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?

Diana Johnstone on the decline of Europe

CIRCLE IN THE DARKNESS: Memoir of a World-Watcher by Diana Johnstone (2020)

Diana Johnstone is an American journalist, a year or two older than me, who has spent most of her adult life reporting from Europe.

This memoir is a rich account of the past half-century of European history.  Its over-arching themes are the erosion of the sovereignty of European nations and of the European left as fighters for peace and defenders of working people.  Another is reality is rarely what the official sources say it is.

It also touches on her personal struggles and family life.  She decided at an early stage in her career to choose freedom to write as she saw things over middle-class security.

I won’t try to summarize her work, which touches on many important events, but I’ll mention a few highlights.

∞∞∞

>> Johnstone was not a supporter of the European Union.  It had been promoted as a way for European nations to unite and make Europe an independent power, setting standards for human rights, social welfare and the environment, which other nations would have to respect in order to engage with Europe or belong to it.

Maybe it was that way in the beginning, at least to a certain extent.  But she pointed out that the proposed European Constitution of 2005, if you read the fine print of its more than 500 pages., committed its signers to supporting neoliberal economics and the NATO alliance.

It the principal objective of the Union was “a highly competitive market economy,” with business competition “undistorted” by state policy.  Public services “of general economic interest” had to be open to competition, including international competition.

The Constitution specified a “common security and defense policy” in which”commitments and cooperation in this area shall be consistent with commitments under the North Atlantic Treaty Organization.”  It also stressed the need to defend against “terrorist attacks.”

It was put to a public vote in France and the Netherlands and rejected both times.  It was revised in the form of the 2008 Lisbon Treaty, which was accepted by all the member governments except Ireland.  The Irish put it up to a referendum, which was rejected in 2008.

After some minor concessions, the Irish were called on to vote again, and on Dec. 1, 2009, the new treaty became law.  The principle is: Keep voting until you get it right.

I doubt if many of those who voted “yes” understood they were locking themselves into economic austerity and undeclared wars.

> Johnstone didn’t know what to make of the 1968 student uprising in Paris.  It was inspired by privileged students’ desire to overthrow restraints on personal behavior (“it is forbidden to forbid”) and not by any program for improving the welfare of society.

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.

Globalist Germany and nationalist France?

German Chancellor Olaf Scoltz and French President Emmanuel Macron

Diana Johnstone, a long-time independent reporter of European politics, wrote an interesting article about the differences between Germany and France in economic, environmental and military police.

Germany is confident and expansive.  France is defensive and fearful of national decline.  Or so she says.

Germany is committed to green energy, feminism, globalization and an anti-Russian “rules-based international order.”  France is committed to nuclear energy and a nationalistic industrial policy, and is reluctant to join in a new Cold War against Russia.

Franco-German unity has been the key to European unity since the founding of the European Coal and Steel Community, the forerunner of the European Union, in 1952.   If they can’t stay unified, the EU may not have much of a future.

Germany’s new government is, as she puts it, a “traffic light” coalition.  Red represents the Social Democrats, yellow (or gold) represents the pro-business Free Democrats and green represents the Green Party.

A new Ministry of Economic and Climate will be in charge of reducing CO2 emissions.  Every governmental measure will have to pass a climate check.  

Germany today is heavily dependent on coal as a result of phasing out nuclear energy, and it has delayed certification of the new gas pipeline from Russia.  Itt has a goal of generating 80 percent of Germany’s electricity from renewable energy, mainly wind farms, by 2030, sooner than before.

One of the new government’s priorities is to develop an electric car industry for the export market, both inside and outside the EU.  Germany’s expectation is that all EU countries will be open to importing the new electric cars without favoring their own industry.   The European Commission is considering rules that would require all cars sold in Europe after 2035 to be carbon neutral.

France’s Emmanuel Macron, meanwhile, is being pulled to the right, Johnstone wrote.  There is a fear that France is losing its national character and also its position in the world.  France is not going to shut down its network of nuclear-powered electric power plants any time soon.

The French government wants to build up French manufacturing industry.  This might bring it into conflict with EU rules and regulations, which bans government policies to favor domestic industry, except in the military sphere.

There has a strong right-wing, anti-immigrant movement in France, led by Marine Le Pen.  But now there’s an even more extreme movement, led by a journalist named Eric Zemmour.  His party is called the Reconquest Party; the idea is to reconquer France for the French.

The new German government wants strong ties with the United States, which, according to Johnstone, means dropping objections to storing nuclear weapons on German soil.  France hasn’t openly opposed NATO, but is less enthusiastic about the alliance than Germany is.

