The unreported economic crisis in Europe

Reality is that which, when you stop believing in it, doesn’t go away.  

==Philip K. Dick

Europe appears to be on the verge of economic collapse because of blowback from the sanctions war against Russia.

The European economic boom, it turns out, was based on availability of cheap oil and gas from Russia.

The UK and the European Union has deliberately cut themselves off, thinking it will punish Russia.  But the Russians are doing okay while Europeans face a winter with shortages of electricity and fuel.  Many are stocking up on firewood and coal.

Whole industries have shut down or relocated to Asia or North America.

Alex Christoforou and Alexander Mercouris, in the video above, say the latest word from oil company executives is that the Europeans might just possibly have enough oil and gas in storage to get by this winter, depending on just how cold the winter is and depending on who you believe.

This is because the European countries bought all the cheap Russian oil and gas they could before the supply shut down.  But next spring, the cupboard (or rather the oil tank) will be bare.  So an even worse crisis will occur in the winter of 2023-2014.

Saudi Arabia, Iran and the United Arab Emirates decline to increase their own output to help the Europeans out.  They and the Russians benefit greatly from the sanctions induced increase in oil prices.

The Europeans are willing to buy second-hand Russian oil and gas from China, India, Turkey and other countries, at prices they refuse to pay Russia directly.  The problem with this is that the importers of Russian oil and gas will only sell that which is surplus to their own needs, and at a very high price.

The U.S. plan is supply Europe with liquified natural gas from North America.  But the infrastructure needed to carry out this plan doesn’t exist, and won’t for at least several years.  Liquifying natural gas, and storing and shipping it, is not easy and not cheap.

In a new video this morning, Christoforou and Mercouris talk about how the economic situation in the UK is so bad that Rishi Sunak, the new British prime minister, has no choice but to raise taxes, cut public services and cut aid to Ukraine.

The goal of sanctions policy is to weaken Russia so as to help Ukraine.  But sanctions policy is weakening Europe, not Russia.  How does this make sense?

This blog gets a certain number of views each day from Europeans.  If you’re one of them, I’d be grateful if you’d help me out.  Am I exaggerating the situation?  Is it less dire than I think?  If I’m wrong or partly wrong, please straighten me out.  If I’m right or partly right, please confirm.

LINKS

Strikes, protests in Europe over cost of living and pay by Reuters.

Energy crisis: Next winter will be worse than this one by Natasha Frank for CNBC

The Threat of Civil War in Europe by László Bernat Vesorémy for The American Conservative.

Protests Rage Across Europe, As Sanctions-Fueled Inflation Surges and Economic Crisis Deepens by Nick Corbishley for Naked Capitalism.

Germany’s Apocalypse Now by Jeremy Stern for The Tablet.

A perfect storm in U.S. foreign policy by M.K. Bradrakumar for Indian Punchline.

The Coming Anti-Americanism by Rod Dreher for The American Conservative.

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