

    Talks are likely to be challenging as Berlin’s preferred vision of a centralised, federal Europe clashes with proposals for a confederation of nation states popular among leaders of eastern EU members.

    “In an early response to Britain’s shock vote to exit the EU, Poland’s powerful rightwing leader Jaroslaw Kaczynski called for EU institutional reforms that would forge a confederation of nation states under a president in charge of a powerful common military.”

    A confederation of states sharing one giant army. So, like, a eurozone version of the military? What could possibly go wrong?

    It’s also worth keeping in mind that a centralized EU military probably eventually means central decisions on weapons procurement, which in turn probably means that some member states’ defense sectors are going to win big while others get wiped out. And since Germany is the third largest arms exporter in the world, with exports doubling just last year, it seems highly likely that the big winners are going to be German defense contractors because they’re apparently making a lot of appealing military hardware. If the EU’s massive and dangerous intra-union account imbalances (which threatens the macroeconomic stability of the eurozone) seems bad now, just wait until we get to add EU army purchases to the list of factors driving that imbalance.

    So it will be really interesting to see not just what military hardware gets manufactured, and which member states do the manufacturing where, but also who ends up paying for all that new hardware and how this impacts that already dysfunctional EU account imbalances because a shiny new army is going to be pretty damn expensive. Will Greece, for instance, be effectively forced to buy German submarines for its share of the joint EU navy? That might be controversial. Hopefully questions like that get meaningfully asked before after the EU decides to form its joint army but since they probably won’t be asked, it’s a reminder that a joint EU army that’s being presented as a kind of post-Brexit symbolic act of EU unity might not end up being very unifying.

    So that’s one way Trump could be a favorite candidate of Berlin: being the only candidate that’s inclined to question the US’s commitment to NATO, Trump is uniquely pro-EU-Military Industrial Complex at a moment when the EU-MIC might exacerbate the underlying EU’s current account calamitous condundrums. Isn’t he a joy?

    Posted by Pterrafractyl | August 26, 2016, 9:25 pm
  2. Considering the media attention that’s already been given to Donald Trump’s reliance on Deutsche Bank for financing a number of his projects and the massive debts he still owes to the bank, it’s kind of surprising some of the other investors in those projects Deutsche Bank helped finance haven’t gotten more attention. Or, more specifically, it’s kind of surprising George Soro’s partnership in Trump’s big Chicago skyscraper project discussed below has gotten more attention.

    Sure, on the on hand it’s just a business partnership and you would expect Trump to form partnerships will all sorts of different characters over the years. But considering we just came out a rather bruising GOP primary with a significant anti-Trump contingent and considering we’re in an age where the far-right media in now mainstream and manufactured stories like “Hillary Clinton secret health problems!” are now the norm, it’s kind of surprising the Soros connection hasn’t come up more:

    The Chicago Tribune

    Big names back Trump tower
    Soros, Deutsche Bank said to be in on 90-story building

    October 28, 2004|By Thomas A. Corfman, Tribune staff reporter.

    Donald Trump has lined up three New York hedge funds, including money from billionaire George Soros, to invest $160 million in his Chicago skyscraper, a key piece in perhaps the largest construction financing in the city’s history, according to real estate sources and public documents.

    Despite reports about the project’s record-breaking sales, most of them from Trump himself, many Chicago real estate developers and lenders have expressed doubts about whether the 90-story tower would ever be built.

    “It is such a huge project, and the prices he said he was getting were so outside the norm,” said Robert Glickman, president and chief executive of Chicago-based Corus Bank.

    “It was reasonable to say, `Is this real?'” he said.

    Much of the skepticism springs from Trump’s own hype. “Chicago developers are much less flamboyant,” said Glickman.

    The massive financing, which sources say also will include a $650 million construction loan from Deutsche Bank, should quell those doubts.

    Trump flies to Chicago Thursday morning for a ceremonial demolition of the former home of the Chicago Sun-Times, 401 N. Wabash Ave., which will be replaced by his 2.5 million-square-foot tower. The demolition is expected to begin for real in January.

    On Wednesday Trump declined to comment on the financing, emphasizing instead the luxury project’s record-breaking sales.

    The chief executive of New York-based Trump Organization said he has agreements to sell three-fourths of the 461 condominiums and 227 hotel-condo units for a combined $515 million.

    “Nobody to my knowledge anywhere in the United States has ever sold more than $500 million worth of apartments prior to construction,” he said. “It’s a great tribute to Chicago, to the location and to a great design.

    “And, I guess, to Trump, when you think of it,” he added.

    The investor trio is led by Fortress Investment Group LLC, according to a financing statement filed Oct. 19 with the Cook County recorder’s office.

    Fortress, which manages more than $10 billion in investments, is familiar with the downtown Chicago condominium market after providing a key $26 million loan on the River East mixed-use development last year.

    The document does not identify the other participants, but a key member is Grove Capital LLP, according to sources familiar with the transaction.

    The firm manages most of the multibillion-dollar real estate portfolio of the $13 billion Soros Fund Management, from which Grove Capital was spun off last month.

    The third investor is Blackacre Institutional Capital Management LLC, the real estate arm of hedge fund Cerberus Capital Management LP, which manages assets totaling $14 billion.

    Executives with the three hedge funds could not be reached for comment.

    The $160 million investment is in the form of a mezzanine loan, a kind of second mortgage that typically charges a much higher interest rate than a first-mortgage construction loan.

    Unlike the mezzanine loan, which has closed, terms of the $650 million construction loan have not yet been finalized, sources said.

    Frankfurt, Germany-based Deutsche Bank, an active commercial real estate lender in the U.S., is expected to split up the loan with other banks.

    Although lining up the financing was a big step for Trump, he still has hurdles to overcome, including avoiding construction delays and cost overruns.

    Still, he expressed no concern about the doubts harbored by some local real estate executives.

    “It’s a very expensive building to build because of the quality we are putting into it,” he said. “So people of course would say, `Gee, that’s a lot of money to raise.’

    “But for me, it’s not a lot of money. You understand,” he said.

    “The $160 million investment is in the form of a mezzanine loan, a kind of second mortgage that typically charges a much higher interest rate than a first-mortgage construction loan.”

    So Soros led a group of three hedge funds that lended Trump $160 million in high-interest loans which was on top of the ~$650 million from Deutsche Bank. And we already know what happened to those Deutsche Bank loans (it was paid off with a new loan from Deutsche Bank’s private bank).

    But what about that $160 million high-interest mezzanine loan Soros helped finance? Well, it’s not easy to find much information on that, but it turns out someone created a blog, aptly named trumpsoroschicago.wordpress.com, with just a single post dedicated solely to elucidating what happened from public sources. And it sure looks like that high-interest loan was also forgiven in 2012 and there’s no indication it was forgiven by issuing a new loan, but instead just forgiven:

    Trumpsoroschicago.wordpress.com

    Did George Soros free Donald Trump of a $312 million debt?

    March 19, 2016
    by sorostrumpchicago

    * In 2005 Trump started construction on his skyscraper the Trump International Hotel and Tower (Chicago)
    * To build the tower, Trump received a loan from Deutsche Bank for $650 million
    * Trump also received a $160 million mezzanine loan* from a group of private investors including George Soros, Fortress Investment Group and Blackacre Capital (The loan was estimated by the Wall Street Journal of having a total value as high as $360 million with accrued interest)
    * By October 2008 Trump had sold nearly $600 million in condo and condo-hotel units, more than half of the total value of all the units in his tower
    * After seven years (2005-2012) Trump was on his way to paying off his main construction loan to Deutsche Bank
    * For reasons unexplained to the public, the majority of Trump’s mezzanine loan was quietly forgiven by the loan’s original lenders
    * No media outlet covering the deal has put together the pieces and told the public that George Soros let Donald Trump off the hook for what has been valued between $82 and $312 million in debt
    * Why would Soros give what amounts to a massive debt relief to Trump during a financially successful period in Trump’s life? Are these men friends, enemies or business partners?

    We have come across information related to a long and bizarre financial deal between Donald J. Trump, George Soros, Fortress Investment Group and Blackacre Capital, a deal discovered by following a specific on-going money trail and likely partnership between these entities.

    In 2005, when Trump began financing the construction of the tallest residential tower on the North American continent the Trump International Hotel and Tower (Chicago), he needed more than just the basic loan he had received from Deutsche Bank. Trump needed what is called a “mezzanine loan”, a loan which is far more expensive than a regular bank loan. This kind of loan needs to be paid off more quickly to avoid high interest payments. It also needs to be paid back in full to keep the lender from taking ownership of the underlying asset.

    “Mezzanine financing is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full…

    …Since mezzanine financing is usually provided to the borrower very quickly with little due diligence on the part of the lender and little or no collateral on the part of the borrower, this type of financing is aggressively priced with the lender seeking a return in the 20-30% range.” 1

    Soros along with Fortress and Blackacre came to Trump with just such a loan at a costly $160 million principal*. The The Wall Street Journal had valued the loan at as much as $360 million, depending on the length of time it accrued interest.

    “Donald Trump has lined up three New York hedge funds, including money from billionaire George Soros, to invest $160 million in his Chicago skyscraper, a key piece in perhaps the largest construction financing in the city’s history, according to real estate sources and public documents… The massive financing, which sources say also will include a $650 million construction loan from Deutsche Bank…” 2

    “Big names back Trump tower” Chicago Tribune – October 28, 2004

    “A loan document says Mr. Trump could have to pay Fortress as much as $360 million, depending on how long the loan accrues interest. Combined with the Deutsche Bank senior loan, he would owe more than $1 billion in total.” 3

    “In Chicago, Trump Hits Headwinds” The Wall Street Journal – October 29, 2008

    By October 2008, the tower was almost complete and Trump had sold nearly $600 million in condo and condo-hotel units, more than half of the total value of all units in the tower.

    “So far, Mr. Trump has lined up buyers for a bit less than $600 million of condo units and condo-hotel units in a residential market that has virtually seized up… He has closed around $200 million in sales so far, with roughly $380 million still in contract.”3

    “In Chicago, Trump Hits Headwinds” The Wall Street Journal – October 29, 2008

    In 2012, Trump continued to owe money to his lenders but sales of his condominiums had picked up and his tower had a 69% occupancy rate. As Crain’s Chicago put it: “The region’s housing and condo market is still mired in a historic slump. But when it comes to buying and selling in Chicago’s high-end condo market, life is surprisingly good… Condominium owners at the $850 million Trump International Hotel & Tower and other newer top-end buildings have, more often than not, experienced value appreciation when they sold in recent years.” 4

    While Trump was not yet making a profit on his tower, his sales and value appreciations were such that his building was generating significant revenue, more than enough revenue to pay back to his lenders large portions of his loans. As former New York real estate developer David Rose writes in his article “How to pay off a Skyscraper”:

    “After a number of years have passed, several things are likely to have happened: 1) the mortgage has been significantly paid down; 2) the value of the underlying building has increased; and 3) the owner has waited for a time in the economic cycle where mortgage rates are low. At that point [they] will ‘refinance’ the original mortgage, and put the balance to work somewhere else where it can make even more money.” 5

    “How Long Does It Take To Pay Off a Skyscraper?” Slate – July 12, 2012

    (Fortunately for Trump, favorable financial conditions existed in 2012. 6 By all accounts, including his own, Trump was ready and able to pay off the loans for his Chicago tower. 7)

    Yet Trump did not have to worry about paying back the majority of his mezzanine loan. A special group of lenders came in and erased a significant portion of this obligation.

    That group was the original mezzanine loan lenders: Soros, Fortress and Blackacre; all of whom decided to forgive Trump’s future interest payments on the loan, selling it to him at the massively reduced price of $48 million. To put that in starker terms, Soros and the others effectively gave Trump possibly hundreds of millions of dollars in debt forgiveness, while cutting down the principal of his loan by $82 million**. Basically, Soros and the others forgave Trump as much as $312 million for no apparent reason.

    “Donald Trump has paid $48 million to buy out junior creditors on his 92-story Chicago condominium and hotel project… The New York developer says he bought the debt, which had a face value of $130 million, back from a group of creditors led by Fortress Investment Group.” 8

    “Trump buys out tower creditors” Crain’s Chicago Business– March 28, 2012

    In a further twist to the story, in the same article from Chicago Business revealed: “After buying out the junior debt [the mezzanine loan], Mr. Trump says he now owes about $120 million on the building that comes due in 1½ years.” 8

    The aforementioned shows us that in 2012 Trump had already paid off most of the Deutsche Bank loan before Soros, etc. came in and wiped out most of his mezzainine debt. This raises the question, why wasn’t Trump expected by Soros, Fortress and Blackacre to pay back their riskier, high-interest mezzanine loan? Also, how was Trump able to pay down his Deutsche Bank loan – demonstrating the means to pay off all his loans – yet still have Soros and the others give him somewhere between $82 million and $312 million in debt forgiveness?

    Additionally to that, why have we heard almost nothing about this gigantic giveaway to Trump? And why were Soros and Blackacre, two of the three main investors in the mezzanine loan, scrubbed from media’s coverage of the final debt forgiveness deal? What backroom agreements were made concerning this mezzanine loan?

    And indeed, not only was this deal made in a cloaked manner, it may have been the most generous amount of debt forgiveness ever given on a mezzanine loan to a borrower who was in good financial health and who had a steadily appreciating asset, as was Trump and his Chicago tower.

