Eagle, I don't want to form an alliance anymore.

"As far as I know, they are building along the coast. We can sign a preliminary framework agreement first, and then deliver the goods once the infrastructure is in place. The key is to lock in a pricing formula that is favorable to us now."

Ryzhkov quickly jotted down a few lines in his notebook, growing even more impressed with the young comrade.

"Comrade Ivanova, you've only been in the Ministry of Foreign Affairs for less than three months, yet you've produced an analytical report that would take people from the Ministry of Foreign Trade and the State Planning Commission a year to write, complete with operational details. Just who are you?"

"Perhaps the mentor couldn't stand it anymore and sent me and Ivanov to play mixed doubles for Fatherland?" Director Nian replied.

Ryzhkov's lips twitched, unsure whether he was smiling or sighing, as he saw Director Nian out the door.

"You two are always doing things beyond your responsibilities. It's a dereliction of duty for us older generation to have to worry about this great alliance when it's your turn as young people."

Director Nian stopped, turned around, and said:

“Nikola Ivanovich, if we don’t take care of this, no one will.”

Gorbachev was busy promoting transparency, Ligachev was busy enforcing discipline, Romanov was busy preserving his military-industrial empire, and Gromyko was busy balancing everyone—everyone was preoccupied with power, and no one was thinking about the future of the alliance.

She pushed up her sunglasses.

"Never forget our original aspiration, and we will achieve our goal. Comrade Premier, I am very pleased that at this time when the Union is about to collapse, there are still people who can remember the aspirations they took when they swore an oath under the Party flag."

She left without looking back.

Ryzhkov sat alone for about a minute after she left, staring blankly at the statue on the wall, thinking about the words and actions of the two young people.

A burning faith surged within him.

He dialed the number, and the person who answered was the governor of the Soviet State Bank.

"Governor, we need to discuss the currency structure of our foreign exchange reserves."

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

In late June, the leader departed for West Germany and Italy under the pretext of strengthening economic cooperation and exchanges between the Soviet Union and Western European countries.

Her entourage consisted of only four people: a section chief from the European Department of the Ministry of Foreign Affairs, a negotiation expert from the Ministry of Gas Industry, a pricing analyst from the Soviet Gas Export Company, and a young financial cadre on loan from the Foreign Trade Bank.

This man, named Gerashchenko, was in his early thirties and had worked for two years at the Moscow National Bank in London. He was one of the very few people within the Soviet system who truly understood how Western financial markets operated.

Many people are unaware that the Soviet Union already had a mature operating platform in Western financial markets—the Soviet-Foreign Banking Network.

This network has a very long history, dating back to the 1920s.

For example, the Moscow People's Bank, located in London and established in 1919, was one of the early players in the Eurodollar market. In the 50s, the Soviet Union used it to move its dollar deposits out of US jurisdiction, which gave rise to the Eurodollar market.

Nordea Commercial Bank, located in Paris, is another key node in the Eurodollar market;

There's also the East-West Commercial Bank in Frankfurt, the Danube Bank in Vienna, the Orient Trade Bank in Zurich, and the East-West United Bank in Luxembourg...

There was also the Singapore branch of the Moscow People's Bank, which was very active in the Far East and lent money to Southeast Asia and Hong Kong in the 70s, becoming a regular customer of Hong Kong's financial circles at the time.

These banks were legally registered Western commercial banks, but their actual ownership and operations were controlled by the Soviet Union. Their core personnel were rigorously selected Soviet cadres with unwavering Marxist beliefs.

For example, Viktor Gerashchenko, who later became the governor of the Central Bank of the Russian Federation, was the one who accompanied the leader on this trip.

This trip wasn't just about discussing natural gas; Ryzhkov had given her another task—exchanging foreign currency.

After discussions among economic experts, the Soviet Union decided to take advantage of the natural gas deal to exchange currency in batches in foreign exchange markets such as London and Paris, spreading it out into dozens of medium-sized transactions, each worth between $5000 million and $1 million, to be completed over 6 to 12 months, thus avoiding market shocks.

