|

Global Warming: The Right Kind

The fragile coalition of US President Obama, German chancellor Angela Merkel, and French President Francois Hollande, all waging a futile second cold war on Russia has shattered.

Led by Donald trump, but fought by Angela Merkel, the world is warming up to Russia.

Obama is gone, Hollande is gone (dropped out), and Merkel is left dangling in a wind strongly blowing against her.

francois-fillon-russia

Please consider European Consensus on Tackling Putin Under Strain.

François Fillon, the centre-right favourite to be France’s next president, shook Europe’s fragile consensus over Russia as he attacked the bloc’s “emotional” approach to President Vladimir Putin.

On the margins of an EU summit aiming to show Europe’s resolve in the face of Mr Putin’s increasing aggression, Mr Fillon captured the growing lack of unity in the West’s stance even as Russian-backed Syrian forces over-ran the stricken city of Aleppo.

Echoing the rhetoric of Donald Trump, the US president-elect, Mr Fillon said: “I have, simply, a lot of respect for Russia.” Mr Fillon was speaking moments after meeting Chancellor Angela Merkel of Germany, a strong advocate of the EU’s sanctions-led policy against Moscow.

“I have always said that whoever is the Russian leader — be his name Vladimir, Boris or Igor — is the leader of the largest country on the earth’s surface,” Mr Fillon added. “Europe must have a long-term strategy with Russia and not simply act on emotion.”

Several countries — including Italy, Hungary, Slovakia and Greece — have long complained of sanctions fatigue and called for a new approach towards Russia. Their position would be strengthened if Mr Fillon — who won a primary contest last month to become the centre-right candidate for France’s presidential elections — were to replace François Hollande in 2017. Mr Hollande arrived at the summit dismissing calls for more dialogue with the Kremlin.

Ms Merkel, who worked hard to win over Mr Hollande to her Russia policy, could face even greater disputes with Mr Fillon.

Merkel Coalition Splinters

The next French election is likely to come down between a choice between Fillon and Marine Le Pen. In addition to being anti-Euro, Le Pen is also warm to Russia.

Either way, the EU nannycrats will lose something.

And the next government in the Netherlands is also increasingly likely to poke a finger in Merkel’s eyes.

Even if Merkel survives the next German election, she will be seriously damaged goods, unable to control a Europe splintering out of her control.

Russia warming is a good thing. Sanctions make no sense. Neither does the euro itself, as implemented.

Author

Mike “Mish” Shedlock's

Mike “Mish” Shedlock's

Sitka Pacific Capital Management,Llc

More from Mike “Mish” Shedlock's
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD rebounds after falling toward 1.1700

EUR/USD gains traction and trades above 1.1730 in the American session, looking to end the week virtually unchanged. The bullish opening in Wall Street makes it difficult for the US Dollar to preserve its recovery momentum and helps the pair rebound heading into the weekend.

GBP/USD steadies below 1.3400 as traders assess BoE policy outlook

Following Thursday's volatile session, GBP/USD moves sideways below 1.3400 on Friday. Investors reassess the Bank of England's policy oıtlook after the MPC decided to cut the interest rate by 25 bps by a slim margin. Meanwhile, the improving risk mood helps the pair hold its ground.

Gold stays below $4,350, looks to post small weekly gains

Gold struggles to gather recovery momentum and stays below $4,350 in the second half of the day on Friday, as the benchmark 10-year US Treasury bond yield edges higher. Nevertheless, the precious metal remains on track to end the week with modest gains as markets gear up for the holiday season.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid bearish market conditions

Bitcoin (BTC) is edging higher, trading above $88,000 at the time of writing on Monday. Altcoins, including Ethereum (ETH) and Ripple (XRP), are following in BTC’s footsteps, experiencing relief rebounds following a volatile week.

How much can one month of soft inflation change the Fed’s mind?

One month of softer inflation data is rarely enough to shift Federal Reserve policy on its own, but in a market highly sensitive to every data point, even a single reading can reshape expectations. November’s inflation report offered a welcome sign of cooling price pressures. 

XRP rebounds amid ETF inflows and declining retail demand demand

XRP rebounds as bulls target a short-term breakout above $2.00 on Friday. XRP ETFs record the highest inflow since December 8, signaling growing institutional appetite.