Speaker 1: Welcome to Bloomberg Opinion. I'm Vonnie Quinn this week. Right now,
Speaker 1: it doesn't look like anyone has the initiative. Neither side
Speaker 1: is strong enough to push the other, and so in
Speaker 1: this salemate situation you need some extraordinary slate of hand
Speaker 1: to the clear victory. Leonin Burschitski on six months of
Speaker 1: Russia's war on Ukraine, as the U. S And Germany
Speaker 1: are among countries preparing to send more aid, ammunition and
Speaker 1: weaponry before Wednesday's Independence day. Later in Germany, we need
Speaker 1: to declare essentially a war economy, and I think it
Speaker 1: will come down to rationally and Asclute from Berlin on
Speaker 1: Germany's energy emergency. First, though, all market attention is directed
Speaker 1: this weekend towards Jackson Hole and the annual Kansas City
Speaker 1: FED Symposium, the opportunity for Fed Cherry J. Powell to
Speaker 1: address markets between July's f OMC meeting and September's meeting.
Speaker 1: We're with Bloomberg Opinions Jonathan Livin, So, Jonathan, the Fed
Speaker 1: Cherry's speech from Jackson Hole continues the pandemic trend, although
Speaker 1: it breaks from pre pandemic norms. Interestingly, well, I think
Speaker 1: it reflects the time that we're in, right, I mean,
Speaker 1: never in recent economic history, at least since the nineties
Speaker 1: I think, has the monetary policy narrative been as important
Speaker 1: as it is right now. This is the driver, right,
Speaker 1: the evolution of inflation and what the Federal Reserve is
Speaker 1: going to do about it is going to be the
Speaker 1: driver for global markets in the next twelve months. So
Speaker 1: you can understand the heightened interest. History shows that nobody
Speaker 1: has ever particularly hawkish in Jackson Hole. You know, I
Speaker 1: looked at the history. I'm working on a project and
Speaker 1: going through market reactions for the last ten Jackson Hole speeches,
Speaker 1: and the biggest market sell off came in. You know,
Speaker 1: the market was off two point six percent on the day,
Speaker 1: and it wasn't even the said that did it. It
Speaker 1: was Trump because you often remember that Trump came in
Speaker 1: and stole the show with the China trade war talk.
Speaker 1: So there seems to be a historical pattern where FED
Speaker 1: chairs for whatever reason, seemed to tiptoe around this event.
Speaker 1: So that this fire and brimstone idea I think is
Speaker 1: off space. As you point out as well, FED fund
Speaker 1: futures have gone from pricing in a December peak around
Speaker 1: three and a quarter percent to pricing in a March
Speaker 1: peak around three and three quarters percent, with Cotson not
Speaker 1: until the later part of three. Does that seem reasonable?
Speaker 1: John Taylor of the Taylor Rule Of course, Stanford told
Speaker 1: us this week he sees the terminal rate at five percent.
Speaker 1: I say five percent as where we should name. And
Speaker 1: that is not high by historical standard, that's for sure.
Speaker 1: Remember what it was in the seven Will it be
Speaker 1: enough March peak of three and three quarters percent? Yeah,
Speaker 1: I think that the market pricing is totally within the
Speaker 1: realm of possibility right now. And I was not there
Speaker 1: maybe three months ago, certainly not certainly not six months ago.
Speaker 1: But this feels plausible. You can disagree a little bit
Speaker 1: to the upside, you can disagree a little bit to
Speaker 1: the downside. You know, the house view of Bloomberg Economics
Speaker 1: is at the terminal rate needs to go to five percent.
Speaker 1: I think that, you know, our economist Dan A. Long
Speaker 1: has some really interesting rationale. They're talking about the labor market.
Speaker 1: But this at least fuels sort of plausible as sort
Speaker 1: of a consensus or average of the distribution of views.
Speaker 1: So I do want to point something you said in
Speaker 1: your column about summertime about how Summer's fling wasn't a
Speaker 1: real thing. Say that to the people that made in
Speaker 1: the SMP from its June low, assuming they timed the
Speaker 1: market right, I mean, I get what you're trying to say,
Speaker 1: but should market participants act like this was just an aberration? Yeah?