At the same time, short positions in the US dollar were hedged in the futures/forward market, and some reserves were converted into long positions in gold. The Soviet Union was the world's second largest gold producer (about 280 tons per year), and keeping more inventory and selling less would face much less political resistance than buying gold.

根据年导的估算，苏联1985年硬通货储备总额（不含黄金）大约180亿美元。如果把美元仓位从70%降到40%，需要重配约50亿美元。

This volume was easily absorbed by the London foreign exchange market (which at the time had daily trading volumes of hundreds of billions of dollars), provided it was properly diversified.

在她的计算中，到1987年底美元相对马克贬值约40%、相对日元贬值约45%，重配50亿美元理论可避免损失约20亿美元——相当于1983年苏联阿富汗战争开支的一半！

The CIA and the UK Defence Intelligence Staff were indeed monitoring the Soviet Union's contact with foreign banks. Unusually large-scale currency reallocation would be noticed, but currency reallocation itself is not illegal.

Western institutions would not immediately realize what kind of virtual threat the Soviet Union was hedging against. According to the economic experts' plan, it was easy to cover up the fact that the money was being used to diversify risk.

...

Before her departure, Director Nian confirmed the bottom line and scope of authorization for the negotiations with Ryzhkov, who granted her greater autonomy than a normal trade and economic visit.

"You can discuss the contract framework as you see fit, as long as the pricing formula is no lower than the benchmark of the current contract. Speed ​​is more important than terms—we need to sign the new contract before the end of this year."

"Why the end of the year?" a negotiation expert from the Ministry of Natural Gas Industry asked on the plane.

Director Nian did not respond.

She couldn't say, "Because the Union believed that oil prices would collapse to below $10 next year, the anchor price of natural gas contracts would plummet, and then the Soviet Union would also plummet to concrete."

She said, “Comrade, because the Twelfth Five-Year Plan starts in 1986, we need to anchor the natural gas export revenue for the next five years before the plan starts.”

The budget for the Five-Year Plan requires reliable forecasts of foreign exchange earnings; delaying its signing until next year will fall behind the budget preparation cycle.

In the Soviet planned economy, keeping up with the budget preparation cycle was a legitimate reason that required no political explanation.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Bonn, West Germany, first week of July.

Ruhrgas' headquarters are located in an unassuming office building in Essen.

As soon as Director Nian entered the conference room, he noticed a detail: a photograph of the Urengoy-Pomare-Uzhhorod pipeline project was hanging on the wall.

The 4,500-kilometer-long steel pipe traverses the permafrost of Siberia and the Ural Mountains, extending all the way to the Czech-Slovak border before branching off into Western European countries.

This pipeline was the physical link between Soviet and European energy cooperation, and its existence meant that billions of dollars in sunk costs had tied West Germany and the Soviet Union to the same steel pipe.

In 1982, the Reagan administration, citing the martial law in Poland, imposed sanctions on Western companies involved in the Siberia-Western Europe gas pipeline, prohibiting the export of pipeline equipment involving American technology to the Soviet Union.

Western European countries—West Germany, France, Italy, the United Kingdom, etc.—collectively resisted the United States' long-arm jurisdiction. Ruhr Gas, Gazprom, and ENI of Italy all continued to fulfill their obligations despite pressure from the United States.

European countries united on economic terms, forcing Reagan to concede and lift sanctions at the end of 1982.

Regardless of what Washington says, Soviet natural gas was an irreplaceable component of West Germany's energy security.

By 1985, the pipeline had been in operation for over a year, and Soviet natural gas was fueling more than 40 percent of West Germany's heating and industrial gas needs.

PS: What cannot be done with missiles and tanks can be accomplished through economic means.

Klaus Leessen, chairman of Ruhr Gas, is a typical German industrialist. He was somewhat surprised when he met Director Nian—

It was unusual for the Soviet Foreign Ministry to send a female deputy minister to negotiate a natural gas contract.

