'Trump Wants 1 in 5 Dollars That Germany Collects Spent on Defence' – Analyst

Merkel said that the overall architecture underpinning our world as we know it has collapsed into many tiny parts. She also criticized Washington's stance toward the Nord Stream 2 gas pipeline. Merkel said:  "we imported large amounts of Russian gas during the Cold War. I don't know why times should be so much worse today".

Her speech sharply contrasted the address made by US Vice President Mike Pence, who demanded that Europe abandon the nuclear deal with Iran. He also said that EU and NATO members need to increase military spending. According to The New York Times, the US vice president's speech in Munich ended in an awkward silence.

Radio Sputnik has talked about Angela Merkel's speech in Munich with Tom Luongo, a geopolitical analyst and publisher of the Gold Goats 'n Guns Newsletter.

Sputnik: [It was] an interesting speech by Angela Merkel, given that she is coming towards the end of her tenure. What is your impression of her speech and the reaction it received?

Tom Luongo: Isn't it obvious? Merkel is talking her book, as we Wall Street guys like to say. She is absolutely right about US opposition to Nord Stream 2. It is a pipeline that is necessary. I think that what she is doing is she is trying to carve an independent path for the European Union; it is very obvious that she and French President Emmanuel Macron are looking for an independent foreign policy from the United States, but they are trying to do so by degrees.

READ MORE: ‘Far Apart': Chancellor Merkel Wins Applause Confronting US VP Pence — Report

So at the same time as she is complaining about the Iran nuclear deal, Nord Stream 2 and NATO spending, she is also going ahead and still saying that she wants to re-up the sanctions against Russia, which were put in place in 2014 after the [MH17 plane crash] and the reunification with Crimea. So Merkel, as always, is caught in the middle and she is trying to, very skilfully I think, carve an independent path. I am no fan of Merkel, I think she is terrible, but in this respect, vis-à-vis world stability, any overtures that she can make that will undermine, frankly, the Trump administration's insane turn towards neo-conservatism, is welcomed.

Sputnik: It is very interesting that we are living in these times when we have such a strong strategy and mission by the US administration since President [George W.] Bush came to power. We have had this malaise with Europe, and specifically Germany, given Donald Trump's attitude towards Germany and their lack of payment towards NATO, for example. Then [there is] the malaise about various products and services, and the imbalance that Trump sees between the export and import of German goods. Why is Washington so insistent on increased military spending? Is it something that previous American administrations have failed to police and to administer correctly, or is President Trump pushing it too far? Who is benefitting? No one is benefitting from it, really?

Tom Luongo: Well, from this economist's perspective: no, in the long run no. What Trump is doing is [that] he is trying to raise the cost of German industry, to bring it in line with the cost of American industry. His idea of "America First" is: "if I can weaken Germany, then it makes America better". He has a very 17th century view on trade, David Stockman said this a few months ago on CNBC one morning and that phrase has stuck with me. He has a very colonial mind-set and that is the way he is handling foreign policy.

The NATO spending thing, I saw something, I think it was on a comment actually on an article on Sputnik from a German, who said: "Trump wants us to spend 2 percent of GDP on military spending — that is like 20 percent of the disposable budget of the German government. So he wants 1 in 5 dollars that the German government collects to be spent on defence".

READ MORE: Merkel: New Germany-France Treaty Step Toward European Army (VIDEO)

Obviously the point is that — if the numbers are correct, so please correct me if I am wrong — but the gist is, of course, to raise the cost of German defence so that they can't subsidise other aspects of their industry to, from Trump's perspective, "unfairly compete with the United States". Trump is a very transactional guy; he is not very deep when it comes to these things.

Sputnik: I think the interesting point for an outsider is why Angela Merkel is now choosing and prompting to take a stand against Washington's recent decisions. We know that because of this general indifference and malaise that there is between the two continents, the European Union's leading countries are now very heavily promoting a European Union army. How intent is Europe under the signatories regarding this new stance that they have and that is underpinned by their attitude towards the Iranian nuclear deal, which is another facet of this general malaise, with them implementing it without the participation of the United States? There is a number of issues that the two continents are in loggerheads over, isn't there?

Tom Luongo: Yes, there really is. I think the easiest way to cut through all this is the cost of energy. This is where Russia comes into it. Everybody in American foreign policy circles knows that Germany and Russia cannot be joined at the hip in any kind of fundamental economic way. Part of our foreign policy strategy, even going back to the beginnings of the Marshall Plan, we would ensure that Germany and Russia were never capable of uniting so that German industrial capacity meets with Russian scientific expertise and raw materials to create a Eurasian juggernaut.

When you look at things from the "great powers heartland" perspective, Germany sits in the middle between the West and the East and is kind of the pivot point. Part of the Iran nuclear deal is at that the Germans want access to relatively cheap Iranian energy; they also want access to Russian energy. They are willing to play games like help destabilise Ukraine in order to force the Russians to give them gas on the cheap and to force price down — that is part of [what] their support for the putsch in Ukraine was back in 2014, but you know once that didn't work then they immediately opened up: "let's just build Nord Stream 2", which then again angered the Americans.

READ MORE: Germany's Merkel Vows to Continue INF Nuclear Arms Talks

So it is a whole weird web of point-counterpoint, move-countermove with the intention, at the end of the day, for Germany to get to secure long-term cheap energy sources to run their industry and then, by extension, run the rest of Europe through the European Union.

The views expressed in this article are solely those of Tom Luongo and do not necessarily reflect the official position of Sputnik.