Macron has floated the idea of an independent European military force, independent of the United States, but hasn’t gotten anywhere with the Germans and other NATO allies.  Johnstone said he wouldn’t like Ukraine in NATO, because it would expand German influence and its farm exports would compete with French farmers.

The worlds inside our heads

Somebody once wrote that the most embarrassing of all studies was intellectual history, because it shows how the ideas that you take as simple common sense were once new and implausible, and the agendas of the people who argued for them.

This was my feeling after reading Charles Taylor’s  2004 book, MODERN SOCIAL IMAGINARIES, as part of an informal study group organized by my friend Paul Mitacek.

It is the story of how Western people once believed and then stopped believing that they were embedded in a divine hierarchy resting on the animal world and lowest human beings, and reaching up to Heaven in a great chain of being.

It also is the story of how Western people once believed and then stopped believing that society is something pre-existing, which people are born into and have to serve as best they can.

Taylor traced the steps by which we came to the present predominant believe, that society consists of separate and independent individuals and exists for their benefit rather than the other way around.

He calls these beliefs “imaginaries” because they form the background of how we perceive our world–a perception that only partly matches up to objective reality, but which we take for granted.

I found his book illuminating and disturbing because it showed me how many of the things I believe in are based on assumptions I can’t prove.

We modern Americans take for granted, for example, that religion has to do with individual morality and that each person has the right to choose their own religion.

But for the ancient Greeks and Romans, the worship of the gods was something they had to do to avoid the gods’ wrath and seek the gods’ blessings.  The gods didn’t care what individuals thought about them, only that they perform the rituals correctly.  That is why the pagan Romans couldn’t understand the Christians’ refusal to burn incense for the Emperor.

The Hebrew Bible has some teachings about individual morality, but nothing about individual salvation or an afterlife.  Israel as a whole either worshipped God or strayed after false gods, and the nation was rewarded or punished accordingly.

Christianity changed this.   Christians believed they would be rewarded or punished in the afterlife based on their individual faith and works, and that lip service to religion wasn’t enough.  Protestantism took this tendency further.  Then freethinkers and rationalists, rather than assuming morality came from religion, questioned religious dogmas and practices in the name of morality.

Many individual Americans and Europeans believe that the ultimate basis of morality is a transcendent religious belief, but American and European societies are not organized around this belief.  Taylor for this reason calls our society “secular”—not because it is hostile to religion, but because it is neutral to religion.

The twilight of NATO?

NATO was formed as a defensive alliance in which the Americans promised to protect Europe.  It has become an offensive alliance for Europeans to support U.S. interventions.   This does not benefit Europe.   American leaders should not take European support for granted.  I question how long NATO can endure.

Breedlove’s Bellicosity: Germany Concerned About Aggressive NATO Stance on Ukraine by the staff of Der Spiegel

NATO and the Two Central Conflicts of the Ukraine Crisis by Karel von Wolferen, a leading Dutch journalist.

The ebb and flow of Russia in Europe

Russia in Europe 1914

Since 1848, the United States has been secure within its present continental boundaries.  That’s not been true of all nations, and particularly not true of Russia and its European neighbors.  I’ve collected a series of maps from Google Image showing the ebb and flow of Russian power in Europe.

What they show is why, on the one hand, Russia’s neighboring countries would feel in need of protection and why, on the other hand, Russia would fear any hostile military power along its border, especially in Ukraine.

The Baltic states, Poland, Belarus and Ukraine did not exist as independent countries a century ago.  People who lived in these regions during the 20th century would have lived under several different governments, including some of the bloodiest regimes in history, without having moved from the place they were born.

The passing scene: Links & comments 2/21/2015

China pivots everywhere by Pepe Escobar for RT News.

EU Reeling Between US and Russia by Pepe Escobar for Sputnik News.

A couple of years ago, President Putin proposed an economic partnership between Russia and the European Union, which would have been to Europe’s benefit.

Now, with Germany caught up in the U.S.-lead conflict with Russia over Ukraine, this has been wiped off the blackboard.  Now Russia looks to China as its economic partner.  If there is any winner in the Ukraine conflict, it is China.

I have misgivings about linking to RT News and Sputnik News.  They are as much organs of the Russian government as the Voice of America is an organ of the U.S. government.

But I’ll make an exception in Pepe Escobar’s case, just as I did some years back with Julian Assange’s short-lived interview show. I think Escobar is both intellectually acute and independent.

Ukraine Denouement: the Russian Loan and the IMF’s One-Two Punch by Michael Hudson for Counterpunch.

A New Policy to Rescue Ukraine by George Soros for the New York Review of Books.

One of the sidelights of the Ukraine situation is the pivotal role of the wealthy speculator George Soros.  A major contributor to the Democratic Party, he has urged a $50 billion loan to Ukraine in order to fight Russia.

