Facing shortages and growing populist movements – the European Union as we know it may be doomed
David Rundell and Michael Gfoeller
Europe is hurdling towards its greatest economic crisis since the 1930s. During the Covid pandemic, European governments increased demand with massive monetary stimulus packages while at the same time reducing supply by closing businesses and urging workers to stay home. This unleashed some of the highest inflation rates seen in a generation. Then came Russia’s invasion of Ukraine followed by Europe’s efforts to weaken Vladimir Putin with extensive economic sanctions. Those sanctions backfired. While the value of the ruble has risen, Europe faces energy shortages, inflation, and slower economic growth. These troubles are causing division and strife within the European Union, giving rise to stronger populist movements, and creating greater challenges for the United States both now, and in the very near future.
Government leaders in Britain and Italy have already resigned. In the Netherlands, Germany, Poland, and Spain, there have been multi-week protests by farmers and truckers. A wave of strikes has plagued the crucial airline sector. As these conditions are unfolding in Europe, millions of refugees fleeing similar problems in Africa and the Middle East are likely to start arriving on Europe’s borders. With food, fuel, and migration problems mounting, all of Europe’s governments will face increased unrest. Many more are likely to fall in the next six to eight months.
Fueled by cheap Russian energy, Germany has been the engine of European economic growth. Not any longer. The Germans have very little oil or gas of their own. They have long relied on Russia for roughly a third of their imports, but last month Gazprom’s exports of natural gas to Europe fell to their lowest level in decades. The essential Nordstream pipeline is operating at 40 percent capacity and President Putin has threatened to reduce flows even further. Meanwhile, Gazprom has declared force majeure on some European customers and some of Germany’s largest energy companies are facing bankruptcy.
Soaring energy costs have made German exports much less competitive, while growth in their largest market, China, is falling. German drivers are paying nearly ten dollars a gallon for gasoline. Germany’s Federal Network Regulatory Agency has warned consumers that household energy costs may treble next year. Even German steelmakers, who still need coal, and get much of it from Russia, are feeling the pain of sanctions. The net result is German inflation that now exceeds anything seen since 1960, combined with German GDP which is falling and expected to fall further.
Europe’s political leaders clearly sense what is coming. Hungarian President Victor Orban, who won re-election easily in April, now feels threatened by economic unrest. He recently condemned the EU’s Russia sanctions policies saying, “I thought we had only shot ourselves in the foot, but now it is clear that the European economy has shot itself in the lungs, and it is gasping for air.” Remarkably, Frans Timmermans, the Vice President of the European Commission, agrees with Orban. He has warned that due to energy shortages, Europe will see “very, very strong conflict and strife” this winter.
Europe is certainly trying to reduce the economic pain it will feel this winter. High-level emissaries have been dispatched to oil and gas exporters such as Azerbaijan, Qatar and the UAE, but this gambit will likely prove too little, too late. Europe has invested too little in the infrastructure needed for a rapid diversification of energy supplies. Russia continues to hold substantial influence over energy exporters such as Kazakhstan, Azerbaijan and Libya. The only country with the reserves and technology needed to produce a massive increase in Western energy resources is the United States, but it is seeking to reduce fossil fuel production.
In the past, economic hardship has often strengthened populist political parties hostile to European unity. For example, the recession of 2008 strengthened France’s National Front. In 2010, the party’s right-wing leader Marine Le Pen became a serious political player when the Front went from receiving 4.3 percent of the vote in the 2007 presidential election to 12 percent of the vote in the nation’s regional elections three years later. Now renamed the National Rally, Le Pen’s party just saw its presence in the French Parliament rise from 8 to 89 seats. Last week, the EU’s voluntary gas rationing plan was strongly opposed by Spain and Portugal. Expect more disunity in the future as national interests diverge.
None of this bodes well for the United States, which needs an economically strong and politically united Europe to help it maintain a rules-based economic order and to confront global political challenges. As the Euro sinks to parity with the dollar and budget deficits soar across the continent, Europe’s willingness to share military, economic or environmental burdens will become increasingly doubtful.
Ambassador Michael Gfoeller is a former Political Advisor to the U.S. Central Command. David H. Rundell is the author of Vision or Mirage, Saudi Arabia at the Crossroads and a former Chief of Mission at the American Embassy in Saudi Arabia.
@Michael S.
The Japanese and Taiwanese would be just as dumb as the Ukrainians who’ve been trying “to wreak the havoc” on Russia.