Speaker 1: I mean, you know, my view was not to say, uh,
Speaker 1: you know, the markets have to sell off for the
Speaker 1: markets need to continue from here. But I thought that,
Speaker 1: you know, people really shouldn't be looking at the price
Speaker 1: action and saying, well, this indicates the direction going forward
Speaker 1: because it was based on nothing essentially fund fundamentally, you know,
Speaker 1: not changed. You know, I think people took heart in
Speaker 1: the fact that earning season wasn't bad. But I've always
Speaker 1: been of the view that the FED has a slow
Speaker 1: moving wrecking ball, and if things are going to get
Speaker 1: really bad for earnings, it was going to take several quarters.
Speaker 1: Retail sales are very much holding up, and I think
Speaker 1: the reason is you have this slow moving effect, right.
Speaker 1: You know, first people need to need to start working
Speaker 1: through their savings, then they move on to more consumer credit,
Speaker 1: and only after that option is exhausted. Do you really
Speaker 1: see sort of retail sales and these things start to
Speaker 1: dry up. So that's a lot of runway, and it's
Speaker 1: conceivable that we may not see those impacts until maybe
Speaker 1: even you know, one Q and we are seeing effects
Speaker 1: and housing and rent and so on. I mean, obviously
Speaker 1: for other reasons too, but we're definitely seeing a dampening
Speaker 1: in housing activity. Yeah, that's for sure. I hate to
Speaker 1: be all gloom and doom, but my nightmare scenario is
Speaker 1: just one in which the fragility of the housing market
Speaker 1: combines with the fragility of the labor market and they
Speaker 1: start to sort of feed on one another in a
Speaker 1: very toxic way. You know, in both cases. There are
Speaker 1: both cases, right, you know. I mean the housing market
Speaker 1: in terms of prices at least is sustained by this
Speaker 1: low inventory situation and people really don't want to sell.
Speaker 1: But that situation could change very very quickly. You know,
Speaker 1: people sadly start losing their job. Yeah, exactly, Jonathan. Does
Speaker 1: the market of confidence in fed chapale It look for
Speaker 1: a moment they're back a few months that that confidence
Speaker 1: might be a little bit fragile, But ever since July
Speaker 1: twenty seven, that feels like the market has confidence again. Yeah,
Speaker 1: I mean, if you look at where inflation expectations are,
Speaker 1: whether it's swaps or some of these surveys, it's certainly
Speaker 1: indicates a confidence, maybe an overconfidence, that this FED is
Speaker 1: going to get the job done. It's either that or
Speaker 1: the market still believes in the transitory story, which you know,
Speaker 1: I don't know what to say about that, Bloomberg Opinions.
Speaker 1: Jonathan Livin. Indonesia's president told Bloomberg recently he's invited Russia's
Speaker 1: Vladimir Putin and China's Cheese Jinping to the Group of
Speaker 1: twenty summit in Bali in November. That poses questions, does
Speaker 1: President Biden attend in person? Does Ukraine's Voladimir Zelenski then
Speaker 1: get an invitation? Here's former Defense Secretary Leon Panetta. Every
Speaker 1: meeting like this of the G twining, it's both a
Speaker 1: challenge and an opportunity. The permutations of possible encounters raise
Speaker 1: the questions what happens in a post war world? And
Speaker 1: how do we even get to that point. We're joined
Speaker 1: from Berlin by Bloomberg Opinions Leonid Breschitski. So, Leonid, what's
Speaker 1: the post end game? If there ever is some kind
Speaker 1: of armistice? Or treaty. One analyst Lawrence Freedman and The
Speaker 1: Guardian this week, saying the Kremlin's current theory is that
Speaker 1: the energy crisis will undermine support in Europe for Ukraine,
Speaker 1: and that might allow Putin to declare some kind of
Speaker 1: face saving victory. But in any event, what do post
Speaker 1: war diplomatic relations look like? Well, I mean there's the
Speaker 1: sense of the list that Russia is somehow isolated, but
Speaker 1: the West is only a minority of both countries and
Speaker 1: global population, and so a lot of countries are willing
Speaker 1: to talk to Puttin, and some of them are even
Speaker 1: Natal members, like Turkey. You know, there's in't yet, There's China,
Speaker 1: there's Indonesia, there's Vietnam, there's African nations that have not
Speaker 1: done anything to support this Western effort to isolate Russia.
Speaker 1: So like reintegration, I don't think Putting in his group
Speaker 1: of chronies feels there's a need to reintegrate into anything Western,
Speaker 1: maybe except maybe some supply change. Yeah, it's a very
Speaker 1: Western view of things to pose the question that way.
