Sometimes Russian Federation President Vladimir Putin just nails the issue in a way that is difficult for western voices to deconstruct. This is one of those examples.
Using the reference of the EU recently raising interest rates in an effort to lower energy costs, a seemingly disconnected approach that attaches energy policy to monetary policy, Vladimir Putin outlines exactly why the EU Central Bank approach is used. This is a really important dynamic to understand.
For a long time, Russia battled with the EU over the pricing process for oil and gas. Russia, specifically Putin, wanted to sell oil/gas to the EU based on production prices and fair profits.
Europe wanted to buy Russian oil/gas based on “market prices” which are manipulated by speculation and traders.
Putin doesn’t like this pricing approach because it artificially inflates the price based on speculation, trading and inorganic influences.
Instead, Putin always said the “market approach” makes your energy prices go up, even when production capacitary prices go down (productivity).
Producers can provide increases in energy volume at lower per unit levels just by turning a dial on gas volume. Why would Europe want to pay more, when the cost to deliver a higher volume lowers the per unit price. The EU never had a good answer, other than that’s just the way the ‘western market’ works.
Concluding the first day of his working visit to India for the BRICS meeting, Vladimir Putin answered a media question about the EU and used this reference to outline why the financial system of the EU is actually the underlying reason for their need to have conflict with Russia. This is really interesting.
Question: You have spoken at length today about the BRICS countries. I would like to raise a question concerning a nation which, though geographically more distant from here, is perhaps closer to you personally – Germany. As is known, elections have recently taken place in Saxony, where the Alternative for Germany secured a decisive victory. It appears a similar trend is emerging in Mecklenburg-Western Pomerania as well. How do you view these developments?
President of Russia Vladimir Putin: I do not wish to, nor will I, comment on matters of the internal political developments currently unfolding in the Federal Republic.
However, there are points which merit attention in this context – and I will explain why. In my view, all that is now happening across Europe as a whole is the consequence of systemic errors committed by the so‑called West, or, to be more precise, by the globalist circles of the West, in the political, security and economic spheres.
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