“Ms. Ivanova,” Lison asked during the coffee break before the meeting began, “what does the new General Secretary’s reform direction mean for our energy cooperation?”

Frankly, Washington has been hinting that Gorbachev might use gas supplies as geopolitical leverage—can you give us some certainty?

Director Nian, holding his coffee, replied:

“Mr. Lison, I can give you two certainties.”

First, the Soviet Union's natural gas export policy was not determined by the General Secretary's personal preferences, but by geology and economics. We have the world's largest natural gas reserves in Siberia, and your industries need a stable supply of fuel. This supply and demand relationship will not change because of who sits in the Kremlin.

Second, our new General Secretary is promoting economic modernization, which requires foreign exchange. Natural gas exports were one of the Soviet Union's most stable sources of foreign exchange, and expanding, rather than reducing, natural gas cooperation with Western Europe was entirely in Moscow's interest.

Lison nodded after listening.

Formal negotiations began in the afternoon.

Within twenty minutes, Director Nian laid out the entire Soviet proposal on the table: the gas supply scale of the incremental contracts, the pricing formula linkage mechanism, the duration of the price protection period, and some innovative clauses.

The innovative terms are as follows: if international oil prices fall by more than 30 percent during the contract period, the adjustment of the natural gas settlement price will have a six-month delay window and a floor price guarantee of no less than 70 percent of the current price.

This means that even if oil prices plummet, the Soviet Union's natural gas revenue will not be affected for six months, and will at most decrease by 30% instead of falling proportionally with oil prices.

Anyway, it's better to sacrifice others than myself. What will happen to the people of West Germany when the oil crisis breaks out? What will happen to the Ruhr gas?

Only heaven knows.

"Why do you suddenly need a floor price clause?" Ruhr Gas's negotiators immediately seized on this unusual request.

Brother, you'll understand why I did this when the oil crisis comes.

"Because our five-year plans require a predictable income base," the leader once again used that universal reason, "the Soviet economic planning system needed to reduce the interference of external fluctuations in budget preparation."

You Germans should understand this, after all, you are the world's most planned market economy.

The Germans laughed upon hearing this.

Using the other party's self-identity to defuse their doubts is one of the techniques that Director Nian is most adept at in diplomatic situations.

The negotiations lasted three days. The bottom price clause was accepted by Ruhr Gas on the afternoon of the second day.

In their view, even if oil prices fell, they were unlikely to fall by that much; the Soviet Union also gave them what they really wanted in the exchange:

During the new contract period, the Soviet Union guarantees that the gas supply will not be less than 95% of the contracted amount, and that even if domestic demand in the Soviet Union increases, the delivery to Western Europe will not be significantly reduced!

This resolved Ruhr Gas’s biggest long-standing concern, and thus, a preliminary agreement on the contract framework was reached in mid-July, with the specific terms to be finalized by the legal teams of both parties in the fall.

Negotiations with the Italian ENI Group in Rome a few days later went much more smoothly than in West Germany.

Italians are more pragmatic and less influenced by Washington than Germans when it comes to energy imports. ENI's predecessor, the Italian National Hydrocarbon Company, had been trading oil with the Soviet Union since the 1960s. Its founder, Enrico Matej, publicly defied the monopoly demands of American oil companies and signed Italy's first crude oil import contracts with the Soviet Union.

By 1985, ENI and the Soviet Union had accumulated over two decades of energy cooperation, and their level of commercial trust was far higher than that of any other Western European partner.

I'm sorry, ENI, but my brother can't die. I have to let you go first. If you need anything, go talk to Hayek.

Chapter 53 At 62, Romano is at the prime of his life, a time for striving.

On June 29, after a frantic rush, the leader finally returned to loyal Moscow before the plenary session in July.

According to her sources, Gorbachev is going to pull off a major stunt at this plenary session, the impact of which on the future of the Soviet Union will be comparable to Khrushchev's secret report after the 20th Congress of the CPSU in 1956!