Speaker 1: I guess you do have to wonder, though, how this ends.
Speaker 1: Do you see protracted war? Do you see Vladimir Putin
Speaker 1: trying to declare some kind of victory. At some point
Speaker 1: does he run out of resources? Well, the plan is
Speaker 1: changing every couple of weeks. The most recent plan was
Speaker 1: apparently to try to integrate the captured Ukrainian territories directly
Speaker 1: into Russia by holding these fake referendums in which they
Speaker 1: would vote quote unquote to during Russia. And the putitive
Speaker 1: date for these referendums was supposed to be September eleventh,
Speaker 1: when a bunch of regional elections are going to be
Speaker 1: held in Russia. But it doesn't look like there's going
Speaker 1: to be much to integrate by September eleven, because the
Speaker 1: invasion has kind of stalled, and that has been really
Speaker 1: very little movement of the front line in the last
Speaker 1: five six weeks. And so if that plan still exists,
Speaker 1: it's getting delayed. But obviously, because the military part of
Speaker 1: this so called special operation is obviously going deadly and
Speaker 1: not going to plan for the Kremlin, they need a
Speaker 1: scheme and invent ways in which they can declare victory.
Speaker 1: I don't think they've come up with even a relatively
Speaker 1: credible plan yet for what to do in a situation
Speaker 1: where they can no longer advance and where the Ukrainians
Speaker 1: could have the initiative if they had the sheer combat
Speaker 1: power to go on a counter offensive. So right now
Speaker 1: it doesn't look like anyone has the initiative. Neither side
Speaker 1: is strong enough to push the other, and so in
Speaker 1: this stalemate situation you need some extraordinary slate of hand
Speaker 1: to declare victory. Is that how you see it ending?
Speaker 1: Or do you see some kind of third party mediating
Speaker 1: to find some kind of truth? I mean, in that situation,
Speaker 1: Putin couldn't say denazified Ukraine or taken Ukraine back into
Speaker 1: the arms of the Russian territories. But will it come
Speaker 1: to that. I don't think I negotiated solution is possible
Speaker 1: in any foreseeable future, mainly because the Ukrainians don't feel
Speaker 1: they can negotiate while putting holds of their territory almost
Speaker 1: and you know, if I were them, I wouldn't negotiate
Speaker 1: even And they clearly see that Russia's ability to win
Speaker 1: more territory is limited and that Russia doesn't really have
Speaker 1: the troops that it needs to advance. So the Ukrainians,
Speaker 1: they're hoping that they're going to mobilize more reserves that
Speaker 1: they're going to train them, going to get more weapons
Speaker 1: from the West, and perhaps sees the initiative and fight
Speaker 1: successfully through the fall. So in that sense, obviously, for Putting,
Speaker 1: it's too early to seek a negotiated solution too, because
Speaker 1: he appears to have hopes for further advancement. So I
Speaker 1: don't think there's going to be any sort of deal
Speaker 1: when anyone is capable of mediating between these two parties.
Speaker 1: So this conflict is going to be resolved militarily one
Speaker 1: way or the other. Speaking of which, the idea of
Speaker 1: conscription will have to come up at some point if
Speaker 1: Putin keeps losing troops or if Putin wants to escalate
Speaker 1: this again somehow. Is there any appetite for conscription in Russia?
Speaker 1: Would it be a successful drive? Well, yes, you're right,
Speaker 1: conscription would need to come up. And like the Russian nationalists,
Speaker 1: the ultra nationalists who are the only enthusiastic supporters of
Speaker 1: the war in Russia, have been saying since the first
Speaker 1: days that to win this war, Russia would need to mobilize.
Speaker 1: And they know what they're talking about because they have
Speaker 1: been actually fighting Ukrainians for these last eight years, and
Speaker 1: they know what they're upper gainst. But I don't think
Speaker 1: there's an appetite for anything like general mobilization or conscription,
Speaker 1: because if there was appetite for that, we would see
Speaker 1: much more active support on the part of the general population,
Speaker 1: including in big cities, which so far have been spared
Speaker 1: most of the military losses. The troops that are fighting
Speaker 1: in Ukraine are mainly drawn from poor rural areas, small towns.
