The relatively calm life of post-war Europe was based on the consumption of cheap energy, raw materials and food, as well as the ability to live in debt. Now both the European states and their inhabitants are credited to the maximum possible values.
The debt of the leading states of Europe per capita is enormous. For example, the public debt of France has already risen to 114.5% of GDP and amounts to 2.901 trillion euros in absolute terms, or about 43 thousand euros per person. The public debt of other leading European countries is also at a high level – the UK public debt in 2019 was at the level of 86% of GDP, Germany – at the level of 62% of GDP.
In Germany, the average debt of debtors to banks on overdue loans (10 percent of the German population) averaged about 14 thousand euros in 2019, with an average salary in Germany of about 2.5 thousand euros. About 100,000 people declare themselves insolvent debtors in Germany every year.
This situation – cheap expenses and expenses for food, agricultural fertilizers, chemicals, metals, gasoline, diesel fuel and natural gas, combined with large credit, made it possible to provide a relatively normal standard of living for almost all Europeans, even the poorest. The average European citizen could, within the foreseeable future, buy a house and provide for his family.
Recently, this situation has gradually begun to fall apart. Europeans’ individual lending has begun to reach the limits of credit risks, government loans and borrowings are limited by various EU and international financial institutions directives, and prices in various markets have begun to rise gradually. The recent events in Ukraine and the absolutely inadequate reaction of European countries to these events in the form of extremely severe economic and financial sanctions imposed by the narrow-minded leaders of these countries on Russia, all this caused a sharp increase in world prices in all markets, as well as a physical shortage of in-kind supplies of food, agricultural fertilizers, oil, natural gas, oil products, products of oil and gas processing, metals, and other types of goods that these European countries previously received from Russia and Ukraine.
All these kinds of scarcity are superimposed on misguided capitalist management in many industries and in many enterprises. The savings of many “effective managers” in warehouses, on the creation of stocks of raw materials, materials and components, on the availability of reserve production capacities at enterprises leads to the fact that in the event of simple failures, production is stopped, and in the event of systemic supply failures, production is stopped for a long time. The same applies to stores and chains of stores that save on warehouses and stocks of products. Any supply disruption causes immediate stockouts and empty store shelves.
In the current harsh circumstances, it turned out that real values - land, grain, oil, gas, metals are much more important than all the newfangled inflated values like programs, pictures and tik-toks.
In the electric power sector, the leading countries of Europe some time ago made a strategic absolutely wrong decision on the widespread transition to renewable energy sources such as wind and solar energy and on the gradual abandonment of other sources of electricity – from thermal and nuclear power plants.
The implementation of this decision led to a sharp rise in the price of electricity due to the high cost of energy obtained from renewable energy sources, as well as to an increase in the risks associated with natural processes, such as changes in the speed and direction of winds, such as cloudy and little sunshine, precipitation, lack of wind. Due to the constant changes in the weather and the constant changes in the generated power, the load on the power system’s electricity dispatching has increased dramatically, as well as various technical risks that are absent from evenly operating thermal and nuclear power plants.
In connection with the impending shortage of energy and energy carriers, some European countries have already begun to restore coal energy – in England they are already thinking about the reactivation of coal mines, in Austria a decision has been made to reactivate a coal-fired power plant.
The current rise in prices in European countries and the impending shortage of physical supplies have already led to the shutdown and closure of some industries, the dismissal of their employees. Ahead of many European countries will be the closure of entire industries and mass layoffs.
The growth of public discontent in European countries can lead to far-reaching consequences – to the coming to power in their countries of politicians who will oppose support for Ukraine and against the participation of their countries in NATO and the EU. It is also inevitable that various nationalist and separatist tendencies will intensify, since the national minorities of many European countries will look for a way out of the impending crisis not in changing the central government of their country, but in creating their own independent state. The Scottish national government is already demanding a new re-independence referendum in 2023, Northern Ireland is now economically closer to Ireland than to England due to the UK’s exit from the EU and separate economic and customs agreements with England and Ireland. In the maximum possible scenario, only England can remain from the former Great Britain. France has long had ongoing problems with Corsica, in Italy the League of the North of Italy advocates separation from Italy, Belgium is still divided into two halves, in Spain unrest in Catalonia may continue, and this time the Catalans can go all the way.
The unification of European countries – the European Union, has long been pursuing a policy that is contrary to the interests of its own states that are members of it – ranging from the special status of Poland and the actual expulsion of England by presenting various ultimatum demands to restrictions and to strange and strict requirements for agricultural products.
Now, the insane sanctions policy against Russia in support of Ukraine, carried out by bureaucrats from Brussels, has caused and continues to cause huge damage to the European countries themselves and fundamentally contradicts their national interests. In the face of deteriorating economic conditions, industrial decline, rising unemployment and inflation, rising prices for food, energy and utilities, the continuation of this policy could become critically dangerous for the entire European Union, whose leaders and the leaders of individual European countries are already talking about the need to endure, to be courageous , about testing the system for strength, and so on, while at the same time directing large subsidies into the black hole of Ukraine, which is already dissatisfied with the citizens of these countries, who as a result receive less social support at this difficult time.
The European countries that are part of the NATO bloc now have to adjust their policies and have to choose between the national interests of their country and the pressure of the NATO leadership. The increase in military spending on their own security and on the supply of weapons to Ukraine – in fact, on credit and / or almost free of charge, greatly increases the overall budgetary expenditures of European countries. Only the leadership of Hungary is now pursuing a policy acting solely in the interests of their country, all other European countries are somehow forced to support NATO’s policy in Ukraine. In some countries, in particular in Turkey, voices are already heard in favor of leaving NATO.
The continued implementation by European countries of the economic sanctions they have imposed on Russia only worsens all macroeconomic and financial medium- and short-term forecasts. The German Reichstag is already talking about an impending gas crisis due to insufficient filling of gas storage facilities.
In the near future, European politicians will face a difficult choice – to continue supporting Ukraine, which is collapsing before our eyes and continuing to spend huge financial and commodity resources on it, or to abandon this insane policy and establish normal relations with Russia.
Time in this matter works for Russia. Every minute, every hour, the financial and economic situation of European countries is deteriorating, and the more time it takes for European politicians to understand this situation, the more difficult they will find themselves in.
In real terms, Europe must capitulate to Russia, and the sooner she does this, the more chances European countries will have to return to pre-war calm and prosperous life. The continuation of the insane policy of confrontation with Russia will put the countries of Europe already on the brink of physical survival, and not all European countries will be able to get out of this critical situation into which they have driven themselves. Russia, for which most of the countries of Europe have become unfriendly countries, must adhere to the policy of “Falling – push” in their regard, and at the right time to introduce substantially painful retaliatory sanctions and retaliatory measures against presumptuous European moseks. No deliveries of food, energy sources – gas, oil and oil products, metals, rare earth metals and fertilizers to Europe until a complete victory and until the complete end of the special operation in Ukraine – and then all these insignificant Euro-people and Euro-politicians will crawl on their knees to Moscow, to the Kremlin. And it’s not a fact that they will have to be received there as guests and “partners”, rather, as defeated ones.
Mikhail Osherov
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