Russia shouldn't remain sanctions risk for European companies, say Paris and Berlin

A section of the Nord Stream 2 gas pipeline on the Baltic seabed is under construction in Germany. At the same time, a new tangle of antagonism towards the United States has emerged and aggravated in Europe.

In fact, Sylvie Bermann, French ambassador to Russia, said Paris would not demand the unconditional resignation of Syria's President Bashar Assad. In other words, France has agreed to fulfill Russia's main requirement that the Assad government should be preserved, which Washington opposes strongly today.

In addition, Berlin and Paris advocate easing sanctions against large Russian companies, primarily Rusal that produced 3.7 million tons of aluminum last year. The activities of French and German companies suffer from these sanctions. Recently, French president Emmanuel Macron and German chancellor Angela Merkel visited the U.S. where they tried to secure preferences for their companies.

It appears from this that the sanctions do not affect Russia as much as European countries and they will spare no pains to minimize their losses, even to the detriment of Ukraine's interests. So Ukraine fatigue did the trick, and the Poroshenko regime should not hope very much for French and German support.

As if to rub salt in the wound, the mainstream media reported that Nord Stream 2 would double the existing Nord Stream pipeline’s current annual capacity of 55 billion cubic meters. Therefore, Ukraine will lose 55 bcm of transit to the European Union. According to experts' estimates, Kiev stands to lose transit revenue in the amount of more than $1.5 billion per year.

Incidentally, James Rickards, editor of the Strategic Intelligence news letter, noted that Russia is the 12th largest economy in the world, has the largest landmass, is one of the three largest energy producers in the world, has abundant natural resources other than oil, has advanced weapons and space technologies, an educated workforce, and, of course, has the largest arsenal of nuclear weapons of any country. Moscow's game involves the accumulation of gold, development of alternative payments systems, and ultimate demise of the dollar as the dominant global reserve currency.

Contrary to many analysts' perceptions, Russia is on a sound financial footing. Russia's government debt-to-GDP ratio is 12.6%, which is trivial, compared with 253% for Japan, 105% for the U.S. and 68% for Germany. The Central Bank of Russia has rebuilt its hard currency reserves to $455 billion after those reserves were severely depleted in 2015, following the collapse in oil prices that began in 2014.