    Footnotes:

    *Two articles quote the total for the mezzanine loan at $130 million, however due to the limited coverage of the deal we do not know at this time which is the true figure. 6 7

    **If we were to rely on the original figure of the $160 million principal, this would be $112 million giveaway on the loan’s principle to Trump

    Sources:

    1. “Mezzanine Financing” Investopedia: http://www.investopedia.com/terms/m/mezzaninefinancing.asp
    2. “Big names back Trump tower” Chicago Tribune – October 28, 2004: http://articles.chicagotribune.com/2004-10-28/news/0410280265_1_donald-trump-soros-fund-management-blackacre-institutional-capital-management
    3. “In Chicago, Trump Hits Headwinds” The Wall Street Journal – October 29, 2008: http://www.wsj.com/articles/SB122523704293478077
    4. “Trumped up: Trophy towers’ condos rise above housing slump” Crain’s Chicago Business – April 14, 2012: http://www.chicagobusiness.com/article/20120414/ISSUE01/304149974/trumped-up-trophy-towers-condos-rise-above-housing-slump
    5. “How Long Does It Take To Pay Off a Skyscraper?” Slate – July 12, 2012: http://www.slate.com/blogs/quora/2012/07/12/how_long_does_it_take_to_pay_off_a_skyscraper_.html
    6. “Mortgage rates sink to new record low” CNN Money – June 7, 2012: http://money.cnn.com/2012/06/07/real_estate/mortgage-rates/
    7. “The 400 Richest Americans – #134 Donald Trump” Forbes – Sept. 17, 2008: http://www.forbes.com/fdc/welcome_mjx.shtml
    8. “Trump buys out tower creditors” Crain’s Chicago Business – March 28, 2012: http://www.chicagobusiness.com/realestate/20120328/CRED03/120329769/trump-buys-out-tower-creditors
    9. “Trump sues lenders for more time to pay off loan on Tower” Chicago Real Estate Daily – November 07, 2008: http://www.chicagobusiness.com/realestate/20081107/CRED03/200031749/trump-sues-lenders-for-more-time-to-pay-off-loan-on-tower

    “That group was the original mezzanine loan lenders: Soros, Fortress and Blackacre; all of whom decided to forgive Trump’s future interest payments on the loan, selling it to him at the massively reduced price of $48 million. To put that in starker terms, Soros and the others effectively gave Trump possibly hundreds of millions of dollars in debt forgiveness, while cutting down the principal of his loan by $82 million**. Basically, Soros and the others forgave Trump as much as $312 million for no apparent reason.”

    It is a bit of a head-scratcher. And a great area of media inquiry considering Soro’s status as a major Democratic donor. At least it seems like it should be a great area of inquiry. Although note there there is one possible explanation available from existing reporting for why Trump was expected to pay back his lower interest but larger Deutsche Bank loans but not his mezzanine loan: Trump was only able to pay off his Deutsche Bank loans in 2012 with the help of an additional Deutsche Bank private bank loan (which is part of why he still owes so much money to Deutsche Bank). So it’s possible that Trump really couldn’t pay off any of his loans in 2012 related to that Chicago skyscraper project. Instead Deutsche Bank bailed him out with a new private bank loan and the Soros/Fortress/Cerberus group bailed him out by selling back the debt at a massively reduced price.

    So it’s possible the mystery behind the sweetheart Soros debt forgiveness is simply that Trump had simply made a bad investment and Soros and Deutsche Bank made a bad investment in Trump. Although it’s still somewhat mysterious since, as we just saw, the skyscraper market in Chicago in 2012 was actually looking pretty decent for big developers like Trump, with significant appreciation in the value of the underlying asset:


    In 2012, Trump continued to owe money to his lenders but sales of his condominiums had picked up and his tower had a 69% occupancy rate. As Crain’s Chicago put it: “The region’s housing and condo market is still mired in a historic slump. But when it comes to buying and selling in Chicago’s high-end condo market, life is surprisingly good… Condominium owners at the $850 million Trump International Hotel & Tower and other newer top-end buildings have, more often than not, experienced value appreciation when they sold in recent years.” 4

    If Trump was indeed unable to pay back both his Deutsche Bank and mezzanine loans, that does sound circumstantially at least kind of odd. It would be an odd time for massive loan forgiveness when the high-end Chicago skyscraper market was looking pretty good in 2012. The condo units on the Trump Tower were basically sold out by 2014, so business was clearly pretty great in the wake of that round of loan forgiveness.

    All in all, it’s an odd business story. But considering that it’s an odd business story involving the conspiracy-mongering GOP nominee getting a mystery sweetheart loan deal a major Democratic donor, and not just some random big donor but George Soros, and this was all just four years ago, the oddest part of this story might be how rarely it’s been told.

    Posted by Pterrafractyl | August 27, 2016, 3:00 pm
  3. With much of the world justifiably terrified of the prospect that President-elect Donald Trump is going to effectively reverse any US commitments to preventing catastrophic climate change and pull the US out of the Paris accord, it’s worth keeping in mind, given our Trumpian trajectory that could impact the climate for decades to come, that food security is basically guaranteed to be a global emergency in coming decades. There was already a looming arable land shortage and now it’s only going to get worse. And that all suggests that we could see a lot more geostrategic interest by nation-states in securing access to those regions of the world with large amounts of arable farmland.

    Given all that, it’s also worth noting that Ukraine is set to be the world’s third largest food exporter some time in the next decade due to its incredibly productive arable land:

    Bloomberg Businessweek

    That Boom You Hear Is Ukraine’s Agriculture
    With the conflict frozen, money is flowing to modernize farms

    Alan Bjerga
    Volodymyr Verbyany

    October 13, 2016 — 10:00 PM CDT

    Ihor Makarevych bumps along the pitted roads to his fields, talking about warfare and his crops. When conflict broke out in eastern Ukraine in 2014, helicopter-launched heat flares scorched his land. Later, 19 of his employees were conscripted into the army. “There were nine road checkpoints installed by Ukrainian soldiers near our farmlands,” says the 52-year-old, who was an officer in the Soviet Army in the 1980s.

    Makarevych is chief executive officer of Agrofirma Podolivska, which manages farmland in Ukraine’s Kharkiv region, to the north bordering Russia and to the east, the Donetsk and Luhansk regions, partly controlled by separatists. Despite that proximity, when he arrives at his fields, the war seems far away. Semi-automated New Holland and John Deere combines are starting to harvest corn and sunflowers, following choreography developed by Kharkiv-based coders. Farmers check moisture levels on monitors inside their cabs, while deep-yellow grain is cut against a blue sky, the colors of the Ukrainian flag.

    The corn and sunflowers will make their way to the ports of Odessa and Mykolayiv for export, sold to Archer Daniels Midland, Cargill, and other multinationals as part of the stream of grain and oilseeds that makes Ukraine the world’s fifth-biggest seller of wheat and other grains. Companies are betting that global appetites will increasingly rely on Black Sea soil even as obstacles to growth remain. “Ukraine is a big answer to the question of how you feed the world,” says Steve Pifer, a former U.S. ambassador there who’s now with the Brookings Institution. “But it’s a complex place to do business.”

    The country’s agricultural superpowers start with its soil, called chernozem, or “black earth.” High in humus and natural fertilizers, it’s celebrated by agrarians for its fertility. “In Iowa, good black soil may be a foot deep,” Pifer says. “In Ukraine, it’s three or four feet deep.” Proximity to the European Union, Middle East, Russia, and Africa provides natural markets. So does suspicion of genetically modified crops. Ukraine’s non-GMO corn varieties have made it China’s No.1 source, helping to turn the former Soviet breadbasket into a global player.

    Ukraine sold $7.6 billion of bulk farm commodities worldwide in 2015, quintupling its revenue from a decade earlier and topping Russia, its closest rival on world markets. By the mid-2020s, “Ukraine will be No.3, after the U.S. and Brazil,” in food production worldwide, says Martin Schuldt, the top representative in Ukraine for Cargill, the world’s largest grain trader. The company, headquartered in Minnetonka, Minn., saw its sunflower-seed processing plant in the Donetsk region overrun by separatists in 2014; it still can’t regain access to the facility. Nonetheless, the company is investing $100 million in a new grain terminal in Ukraine. Bunge, the world’s biggest soy processor, opened a port this year at a ceremony with Ukrainian President Petro Poroshenko—another vote of confidence in the country.

    Conflict in what’s broadly referred to as the Donbas pretty much hasn’t spilled over to the rest of the country, says John Shmorhun, CEO of AgroGeneration, a company in the portfolio of SigmaBleyzer Investment Group, a global private equity firm based in Houston. AgroGeneration owns Agrofirma Podolivska, which cultivates part of the 120,000 hectares (296,500 acres) of land it operates in Ukraine. It would like to have more land. “I know that if I take someone else’s land, I can double, triple the yield,” says Shmorhun, a Ukrainian American and ex-U.S. fighter pilot who led Ukraine operations for DuPont before moving to AgroGeneration.

    About 1 in every 6 acres of agricultural land in Ukraine isn’t being farmed. Of land in production, Shmorhun says only about a quarter is reaching yields on the level of those in the developed world, because of lower-quality seeds, fertilizers, and equipment. “It’s a huge upside. It’s mind-boggling,” he says. Despite occasional saber rattling, the country is stable, he says. “The way I look at the war today, there is a conflict zone. You draw a line around it.”

    Land reform in the years immediately after Ukrainian independence in 1991 left title to much of the farmland in the hands of former Soviet farmworkers and their descendants, along with the government. Legally, no one can sell it—companies such as AgroGeneration have grown by signing long-term leases with owners for parcels as small as 5 acres. But the uncertainty of land titles has deterred investors and kept farmers from expanding, says Pifer, the former U.S. diplomat.

    “Lack of cheap funding is a big obstacle,” Shmorhun says. “If you want to get higher quality, you must invest in infrastructure, including roads, grain elevators, dryers, storage.” Average long-term borrowing costs exceed 20 percent for loans in hryvnia and 7 percent for loans in foreign currencies—at 26 to the dollar, the hryvnia is one of the world’s weakest currencies—making investments from any but the best-capitalized enterprises rare. “Without a mortgage market, farmers can’t finance better seeds or machinery,” Shmorhun says. That leaves the bulk of farmland to be tilled and harvested with 20th century, and in some cases 19th century, technology. Given the outmoded farm technology used by most, it’s remarkable Ukraine produces as much as it does.

    Poroshenko supports creating a market for farmland, but the Parliament regularly extends the ban on selling agricultural property. Earlier in October, legislators backed a bill prolonging the moratorium through 2018, but the president has yet to sign it. The fear is that large Ukrainian companies and foreign investors will gobble up the land and displace small farmers.

    “Ukraine sold $7.6 billion of bulk farm commodities worldwide in 2015, quintupling its revenue from a decade earlier and topping Russia, its closest rival on world markets. By the mid-2020s, “Ukraine will be No.3, after the U.S. and Brazil,” in food production worldwide, says Martin Schuldt, the top representative in Ukraine for Cargill, the world’s largest grain trader. The company, headquartered in Minnetonka, Minn., saw its sunflower-seed processing plant in the Donetsk region overrun by separatists in 2014; it still can’t regain access to the facility. Nonetheless, the company is investing $100 million in a new grain terminal in Ukraine. Bunge, the world’s biggest soy processor, opened a port this year at a ceremony with Ukrainian President Petro Poroshenko—another vote of confidence in the country.”

    Yes, the country that, in the words of former US ambassador Steve Pifer is “a big answer to the question of how you feed the world”, is also currently in the middle of civil war and both US and German agricultural giants have a major presence there and plan on even more investments. Oh, and Donald Trump’s climate change policies are signaling to the world that the US is going to do what it can to ensure that climate change is as extreme and brutal as humanity can make it. So while many Ukrainians are probably somewhat nervous about a Trump presidency given the widespread assumption that Trump is a Putin puppet, they can at least find solace in the fact that the gross irresponsiblity of Trump’s climate policies is probably going to make one of Ukraine’s key natural resources a global treasure.

    Of course, any situation that makes Ukraine’s land a global treasure also raises the stakes for the outcome of the conflict, and that means when you read something like this…


    Land reform in the years immediately after Ukrainian independence in 1991 left title to much of the farmland in the hands of former Soviet farmworkers and their descendants, along with the government. Legally, no one can sell it—companies such as AgroGeneration have grown by signing long-term leases with owners for parcels as small as 5 acres. But the uncertainty of land titles has deterred investors and kept farmers from expanding, says Pifer, the former U.S. diplomat.

    Poroshenko supports creating a market for farmland, but the Parliament regularly extends the ban on selling agricultural property. Earlier in October, legislators backed a bill prolonging the moratorium through 2018, but the president has yet to sign it. The fear is that large Ukrainian companies and foreign investors will gobble up the land and displace small farmers.

    …those fears of large Ukrainian companies and foreign investors gobbling up the land and displacing small farmers are probably going to become a reality at some point.

    So we’ll see how a Trump administration shifts the prospects for peace or greater conflict in Ukraine. But considering that this is a President-elect who appears to view foreign policies as business transactions and profit opportunities, the fact that Trump’s climate policies are probably going to turn Ukraine’s black soil into an agricultural gold mine is something to keep in mind.

    Posted by Pterrafractyl | November 17, 2016, 9:35 pm
  4. If it turns out the 2016 US elections were actually hacked by Russia and not the myriad of other viable suspects (like the GOP or far-right hackers), here’s an example of why that could end up being one of the biggest blunders the Russian government could have possibly made…unless a heavy military build up in Europe is part of some sneaky long-term plan: Look who’s using Trump’s win as an excuse reason to ‘turbo boost’ a massive defense spending spree and build a giant, newly integrated military industrial complex right on Russia’s border. Predictably:

    Financial Times

    Brussels plans to ‘turbo boost’ defence spending

    EU proposal comes as Donald Trump presses Nato allies to lift military expenditure

    by: Arthur Beesley in Brussels
    11/28/2016

    Brussels is to unveil plans to “turbo boost” spending on cyber security, war ships and drone technology as part of a multibillion-euro European Defence Fund, which comes as US president-elect Donald Trump presses Nato allies to significantly increase military spending.