Speaker 1: They're not from Bosco or St. Petersburg or Ekaterinburg or
Speaker 1: No Sabersk or any of these big cities where it
Speaker 1: appears it's been extremely hard to find volunteers, even with
Speaker 1: promises of large amounts of cash. So if a general
Speaker 1: mobilization or conscription is announced, there's going to be certainly
Speaker 1: mass draft dodging and probably increased emigration. And then you know,
Speaker 1: you already see even contract troops, professional troops refusing to
Speaker 1: fight with the kind of equipment they're given and under
Speaker 1: the under the conditions that they're in. So that is
Speaker 1: going to be even more of a mass phenomenon with
Speaker 1: the draft based army. So Leonard, there is debate raging
Speaker 1: right now about Russians being granted visas to travel outside Russia.
Speaker 1: It's obviously more approximate in Europe, but pressure is building
Speaker 1: for a Pan EU ban on visas for Russian citizens.
Speaker 1: Is that wise? The first question to ask would be
Speaker 1: is it likely? And I think it isn't because the
Speaker 1: countries that are advocating wholesale ban on Russian's entering are
Speaker 1: a very specific group that have been either subjugated or
Speaker 1: colonized or whatever words you want to use by Russia
Speaker 1: in the twentieth century, and so obviously what Russia has
Speaker 1: done in Ukraine fits too close to home for these
Speaker 1: particular countries, the Baltics, Poland, the Czech Republic, Finland, and
Speaker 1: their reaction is perfectly understandable. They don't really want to
Speaker 1: see any Russians, especially Prussian holiday makers, while Russia is
Speaker 1: waging this war in Ukraine. The rest of Europe, which
Speaker 1: does not have this kind of tragic past, doesn't really
Speaker 1: have those unhealed wounds inflicted by Russia and Russians, some
Speaker 1: of which actually all Russia at that, like Germany Germans.
Speaker 1: Many of them are still grateful for the Soviet unions
Speaker 1: or Russia's part in freeing them from the Nazis. So
Speaker 1: it's unlikely that you'll see Germany or France or Italy
Speaker 1: or for that matter of Hungary, and you know, voting
Speaker 1: for a blanket with the band for Russians. Well, and
Speaker 1: of course it's important to have descent outside of Russia
Speaker 1: as well, to have voices free to express disagreement with
Speaker 1: what the president Vladimir Putin is doing. How easy is
Speaker 1: it to get out of Russia if you're so inclined
Speaker 1: right now, Well, that is sort of the other half
Speaker 1: of the equation. I'd rather think we Russians, whether we
Speaker 1: are in Europe or in Russia or elsewhere, should not
Speaker 1: really be making as much noise about this whole visiband
Speaker 1: situation as we have been. It is extremely easy to
Speaker 1: get out of Russia if you're not trying to go
Speaker 1: to any of the group of countries that expressly do
Speaker 1: not want us. There's dozens of countries in the world
Speaker 1: that allow Russians visit free entry, all of Latin America,
Speaker 1: a lot of Asian nations, a bunch of countries, and
Speaker 1: Russia's immediate neighborhood former Soviet republics Kazakhstan, a media Georgia.
Speaker 1: There's even European country Serbia, that allows visit free entry
Speaker 1: to Russians. There's plenty of places you can go even
Speaker 1: if you don't have all that much money for like travel.
Speaker 1: If you want to fly to any destination within the
Speaker 1: you you're going to have to take a very circuitous
Speaker 1: route because Russian planes have been banned from the U.
Speaker 1: But there are countries much closer where you don't have
Speaker 1: to go around the entire U air space and spend
Speaker 1: thousands of dollars on a twelve or fifteen hour journey.
Speaker 1: There are places that are within to three hours flight
Speaker 1: that will take you if you need to run. The
Speaker 1: other point is that people may not be willing to
Speaker 1: go without their belongings, or may not be able to
Speaker 1: go without their belongings, and also may not want to
Speaker 1: leave home. Do we have any idea of how many
Speaker 1: people are in Russia that know what's going on and
Speaker 1: that are staying in Russia but are very against the situation. Well,
Speaker 1: I'd say most Russians know what's going on, and I
Speaker 1: doubt that the majority really supports the war to the
Speaker 1: extent that they're willing to do anything in its support,
Speaker 1: whether to go fight or to give up money, or
Speaker 1: to go out and demonstrate and support of the so
Speaker 1: called special military operation. Active support, I would guess is
Speaker 1: a tiny timing minority is capable of active support. And
Speaker 1: so the reason Russians are seeing kind of passively supporting
Speaker 1: Busin is because Russia is a fascist dictatorship and people
Speaker 1: are scared to speak out and to protest against what
Speaker 1: Putting is doing. It's very natural. A lot of people
Speaker 1: are afraid for their families and you know, their property,
Speaker 1: their lives, their safety, so they look like they support
Speaker 1: it without actually doing anything active to help Putin's war.
