Sunday, May 31, 2009

Russians buying a car company

Putin and Schroeder share an awkward hug

The German government announced yesterday that it had picked a partnership led by Magna International Inc., a Canadian auto-parts supplier, Russia’s biggest bank, OAO Sberbank, and Russian carmaker OAO GAZ as the buyer for Opel, the European division of GM. This augurs ever closer ties between Russia and Germany, which in turns stokes the fears of every Eastern European living between the two states.

The last premier of Germany, Gerhard Schroeder, was hired by Russian state gas export monopoly, Gazprom OAO, months after he left office in 2005 to spearhead the construction of the Nord Stream pipeline that will provide Russian gas to Germany (while circumventing Eastern Europe).

As the Polish opposition noted in a comment to Bloomberg news services, “Nothing’s ever purely economic with the Russians, there’s always political interest involved.” No doubt.

The Clarion Content finds the arguments in favor of Russian ownership specious. Firstly, there is no indication that the rule of law as yet reigns supreme in Russia. Nothing exists that would stop the Russian state from outright confiscation of the company and/or its assets. Secondly, as the Poles know well, Russia always has ulterior power projection motives in mind, take a look at their natural gas blackmail of the Ukraine! Which incidentally still simmers and could explode at any time, likely taking down the democratically elected government of the Ukraine with it. The Germans, always suckers for authoritarianism, probably secretly sympathize with the style and manner of Russian dictator Vladimir Putin. The laughable suggestion made by a German professor in the Bloomberg article that Russia is poised to become Europe's biggest car market ignores the reality of Russia's plummeting population decline and massive income inequality.

Fact is, if this is a legal acquisition, it is hard to oppose as a libertarian. The Clarion Content decried the ludicrous Senate maneuvering that blocked the Chinese state owned oil monopoly's purchase of Conoco, same for the jingoistic blocking of the sale of American ports to the state of Dubai. We do not actually oppose the Russians purchase of G.M.'s Opel. We just want to sound the horn of caution about what it says for erstwhile United States ally, Germany.

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