    The proposals from the European Commission, to be unveiled on Wednesday, follow a decision by member states to deepen defence co-ordination in an effort to fortify Europe’s anti-terror defences and reinforce external borders.

    The plans include an increase in cross-border defence procurement and greater emphasis on the standardisation of equipment, as well as the use of EU space programmes for security and defence purposes. At the moment about 80 per cent of defence procurement is run on a national basis, the commission estimates.

    Mr Trump’s election win has prompted deep anxiety within Nato. The president-elect warned during his campaign that Washington might not defend its allies under Russian attack, although he later “underlined Nato’s enduring importance” in a post-election call with Jens Stoltenberg, secretary-general of the alliance.

    But he has consistently called for European members of Nato to increase defence expenditure to meet the alliance’s target to spend 2 per cent of economic output on defence. Twenty-two of the 28 EU member states are in Nato, although only the UK, Estonia, Poland and Greece meet the threshold.

    The new plan from the EU executive, to be put forward by Jyrki Katainen, commission vice-president, aims to increase Europe’s land, air, sea and space capabilities, as well as investment in cyber security and intelligence gathering.

    It comes amid heightened concern in Europe about the threat of international terrorism and the increase in military activity by Russia, particularly after its seizure of Crimea from Ukraine and support for separatist factions in the east of that country.

    The UK’s looming departure from the EU has presented an opportunity to hasten plans for greater European defence co-operation. London has traditionally opposed Europe-wide defence initiatives, arguing that was Nato’s exclusive responsibility.

    France and Germany have led the charge for deeper defence co-ordination, backed by Italy and Spain. Federica Mogherini, EU foreign policy chief, believes that European public opinion increasingly views security as a matter for the EU.

    Jean-Claude Juncker, European Commission president, has said Europe cannot afford to “piggy-back” on the military might of others. He said recently that a special defence fund was required “to turbo boost research and innovation”.

    The key objective in the new proposal is to deliver a better return from rising defence expenditure in the bloc. Although member states would still own all military assets and technology, the plan assumes some members would pool national resources to maximise the benefit and efficiency of strategic equipment.

    Mr Katainen suggested in an FT interview in September that member states might raise European defence bonds on financial markets to fund joint purchases of “EU-owned” assets through a European Defence Fund.

    Although Europe has the second-largest military expenditure in the world, the commission paper will argue that such spending is inefficient because of duplication, the lack of interoperability with equipment and technological gaps. The commission estimates that lack of co-ordination costs €25bn-€100bn a year given the absence of competition and economies of scale for industry and production.

    The US invests more than twice as much as EU member states’ total defence spend, while China has increased its defence budget 150 per cent in the past decade.

    The plan will say that Europe’s €100bn defence industry could fall behind the next-generation technology of global rivals without a sustained investment by member states in defence capability. Failure to boost investment would compromise the bloc’s efforts to develop the capacity to act autonomously when necessary.

    “Although Europe has the second-largest military expenditure in the world, the commission paper will argue that such spending is inefficient because of duplication, the lack of interoperability with equipment and technological gaps. The commission estimates that lack of co-ordination costs €25bn-€100bn a year given the absence of competition and economies of scale for industry and production.”

    Yep, the military bloc that represents the second-largest military expenditure in the world is about to simultaneously go on both a spending spree but also an overhaul of how that money is spent to maximize the amount of real military power gained from such spending. If encouraging the EU to dramatically, and likely permanently, increase the EU’s military capacity was part of the Kremlin’s plan, it must be a pretty sophisticate plan. A sophisticated plan that is thus far working quite well.

    And if that plan included giving the EU a big push towards a post-NATO security arrangement and its own “EU Army”, that part of the plan also appears to be working:

    The Independent

    European Parliament backs plans to create a defence union

    The EU takes a step closer to the formation of a ‘European army’

    Shehab Khan
    Strasbourg

    Tuesday 22 November 2016

    The European Parliament has backed plans to create a defence union which will secure structured cooperation between nations as well as a new EU military operational headquarters.

    Lawmakers at the European Parliament voted 369-255 in favour of the proposals, which also calls for greater spending by nations on defence.

    Although the vote is not legally binding it does represent support for the proposition before the European Council meets in December to discuss Europe’s defence capabilities.

    Urmas Paet, the former foreign minister of Estonia, drafted the report and told The Independent he was glad Parliament had made a clear statement on how European defence should now develop.

    “There are more and more risks to Europe related to terrorism, Russia, the Middle East and North and Central Africa,” Mr Paet said.

    “[Currently] if there is some crisis emerging and you need to move military personnel and equipment from one European country to another, then it will take days or even weeks to get all the approvals.

    “It is a very bureaucratic process and we all understand that when it is a crisis there is no time to wait for this kind of stuff.”

    The plan was proposed in September by France and Germany but some have argued that the new European Defence Union would be a threat to Nato.

    Geoffrey Van Orden, the Conservative’s European defence and military spokesman, argued strongly against the proposals.

    “You can’t have the European Union trying to hijack what is essentially a Nato requirement. You have to separate the requirements for member states, in other words European allies, to spend two per cent of their GDP on defence, which has precious little to do with the EU’s ambitions,” Mr Van Orden told The Independent.

    “The ambitions have been heightened for the creation of a European Defence Union and call it by whatever name you like, some sort of ‘European army’. Although they deny that’s what they want; but it is a ‘European army’ in everything but the name.”

    Mr Orden also added that the motivation behind the proposal was to create further political integration and for the EU to act as “some sort of actor on the world stage”.

    Mr Paet rejected this notion and said his proposals would strengthen the capabilities of Nato.

    “Everything the EU does must go hand in hand with Nato. Some say it will weaken Nato but vice versa, we should do this in close coordination with Nato

    “…Twenty-two EU member states are also Nato members. If they increase their defence budgets, it also automatically means more money for Nato,” the Estonian MEP told The Independent.

    Mr Paet was also very strong in denouncing the idea that this represented a new “European army”.

    “If Nato is there and functional, I don’t think so. If you have this ‘[European] army’ of 28 nations, there will be other problems. Cultural backgrounds and historical backgrounds and so on,” Mr Paet said.

    “Mr Paet was also very strong in denouncing the idea that this represented a new “European army”.”

    LOL! Yeah, it’s not an a “European army”. It’s merely a “Defense Union”. With its own military headquarters. Also keep in mind that the head of NATO, Jens Stoltenberg, declared just a few days before this EU parliament vote that the European Defense Force proposal was dead, and shouldn’t happen anyway because it would duplicate and weaken NATO.

    So we’re heading into a situation where, whether or not Trump ends up effectively weakening NATO by destroying Europe’s confidence in the US’s dedication to the alliance, NATO might effectively die anyway, or just fade away by being effectively duplicated by the EU’s new army. And while ending, or at least significantly weakening, NATO is something the Kremlin would no doubt love to encourage, doing that at the cost of catalyzing an EU army seems like a questionable trade off. Especially since one of the goals of the EU army that we keep hearing about is increasing the EU’s capacity to project power on the world stage in a way it can’t do at this point. If that was part of some Kremlin plan to assist Trump, it must be one helluva plan.

    Posted by Pterrafractyl | November 29, 2016, 4:10 pm
  5. With big questions looming over how, or even if, a Trump administration will modify the US’s various trade agreements, it’s probably worth noting we haven’t heard Trump mention a trade war with Germany despite all his tirades against China and Mexico. It raises the question of why, since Germany’s unprecedented and damaging surpluses make it such an obvious trade war target:

    MarketWatch

    Opinion: If Trump wants a trade war, starting one with Germany makes more sense

    By Matthew Lynn

    Published: Nov 30, 2016 5:35 a.m. ET

    LONDON (MarketWatch) — Building a wall along the border with Mexico. Launching a trade war with China. Scrapping the Trans-Pacific Partnership, and rethinking the involvement of the United States in trade agreements around the world.

    When he moves into the White House in January, President Dondald Trump will have plenty of options for making good on his campaign promise to use tariff barriers to rebuild American industry.

    There is one potential trade war, however, that few people have so far noticed — but which could soon be his easiest target. Germany. Given the size of its population, it runs a far larger trade surplus than China — and a massive surplus with the U.S. in particular. Even better, the industries to pick off are relatively simple to identify, and would actually have a chance of creating well-paid American jobs.

    Heck, Trump would even be settling a family score — the Germans deported his grandfather, Frederick Trump,, for draft-dodging. They might be feeling nervous about Jan. 20, the day of Trump’s inauguration, in Beijing and Mexico City — but the place they should be feeling really nervous is Berlin.

    When Trump confounded expectations earlier this month, and brushed aside Hillary Clinton to win the presidency, world leaders were not exactly falling over one another to congratulate them. Few had wanted him to win. Even so, the message from German Chancellor Angela Merkel was especially chilly, making plenty of pointed remarks about liberal values and shared responsibilities.

    To most commentators, that was a reflection of Merkel’s commitment to tolerance and openness, which are certainly among her best qualities. But it may have reflected something else as well. Trump’s campaign rhetoric about ripping up free-trade agreements, and about protecting American industry, must sound troubling to anyone who is aware of what keeps the German economy ticking.

    In Germany, the threat its massive trade surplus with America has already been noted. The influential and well-connected magazine Der Spiegel ran an article in the wake of his victory saying that Germany was preparing itself for a trade war with Trump’s America. The country’s Economics Ministry has, the magazine reported, been told to start putting together the counter-arguments against tariffs barriers — pointing out that it is the result of the country’s aging population and the structure of its industrial base.

    If there is to be a diplomatic war over the issue, Germany wants its ground to be well-prepared.

    Is it right to be worried?

    It certainly is.

    Germany’s trade surplus is absolutely massive, and unprecedented in modern industrial history.

    Last year it hit 8.9% of gross domestic product, and it is likely to break through 9% before the end of 2016. Globally, it is second in size only to China’s, but given that Germany is a far smaller country, it is only fair to measure it on a per capita basis — and when you look at it that way, Germany’s surplus is seven times bigger than China’s.

    Even worse, China is a developing country — and those are generally expected to run surpluses as they build up industries through exports. Over time, those surpluses come down, as domestic demand grows, and that process already seems to be underway in China. In contrast, Germany is a mature industrial economy, and yet its surplus keeps on growing relentlessly.

    In truth, Germany has become a machine for dumping deflation on the rest of the world.

    Its surplus with the U.S. is particularly acute. According to U.S. government figures, the country ran a deficit with Germany of $74 billion in 2015. Go back to 2006 and that was only $47 billion — it has almost doubled in a decade, and keeps on growing.

    Out of the total deficit for 2015 of $531 billion, Germany accounted for 14% of it, an impressive achievement given that Germany only accounts for 4.6% of the global economy. If you are sitting in the White House, thinking that you want to do something about the deficit, then it makes a lot more sense to concentrate on Germany than Mexico or China.

    That is not all.

    Much of Germany’s trade surplus is clearly the result of currency manipulation. The euro has depressed the real value of the country’s exports, allowing it rack up those huge exports. You can argue about whether China’s currency is really at its fair value or not — but no one can really dispute that Germany’s currency is way, way below what it would be if it still had the deutschemark.

    Even more significantly, there would be some real gains from taking action. When Trump talks of bringing back well-paid manufacturing jobs, it is hard to see how a trade war with China would help. Blue-collar workers in Michigan don’t really want to assemble toys 12-hours a day on near-starvation wages, which is what a lot of Chinese laborers do.

    But Germany’s exports to the U.S. are high-end goods such as automobiles, which account for 12% of its exports by themselves, followed by vehicle parts, chemicals and aerospace. Those are precisely the kind of well-paid jobs that Trump voters thought their man would deliver for them.

    So could Trump launch a trade war with Germany?

    Under World Trade Organization rules, it would not be easy. It is very hard to impose unilateral tariffs on one country without ripping up the entire network. But that doesn’t mean that he couldn’t find a way. Volkswagen’s diesel scandal, for example, might be the perfect excuse to slap punitive restrictions on the German car industry. Likewise, its medical exports can always be deemed “unsafe.”

    If Americans had to ditch their BMWs for Cadillacs and Lincolns, that would certainly create a few decently paid jobs.

    A trade war between the United Sates and Germany is probably the last thing it needs. But if Trump wants to make good on some of his pledges, restrictions on German exports are the easiest way to do that — and that means it can’t be ruled out.

    “Much of Germany’s trade surplus is clearly the result of currency manipulation. The euro has depressed the real value of the country’s exports, allowing it rack up those huge exports. You can argue about whether China’s currency is really at its fair value or not — but no one can really dispute that Germany’s currency is way, way below what it would be if it still had the deutschemark.”

    Yeah, it’s kind of hard to argue that there isn’t systematic currency manipulation taking place when a country is part of a massive currency union that permanently lowers the value of its currency. And then there’s the systematic wage suppression specifically intended to encourage exports. Or the fact that, on a per capita basis, Germany’s surplus is seven times larger than China’s and is currently only behind China and Japan (barely) in the ranking of countries running surpluses with the US. If you’re determined to pick a trade war, that all sure seems like a reason to pick one with Germany. Especially since the German government is already honing its counterarguments against these criticism, and they basically amount to something along the lines of ‘don’t blame us, all of the criticism aren’t really very valid, and there nothing we can do about this…or intend to do about this’:

    Der Spiegel International

    Germany Prepares for Trade Conflict with Trump

    Germany’s current account surplus is higher than ever before and the country is concerned that it could become a target of US president-elect Donald Trump’s ire as a result. Berlin is already making preparations for the possible conflict.