Speaker 1: Leon and Brishitski in Berlin. European natural gas futures have
Speaker 1: been skyrocketing with no respite in sight now, as European
Speaker 1: authorities warn of a possible total shutdown of Russia supplies.
Speaker 1: I spoke with Bloomer Opinions and ask foot for a view.
Speaker 1: From Berlin. Storage is at a fill level of two
Speaker 1: weeks ahead of schedule. But what does that fact signal
Speaker 1: about Germany's energy capacity at this point? The first of all, money,
Speaker 1: it shows you quite little. At the moment. What's happened
Speaker 1: is that Russia, Vladimir Putin has throttled the gas flowing
Speaker 1: through the main pipeline from Russia to Germany, which is
Speaker 1: called North Stream one to bout of its normal capacity
Speaker 1: at this stage. And you know, there's gas coming from
Speaker 1: other places like Norway and stuff, and they're trying to
Speaker 1: organize liquid natural gas to replace what's missing from Russia.
Speaker 1: But they're going to have this problem, and so what
Speaker 1: they're trying now is to use whatever they have to
Speaker 1: fill those storage tanks that you mentioned to be ready
Speaker 1: for whatever Vladimir Putin does next. Okay, so Vladimir Putin
Speaker 1: plays along, then Germany and other countries like Austria will
Speaker 1: be fine. If not, it'll get really tight. And Germany
Speaker 1: is just now in the middle of a debate on
Speaker 1: how to pass on those higher costs to consumers and
Speaker 1: how to compensate poor people for that and stuff. And
Speaker 1: this is of course a dependency the situation that the
Speaker 1: Germans almost deliberately naively got themselves into over the course
Speaker 1: of about twenty years. And we'll speak more about that,
Speaker 1: but first, if stories got would that be enough to
Speaker 1: get Germany through the winter, I think is more of
Speaker 1: a notional amount. I think that that's never happened before.
Speaker 1: I think. But they're ahead of target right now, and
Speaker 1: even ahead of where they would be at this time
Speaker 1: of year in other years. So that's not the problem.
Speaker 1: I mean, that's supposed to help while the normal gas
Speaker 1: flows continue. So if they use just what's in the
Speaker 1: st orange, they could get through three months, which isn't great.
Speaker 1: Now the government has asked people to reduce energy consumption,
Speaker 1: by it's not a mandate. I was speaking with Liam
Speaker 1: Denning on this and he was pointing out that it
Speaker 1: almost needs to be war rhetoric. It almost needs to
Speaker 1: be a mandate that people reduce their energy consumption. Will
Speaker 1: people comply? Well? The actually comes from the European Union,
Speaker 1: probably at the behest of Germany, because Germany wanted all
Speaker 1: European EU countries to save, and countries like Spain in
Speaker 1: particular that hang on, what does that have to do
Speaker 1: with us. You made the wrong decisions with pipelines in
Speaker 1: the past, We made the right decisions with l n
Speaker 1: G in the past. If we save gas, we can't
Speaker 1: even pipe it to Germany. There's no point in US
Speaker 1: taking shorter showers. So there was a big debate within
Speaker 1: Europe and in Germany. We need to declare essentially a
Speaker 1: war economy, and I think it will come down to rationally.
Speaker 1: That would be the third of three steps. Were in
Speaker 1: step two right now of an emergency plan that the
Speaker 1: Economics and Energy Minister named Robert Hobbeck could invoke. Okay,
Speaker 1: so it may come to that, But the savings is
Speaker 1: mainly going to fall on industry, the big chemical plans
Speaker 1: like B A, SF and and they're in preparations to
Speaker 1: save as much as they can. And then consumers will also,
Speaker 1: of course, and you'll hear a lot of talk about
Speaker 1: taking shorter showers, shorter showers with cold or water, you know,
Speaker 1: do that anyway? That right now is that we're in
Speaker 1: the middle of a eaight wave. People are diving in
Speaker 1: their lakes. Actually the summer atmosphere as a sunk in
Speaker 1: yet really you know so, and a lot then depends
Speaker 1: on how bitter and cold the winter gets. By the way,
Speaker 1: a lot of people and that includes me. I rent
Speaker 1: my home. I don't even know. I have a utility
Speaker 1: that warms our home, but I don't even know if
Speaker 1: gas is part of it. And it felt paid this
Speaker 1: new levee or not. A lot of people don't know.