Of course, this channel is not formal—the Politburo's personnel plan is a top secret before it is submitted to the plenary session, and even members of the Central Committee can only see the complete list on the day of the plenary session.

She pieced together a fragment from Ligachev, a second fragment from Ryzhkov's secretary, and then completed the rest of the puzzle using her own judgment:

Gorbachev plans to complete at least four major personnel changes at the Central Committee plenary session on July 1: Romanov will be ousted, Shevardnadze will be promoted to foreign minister, Gromyko will be "promoted" to chairman of the Presidium of the Supreme Soviet, and Zaykov and Yeltsin will enter the Secretariat.

Four swords slashed down at the same time!

Eliminating rivals, sidelining benefactors, installing cronies, filling positions with underlings... all were accomplished in a single plenary session. The speed and efficiency of this operation are reminiscent of the personnel storm that Andropov experienced in the first few months after taking power.

The difference is that Andropov purged corrupt officials, while Gorbachev purged his opponents.

In March 1985, after Gorbachev was elected General Secretary, he privately informed his old rival Romanov, telling him directly:

"You have no future under me, Romanov."

This blatant showdown demonstrates that Gorbachev viewed Romanov as the first adversary he had to eliminate from the very beginning.

May 9, 1985, was Victory Day, a day to celebrate the victory in the anti-fascist war of World War II. This was the last time Romanov made a public appearance, after which he completely disappeared from public view.

On July 1, 1985, during the July Plenum, the Central Committee of the Communist Party of the Soviet Union formally approved Romanov's request to retire for "health reasons."

This is a euphemism for being purged, a standard term in Soviet tradition.

On the same day, Shevardnadze from Georgia was promoted from alternate member to full member to replace him, and he also replaced Gromyko as foreign minister. Zaikov from Leningrad and Yeltsin from Sverdlovsk were elected to the Secretariat.

But who is Shevardnadze? Shevardnadze, the secretary of the Georgian Ministry of Internal Affairs, has never worked a day in diplomacy and can't even speak a foreign language, yet he was promoted to foreign minister by Gorbachev?

Prior to this, Gorbachev's team had also spread a series of rumors about Romanov's personal character, most notably the wedding scandal:

It is said that at his daughter's wedding, Romanov borrowed porcelain tableware from the time of Catherine the Great from the Winter Palace in Leningrad. During the banquet, the guests got drunk and smashed the precious antique porcelain.

Today, I, Gorbachev, will not discuss positions, but only the truth. Romanov is a wicked and corrupt official who abuses his power for personal gain!

At the same time, Gorbachev also purged the party organization in Leningrad, handing over the base that Romanov had cultivated for thirteen years to his own man, Zaykov, thus directly severing the connection between Romanov and his political base.

Finally, Gorbachev gave Romanov two choices: either "voluntarily" retire for health reasons to maintain his dignity, or be publicly purged and lose face.

Romanov chose the former.

Director Nian realized this was a golden opportunity; it was better to offer help in times of need than to add to someone's success. She didn't need to confront Gorbachev directly.

She was a natural power player, adept at navigating the power struggles within the Kremlin, and used her own methods to achieve her political goals. All she needed to do was insert a small wedge into each stage of her scheme.

She started making phone calls.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

The first call was made to Gromyko.

The call to the Ministry of Foreign Affairs office went unanswered. The secretary said Gromyko had already gone home after get off work, so Director Nian had to get the phone number of his villa in the western suburbs of Moscow from the secretary.

The secretary agreed.

Gromyko was getting old. Since 1957, this 75-year-old foreign minister had outlived countless US presidents and Soviet general secretaries. His habit was that he still had to review some official business after get off work every day, so calling him at this time was not considered disturbing his rest.

"Ding--"

At that moment, Gromyko was in his study, drinking red tea and reviewing diplomatic telegrams to be processed the next day.

"Andrei, it's a call from the Kremlin. Comrade Nadezhda Ivanovna Ivanova wants to see you."