    By Christian Reiermann
    November 25, 2016 06:00 PM

    US president-elect Donald Trump has long accused China of being a rogue state on the global economic stage. He has blasted the country for allegedly destroying huge numbers of American jobs with its exports and he says he is planning punitive tariffs in retaliation.

    This kind of trade policy bluster coming from the newly elected president is generating unease in Berlin. The German government is concerned that Germany could soon fall into Trump’s sights as well.

    There are plenty of reasons for that. Germany’s current account surplus has never been as high as it is this year and never before has that surplus represented such a significant share of the country’s gross domestic product. Making matters worse is the fact that the US is the largest consumer of German exports.

    According to German government calculations from October, the current account surplus is set to climb to 8.9 percent this year, which would be larger than ever before and higher even than China’s. Such a surplus comes about when a country produces more than it consumes and receives more revenues from overseas than it invests.

    As high as it is, though, the current surplus is likely to continue growing. The recent fall in the euro’s value relative to the dollar following Trump’s election makes German products and services even more competitive. And many economists believe that the value of the dollar will continue to climb, which means that the value of the euro against the dollar will shrink correspondingly. Their predictions are based on recent indications that Trump’s announced economic stimulus policies will push up both America’s sovereign debt load and its interest rates.

    Experts at Germany’s central bank, the Bundesbank, and at the European Central Bank have calculated an even higher current account surplus for Germany in a forecast to be released in two weeks. Accordingly, Germany’s surplus will exceed 9 percent for this year — and perhaps by quite a lot.

    Never before has a large, mature and prosperous economy like Germany’s produced higher surpluses. Such values tend to be seen in emerging economies, which leverage their competitive advantages — such as low wages — to achieve prosperity via exports.

    Ongoing Conflict

    It seems likely that Trump’s administration will ultimately turn its ire on Berlin and experts in both the Finance Ministry and the Economics Ministry are preparing for a possible new trans-Atlantic front in what has been an ongoing conflict with its European neighbors.

    Indeed, Germany has had plenty of opportunity in recent years to formulate its counterarguments. The Economics Ministry, under the leadership of Merkel’s vice chancellor Sigmar Gabriel, recently presented a sweeping rejection of the widespread criticism. The argument holds that Germany’s surplus would be much lower if both the euro and oil weren’t so cheap. Such temporary factors “likely account for around a third of Germany’s prevailing current account surplus,” they wrote in a recent report. In other words, once the euro gains strength and oil prices go up, the surplus will shrink on its own.

    The Economics Ministry report claims that conservative collective bargaining agreements play less of a role. Relatively low wages make German products more affordable in addition to suppressing domestic demand, which reduces the number of imported products sold in the country. But the report says that conservative wages in the past “have relatively little effect on the current account balance.” Plus, the report continues, such effects wane as wages climb, as has been the case more recently.

    Other causes, by contrast, are longer lasting. The report notes that an aging society, like Germany’s, tends to focus more on saving money for retirement, which dampens consumption. Up to 3 percent of Germany’s surplus can be traced back to that phenomenon, the report claims. Furthermore, Germans often invest their saved money in the US, thus making money available to the Americans with which they can buy German products.

    Such capital exports continue to increase the current account surplus in subsequent years as well. The money from Germany tends to be invested in long-term securities such as company or sovereign bonds. Yields from these investments are then wired to Germany, which increases the surplus further. Around 2 percent of Germany’s current surplus is attributable to this effect, according to the report.

    Only about 1 percent of Germany’s current account surplus, the German Economics Ministry report posits, is the result of economic policy decisions over which the government in Berlin has control — by investing more money in the country’s infrastructure, for example, or lowering taxes. The report arrives at the conclusion “that the vast majority of Germany’s current account surplus is the product of market economy processes and decisions of market participants, both domestically and abroad.”

    In other words, German politicians can’t do much about it. The question, however, is if Trump will agree.

    Only about 1 percent of Germany’s current account surplus, the German Economics Ministry report posits, is the result of economic policy decisions over which the government in Berlin has control — by investing more money in the country’s infrastructure, for example, or lowering taxes. The report arrives at the conclusion “that the vast majority of Germany’s current account surplus is the product of market economy processes and decisions of market participants, both domestically and abroad.””

    That’s the big, bold set of sweeping arguments the German government already has ready: ignoring systemic devaluation that came with joining the euro and largely ignoring the strategy of wage suppression while simultaneously predicting these trade surpluses will keep growing for the foreseeable future. In other words, it will be rather odd if Trump goes a trade war rampage but doesn’t pick one with Germany.

    So we’ll see what happens, but also note there’s another possible solution to America’s trade deficit with Germany given the new German focus on building a EU army: selling Germany a bunch of US military hardware that it would have otherwise purchased elsewhere. Don’t be super shocked if that ends up being part of a mutually agreeable solution.

    Posted by Pterrafractyl | November 30, 2016, 8:56 pm
  6. While improving relations between the US and Russia would under normal circumstances probably be seen as the kind of thing that could benefit something like nuclear arms control, these are not normal circumstance. These are Trumpian circumstances. So, of course, both Putin and Trump are now talking about the need to invest in stronger nuclear forces:

    Financial Times

    Putin and Trump call for stronger nuclear forces

    Russia president says military now ‘stronger than any potential aggressor’

    by: Max Seddon in Moscow and Demetri Sevastopulo in Washington
    12/22/2016

    Vladimir Putin and Donald Trump on Thursday called for the strengthening of their countries’ nuclear capabilities.

    Speaking at a meeting of defence chiefs in Moscow, Mr Putin said Russia needed to “strengthen the strategic nuclear forces, for that we should develop missiles capable of penetrating any current and prospective missile defence systems”, according to the Tass news agency.

    Mr Putin claimed Russia’s military was able to repel any possible threat. Russia was now “stronger than any potential aggressor”, he said.

    A few hours after the Russian president spoke, Mr Trump tweeted that the US needed to expand its nuclear capabilities. “The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes,” the US president-elect wrote.

    The Trump transition team did not respond immediately to questions about whether Mr Trump was referring to the current US nuclear modernisation programme, which will not result in an increase in the number of warheads in the nuclear arsenal.

    The Trump transition website contains a statement that his incoming administration “recognizes the uniquely catastrophic threats posed by nuclear weapons and cyber attacks” and that Mr Trump would “ensure our strategic nuclear triad is modernized to ensure it continues to be an effective deterrent”.

    Daryl Kimball, head of the Arms Control Association in Washington, said it was unclear if Mr Trump was simply supporting the current US programme ovr was talking about adding more weapons.

    The tweet came the morning after Mr Trump met Michael Flynn, his national security adviser, and some of the top Pentagon brass.

    “This tweet is probably his ham-handed attempt to express his support for the (modernisation programme),” said Mr Kimball. “(But) he also said we must strengthen and expand our nuclear capacity, which implies that he is thinking about, or wants to build new nuclear warheads…which would be a radical departure in US policy that goes back decades.”

    Mr Kimball stressed that, regardless of the intention of Mr Trump’s tweet, it was “very irresponsible for the president-elect or president to, in 140 characters, try to encapsulate the future direction of policy of the worlds’ largest nuclear superpower”.

    Mr Putin’s comments follow the most intense nuclear posturing by Moscow since the end of the Soviet Union.

    Russia has cancelled three nuclear deals with the US, while Russian state television recently warned that Washington was about to start a war, comparing tension over Syria with the Cuban missile crisis.

    Some analysts saw Moscow’s nuclear posturing as an attempt at intimidating the incoming Trump administration, as well as bolstering Mr Putin ahead of elections in 2018.

    Despite huge spending on military modernisation in recent years, Russia’s conventional forces remain a fraction of the size of Nato’s. But its nuclear arsenal is on a par with America’s — though both are far smaller than at the height of the cold war — allowing it to level the playing field.

    Russia’s armed forces have been deployed in Mr Putin’s stand-off with the west over Syria and Ukraine. In 2014, they took the Crimean peninsula and last week helped Syrian government forces retake Aleppo, a key flashpoint in the country’s five-year civil war.

    In Syria, Russian armed forces have killed 35,000 rebel fighters and destroyed 725 training camps since Moscow intervened on behalf of president Bashar al-Assad’s regime last year, according to Sergei Shoigu, Russian defence minister. Moscow had carried out 18,800 sorties and 71,000 strikes in Syria, Mr Shoigu added.

    The military has used 162 different weapons systems in the conflict, which has served as a showcase for much of the new equipment developed under Mr Putin’s modernisation drive. Mr Shoigu also said Russia would produce five new strategic bombers and add three new units to Russia’s nuclear forces.

    Also on Thursday Mr Putin attended the funeral of Andrei Karlov, Russia’s ambassador to Turkey, who was shot dead by a former riot policeman claiming to exact revenge for the Aleppo siege. Karlov was posthumously named a Hero of Russia, the country’s highest honour.

    “A few hours after the Russian president spoke, Mr Trump tweeted that the US needed to expand its nuclear capabilities. “The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes,” the US president-elect wrote.

    That appears to be the method to our contemporary MADness: we’re just going to keep building these weapon systems until the rest of you crazy bastards realize how insane this is and stop following our lead. And both the leading nuclear powers basically issued the same statement on the same day, with Trump writing his nuclear armed tweets just a few hours after Putin’s announcement. Sounds expensive. And ominous.

    But if it seemed like Trump’s nuclear tweets were a response to Putin’s speech, not that there were another event happening right around the same time that could also partially explain both the timing of the tweet and the content: It turns out Trump had a meeting with the CEOs of Boeing and Lockheed Martin yesterday, and those companies happen to be two out of the three defense contractors currently bidding on a massive defense contract to replace the US’s nuclear missile silos:

    CNBC

    Trump’s nuclear tweet raises question of ‘quid pro quo’ for defense contractors

    Jake Novak
    12/22/2016

    Perhaps there is one pricey Washington program President-elect Donald Trump does like. Just a few weeks after berating Boeing for its high-priced Air Force One replacement program and Lockheed Martin for it’s even more pricey F-35 fighter jet, Trump tweeted out what sure looks like his support for what could be the priciest defense project of them all: Replacing the U.S. nuclear missile arsenal.

    The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes— Donald J. Trump (@realDonaldTrump) December 22, 2016

    The above statement hardly comes out of nowhere. First, the Air Force is starting the process of replacing America’s Minuteman nuclear arsenal. More than 400 of those ICBMs, most built in the 1960s, now sit in missile silos across the U.S.

    And, not coincidentally, the three companies bidding to get the replacement contract are Boeing, Northrop Grumman, and Lockheed Martin. Of course, the CEOs of Boeing and Lockheed just met with Trump in Florida yesterday. While Boeing came out of that meeting promising to keep the costs of replacing Air Force One below $4 billion, that’s chickenfeed compared to the $60 billion to $86 billion estimated cost of replacing the Minuteman program.

    Was some kind of quid pro quo discussed in Mar a Lago Wednesday? Perhaps we’ll never know, but if Boeing gets the contract that will be a prevailing suspicion for years to come.

    With the F-35 program pretty much a done deal, Trump’s focus on America’s nuclear weapons is significant in terms of cost and the projection of U.S. military might. Throughout the election and transition period, Trump has tried to project an image of a leader who can increase American strength while staying fiscally conservative.

    Thursday’s nuclear comments take what looks like a clear detour from the fiscal side of that image since Trump did not mention cost at all. But it may signal to everyone that when it comes to choosing strength or savings, Trump is likely to go with strength from here on out.

    “And, not coincidentally, the three companies bidding to get the replacement contract are Boeing, Northrop Grumman, and Lockheed Martin. Of course, the CEOs of Boeing and Lockheed just met with Trump in Florida yesterday. While Boeing came out of that meeting promising to keep the costs of replacing Air Force One below $4 billion, that’s chickenfeed compared to the $60 billion to $86 billion estimated cost of replacing the Minuteman program.”

    Well, so that’s sort of a positive spin on Trump’s nuclear tweet: maybe he wasn’t signaling some sort of massive new arms race. Hopefully he was just playing rhetorical footsie with a pair of powerful defense contractors and hyping the existing nuclear modernization program. That’s the kind of hope we get to have these days.

    But also note that these tweets didn’t actually address one of the biggest issues a Trump presidency presents to the world regarding the threat of nuclear conflict: Is the US going to continue casting its nuclear umbrella over the the heads of existing allies or will Trump do what he hinted at during the campaign and continue suggesting that countries like South Korea and Japan should get their own nuclear deterrents. In other words, is Trump suggesting the US needs to expand its nuclear capacity as a means of dissuading other nations from pursuing their own nuclear weapons? Or was Trump suggesting the US expand its capacity because he’s planning on creating a future where many more nations around the globe possess their own nuclear stockpiles? That’s not really clear from Trump’s tweet, and inquiring minds want to know. Especially in Europe’s capitals where they’re now looking into a nuclear deterrent alternate:

    Der Spiegel

    Elephant in the Room Europeans Debate Nuclear Self-Defense after Trump Win

    For decades, American nuclear weapons have served as a guarantor of European security. But what happens if Donald Trump casts doubt on that atomic shield? A debate has already opened in Berlin and Brussels over alternatives to the U.S. deterrent.

    By Konstantin von Hammerstein, Christiane Hoffmann, Peter Müller, Otfried Nassauer, Christoph Schult and Klaus Wiegrefe

    December 09, 2016 06:08 PM

    The issue is so secret that it isn’t even listed on any daily agenda at NATO headquarters. When military officials and diplomats speak about it in Brussels, they meet privately and in very small groups — sometimes only with two or three people at a time. There is a reason why signs are displayed in the headquarters reading, “no classified conversation.”

