EU RUSSIAN SANCTIONS ARE ONLY SUCCEEDING IN BRINGING ABOUT EUROPE’S OWN ECONOMIC DEMISE

Details: Economics; 23 November 2022

By Arnaud Develay

Back in March 2022, France’s Economy Minister Bruno LEMAIRE famously declared that through the imposing of sanctions on Russia following the start of the Special Military Operation "we will bring about the collapse of the Russian economy". (1)

Eight months later, it seems things haven’t quite gone according to plan.

Throughout the EU, inflation has skyrocketed forcing thousands of small-size business to go bankrupt.

“In the first half of 2022, 183,530 French companies closed a 35% increase compared to the same time last year and a 40% increase from 2020, according to official data from French Commercial Courts” (2)

The Bank of England estimated back in September that inflationary pressure for 2022 would reach a whopping 11%. This has led small business owners to request financial relief from the government. (3)

In Italy, “prices have skyrocketed in 2022 to four-decade highs, and the highest rate since the country joined the eurozone, off the back of unwinding supply chains following the Covid-19 pandemic and Russia’s invasion of Ukraine, which has cut off vast swathes of energy supply and put up prices for households and businesses.” (4)

As a result of the EU-wide economic deterioration, the Union’s citizens have seen their quality of life directly take a turn for the worse. Public facilities such as swimming pools have been forced either to adjust or altogether cease operating.

"It’s pretty crazy to think that we are closing public places," Alice, a student says, indicating that the situation will only get worse this winter. (5)

Increasing energy prices have led schools to demand assistance from government and it is not uncommon for students attend class bundled in blankets or wearing winter coast. A surreal scene in 21^st Century Europe. (6)

“A spokesperson for Bristol City Council said: “UK energy prices have risen sharply which in turn is pushing up bills across the city. Homes, businesses, schools are all feeling this additional financial challenge and it’s forcing many to make difficult choices about how they meet these extra costs. To support schools, our energy services are working on trying to extend current energy contracts to limit the impact of this surge in prices for those settings that are part of our contract scheme.” (7)

EU political elites seem disconnected from reality and strategic thinking.

While obsessed with the “Green Agenda”, EU political leaders find themselves increasingly suffering from cognitive dissonance. Indeed, the continent is now experiencing a revival of 19^th Century energy policy with coal mines being considered at the highest level of the EU power structure.

“The unexpectedly sharp increase in fossil fuel prices ... has generated substantial uncertainty. The high energy prices have eaten into households’ real income and business profitability, which makes investing in low-carbon technologies and activities difficult for now. European governments have provided substantial subsidies to businesses and households to cushion the impact of energy price rises. At the same time, they have scrambled to secure energy supplies, undertaking substantial investment in fossil-fuel infrastructure. That includes re-opening mothballed coal-fired plants and constructing liquefied natural gas terminals.” (8)

In France, the concept of wind turbines is now openly being abandoned in favor of the tried and true resort to nuclear energy even though the return of such proven policies is coated in politically-correct references to energy transition. (9)

Who benefits from the deterioration of relations and trade between Russia and EU?

The answer to this question is two-fold.

First, it seems that as a result of the current tensions, the US is removing the EU as an economic competitor. The main engine of European growth has always been the Federal Republic of Germany. The reasoning in Washington has always been that no effort should be spared to decouple German high-level manufacturing sector from cheap Russian influx of energy.

Senior US officials have been quite vocal on this issue.

As early as February 23^rd 2022, the Biden administration has called for the shutting down of NorthSteam 1 and 2.

“...yesterday, after further close consultations between our two governments, Germany announced that it would halt certification of the pipeline. Today, I have directed my administration to impose sanctions on Nord Stream 2 AG and its corporate officers… Through his actions, President Putin has provided the world with an overwhelming incentive to move away from Russian gas and to other forms of energy.” (10)

Earlier in January, US Assistant Secretary of State Victoria NULAND had declared that "If Russia invades Ukraine, one way or another Nord Stream 2 will not move forward" (11)

Those bellicose statements preceded an act of sabotage on the pipeline in October 2022 with subsidized Western media promptly implying that Russia essentially sabotaged itself.

The reality is that despite the damage inflicted on the project, (Gazprom specialists pointed out the feasibility to proceed with repairs in short order and Moscow reiterated its offer to proceed with the delivery of gas as agreed between BERLIN and MOSCOW when Angela Merkel was still German Chancellor), Russia has been able to sell its oil and gas to Eurasian partners China and India. Oil sales revenues have witnessed a 38% increase from 2021 with Moscow running an account surplus of $110.3 billion in the first five months of 2022, up from $32.1 billion from 2021. (12)

Europe on the other hand will now have to pay to build the port facilities required to import US GNL which as of today only covers 40% of Europe’s needs at a price estimated to run 400% higher than Russian gas.

With Western capitalism teetering collapse with insurmountable debt-levels, DAVOS “Stake-holders” have conceived of a restructuring of society in which the means of production are concentrated in a few oligarchic hands. They call it the Great Reset.

Under the cover of altruistic environmental premises, the Great Reset envisions subjecting the general population to a collectivist administrating of resources whereupon daily life is conditioned by a Chinese-inspired “social credit system” of QR Codes and carbon passes.

The consumer society is progressively replaced with chronic shortages and “sobriety”: the two pillars of what French President Emmanuel MACRON called “the End of Abundance” (13)

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November 23, 2022

Arnaud Develay is an international lawyer. He participated to the defense of former President Saddam Hussein along with Former US Attorney General Ramsey CLARK; he has documented the illegal sanction regime imposed on Syria while living in Damascus in the wake of the Caesar Act.