Speaker 1: Some people do, of course. Fascinating. The other thing that
Speaker 1: I noticed this week is that Germany wants in Dutch
Speaker 1: as the Netherlands has plenty. As you point out in
Speaker 1: one of your columns, Europe's largest gas field is in
Speaker 1: growing in. But there's a simple matter of earthquakes which
Speaker 1: happened when the Netherlands tries to get the gas out
Speaker 1: of the gas field. Is that an option at all?
Speaker 1: Is is the Netherlands considering it. I moved here from California,
Speaker 1: so I know earthquakes, and these are smaller earthquakes. These
Speaker 1: are there's no fault line. But if you pump these
Speaker 1: chemicals underground, then you fracture rock and you cause smaller earthquakes.
Speaker 1: And that's been going on for many, many years, and
Speaker 1: therefore the Dutch have decided. There has been a long
Speaker 1: campaign to exit the production of that gas field. They
Speaker 1: were hoping to phase that out this year, just as
Speaker 1: the Germans who are hoping to phase out nuclear power
Speaker 1: this year and then later to phase out coal power.
Speaker 1: And so the Germans are now asking the Dutch to
Speaker 1: please not phase that out, but pump it and send
Speaker 1: it over. And there's a couple of technical problems. The
Speaker 1: quality of the gas is different than what the grid
Speaker 1: is ready for in Germany. But that's what they want,
Speaker 1: of course, and the Dutch is saying, well, okay, we've
Speaker 1: got this gas field. You're right, but you guys next door,
Speaker 1: you're hyperventilating. The Germans are famous for this about phasing
Speaker 1: out your nuclear power plans, and why don't you do
Speaker 1: that first or at the same time, at least so
Speaker 1: we can explain to our motors who are upset about
Speaker 1: earthquakes that we have to do this to show solidarity
Speaker 1: with you. But it's hard to do that if you insist,
Speaker 1: unlike other Europeans, to shut off the last three nuclear
Speaker 1: power plants in your electricity grid this year, by the
Speaker 1: end of this year. Right, So this problem is producing
Speaker 1: a whole lot of neighbor league problems as well, sort
Speaker 1: of not in my backyard and why me and not you?
Speaker 1: And so on. You mentioned nuclear you the great column
Speaker 1: recently on nuclear as well. Germany is trying to exit
Speaker 1: at three times, as trying a fourth time now, but
Speaker 1: it's still accounts for twelve percent of electricity at least
Speaker 1: last year. How strong is the argument for not exiting
Speaker 1: a moment, even though obviously nuclear is a huge flash point,
Speaker 1: the argument for not exiting it is very good. And
Speaker 1: always has been. The French get most of their electricity
Speaker 1: from nuclear and want to invest more in it. Cutting
Speaker 1: edge countries like Finland they used everything. You're renewables, of course,
Speaker 1: but for them nuclear is always part of the mix
Speaker 1: because you want a resilient grid and you want new
Speaker 1: nuclear technology that is safe, and they also found ways
Speaker 1: to deal with nuclear waste. So the arguments are very good.
Speaker 1: They've never got a fair hearing in Germany because Germany, interestingly,
Speaker 1: also Costria next door and Luxembourg very similar cultures culturally
Speaker 1: and psychologically. For an entire generation, they've been on a
Speaker 1: rampage against nuclear power, and in particular one party, the
Speaker 1: Green Party, came out of the counterculture but also out
Speaker 1: of these marches and demonstrations in the seventies eighties, and
Speaker 1: they're in power. They're one of the three parties in
Speaker 1: the coalition. For them, been a long religious war. I
Speaker 1: mean they've switched off almost twenty already and it's about
Speaker 1: three are remaining. Can you stretch that a little bit
Speaker 1: into next spring or summer, because every little bit helps.