    And this issue is extremely sensitive. The alliance wants to avoid a public discussion at any cost. Such a debate, one diplomat warns, could trigger an “avalanche.” The foundations of the trans-Atlantic security architecture would be endangered if this “Pandora’s box” were to be opened.

    Great Uncertainty

    The discussion surrounds nuclear deterrent. For decades, the final line of defense for Europe against possible Russian aggression has been provided by the American nuclear arsenal. But since Donald Trump’s election as the 45th president of the United States, officials in Berlin and Brussels are no longer certain that Washington will continue to hold a protective hand over Europe.

    It isn’t yet clear what foreign policy course the new administration will take — that is, if it takes one at all. It could be that Trump will run US foreign policy under the same principle with which he operates his corporate empire: a maximum level of unpredictability.

    With his disparaging statements during the campaign about NATO being “obsolete,” Trump has already created doubts about the Americans’ loyalty to the alliance. Consequently, Europe has begun preparing for a future in which it is likely to have to pick up a much greater share of the costs for its security.

    But what happens if the president-elect has an even more fundamental shift in mind for American security policy? What if he questions the nuclear shield that provided security to Europe during the Cold War?

    For more than 60 years, Germany entrusted its security to NATO and its leading power, the United States. Without a credible deterrent, the European NATO member states would be vulnerable to possible threats from Russia. It would be the end of the trans-Atlantic alliance.

    Could the French or British Step In?

    In European capitals, officials have been contemplating the possibility of a European nuclear deterrent since Trump’s election. The hurdles — military, political and international law — are massive and there are no concrete intentions or plans. Still, French diplomats in Brussels have already been discussing the issue with their counterparts from other member states: Could the French and the British, who both possess nuclear arsenals, step in to provide protection for other countries like Germany?

    “It’s good that this is finally being discussed,” says Jan Techau, director of the Holbrooke Forum at the American Academy in Berlin. “The question of Europe’s future nuclear defense is the elephant in the room in the European security debate. If the United States’ nuclear security guarantee disappears, then it will be important to clarify who will protect us in the future. And how do we prevent ourselves from becoming blackmailable over the nuclear issue in the future?”

    An essay in the November issue of Foreign Affairs argues that if Trump seriously questions the American guarantees, Berlin will have to consider establishing a European nuclear deterrent on the basis of the French and British capabilities. Germany’s respected Frankfurter Allgemeine Zeitung newspaper, meanwhile, even contemplated the “unthinkable” in an editorial: a German bomb.

    ‘The Last Thing Germany Needs Now’

    Politicians in Berlin want to prevent a debate at all costs. “A public debate over what happens if Trump were to change the American nuclear doctrine is the very last thing that Germany needs right now,” says Wolfgang Ischinger, head of the Munich Security Conference. “It would be a catastrophic mistake if Berlin of all places were to start that kind of discussion. Might Germany perhaps actually want a nuclear weapon, despite all promises to the contrary? That would provide fodder for any anti-German campaign.”

    The debate however, is no longer relegated the relatively safe circles of think tanks and foreign policy publications. In an interview that gained attention internationally in mid-November, Roderich Kiesewetter, the chairman for the conservative Christian Democrats on the Foreign Policy Committee in German parliament proposed a French-British nuclear shield in the event Trump calls into question American protection for Europe. “The US nuclear shield and nuclear security guarantees are imperative for Europe,” he told Reuters. “If the United States no longer wants to provide this guarantee, Europe still needs nuclear protection for deterrent purposes.”

    Last weekend, Angela Merkel’s chief of staff, Peter Altmaier, said in an interview that providing a nuclear shield for Europe was in America’s “security policy interest.” Besides, he said, “two EU member states possess nuclear weapons.”

    Unpopular and Politically Explosive

    Kiesewetter argues that Europe must prepare for all eventualities. “There can be no limits placed on our security debate,” he says. The CDU security policy expert is a former colonel in the German armed forces and also did stints at both NATO headquarters in Brussels and at the alliance’s military headquarters in Mons, Belgium. After Trump’s election, he spoke not only to French and British diplomats, but also explored views within the German government.

    He says he spoke with Christoph Heusgen, Merkel’s security adviser, and with Defense Ministry Policy Director Gésa von Geyr. Kiesewetter says the issue is not one that either the Chancellery or the Defense Ministry is taking up. At the same time, he says, he also didn’t get the impression that his ideas had been dismissed as fantasy either.

    It’s understandable that the German government wants to quickly end the debate. The issue is politically explosive and would also be highly unpopular. In polls, more than 90 percent of Germans have opposed the idea of Germany possessing its own nuclear bomb. The American nuclear shield has so far offered Germans the luxury of standing on the right side of the moral debate even as Washington guarantees their security.

    ‘The Wrong Message’

    Officials in Brussels also aren’t thrilled by the statements coming out of Berlin. “The fact that these considerations have been made public is deeply concerning,” a diplomat representing one NATO member state says. “It would send the wrong message to America but also the grotesquely wrong message to Russia,” says Ischinger. He warns that the message cannot be sent to Washington that Europe is in the process of exploring alternatives to the American protective shield.

    But military officers and diplomats are addressing the issue inside NATO headquarters. One diplomat says that these ideas have been circulating “informally and off-the-record” inside NATO headquarters for a few months now. “The statements made by Mr. Kiesewetter reflect the concerns that exist everywhere in Europe over what Trump’s inauguration will mean for US engagement and its strategy on nuclear deterrent.”

    On the nuclear question, Trump has attracted attention primarily for off-the-cuff remarks he made during the campaign. “If we have nuclear weapons, why can’t we use them?” he allegedly said during a foreign policy briefing in the summer.

    During the campaign, he also toyed with the idea of eliminating the US nuclear shield that provides protection to Japan and South Korea. Essentially, he bluntly suggested that the two Asian nations ought to develop their own nuclear weapons. Europeans have worried ever since that a similar threat could be directed at them.

    Such comments come at a time when Moscow is more focused on its role as a nuclear power than it ever has been since the end of the Cold War. Like the United States, Russia is currently in the process of modernizing its nuclear arsenal. For a few years now, veiled threats about Moscow’s nuclear arsenal have become part of the standard repertoire in President Vladimir Putin’s rhetoric.

    The British and French Deterrents

    Europe would face very high hurdles if it sought to create its own nuclear shield. Why would Britain, currently in the process of leaving the European Union, even agree to it? And why would the French give the Germans any say when it comes to their Force de Frappe deterrent? Both have allegedly declined to consider the notion in initial probes in Brussels. But there’s yet a bigger issue. Even if they were to cooperate, would the nuclear arsenal held by European nuclear powers even be sufficient to guarantee a nuclear deterrent?

    Likely, yes. Taken together, Britain and France may only have 10 percent as many nuclear weapons as the Americans, but their second-strike capability is strong enough to effectively deter potential attackers.

    ‘Sufficient for Defending Germany’

    “Viewed entirely from a military perspective, the nuclear weapons held by France and Britain would likely be sufficient for defending Germany,” says the American Academy’s Techau. The fact that they don’t have the same number of nuclear weapons as Russia doesn’t really matter. “The second-strike capability, which is decisive for deterrence, exists.”

    Politically, though, things get more complicated. France has always viewed its nuclear capability as a national asset and has never placed its weapons under a NATO mandate. It coordinates with Brussels, but would decide independently of the alliance on any potential deployment of its nuclear weapons.

    Even during the Cold War, several political efforts were made to establish German-French nuclear cooperation, but nothing ever came of them.

    Chancellor Konrad Adenauer and Defense Minister Franz Josef Strauss had hoped to work together with Paris. But Charles de Gaulle immediately halted the secret project as soon as he was elected in 1958.

    Later, two years after he got voted out of office, former German Chancellor Helmut Schmidt of the center-left Social Democrats (SPD) also proposed a deal. He suggested that France expand its nuclear deterrent to include Germany. In exchange, West Germany would offer its “capital and financial strength” in order to help finance the French nuclear weapons program.

    France Shunned Germany

    Helmut Kohl, who was chancellor at the time, dismissed the idea as an “intellectual gimmick.” A secret protocol dating from December 1985 — and only made public at the beginning of this year — showed why Kohl’s distrust had been justified. In it, French President François Mitterrand admits to Kohl that France would be unwilling to “provide Germany with nuclear protection.” He said France’s nuclear potential could only serve to protect “a small territory” — in other words, France. If Paris were to extend its protection, the French leader said, it would expose his country to a “lethal threat.” In other words, Mitterrand did not want to risk dying to defend Germany.

    Even if France were to change its position, it would be tricky under international law for Germany to participate militarily in a European nuclear shield. Whether or not Germany’s participation in NATO’s nuclear shield is permitted under international law has already been the subject of considerable debate. An actual German bomb would violate the terms of both the Nuclear Non-Proliferation Treaty (NPT) and the Two Plus Four Agreement, the treaty which resulted in Germany’s reunification.

    By becoming a signatory to the NPT in 1975, the Germans committed “not to receive the transfer from any transferor of nuclear weapons or other nuclear explosive devices or of control over such weapons or explosive devices directly, or indirectly.” During negotiations over German reunification in 1990, then-Chancellor Kohl also affirmed Germany’s “renunciation” of the manufacture, possession and control of nuclear weapons. The provision became an integral part of the Two Plus Four Agreement.

    A European Nuclear Power?

    But the Germans always left a few loopholes open. In diplomatic notes attached to German NPT ratification documents, the government in Bonn stated at the time it had signed it “convinced that no stipulation in the treaty can be construed to hinder the further development European unification, especially the creation of a European Union with appropriate capabilities.” Wolfgang Mischnick, parliamentary floor leader of the Free Democratic Party, which shared power with Kohl’s Christian Democrats at the time of reunification, publicly clarified what that meant during a session of the Bundestag on February 20, 1974: “It is still possible to develop a European nuclear power,” he said.

    Forty years later the issue is actually now being raised for the first time. With it also comes the question of the degree to which Europeans actually trust each other. The real test will come if the United States decides to withdraw its nuclear support from Europe. Then Europeans would be forced to ask whether Paris and London were prepared to guarantee security for Germany and other Europeans. And also: Would Germans place their trust in a nuclear shield provided by their European partners?

    For France, which always found Europe’s reliance on NATO to be suspect, a European nuclear shield could also present an opportunity. A nuclear arsenal under French leadership, but large parts of which were financed by the Germans, would place the economically weakened country in a dominant position in terms of European security.

    “An essay in the November issue of Foreign Affairs argues that if Trump seriously questions the American guarantees, Berlin will have to consider establishing a European nuclear deterrent on the basis of the French and British capabilities. Germany’s respected Frankfurter Allgemeine Zeitung newspaper, meanwhile, even contemplated the “unthinkable” in an editorial: a German bomb.

    So overall it doesn’t sound like France or the UK would be super enthusiastic about extending their own nuclear umbrella’s to the rest of Europe, which is a big reason that editorial in Frankfurter Allgemeine Zeitung calling for German nukes probably shouldn’t be dismissed out of hand despite the overwhelming German public opinion against a German bomb.

    But also keep in mind that this is all happening in the context of growing talk of an EU army with its own military headquarters and command structure. So if Trump really does withdraw the US’s implied nuclear deterrence and France and the UK refuse to extend their own umbrellas, that doesn’t necessarily mean a shared European nuclear deterrence would have to be developed by some other specific country like Germany. We could see a shared program that involves Germany but isn’t exclusively run by Germany (a fun nuclear timeshare).

    Is that a possibility and would it provide the psychological trick that overcomes popular opposition to a German nuclear program? Who knows, but with an EU army now on the agenda along side this sudden nuclear question, a new multinational European nuclear program is certainly looking more possible than it has been in the past. It may not be probable at this point but it’s more possible than it was before. Kind of like nuclear proliferation and annihilation in the age of Trump.

    Posted by Pterrafractyl | December 22, 2016, 4:03 pm
  7. In in a preview for what is bound to be a typical day for the Trump administration, Donald Trump’s spokesmen spent much of today in damage control mode following Trump’s tweet about expanding the US’s nuclear capabilities. And in another preview for what is bound to be a typical day for the Trump administration, Donald Trump proceeded to double down on the damage:

    Bloomberg Politics

    Trump Exhibits Little Concern About Nuclear Arms Race

    by Margaret Talev
    December 23, 2016, 9:57 AM CST

    * His remarks came after a tweet that rattled Moscow and Beijing
    * Trump’s new press secretary tried to walk back the tweet

    Donald Trump escalated his remarks about the U.S. nuclear arsenal on Friday, telling a television host off-air that he isn’t concerned about triggering an arms race with Russia or other adversaries, a day after a tweet that appeared to reset the nation’s posture on atomic weapons.

    The president-elect told his 17.8 million Twitter followers on Thursday that the U.S. must “greatly strengthen and expand its nuclear capability,” drawing rebuttals from Moscow and Beijing.

    Russian President Vladimir Putin vowed on Friday that he would respond to a fresh U.S. nuclear weapons build-up, and a spokeswoman for China’s foreign ministry said that the U.S. and Russia, which hold the world’s largest arsenals, bear responsibility for leading the world toward denuclearization.

    Sean Spicer, named Thursday as Trump’s White House press secretary, attempted a round of damage control on morning news shows Friday, yet his efforts were undercut by the president-elect himself.

    “Let it be an arms race; we will outmatch them at every pass and outlast them all,” Trump told Mika Brzezinski of MSNBC’s “Morning Joe” in an off-air telephone conversation, according to accounts by her and her co-host Joe Scarborough.

