July 29: Russia throws the switch on Euro energy diplomacy

In which, Russia and European power politics collide in Africa, President Biden tries to avoid colliding with economic reality, and China and the US appear on a collision course in Taiwan.

Russia throws the switch on Euro energy diplomacy

Last week, I discussed the challenging energy map for Europe and the effect energy challenges were beginning to have on the unity of the EU bloc against Russia.

That conflict got very real this week, as Russia, beginning to experience the economic bite of sanctions appeared to make a two-front attack on European energy supplies.

The first prong of the attack was right along the lines that American diplomats from the Obama, Trump, and Biden administrations had been warning against: natural gas to Germany. Just after completing maintenance on Nord Stream 1 and throwing the switch on, Russia threw it off just to flex its muscle and cause panic amidst the EU.

The power play was not a surprise, though, as European countries have been looking abroad for alternate supply lines ever since the Ukraine war got going. Greece signed a deal with Saudi Arabia for cheaper energy supplies, and France is both looking to North Africa and wining and dining the Saudis. 

European-Russian geopolitics moves to Africa

In that latter case, President Macron took heat for his about face on human rights concerns with Saudi Arabia, following the pragmatic/hypocritical (depends on who you ask) lead of President Biden and making amends with Mohammed bin Salman.

Recognizing Europe’s pivot to Africa and the Middle East for additional energy supplies, Russia launched the second prong of its geopolitical power play: A tour of African countries by Foreign Minister Sergei Lavrov.

The tour sought to build ties with former Soviet allies and expand possibilities for economic investment, which (if successful) would undercut European energy diplomacy.

While attention has been primarily given to China’s investment inroads into Africa, and rightfully so given the scale of some of those investments, one shouldn’t sleep on Russian activity given the latter’s long history of Soviet-era work on the continent.

Perhaps a third leg of Russian geopolitical power moves this week could be Iran, which announced that it would no longer be carrying on trade with Russia using US dollars. That move is not likely to impact the power of the US dollar in the global economy, but it does demonstrate that the dollar is not omnipotent and signals a limit to the sanctions regime. A limit that some European leaders are already saying has been reached.

Democrats roll out their midterm offensive

It wasn’t just the Russians going on the political offensive this week. Coming off his bout with Covid, President Biden and the Democrats came out swinging on two fronts in American domestic politics.

On the economic front, the President bluntly stated that he didn’t think America would be in a recession when economic growth data would be published on Thursday. A view reinforced by Treasury Secretary Janet Yellen. 

When that number indicated that the American economy had in fact contracted for the second straight quarter (the general definition of a recession), Biden pivoted, pointed to employment numbers and cheerfully said, “Doesn’t sound like a recession to me.” This less than subtle redefinition of recession has been immediately picked up by American media, giving Biden something of a rhetorical victory. He may not be able to control inflation, but at least his team is doing what they can to control spin.

On the policy front, the Green New Deal appears to be back from the dead as Democrat Senators Chuck Schumer and Joe Manchin announced a compromise package that funds elements of the Green New Deal… with tax increases. Before you freak out folks, remember, we’re not in a recession and the Fed is getting control of inflation, so higher taxes totally make sense.

But Democrats aren’t done yet, not by a long shot. As we move to the end of midterm primary elections and into general election season, the Democrats have been working overtime to *checks notes* support Trump-friendly candidates in GOP primaries. The belief is that these MAGA deplorables are largely political novices and given their toxic affinity for Trump they’ll be easier to defeat. That’s the belief, the strategy is to generate support for the weaker opponent, so you can increase your chances of winning come November. It worked in 2016, so it’ll work again, right….. Right?

In a number of primaries across the country, that strategy appears to be working at least the part about getting the perceived weaker opponent into the ring. We’ll know if the strategy really worked in November. 

Despite the early success, the approach is not without its detractors. Several Democratic strategists worry that the approach could backfire given Biden’s low approval and the lackluster economy.