Europe’s Woes May Be The Solution To The Ukraine-Russia Conflict

Europe’s Woes May Be The Solution To The Ukraine-Russia Conflict

by Venu Gopal Narayanan - Oct 13, 2022 01:14 PM +05:30 IST
Europe’s Woes May Be The Solution To The Ukraine-Russia ConflictPrices are through the roof, inflation is out of control in Europe.
  • The war in Ukraine has cost Europe a lot and it will now have to learn to fend for itself.

    And the only way it can do that is by making peace with Russia.

From eight months ago, multiple writers at Swarajya began to repeatedly predict that America, Britain, and Europe’s proxy war with Russia, using Ukraine, would end only when dissonance in Europe raised its head (especially widespread, public disaffection with this senseless war).

That critical moment seems to be approaching at last.

Europe is now feeling the pinch of the crisis it triggered, and how. Prices are through the roof, inflation is out of control, fuel shortages are rampant, growth has been hit, and recessions are either looming or are already on.

With governments growing increasingly incapable of balancing budgets or taming inflation, their much-vaunted cradle-to-grave welfare system is under severe strain, and people are finding it simply impossible to make ends meet.

In Lithuania, food inflation has crossed 30 per cent. Pig farmers can’t afford feed grain for their hogs. Electricity prices are up 700 per cent. Farmers can’t afford to grow food because they can’t pay to power their greenhouses.

Demand has also been hit. Petras Čepkauskas of price-tracking service Pricer says: “Those with lower incomes [...] have long forgotten the taste of meat".

In Leipzig, Germany, hundreds marched through the city’s streets to protest against the misery they have to suffer because of their government’s decision to get actively involved in the Ukrainian conflict. “We can’t afford this war”, they chanted.

Fights are breaking out at petrol pumps in France because of fuel shortages. Their police cannot patrol the streets adequately because their cars do not have enough petrol.

The British aren’t quite there yet even though their economy is in rather a mess.

Sir Jeremy Fleming, head of one of their intelligence agencies, bravely declared that the Russian military was running out of arms, that their troops were exhausted, that they were making strategic mistakes, and, that the Ukrainians were making gains.

John Cleese couldn’t have scripted such surreal lines for a Monty Python skit even if he tried, because Sir Jeremy’s speech came less than a day after a massive Russian missile strike wrecked Ukraine’s electricity grid, reversed Ukrainian gains, and plunged large parts of the country into a cold, cold darkness.

The American establishment, too, appears to be inhabiting a separate space-time dimension. In a shocking demonstration of utter ignorance, a Yale professor named Jeffrey Sonnenfeld actually wrote in the Financial Times that Europe doesn’t need Russian gas.

There is very little one can say or do about such ridiculous articles by these academicians, except empathise with the plight of their students, and sigh at the Financial Times’ editorial skills.

The crux of the problem is that while sanctions have disrupted supplies of oil, gas and coal from Russia to Europe, the shortfall has not been covered up.

America led Europe by the nose to provoke a conflict in Ukraine, and to sanction Russia, on American President Joe Biden’s promise that America would replace Russia as Europe’s principal supplier of oil and gas. But that is just not happening.

Drilling activity in America is still muted, as a result of which, domestic hydrocarbon production has not ramped up to anywhere near requisite levels. This is particularly true of LNG exports.

Now, while America has increased LNG exports to Europe, total exports have not risen commensurately. Also, very strangely, the American Energy Information Agency (EIA) has not updated LNG export data on its website since July 2022. We wonder why...

The problem is that no Texan oilman worth his salt would dare over-invest at present, since he would be left holding the baby if other energy suppliers engaged in a price war.

This is compounded by European limitations in LNG storage (there is simply no alternative to piped gas). As a result, the supply gap is still grossly inadequate, and looks set to stay that way for some time to come.

This poses an existential crisis to Europe as winter approaches. They will not survive the next six months without cheap, adequate energy. Perhaps that is why the first real murmurs of disgruntlement have finally appeared in European political circles.

German Economy Minister Robert Habeck (ironically of the Greens party), grumbled that they were being ripped off by "friendly gas suppliers" who were charging "moon-prices". He meant Norway and America.

The Norwegians, who supply a significant volume of gas to Europe, aren’t complaining, because their gas revenues have gone up by 400 per cent in the past year!

The European Union’s foreign policy chief, Josep Borrell, expressed his concerns a lot more pointedly.

In a startling display of candour at the EU’s annual ambassadors’ conference this week, he said that Europe’s post-war prosperity was based on three factors: cheap energy from Russia, trade with China, and a comprehensive delegation of regional security to America.

Yet, alas, none of those conditions exist today. Borrell’s prescription, therefore, was that Europe learn to fend for itself.

How they expect to achieve that Utopian vision was left unclear, but he did say that Russia would continue to remain a neighbour long after the ongoing Ukrainian conflict had ended.

Jiří Šedivý, head of the European Defence Agency (EDA), an EU agency, was even more blunt.

He said he was advised by American colleagues to ‘Invest in your own strategic enablers, because there might come a time, and it could be pretty soon, when actually, we, the U.S., might be engaged fully elsewhere in Asia-Pacific and we will be simply unable to support you.’

The French, who have always sought to limit their dependence on America for their security and strategic needs, sense this better than any other country in Europe. They have, therefore, already initiated efforts to enhance energy supplies from Algeria.

President Emmanuel Macron was in Algiers in August 2022 for discussions, and the French Prime Minister was in Algiers last weekend along with half the French cabinet for a follow-up.

Algeria currently supplies slightly less than 10 per cent of France’s gas needs. The French want to double this volume.

The Americans are not too enthused because Algeria, apart from being a member of Organization of the Petroleum Exporting Countries (OPEC), is also a Russian ally. In addition, the Russians are all set to sign a multi-billion-dollar arms deal with Algeria.

But with fist-fights breaking out at petrol pumps, Paris is largely beyond caring, not least because Marine Le Pen, Macron’s principal opponent, has been voicing her antipathy to the Russia-Ukraine conflict in no uncertain terms for months now.

Perhaps that is why French Finance Minister Bruno La Marie didn’t mince words while speaking in the National Assembly on 10 October.

Stopping just short of calling the Americans opportunistic profiteers, he said it was unacceptable that America sells its gas to Europe at four times the domestic rate.

And for effect, he warned the house: “The conflict in Ukraine must not end in American economic domination and a weakening of the EU."

The point is that slowly, very slowly, a sinking realisation is growing across Europe, in step with a hitherto-unthinkable dissonance towards the trans-Atlantic alliance. Nation after nation is being forced to weigh the worth of following America’s lead.

As the cost of living becomes unbearable, and winter descends, they’re discovering that America can no longer guarantee Europe’s energy and military security.

Europe will have to learn to fend for itself. And the only way it can do that is by making peace with Russia.

The sad part is that it shouldn't have come to this, but better late than never; perhaps an end to this meaningless conflict will finally be found by Europe, albeit to America’s chagrin and her global diminution, in these needlessly self-inflicted woes.

Venu Gopal Narayanan is an independent upstream petroleum consultant who focuses on energy, geopolitics, current affairs and electoral arithmetic. He tweets at @ideorogue.
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