    Damage Control

    Spicer said in interviews on MSNBC, NBC, Fox and CNN that Trump’s tweet was intended to signal to Russia, China and other countries that the U.S., while not looking for a fight, would not be intimidated, and that the projection of strength would in an of itself be a deterrent. Trump’s tweet was apparently provoked by a Putin speech on Thursday in which he said the Russian nuclear arsenal should be improved in order to defeat anti-missile defenses.

    “Other countries need to understand that if they expand their nuclear capabilities, this president’s not going to sit back,” Spicer said on MSNBC before Trump’s off-air remark to Brzezinski, and that “the United States is going to reassert its position in the globe.”

    Spicer separately told NBC that “the president isn’t saying we’re going to do this” and that “there’s not going to be” an arms race because other countries would back down.

    “They will come to their senses and we will be just fine,” he said. Trump, he told CNN, was “absolutely not” escalating the situation.

    Putin, at his annual end-of-year news conference, said that if there is an arms race “it was not started by us” but “we have to respond.”

    Nuclear Diplomacy

    While Trump’s comments have raised alarm among proponents of nuclear non-proliferation, they may serve as a counterpoint to critics who have said Trump is too cozy toward Putin and Russia.

    It isn’t the first time Trump has toyed with nuclear diplomacy, a field in which the slightest derivation from established policy can cause anxiety among both U.S. allies and adversaries. During his campaign, Trump suggested that countries including Japan and South Korea should consider building their own nuclear arsenals — remarks he later insisted he never said.

    A second Trump spokesman, Jason Miller, attempted to walk back Trump’s tweet on Thursday, ascribing meaning to the remark that was not evident in the lone tweet.

    “President-elect Trump was referring to the threat of nuclear proliferation and the critical need to prevent it — particularly to and among terrorist organizations and unstable and rogue regimes,” Miller said in an e-mailed statement. “He has also emphasized the need to improve and modernize our deterrent capability as a vital way to pursue peace through strength.”

    ““President-elect Trump was referring to the threat of nuclear proliferation and the critical need to prevent it — particularly to and among terrorist organizations and unstable and rogue regimes,” Miller said in an e-mailed statement. “He has also emphasized the need to improve and modernize our deterrent capability as a vital way to pursue peace through strength.””

    Get ready to hear a lot more talk about “Peace through strength” from the Trump team. As long as the Trump administration can redefine strength as the erratic ratcheting up of tensions and a casual dismissal of things like nuclear non-proliferation (because nuclear non-proliferation is for wusses), “peace through strength” does kind of work thematically for Trump.

    But despite the assurances from Trump’s people that this was all just some sort of reverse psychology employed to dissuade Russia from expanding its own arsenal, let’s keep in mind what just happened: Putin declared that Russia was expanding its nuclear capability, it’s clearly something Russia sees in its best interest, and Trump responded in a manner that completely justifies whatever expansion Putin chooses. Heck, Putin could declare tomorrow that he’s decided to double Russia’s plans for expanding its nuclear capabilities and there’s basically nothing the US government could say in response other than “we’ll expand our capabilities even more!”. And this doesn’t just apply to Russia. Now any current member of the globe’s nuclear club can feel free to expand away! Trump gave his prior approval. Along with his prior suggestions that maybe some new members like South Korea or Japan could join the nuclear club too:

    While Trump’s comments have raised alarm among proponents of nuclear non-proliferation, they may serve as a counterpoint to critics who have said Trump is too cozy toward Putin and Russia.

    It isn’t the first time Trump has toyed with nuclear diplomacy, a field in which the slightest derivation from established policy can cause anxiety among both U.S. allies and adversaries. During his campaign, Trump suggested that countries including Japan and South Korea should consider building their own nuclear arsenals — remarks he later insisted he never said.

    “While Trump’s comments have raised alarm among proponents of nuclear non-proliferation, they may serve as a counterpoint to critics who have said Trump is too cozy toward Putin and Russia.”

    Heh, yeah, Putin must be super upset that he’s been giving a green light to do all the nuclear expansion he wants in coming years. Along with every other country that either has nukes and wants more or has none and wants some. They must all be super upset about this Trumpian green light too.

    So, with that in mind, here’s a hot stock tip: companies likely to get government contracts involving the modernization, maintenance, and (hopefully) eventual decomissioning of nuclear weapons are looking increasingly set to get a ‘Trump bump’ for the next 50 years or so …on top of the bump they were already going to be getting from the trillion dollar price tag on the US’s existing nuclear modernization plans (a future price tag that will be going up with Trump’s expansion plans)

    Business Insider

    Trump seemed to welcome a new nuclear arms race — here’s what that could mean

    Alex Lockie
    12/23/2016

    President-elect Donald Trump once again shook the international-relations community after tweeting Thursday that the “United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes.”

    Trump then doubled down on his tweet Friday morning, telling “Morning Joe” co-host Mika Brzezinski off-air to “let it be an arms race” after she asked if a US nuclear buildup would spur other nations to further develop their own nuclear programs.

    Trump’s comments come at a time when other nations, particularly Russia and North Korea, are either upgrading or developing their own nuclear arsenals. And Russia still remains the No. 1 nuclear threat to the US, as Moscow does indeed have scarier, more destructive nukes.

    A Russian ICBM can break apart in space and reenter the Earth’s atmosphere with 10 independently targetable warheads.

    US nukes are designed differently. The US philosophy on nukes puts precision first, and the US builds longer-lasting nuclear platforms. The Russian platforms are designed to be replaced, or “modernized,” more often.

    Modernizing the nuclear arsenal means updating the platforms that carry nukes: Bombers, intercontinental ballistic missiles (ICBMs), cruise missiles, and ballistic missile submarines. The US’s nuclear-capable submarines are old, and modernizing them means building new subs, a process that is already underway. The US is already looking into procuring a new long-range nuclear bomber, the B-21.

    Several experts on nuclear weapons say they all favor deescalation and reducing stockpiles, though no one realistically expects the US or Russia to disarm unilaterally.

    “The current path that we’re on in terms of sustaining our arsenal is excessive, and given the costs and opportunity costs of modernization—it’s unsustainable,” Kingston Reif, the director for disarmament and threat reduction policy at the Arms Control Association, told Business Insider in a recent interview.

    The “real issue,” according to Reif, is not that the US doesn’t have enough nukes, or that we’re falling behind to competitors like Russia and China.

    “Our arsenal second to none,” Reif said.

    The Obama administration, which set a goal of a world without nuclear weapons upon President Barack Obama’s ascendancy to the presidency, only made moves to reduce stockpiles — not outright disarm.

    However, “the Pentagon and President Obama determined the US already have one third more than needed to deter threats,” Reif said.

    But dialogue between the US and Russia on disarmament has greatly diminished. Moscow has withdrawn from a plutonium-reduction agreement. More broadly, most communication between the world’s leading nuclear powers has become virtually frozen.

    So while experts like Reif think that Obama’s plans for nuclear modernization already exceeded global needs, Trump’s tweet has seemed to suggest going above and beyond already unstable and expensive needs.

    Most defense experts agree that the US nuclear arsenal needs to be modernized, but disagree to what extent. Trump’s own pick to be defense secretary, former Marine Gen. James Mattis, has said the US can ditch ICBMs and go with a nuclear dyad. Trump’s tweet seemed to differ from Mattis’ position.

    Modernizing the US’s nuclear arsenal is projected to cost hundreds of billions in the 2020s and 2030s and close to $1 trillion in total. During this time, a plethora of other expensive defense projects are on the docket. They are collectively referred to as the “bow wave,” a hulking cost of a handful of defense projects that just can’t wait any longer.

    Reif has warned that the flurry of spending on nukes greatly threatens the US’s conventional, non-nuclear forces by hamstringing some of the defense spending that would support US military men and women around the world.

    Modernizing the US’s nuclear arsenal is projected to cost hundreds of billions in the 2020s and 2030s and close to $1 trillion in total. During this time, a plethora of other expensive defense projects are on the docket. They are collectively referred to as the “bow wave,” a hulking cost of a handful of defense projects that just can’t wait any longer.”

    Yep, in the middle of a global nuclear spending race that everyone knew the US was already scheduled to win by a long-shot over the coming decades, Donald Trump decides to declare that he’s fine with everyone else increasing their nuclear spending because he’s confident the US will be able to increase its spending enough to “beat” the US’s nuclear rival. And this is all apparently part of some sort of psychological strategy where, by making such a declaration, Trump will psyche out the rest of the world and the world will conclude that the expansion of their own nuclear arsenals is suddenly not worth it…because they will have concluded that a nuclear arms race that they never possibly could have won before (but decided to participate in anyway because “winning” the race wasn’t actually the objective) is now extra unwinnable.

    In other words, Donald Trump has apparently concluded that “winning” a nuclear arms race is the only reason a nation might want to expand its nuclear capability, and based on that assumption he’s apparently signaled to the world that the US is totally fine with a net global increase in nuclear capabilities because he’s super confident that the US will “win” that race. Yes, Trump could actually be planning on “winning” a period of global nuclear proliferation that he helps start. So remember how Trump was going on all those rants about how the US would start “winning” so much if he got elected that Americans might get sick of it. It turns out that could actually happen.

    Posted by Pterrafractyl | December 23, 2016, 5:03 pm
  8. Check out one of the latest consequences of Donald Trump’s brand of bold leadership that must have ISIS quaking it its boots: After reiterating his long-held view that the US should have stolen all of Iraq’s oil as part of the spoils of victory for the Iraq invasion and then hinting that the US might “have another chance” to do exactly that, all of the Iraqi troops currently working with the US on anti-ISIS campaigns now have very good reason to expect the US reinvade Iraq to take all the oil. That should do wonders for any anti-ISIS military coalitions involving US troops:

    New York Magazine

    Trump Says U.S. Should Have Stolen Iraq’s Oil, and ‘Maybe We’ll Have Another Chance’

    By Margaret Hartmann
    January 22, 2017 4:53 p.m.

    While addressing the CIA on Saturday, President Donald Trump took a break from lambasting the media to remind everyone that he thinks the U.S. should have stolen Iraq’s oil. He also suggested that the U.S. might get another chance to violate international law.

    “Now I said it for economic reasons,” Trump said while introducing Representative Mike Pompeo, his pick to lead the agency. “But if you think about it, Mike, if we kept the oil, you probably wouldn’t have ISIS because that’s where they made their money in the first place, so we should have kept the oil. But, okay, maybe we’ll have another chance.”

    National Review has noted that Trump’s “odd fixation” with taking Iraq’s oil dates back to at least 2011. He made the argument numerous times on the campaign trail, suggesting that the U.S. could take Iraq’s oil while fighting ISIS. When PolitiFact examined the claim in September, numerous experts said trying to seize Iraqi oil would not be legal, feasible, or desirable. The idea is “so out of step with any plausible interpretation of U.S. history or international law that they should be dismissed out of hand by anyone with even a rudimentary understanding of world affairs,” said Lance Janda, a military historian at Cameron University.

    It’s not clear what Trump meant by “maybe we’ll have another chance,” but when you’re president, people take even offhand remarks about violating international law pretty seriously. BuzzFeed spoke with several Iraqis on the front lines of the battle against ISIS, and they said they were prepared to take up arms against Americans if they attempted to take their country’s natural resources.

    “I participated in the attack against the Americans by attacking them with mortars and roadside bombs, and I’m ready to do it again,” said Abu Luay, an Iraqi security official using a nom de guerre, who is currently fighting the terrorist group in northwest Iraq. “We kept our ammunition and weapons from the time the Americans left for fighting ISIS. But once ISIS is gone we will save our weapons for the Americans.”

    “It’s not clear what Trump meant by “maybe we’ll have another chance,” but when you’re president, people take even offhand remarks about violating international law pretty seriously. BuzzFeed spoke with several Iraqis on the front lines of the battle against ISIS, and they said they were prepared to take up arms against Americans if they attempted to take their country’s natural resources.

    Well, that was some really, really, really disturbing leadership. And, of course, really, really, really stupid leadership too:

    The Guardian

    Trump’s plan to seize Iraq’s oil: ‘It’s not stealing, we’re reimbursing ourselves’

    Strategy of taking oil in Iraq and from areas controlled by Isis presents huge issues from almost every angle and ‘would amount to a war crime’, experts say

    Julian Borger World affairs editor

    Wednesday 21 September 2016 06.00 EDT

    One of the recurring themes of Donald Trump’s national security strategy is his plan to “take the oil” in Iraq and from areas controlled by Islamic State (Isis) extremists. It would drain Isis’s coffers and reimburse the US for the costs of its military commitments in the Middle East, the candidate insists.

    At a forum hosted by NBC on 7 September, Trump suggested oil seizure would have been a way to pay for the Iraq war, saying: “We go in, we spend $3tn, we lose thousands and thousands of lives, and then … what happens is we get nothing. You know, it used to be to the victor belong the spoils.”

    He added: “One of the benefits we would have had if we took the oil is Isis would not have been able to take oil and use that oil to fuel themselves.”

    The idea predates Trump’s presidential campaign. As far back as 2011, he was telling the Wall Street Journal that this was his policy for Iraq. “You heard me, I would take the oil,” he said. “I would not leave Iraq and let Iran take the oil.” And he insisted to ABC News that this did not amount to national theft.

    “You’re not stealing anything,” Trump said. “We’re reimbursing ourselves … at a minimum, and I say more. We’re taking back $1.5tn to reimburse ourselves.”

    As a security strategy, this presents huge problems from almost every angle, according to military, strategic, legal and oil experts. First of all, there are issues of principle and legality. Trump’s frequent invocation of the “spoils of war” seems to hark back to a bygone age of conquistadors and plunder-based imperialism, illegal now under the laws of war.

