Why can’t Europe pull out of its self-imposed economic and social tailspin?

Why can’t Europe pull out of its self-imposed economic and social tailspin?

By: Rachel Marsden

PARIS — Europe is running out of time to save itself. Those of us here on the continent feel like we’re watching an entirely avoidable slow-motion train wreck, whose protagonists horrifically insist on blowing past every possible exit ramp en route to disaster.

The warnings keep rolling in one after the other. Numerous European officials from industry to government are sounding the alarm about the blowback of the EU’s insane decision to sanction its own gas supply from Russia in the clear absence of any readily available substitute. Apparently dictating to citizens the temperature to which they should heat or cool their businesses or homes just isn’t cutting it. Nor is bragging about taking increasingly shorter showers, as German economy minister Robert Habeck claims to have done. It’s all fun and games until people have to choose between eating and freezing — which is exactly what London Mayor Sadiq Khan warned about last weekend. “As we near the winter months, choosing between heating and eating is a fear and reality for many. The impact on people’s health will increase the pressure on our NHS after two pandemic years. The Govt must act now to protect people and the NHS,” Khan said, referring to a new report from British health care system leaders warning of a “humanitarian crisis” in the UK if people are faced with making dire choices about their basic needs amid skyrocketing inflation and energy costs.

Meanwhile, Swiss government officials are bracing for blackout (both planned and unplanned) and grid failure scenarios. “Imagine, you can no longer withdraw money at the ATM, you can no longer pay with the card in the store or refuel your tank at the gas station. Heating stops working. It’s cold. Streets go dark. It is conceivable that the population would rebel or that there would be looting,” Secretary General of the Energy Directors’ Conference, Jan Flückiger, told the Swiss newspaper, Blick.

The potential for social unrest was also raised by a spokesperson for the German interior ministry earlier this month. “We can assume that populists and extremists will again try to influence protests to their liking. Extremist actors and groups in Germany can lead to a growth in dangers if corresponding social crisis conditions allow for it,” Interior Ministry spokesperson, Britta Beylage-Haarmann, told Deutsche Welle.

Clearly, the framing of anyone resisting or denouncing this crisis imposed on citizens by their own governments as “populist” or “extremist” is underway. Meaning that pensioners who will have to choose between heating and eating will be considered radicals.

And if all that isn’t bad enough, the EU’s economic engine, Germany, is now running the risk of deindustrialization, according to experts — who are also warning of social unrest there, as a result. “Prices are placing a heavy burden on many energy-intensive companies competing internationally,” a spokesman for the world’s second-largest chemical producer, German-based Economic Industries, told Bloomberg.

The EU and the U.S. clearly miscalculated in assuming that Russia was going to be the big loser in the Ukraine conflict. Already long adept at contending with Western sanctions as one of the most sanctioned countries on Earth, French state TV ran a report recently in which one of its reporters in-country remarked that store shelves were stocked and that life seemed to go on as usual for Russians. The International Monetary Fund similarly reported last month that “the Russian central bank and the Russian policymakers have been able to stave off a banking panic or financial meltdown when the sanctions were first imposed," and referred to the high energy prices that are buoying the economy.

Russia isn’t short of trade partners, and has used this period as an opportunity to pivot away from the West with the decisiveness of someone who had been through a breakup and moved on, to deepen its cooperation with Asia and the global south. It had no problem adapting similarly to Western sanctions imposed on it in 2014, leveraging the opportunity to reduce its reliance on oil revenues. This was achieved by developing key domestic sectors like agriculture and high-tech production with cash from the country’s “rainy day” sovereign wealth funds, which had been set up with energy revenues by Russian President Vladimir Putin.

So the big loser in the Ukraine conflict isn’t going to be Russia, but Europe. Still, European officials seem uninterested in pulling out of their self-imposed tailspin. What the heck is wrong with European leaders that they can’t stop forcing unnecessary and unproductive hardship on their own citizens? Clearly their plan to bring down Russian President Vladimir Putin is a huge failure, but if they stay the course in their folly, they’re much more likely to end up regime changing themselves.