Europe faces self-imposed economic crash

Thousands in Prague protest energy crisis and NATO alliance

I’ve written about why I think Russia is likely to win its ground war in Ukraine and its sanctions war worldwide, and what I think the results of Russian victory might be.  This post is about one aspect of that war—how the sanctions war has brought about an economic crisis in Europe.

Six months ago, Europe’s leaders boasted they’d bring Russia to its knees through economic sanctions. Today their countries fact economic disaster because of blowback from those sanctions.

Many Germans are hunting through forests for firewood for the winter, because of the looming scarcity of oil and natural gas.  One report says there is a one-year waiting list for purchasers of wood stoves. Coal also is in great demand and short supply.

In Spain, the government is imposed rules forbidding air conditioning to be set below 80 degrees Fahrenheit. In the Netherlands, a campaign called Flip the Switch asks Dutch people to limit showers to five minutes and do without air conditioning and clothes dryers.

One expert says six in 10 British factories are in danger of closing as a result of higher energy bills. The average British household is expected to see its annual average energy bill rise to $4,180, a rise of $1,765, according to CNN Business.

Forward contracts for electricity in France and Germany are 10 times what they were this time last year.

It’s hard to see how Europe can escape a energy crisis and an economic recession this winter.  The initial reaction of Europe’s leaders has been to double down.  Germany’s foreign minister said Germany will never desert Ukraine, no matter what.

The European Union is reportedly planning to seek sweeping powers over businesses in member states that would basically allow Brussels to tell these companies what to produce, how much of it, and whom to sell it to in times of a crisis.

A public opinion poll indicates a majority of Germans would like to negotiate a peace.  Unfortunately a compromise peace is no longer being offered.  The Russians now say their terms are unconditional surrender.

Tens of thousands joined to protest against the sanctions war in Prague.  I think it is the first of many such protests.  They may lead to sweeping changes across Europe; they may lead to existing governments and the. EU itself invoking emergency powers to stay in power.

I sympathize with the European peoples who’ve been caught up in the global struggle of the USA vs. the Russian-Chinese alliance.  Europeans have a lot to lose and little to gain by joining in.

Source: the Sun, London

Closed and reduced-production fertilizer plants in Europe

LINKS

Europe’s Minsky Moment Arrives by Rod Dreher for Naked Capitalism.

“Lehman Event” Looms for Europe as Energy Companies Face $1.6 Trillion in Margin Calls by Yves Smith for Naked Capitalism.

Europe’s Economic Controlled Fight Into Terrain by Yves Smith for Naked Capitalism.

What Happens When Plan B Is Just More of Plan A? by Helmholtz Smith for A Son of the New American Revolution.

European Stainless Steel Mills Are Closing Due to Energy Crisis by Yves Smith for Naked Capitalism. 

United States and Europe Shoot Themselves in the Head and Blame Russia by Larry Johnson for A Son of the New American Revolution.

Six in 10 British Factories at Risk of Going Under as Bills Soar by Julian Harris for Bloomberg News.

Europe’s Energy Crisis Is Tipping Legions of Small Businesses Over the Edge by Nick Corbishley for Naked Capitalism.

Putin’s Last Laugh by Rod Dreher for The American Conservative.

‘Starve or Freeze’: Millions of elderly Brits fear a grim choice this winder as costs spiral by Kara Fox for CNN Business.

Beer shortages and pig pile-ups: Fertilizer crisis rattles European food chain by Graham Lanktree, Sebastian Whales, Bertosz Brzezinski and Gabriela Galindo for Politico.

Will Europe Go Down to Defeat Before Ukraine? by Yves Smith for Naked Capitalism.

EU: Controlled Demolition by Raul Ilargi Mejier for Automatic Earth.

Tags: Economic Sanctions, Europe, European Union, War in Ukraine