Michael Hudson reported that Soros’s funds are drawing up lists of assets they’d like to buy from Ukrainian oligarchs and the Kiev government when the International Monetary Fund demands they be sold by pay down Ukaine’s debts..

A Whistleblower’s Horror Story by Matt Taibbi for Rolling Stone.

It’s not just the federal government that shields wrongdoers while doing after employees that expose them.  Wall Street buys its way out of prosecution while blacklisting employees who reveal its misdeeds.  A case in point: Countrywide / Voice of America whistleblower Michael Winston.

The plight of the bitter nerd: Why so many awkward shy guys wind up hating feminism by Arthur Chu for Salon.

‘I’m Brianna Wu And I’m Risking My Life Standing Up to Gamergate’ by Brianna Wu for Bustle.

Feminist writers are so besieged by online abuse that some have begun to retire by Michelle Goldberg for The Washington Post.  (Hat tip to Mike the Man Biologist)

Harassment of women on the Internet is no joke, as is shown by this woman’s story of doxing (tracking down and publishing home addresses and other personal information), swatting (sending false emergency calls in her name) and death threats.

Russia turning down the gas on Europe

Russia cut natural gas shipments to Europe by 60 percent, and announced plans to eventually cut off shipments through Ukraine altogether.

The Urkainian route will be replaced with a new pipeline through Turkey, which will take a couple of years to build.  The European Union will need to build its own infrastructure to take the gas from the Greek border to the rest of Europe.

If the Europeans don’t get their new pipelines built in time, Russia will send its gas elsewhere, the head of Gazprom said.  Russia is working on gas deals not only with China, but with India.

Vladimir Putin is not a helpless victim of economic sanctions and falling oil prices.  He is willing and able to use Russia’s economic power to damage Ukraine and the European nations.

Nobody benefits from this cycle of tit-for-tat retaliation.  It’s an economic form of mutually assured destruction.

Russia Fires Ukraine as Natural Gas Transit for Europe by Michael Collins for Op-Ed News [added 1/16/2015]

What’s the matter with us Americans?

Europeans think Americans have gone crazy.  Ann Jones, who has lived in Europe for decades, said her European friends once respected the United States, but no longer.  Here are questions she gets from her European friends.

• Why would anybody oppose national health care?
• How could you set up that concentration camp in Cuba and why can’t you shut it down?
• How can  you pretend to be a Christian country and still carry out the death penalty?
• Why can’t you Americans stop interfering with women’s health care?
• Why can’t you understand science?
• How can you still be so blind to the reality of climate change?
• How can you speak of the rule of law when your presidents break international laws to make war whenever they want?
• How can you hand over the power to blow up the planet to one lone, ordinary man?
• How can you throw away the Geneva Conventions and your principles to advocate torture?
• Why do you Americans like guns so much? Why do you kill each other at such a rate?
• Why do you send your military all over the world to stir up trouble for the rest of us?

She added:

That last question is particularly pressing because countries historically friendly to the United States, from Australia to Finland, are struggling to keep up with an influx of refugees from America’s wars and interventions.

Throughout Western Europe and Scandinavia, right-wing parties that have scarcely or never played a role in government are now rising rapidly on a wave of opposition to long-established immigration policies.

Only last month, such a party almost toppled the sitting social democratic government of Sweden, a generous country that has absorbed more than its fair share of asylum seekers fleeing the shock waves of “the finest fighting force that the world has ever known.”

Europe’s alternative to Putin’s oil and gas

Map: Global Research

Dependence of key European nations on imports of Russian oil and gas puts the European Union in weak position in relation to Vladimir Putin.

One way to get out of that position of weakness is to end the sanctions against Iran, and import Iranian oil and gas.  In the longer run, Europe would benefit from a new gas pipeline from Iran to Europe.

The European Union has no conflict of interests with Iran.  It is following the lead of the United States.  As far as that goes, the United States has no conflict of interests with Iran.  We Americans are merely nursing old resentments and following the lead of Israel and Saudi Arabia.

§§§

Breaking Europe’s Putin addiction by Amir Handjani for Al Jazeera.

The interdependence of Russia and Europe

More Signs of Doubt in Europe About the Costs of Siding With Ukraine by Yves Smith for Naked Capitalism.

The Beginning of an End of the Trans-Atlantic Alliance by Mark from Ireland for Ian Welsh.

Hat tip for the map to Vox.

Optical illusions on the highway

Karanvir Singh Sangha, a student in Moga, India, posted some astonishing photos on his Karansangha’s Blog, of semi-trailers on European highways that are painted to look like what they’re not.

I don’t know what I’d think if I were driving down the road and saw one of these coming in the opposite direction.

Look at the photos to see what I mean.