    “In international law, you can’t take civilian goods or seize them. That would amount to a war crime,” Anthony Cordesman, the Arleigh Burke chair in strategy at the Centre for Strategic and International Studies. “Oil exports were almost the only Iraqi source of money. So you would have to pay for government salaries, maintain the army, and you have triggered a level of national animosity far worse than we did. It would be the worst kind of neo-colonialism. Not even Britain did that.”

    Jay Hakes, the author of A Declaration of Energy Independence, about the relationship between US national security and Middle Eastern oil, was similarly unsparing.

    “It is hard to overstate the stupidity of this idea,” he wrote on Real Clear Energy. “Even our allies in the Middle East regard oil in their lands as a gift from God and the only major source of income to develop their countries. Seizing Iraq’s oil would make our current allies against Isis our new enemies. We would likely, at the least, have to return to the massive military expenditures and deployment of American troops at the war’s peak.”

    Hakes pointed out that Gen Douglas MacArthur, who Trump professes to admire, did the opposite when he oversaw the occupation of Japan: MacArthur brought resources in to help fend off starvation of the population.

    Trump may also have an exaggerated notion of how much oil is at stake when he suggests it might have helped pay for the Iraq occupation. The Iraqis he said “have among the largest oil reserves in the world, in the entire world”. Iraq is estimated to have the fifth biggest reserves, but the bulk of that oil is not under Isis’s control.

    “The territory that [Isis] holds just does not have much oil under it,” said Jim Krane, an energy studies fellow at Rice University’s Baker Institute for Public Policy in Houston. “In Iraq, most of the Iraq oil reserves are in the far south, around the Persian Gulf. There is some in the Kurdish north, but the Kurds swept in and took that area near Kirkuk.

    “Syria is not a big oil producer,” Krane added. “It produced 400,000 barrels a day before the war. And 27,000 barrels in 2015. That is minuscule. There is not a lot of oil production that [Isis] controls. When oil was $100 a barrel, that was one thing, but nowadays it’s not a lucrative business.”

    The US military has already targeted Isis’s small-scale oil refineries and oil convoys as a way of cutting off that income, but Trump clearly has something else in mind – actually seizing the oil fields with troops.

    “We would leave a certain group behind and you would take various sections where they have the oil,” he said at the forum.

    That “certain group” would have to be pretty big to hold and protect the oil fields, according to Chris Harmer, a former navy officer and naval aviator, and now a military analyst.

    “It would take close to 100,000 troops plus the equipment, the airborne patrols, to secure the oilfields and extract the oil,” Harmer said. “Theoretically it would suck up all the deployable assets we have. Forget about the Pacific, forget about Africa. They would just have one purpose – sucking up oil assets in the Middle East.”

    The military footprint would have to be even larger to actually get the oil out.
    “You’d have to occupy most of Syria to get the oil out of the country, since the Syrian export pipelines travel from the oilfields in eastern Syria all the way to the Mediterranean coast, right across the central breadth of the country,” Krane said.

    “It wouldn’t do you much good to just capture the oilfields. If you wanted to steal the oil, it would take a full military occupation of Syria to control the full length of the pipelines, so you could move the oil to market. At a minimum, that would mean occupying the city of Homs in central Syria, as well as the main Syrian oil terminals at Banias and Tartus. All that is in addition to occupying rebel-held areas such as Deir ez-Zour where the oilfields lie.”

    Nor would be it be an in-and-out deployment. When he says “take the oil”, Trump clearly has the reserves in mind. That would take years.

    “There is no physical way you can take oil reserves any faster than you can pump the oil,” Cordesman said.

    The costs of the military operations would far exceed any revenue that could be extracted.

    “If you commandeered every bit of it it wouldn’t be a very cost-effective way to fund an occupation,” Krane argued. “And that’s before you start getting people shot and sending them home in body bags.”

    ““We would leave a certain group behind and you would take various sections where they have the oil,” he said at the forum.”

    That was Trump’s proposal back in September: just leaves some troops behind and let them take the oil. And how many troops would that be for how long?

    “It would take close to 100,000 troops plus the equipment, the airborne patrols, to secure the oilfields and extract the oil,” Harmer said. “Theoretically it would suck up all the deployable assets we have. Forget about the Pacific, forget about Africa. They would just have one purpose – sucking up oil assets in the Middle East.”

    The military footprint would have to be even larger to actually get the oil out.
    “You’d have to occupy most of Syria to get the oil out of the country, since the Syrian export pipelines travel from the oilfields in eastern Syria all the way to the Mediterranean coast, right across the central breadth of the country,” Krane said.

    “It wouldn’t do you much good to just capture the oilfields. If you wanted to steal the oil, it would take a full military occupation of Syria to control the full length of the pipelines, so you could move the oil to market. At a minimum, that would mean occupying the city of Homs in central Syria, as well as the main Syrian oil terminals at Banias and Tartus. All that is in addition to occupying rebel-held areas such as Deir ez-Zour where the oilfields lie.”

    Nor would be it be an in-and-out deployment. When he says “take the oil”, Trump clearly has the reserves in mind. That would take years.

    “There is no physical way you can take oil reserves any faster than you can pump the oil,” Cordesman said.

    The costs of the military operations would far exceed any revenue that could be extracted.

    ““It would take close to 100,000 troops plus the equipment, the airborne patrols, to secure the oilfields and extract the oil,” Harmer said. “Theoretically it would suck up all the deployable assets we have. Forget about the Pacific, forget about Africa. They would just have one purpose – sucking up oil assets in the Middle East.”

    So the Trump’s big plan to steal Iraq’s oil, and presumably Syria’s oil too, would probably cost more than it would make, not even counting the lives lost. Yeah, that sounds like a Trump plan.

    We’ll see if Trump’s tongue ends up shredding the remaining relationship between US and Iraqi troops as they fight to take back territory for ISIS. But on the plus side, it’s worth noting that if Trump is planning on stealing all the oil in a country at least he’s less likely to nuke the place. So that’s kind of nice.

    Posted by Pterrafractyl | January 24, 2017, 3:49 pm
  9. Donald Trump is back in the US tweeting away during this Memorial Day weekend following his big first overseas trip. And while the bar was incredibly low in terms of what constitutes a successful trip (basically, as long as he doesn’t break anything it will be considered a success), at least we can say that Donald Trump didn’t break anything it looks like he broke NATO:

    The Washington Post

    Following Trump’s trip, Merkel says Europe can’t rely on ‘others.’ She means the U.S.

    By Michael Birnbaum and Rick Noack
    May 28, 2017 at 2:47 PM

    LONDON — German Chancellor Angela Merkel on Sunday declared a new chapter in U.S.-European relations after contentious meetings with President Trump last week, saying that Europe “really must take our fate into our own hands.”

    Offering a tough review in the wake of Trump’s trip to visit E.U., NATO and Group of Seven leaders last week, Merkel told a packed Bavarian beer hall rally that the days when Europe could rely on others was “over to a certain extent. This is what I have experienced in the last few days.”

    It was a stark declaration from the leader of Europe’s most powerful economy, and a grim take on the transatlantic ties that have underpinned Western security in the generations since World War II. Although relations between Washington and Europe have been strained during periods since 1945, before Trump there has rarely been such a strong feeling from European leaders that they must turn away from Washington and prepare to face the world alone.

    Merkel said that Europe’s need to go it alone should be done “of course in friendship with the United States of America, in friendship with Great Britain and as good neighbors wherever that works.”

    But it was a clear repudiation of Trump’s troubled few days with European leaders, even as she held back from mentioning the U.S. president by name. On Thursday, Trump had stern words for German trade behind closed doors. Hours later, he blasted European leaders at NATO for failing to spend enough on defense, while holding back from offering an unconditional guarantee for European security. Then, at the Group of Seven summit of leaders of major world economies on Friday and Saturday, he refused to endorse the Paris agreements on combating climate change, punting a decision until next week.

    Merkel’s comments were similar to some she made shortly after Trump’s November election. But they carry extra heft now that Trump is actually in office – and after Trump had a days-long opportunity to reset relations with Washington’s closest allies. Instead, by most European accounts he strained them even more.

    Trump – who returned from his nine-day international trip on Saturday – had a different take.

    “Just returned from Europe. Trip was a great success for America. Hard work but big results!” Trump wrote on Sunday, reviving a prolific Twitter habit that had slackened during his days on the road.

    But many European leaders emerged from their meetings with Trump filled with fresh worry that an earthquake truly had hit transatlantic relations. Trump was far more solicitous toward the autocratic king of Saudi Arabia earlier in the week, telling him and other leaders of Muslim-majority countries – many of them not democratically elected – that he was not “here to lecture.” Days later in Brussels he offered a scathing assessment of Washington’s closest allies, saying they were being “unfair” to American taxpayers.

    “The belief in shared values has been shattered by the Trump administration,” said Stephan Bierling, an expert on transatlantic relations at Germany’s University of Regensburg. “After the inauguration, everyone in Europe was hopeful that Trump would become more moderate and take into account the positions of the G-7 and of NATO. But the opposite has happened. It’s as if he is still trying to win a campaign.”

    The United States remains the largest economy in the world, and its military is indispensable for European security, putting a clear limit on Europe’s ability to declare independence. American consumers also form an important market for European products – including the German BMWs that Trump complained about in closed-door meetings in Brussels, according to German press accounts.

    But Merkel has expressed willingness to jolt her nation’s military spending upwards, a first step both to answering American criticism that it falls far short of NATO pledges and to lessening its dependence on the U.S. security blanket. Germany hiked its military spending by $2.2 billion this year, to $41 billion, but it remains far from being able to stand on its own militarily.

    ———-
    “Following Trump’s trip, Merkel says Europe can’t rely on ‘others.’ She means the U.S.” by Michael Birnbaum and Rick Noack; The Washington Post; 05/28/2017;

    “Offering a tough review in the wake of Trump’s trip to visit E.U., NATO and Group of Seven leaders last week, Merkel told a packed Bavarian beer hall rally that the days when Europe could rely on others was “over to a certain extent. This is what I have experienced in the last few days.”

    So long transatlantic relationship, hello EU army hello multinational Bundeswehr:

    Foreign Policy

    Germany Is Quietly Building a European Army Under Its Command

    Berlin is using a bland name to obscure a dramatic shift in its approach to defense: integrating brigades from smaller countries into the Bundeswehr.

    By Elisabeth Braw
    May 22, 2017

    Every few years, the idea of an EU army finds its way back into the news, causing a kerfuffle. The concept is both fantasy and bogeyman: For every federalist in Brussels who thinks a common defense force is what Europe needs to boost its standing in the world, there are those in London and elsewhere who recoil at the notion of a potential NATO rival.

    But this year, far from the headlines, Germany and two of its European allies, the Czech Republic and Romania, quietly took a radical step down a path toward something that looks like an EU army while avoiding the messy politics associated with it: They announced the integration of their armed forces.

    Romania’s entire military won’t join the Bundeswehr, nor will the Czech armed forces become a mere German subdivision. But in the next several months each country will integrate one brigade into the German armed forces: Romania’s 81st Mechanized Brigade will join the Bundeswehr’s Rapid Response Forces Division, while the Czech 4th Rapid Deployment Brigade, which has served in Afghanistan and Kosovo and is considered the Czech Army’s spearhead force, will become part of the Germans’ 10th Armored Division. In doing so, they’ll follow in the footsteps of two Dutch brigades, one of which has already joined the Bundeswehr’s Rapid Response Forces Division and another that has been integrated into the Bundeswehr’s 1st Armored Division. According to Carlo Masala, a professor of international politics at the University of the Bundeswehr in Munich, “The German government is showing that it’s willing to proceed with European military integration” — even if others on the continent aren’t yet.

    European Commission President Jean-Claude Juncker has repeatedly floated the idea of an EU army, only to be met with either ridicule or awkward silence. That remains the case even as the U.K., a perennial foe of the idea, is on its way out of the union. There’s little agreement among remaining member states over what exactly such a force would look like and which capabilities national armed forces would give up as a result. And so progress has been slow going. This March, the European Union created a joint military headquarters — but it’s only in charge of training missions in Somalia, Mali, and the Central African Republic and has a meager staff of 30. Other multinational concepts have been designed, such as the Nordic Battle Group, a small 2,400-troop rapid reaction force formed by the Baltic states and several Nordic countries and the Netherlands, and Britain’s Joint Expeditionary Force, a “mini-NATO” whose members include the Baltic states, Sweden, and Finland. But in the absence of suitable deployment opportunities, such operations-based teams may as well not exist.

    But under the bland label of the Framework Nations Concept, Germany has been at work on something far more ambitious — the creation of what is essentially a Bundeswehr-led network of European miniarmies. “The initiative came out of the weakness of the Bundeswehr,” said Justyna Gotkowska, a Northern Europe security analyst at Poland’s Centre for Eastern Studies think tank. “The Germans realized that the Bundeswehr needed to fill gaps in its land forces … in order to gain political and military influence within NATO.” An assist from junior partners may be Germany’s best shot at bulking out its military quickly — and German-led miniarmies may be Europe’s most realistic option if it’s to get serious about joint security. “It’s an attempt to prevent joint European security from completely failing,” Masala said.

    “Gaps” in the Bundeswehr is an understatement. In 1989, the West German government spent 2.7 percent of GDP on defense, but by 2000 spending had dropped to 1.4 percent, where it remained for years. Indeed, between 2013 and 2016 defense spending was stuck at 1.2 percent — far from NATO’s 2 percent benchmark. In a 2014 report to the Bundestag, the German parliament, the Bundeswehr’s inspectors-general presented a woeful picture: Most of the Navy’s helicopters were not working, and of the Army’s 64 helicopters, only 18 were usable. And while the Cold War Bundeswehr had consisted of 370,000 troops, by last summer it was only 176,015 men and women strong.