Speaker 1: I think they're going to put up a good fight
Speaker 1: and then probably end up doing that because that's easy
Speaker 1: to do. The bigger debate is why don't we rethink
Speaker 1: the whole exit, Why don't we keep them running permanently?
Speaker 1: Why don't we restart old ones? Why don't we build new,
Speaker 1: better ones in future? Because we have this problem that
Speaker 1: we're no longer going to get gas from Russia, you know,
Speaker 1: and I mean the Germans have been saying they're notorious
Speaker 1: for this. No to everything, no to fracking, no to coal,
Speaker 1: no to nuclear, no to you know, they're saying no
Speaker 1: to everything. I mean, the attentions are good, but you know,
Speaker 1: the reality of it is different. The intentions are a
Speaker 1: lot of NIMBYism to locally Germans even saying no to
Speaker 1: win mills, you know, turbines if it happens to be
Speaker 1: near their house, you know, so you can't just say no.
Speaker 1: The irony that has finally sunk in is that they're
Speaker 1: now starting coal fired electricity plans to make up the shortfall,
Speaker 1: and that of course is for the climate the worst.
Speaker 1: Nuclear has disadvantages, but it admits no carbon dioxide and
Speaker 1: coal is the dirtiest. Well, they're not going to just
Speaker 1: put up wind turbines and deal with Vladimir Putin and
Speaker 1: climate change that way. Well, and as you've pointed out,
Speaker 1: even keeping the nuclear reactor is going would probably save
Speaker 1: only about four percent of the country's overall gas consumption,
Speaker 1: so on its own it wouldn't be that much of
Speaker 1: a help anyway. Plus, younger generations perhaps don't appreciate the
Speaker 1: terror of the nuclear era and what it means to
Speaker 1: people to have nuclear in their country. I don't know.
Speaker 1: I think what's interesting culturally is that the Germans are
Speaker 1: so much more scared about nuclear technology and radiationally than
Speaker 1: anybody else in the world. The last exit after several
Speaker 1: U turns, was after Fukushima, and even the Japanese have
Speaker 1: not fully exited nuclear technology. You have a little bizarre's
Speaker 1: twist in the Ukraine War, which is the background of
Speaker 1: our whole conversation money, which is that one of the
Speaker 1: big risks is about Europe's largest nuclear power plant, which
Speaker 1: the Russians have taken, which Ukrainian engineers are still running,
Speaker 1: and where they're shooting at each other and we're all
Speaker 1: trying to get into it to make sure that it's safe.
Speaker 1: Another Chernobyl this debate, we might have to have another podcast,
Speaker 1: you and I because the psychology could change again. It's
Speaker 1: hard to postulate with counterfactuals. But what would Angel America
Speaker 1: have done? What must you be thinking at us? We
Speaker 1: don't know. She's given one interview since she left office
Speaker 1: in December, and that didn't satisfy me. I've often been
Speaker 1: a fan. I generally like her. She's intelligent, she's the
Speaker 1: opposite of vain and all that. But her legacy is
Speaker 1: being re examined and will I think start look worse
Speaker 1: worse because she's not to blame. She oversaw country and
Speaker 1: coalitions of people who agreed on these big errors. The
Speaker 1: biggest error was the wrong policy toward Russia and Putin.
Speaker 1: First of all, Okay, all of Germany's eastern partners in
Speaker 1: the European Union, which should be its closest partners, Stonia, Latville, Lithuania, Poland,
Speaker 1: they've all been saying all these years, don't build these pipelines.
Speaker 1: Don't put so much faith in Vladimir Putin. He's dangerous.
Speaker 1: And Germany said, no, no, no, you're wrong, We're going
Speaker 1: to do this, and they deliberately made dependency almost a policy. Okay,
Speaker 1: that was not her doing. It was more of the
Speaker 1: Social Democrats and they're in power now, but they were
Speaker 1: her junior partners. But she went along with that, and
Speaker 1: in that interview that I mentioned, she claimed that she
Speaker 1: knew all along how dangerous Putin was. So then the
Speaker 1: question is why didn't you explain that to Germans earlier
Speaker 1: Boomberg Opinions and I asclude that does it for this week.
Speaker 1: Do get in touch though. I'm at Vonnie Quinn on
Speaker 1: Twitter or email v Quinn at Bloomberg dot net. We're
Speaker 1: produced by Eric mollow Till next time on Bloomberg Opinion.
Speaker 1: H