Wednesday, December 3, 2014

Putin Gives the EU the Finger; Cancels $50 Billion Pipeline Project

Vladimir Putin has announced that he is cancelling the $50 billion South Stream pipeline project.

The cancellation comes after the European Commission refused to give Russia's state controlled energy company,Gazprom, the exemption it would need to operate the pipeline at full capacity, viewing it as a potential further tool for the Kremlin to exert economic control over southern and eastern Europe.

So now those countries will get nothing. Eastern European nations reacted with shock and anger, reports FT.

Bulgaria, Serbia and Hungary said they had received no advance warning that Moscow was scrapping South Stream, even though they all have substantial financial and political capital invested.

Putin claimed the demise of the project would cost Bulgaria about €400m a year in foregone income and suggested that Bulgaria had not behaved “as an independent country” over the issue – an apparent reference to the EU’s misgivings about South Stream, says FT.

 “If Europe does not want to carry out [South Stream], then it will not be carried out,” he said. “It would be ridiculous for us to invest hundreds of millions of dollars constructing a project, bringing it to Bulgaria’s borders and having to drop it from there on.”

Putin said that Gazprom would consider developing a gas hub to southern Europe via Turkey, China is also a possible customer for the gas.

(map via FT)


  1. A state-run company isn't a company. It's a government agency. The difference? When a company makes a deal via contract, it does so because there exists mutual benefit. To stop some venture means pain to the company, its workers, and its bottom line. When a state agency "contracts", it can cancel at any time via the whims of the oligarchy - especially its head. Their power still intact, they have no true need for cooperation and can waste everyone's time and money without much consequence. Also, there will be no competitor swooping in to finish the work in this situation - they'd be arrested. This applies to all of the countries listed above. The moment governments (countries) are listed in "business deals", we're heading down a fascist/communist road or already at the end of it.

    1. “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power”
      ― Benito Mussolini

  2. "Not acting like an independent country"

  3. Uh-oh the Solntsevskaya Bratva and the Gambino's aren't getting along and the Slovak mafia are caught in the middle.

    It's good theater watching Putin give the west the what-fore but the entertainment is diminished when the effects to the productive class is considered.

  4. Meet and Greet Natalie Jaresko, US Government Employee, Ukraine Finance Minister

    I have a sneaking suspicion that the US media won’t take notice of Natalie Jaresko’s new appointment and on the accusations of her former husband that she made an improper loan out of an investment company heavily, if not entirely, funded by the US government. As Helmer writes:

    It hasn’t been rare for American spouses to go into the asset management business in the former Soviet Union, and make profits underwritten by the US Government with information supplied from their US Government positions or contacts. It is exceptional for them to fall out over the loot.