    Since then the Bundeswehr has grown to more than 178,000 active-duty troops; last year the government increased funding by 4.2 percent, and this year defense spending will grow by 8 percent. But Germany still lags far behind France and the U.K. as a military power. And boosting defense spending is not uncontroversial in Germany, which is wary of its history as a military power. Foreign Minister Sigmar Gabriel recently said it was “completely unrealistic” to think that Germany would reach NATO’s defense spending benchmark of 2 percent of GDP — even though nearly all of Germany’s allies, from smaller European countries to the United States, are urging it to play a larger military role in the world.

    Germany may not yet have the political will to expand its military forces on the scale that many are hoping for — but what it has had since 2013 is the Framework Nations Concept. For Germany, the idea is to share its resources with smaller countries in exchange for the use of their troops. For these smaller countries, the initiative is a way of getting Germany more involved in European security while sidestepping the tricky politics of Germany military expansion. “It’s a move towards more European military independence,” Masala said. “The U.K. and France are not available to take a lead in European security” — the U.K. is on a collision course with its EU allies, while France, a military heavyweight, has often been a reluctant participant in multinational efforts within NATO. “That leaves Germany,” he said. Operationally, the resulting binational units are more deployable because they’re permanent (most multinational units have so far been ad hoc). Crucially for the junior partners, it also amplifies their military muscle. And should Germany decide to deploy an integrated unit, it could only do so with the junior partner’s consent.

    Of course, since 1945 Germany has been extraordinarily reluctant to deploy its military abroad, until 1990 even barring the Bundeswehr from foreign deployments. Indeed, junior partners — and potential junior partners — hope that the Framework Nations arrangement will make Germany take on more responsibility for European security. So far, Germany and its multinational miniarmies remain only that: small-scale initiatives, far removed from a full-fledged European army. But the initiative is likely to grow. Germany’s partners have been touting the practical benefits of integration: For Romania and the Czech Republic, it means bringing their troops to the same level of training as the German military; for the Netherlands, it has meant regaining tank capabilities. (The Dutch had sold the last of their tanks in 2011, but the 43rd Mechanized Brigade’s troops, who are partially based with the 1st Armored Division in the western German city of Oldenburg, now drive the Germans’ tanks and could use them if deployed with the rest of the Dutch army.) Col. Anthony Leuvering, the 43rd Mechanized’s Oldenburg-based commander, told me that the integration has had remarkably few hiccups. “The Bundeswehr has some 180,000 personnel, but they don’t treat us like an underdog,” he said. He expects more countries to jump on the bandwagon: “Many, many countries want to cooperate with the Bundeswehr.” The Bundeswehr, in turn, has a list of junior partners in mind, said Robin Allers, a German associate professor at the Norwegian Institute for Defence Studies who has seen the German military’s list. According to Masala, the Scandinavian countries — which already use a large amount of German-made equipment — would be the best candidates for the Bundeswehr’s next round of integration.

    So far, the low-profile and ad hoc approach of the Framework Nations Concept has worked to its advantage; few people in Europe have objected to the integration of Dutch or Romanian units into German divisions, partly because they may not have noticed. Whether there will be political repercussions should more nations sign up to the initiative is less clear.

    ———-

    “Germany Is Quietly Building a European Army Under Its Command” by Elisabeth Braw; Foreign Policy; 05/22/2017

    “Of course, since 1945 Germany has been extraordinarily reluctant to deploy its military abroad, until 1990 even barring the Bundeswehr from foreign deployments. Indeed, junior partners — and potential junior partners — hope that the Framework Nations arrangement will make Germany take on more responsibility for European security. So far, Germany and its multinational miniarmies remain only that: small-scale initiatives, far removed from a full-fledged European army. But the initiative is likely to grow. Germany’s partners have been touting the practical benefits of integration: For Romania and the Czech Republic, it means bringing their troops to the same level of training as the German military; for the Netherlands, it has meant regaining tank capabilities. (The Dutch had sold the last of their tanks in 2011, but the 43rd Mechanized Brigade’s troops, who are partially based with the 1st Armored Division in the western German city of Oldenburg, now drive the Germans’ tanks and could use them if deployed with the rest of the Dutch army.) Col. Anthony Leuvering, the 43rd Mechanized’s Oldenburg-based commander, told me that the integration has had remarkably few hiccups. “The Bundeswehr has some 180,000 personnel, but they don’t treat us like an underdog,” he said. He expects more countries to jump on the bandwagon: “Many, many countries want to cooperate with the Bundeswehr.” The Bundeswehr, in turn, has a list of junior partners in mind, said Robin Allers, a German associate professor at the Norwegian Institute for Defence Studies who has seen the German military’s list. According to Masala, the Scandinavian countries — which already use a large amount of German-made equipment — would be the best candidates for the Bundeswehr’s next round of integration.”

    Let’s see…we have Romania, the Czech Republic, the Netherlands already integrating under the Bundeswehr’s command, with many more states likely to follow. Specifically the Scandinavian states. At least those are the states Germany really wants under its command. And that whole process just got a massive boost thanks to Donald Trump’s general trash talking of NATO culminating in a refusal to reaffirm the US’s commitment to NATO’s article 5.

    And that was just Trump’s first trip around the world.

    Posted by Pterrafractyl | May 28, 2017, 1:24 pm
  10. Here’s a reminder that when Donald Trump publicly fights with Angela Merkel he’s not just weakening NATO and the trans-Atlantic alliance. He’s also invalidating any valid criticisms of German policy. How so? By simply by very, very unlikable to Europeans in general. So when you considering that Angela Merkel is in the middle of a reelection campaign and fighting with Trump only helps her in the polls, we should probably consider quite a few more trans-Atlantic spats over the coming months. They’re just too politically helpful for Angela to pass up:

    Slate

    Thanks to Trump, Germany Has a Free Pass to Keep Wrecking Europe’s Economy

    By Jordan Weissmann
    May 30 2017 8:07 PM

    One downside to having a witless howler monkey for a president is that, even on the rare occasions when Donald Trump is fundamentally right about an issue, he still makes a hash of it.

    Consider his recent squabbles with Germany over trade. After delivering an awkward speech at NATO headquarters last week in which he lectured our European allies for failing to spend enough on their own military defense, Trump reportedly griped to a room full of leaders that the Germans were “very bad” (or possibly, depending on your translation, “very evil”) for running a large trade surplus. “Look at the millions of cars they sell in the U.S. We’ll stop that,” he reportedly said. These comments were widely mocked—German companies already make many of their cars in the U.S.—but Trump nonetheless doubled down publicly on his position Tuesday morning on Twitter.

    We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for U.S. This will change— Donald J. Trump (@realDonaldTrump) May 30, 2017

    And you know what? He has a point. As usual, Trump’s comments lack any semblance of nuance, and he may only barely understand that of which he tweets. But economists have criticized Germany for years over an approach to trade that has punished its European neighbors, destabilized the eurozone, and sapped global growth. The president’s basic intuition that Berlin is a bad actor on this issue is correct.

    There is arguably no country that does a better job gaming global trade right now than Germany. The country’s exports have topped its imports year after year, and in 2016 it piled up the world’s largest current account surplus—dwarfing even China’s both as a total dollar figure and as a percentage of its economy. Germans have not accomplished this feat solely because they have a knack for designing sports cars. Rather, they’ve done it by being thrifty to a fault, saving far more than they spend—which by the rules of economics ultimately leads to a trade surplus. Households in Stuttgart and Munich simply don’t buy enough imported merchandise to balance out the roadsters and turbines and prescription drugs German companies ship to the world.

    You can’t blame German families for stowing money away. They’re a proudly frugal people who regard a penny-pinching housewife as a symbol of their national character, after all. The country’s population is also aging, and old folks need their nest eggs. But the savings glut that fuels Germany’s trade surplus is also a product of public-policy choices that have pitted its well-being against the world’s. Angela Merkel’s government has insisted on running a budget surplus—which this year hit a record high—which contributes to the national savings rate. Meanwhile, workers’ pay has been kept down by a combination of concessions made by labor unions and labor market reforms from the early 2000s that made it easier for companies to hire inexpensive temporary employees. Those low wages have allowed German companies to be more competitive abroad while also discouraging consumer spending at home.

    None of this would be a problem if Germany still had its own free-floating currency. If it did, rising exports would drive up the Deutsche mark’s value, leading Germans to sell less and buy more from overseas. But instead it shares the euro with economically weaker compatriots like Spain and Italy, which keeps the cost of German wares artificially cheap both inside and outside Europe.

    Not coincidentally, Germany’s trade surpluses have been most devastating to other members of the currency union. It’s not merely that these other countries’ manufacturers were outcompeted by German companies. It’s that countries like Greece financed their own trade surpluses with debt—often borrowed from German banks reinvesting their country’s trade bounty—that required bailouts after the financial crisis. These bailouts were approved by moralizing German officials only on the condition of an economically crushing cycle of austerity. Before right-wing nationalists like Donald Trump and the Brexiteers became ascendent, it seemed the single largest threat to Europe’s future was German-accented economics—67 percent of economists polled by the Centre for Macroeconomics and CEPR, for instance, said they agreed the country’s surpluses were destabilizing the euro zone.

    But jobless workers in Athens and Andalucia haven’t been the only victims. Economists such as former Federal Reserve Chair Ben Bernanke and New York Times columnist Paul Krugman (who won his Nobel prize for work on trade) have argued that Germany’s surpluses were a drag on the entire global economy in the post-recession years. “We are still in a world ruled by inadequate demand, and very much subject to the paradox of thrift,” Krugman wrote in late 2013. “By running inappropriate large surpluses, Germany is hurting growth and employment in the world at large. Germans may find this incomprehensible, but it’s just macroeconomics 101.” Even the U.S. Treasury got in on the act, criticizing “Germany’s anemic pace of domestic demand growth and dependence on exports” for driving up the risk of deflation in “the euro area, as well as for the world economy.”

    In short, criticizing Germany on trade is not some sort of fringe position. It’s been standard among sane economists for years.

    But that brings us back to Trump. The president may not even realize it, but the two things that frustrate him about Germany—its trade balance and its military budget—are connected. Germany needs to spend more to reduce its trade balance. The most obvious way to do that is through a project like mass infrastructure investment, as Merkel’s political opponents support (her party prefers tax cuts). But lavishing more money on the military, as Trump would like, would likely work as well. It’s a position that a diplomatically adroit White House could push in private and perhaps not be laughed from the room.

    Donald Trump, though, is not adroit. Since the inauguration, Europeans have been apt to laugh off the Trump administration’s criticisms of Germany as ill-informed bluster, even when they were basically valid. By waffling on NATO while attempting to bully our European allies, he’s stiffened their resistance to him and allowed Merkel to cast herself as the defender of Europe in an age when Washington can’t be trusted. “We have to know that we must fight for our future on our own, for our destiny as Europeans,” Merkel said on the campaign trail after Trump’s Euro jaunt. New French President Emmanuel Macron is joining along, cozying up to Merkel while making a theatrical display of trying to destroy Trump’s knuckles. By making himself the enemy, Trump’s taken the heat off Germany and made real economic reforms there that much less likely.

    ———-

    “Thanks to Trump, Germany Has a Free Pass to Keep Wrecking Europe’s Economy” by Jordan Weissmann; Slate; 05/30/2017

    “In short, criticizing Germany on trade is not some sort of fringe position. It’s been standard among sane economists for years.”

    Yep, Trump accidentally tweeted something sane. But since he framed it all from an ‘America First’ standpoint – ignoring that Germany’s trade imbalance and pro-austerity stances have a much, much greater negative impact on Germany’s European neighbors than it does the US – the world got to laugh it off and turned it into an opportunity to mock Trump. It’s the kind of experience that probably left Merkel’s advisors scrambling trying to figure out how to goad Trump into more of these tiffs.

    But also note the possible ‘solution’ to Trump’s duel criticisms – that Germany doesn’t spend enough on its military and it’s not importing enough US goods – and how this plays into Merkel’s own goal of convincing the German public to spend more on the military: if Germany buys a bunch of US military hardware that would address both of Trump’s complaints:


    But that brings us back to Trump. The president may not even realize it, but the two things that frustrate him about Germany—its trade balance and its military budget—are connected. Germany needs to spend more to reduce its trade balance. The most obvious way to do that is through a project like mass infrastructure investment, as Merkel’s political opponents support (her party prefers tax cuts). But lavishing more money on the military, as Trump would like, would likely work as well. It’s a position that a diplomatically adroit White House could push in private and perhaps not be laughed from the room.

    And that’s part of the weird situation the Merkel government is in regarding how to handle Trump’s boorishness on these issues: if they mock Trump, they can score some good public relations points in terms of dismissing criticisms of Germany’s chronically high trade surplus. And score good public relations points in general just from mocking Trump because that’s popular in Germany. But if they publicly take Trump’s critiques seriously, that gives the German government a good excuse to increase military spending over long-held public opposition. On the other hand, the more Trump damages US/German relations, the more compelling Merkel’s calls for an EU Army only get.

    It’s a strange tightrope of respectful derision that needs to be walked. To mock, or not to mock. Trump. That is the question facing Angela Merkel. With the answer probably having a lot to do with how tight her race gets. She’s probably going to want to mock Trump, just not too much…unless the race is really close in which case look out US-German relations!

    Posted by Pterrafractyl | May 30, 2017, 7:47 pm

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