The major reason for the US provoking those conflicts is to make the aborigines fight each other so they won’t unite and fight their colonial master(s) AND so they will exhaust each other and their economies, lose a lot of young men in battle, etc., etc., the oldest colonial trick in the book.
This is also how you bring down those who might otherwise become your competitors in the world market.
Reader,
I expect China to attack Taiwan sometime within the next two years. Wha6t’s more, I think the “Good Cop-Bad Cop” duo of Biden and Pelosi is intended to provoke them. The US, on its own, would lose in such an encounter. The Japanese and Taiwanese, however could wreak havoc on the Chinese.
cf https://warroom.org/2022/07/29/dr-gorka-on-chinas-unrestricted-warfare-china-has-been-at-war-with-us-since-1948/
@Michael S.
I know very little about modern China, except that I think that they really don’t want to nuke anybody or get involved in any wars.
I hope that your daughter and her family do well in New Zealand and escape the effects of the “collapse”.
I think that there are no such thing as “free countries” because every government needs to be able to “control the mob”, it is just that the Western (especially the Anglo) politicians are really great at brainwashing the slaves into thinking that they are free and into feeling superior to others who haven’t been this beautifully brainwashed.
Looking back at the first half of the 20th century (at least), it seems to me that the governments of the so-called “civilized” Western countries are making the world collapse on purpose.
There are probably hundreds of books written about the causes of the Great Depression – as I watch what is happening now, I think it was man-made by the super-rich businessmen on whose behalf the Western governments (especially the Anglo ones) act.
The rich love these events “because they clear out the trash” AND help them concentrate the money, property, and power in their hands.
The biggest problem for the Jews is that when things start going from bad to worse, most of the rest of the population all of a sudden “discover whose fault all of this really is” and start acting accordingly.
Most Jews are not free to make aliyah because the Jewish Agency (Sochnut/JAFI) doesn’t want all Jews, it only wants the cream of the crop.
I think (this is my own opinion) that the problem Sochnut is now having in Russia occurred because the Russian officials are getting paranoid about the countries who support Ukraine and follow the US policies, they noticed the Jewish Agency’s “selectivity” and decided that the agency promotes a “brain drain” in Russia on purpose.
Hi, Reader. You said,
Tragically, you may be describing my daughter and grandchildren in China — who think they MIGHT come back to the US in three years, if everything lines up right. The reality is:
1. Neither I nor they know when they will need to, and be able to, leave, and
2. I have no guarantee that conditions in the US will be any better than in China in the near future. Some examples:
A couple years ago, my son-in-law’s daughter and her husband suddenly slipped out of Hong Kong and relocated in New Zealand. A good move? Maybe. New Zealand is now one of the most dictatorial countries on earth.
In the late 1960s, the nightly news was showing that America was unraveling at the seams: assasinations, mass protests, police riots, rising crime, division and rebellion, you name it. I emigrated to Australia, to get away from it. After a year, I ran out of money and had to return. Today, Australia is almost as dictatorial as New Zealand; and other countries of “escape”, such as Canada, are functioning like Marxist states.
In China, my daughter has been able to teach her children the US Constitution and US History. If our grandchildren were being schooled in US schools, they would be indoctrinated with critical race theory and gender dysphoria.
In the 1930s, most Jews recognized that there was a problem, just as most Jews do today. Now they are better off, in that they can freely do aliyah. Even so, aliyah may mean escaping being persecuted from town to town, only to being attacked by all the nations of the world.
None of us know the exact timing of these things, nor do we know precisely which path to take. Wherever we find ourselves, we need to have a proper relationship with Hashem; because He is in control of all things.
All that said, the world is quickly collapsing.
@Michael S.
I agree with you completely but that is how the Jewish history works – persecution/optimism – “it can’t happen here!”/next “sudden and unexpected” persecution – repeat the cycle.
When it is time to get out, the ones who can get out – won’t, and the ones who want to get out – can’t.
In the 1930s, World Jewry was completely flat-footed. The main problem, it seems, is that nobody realized how quickly things would collapse. This is happening again — with, of course, the whole world collapsing instead of just Europe. The latest economic data is not encouraging:
https://www.zerohedge.com/markets/treasury-yields-are-collapsing
https://www.zerohedge.com/economics/eu-consumer-confidence-crashes-record-lows-german-cpi-re-accelerates
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/Image-22-Bank-Governor-Poloz-Says-Toronto%E2%80%99s-RE-Market-Is-A-House-of-Cards-Screenshot.png?itok=xAaKyVYi
That ought to send shivers down the spine of any Jew with any knowledge of history (Are there any left?).