Sunday, October 2, 2022

EU economies are on their knees – Indian punchline

EU economies are on their knees - Indian punchlineRussian President Vladimir Putin (L), in a meeting with Defense Minister Sergei Shoigu, reveals the proposals of army commanders in Ukraine “For the development of offensive operations”, Moscow, July 4, 2022

At the White House on July 1, US President Joe Biden made a shocking disclosure that “the idea that we are going to be able to click a switch is not possible in the near future.”

US gas exporters have positioned themselves to fill the gap as Europe turns away from Russian imports. The FT recently reported that “US liquefied natural gas producers have announced a number of deals to boost exports as the industry makes up for the shortfall that has left Europe with a growing energy crisis.”

The deals are so lucrative that Chenier, a major US gas exporter, has made an investment decision to move forward with a project that will increase its capacity by more than 20 percent by the end of 2025, anticipating longer-term supply deals and the US. US producers of gas are reportedly running plants flat-out to increase supplies to the European Union over the coming decades.

The US has overtaken Russia for the first time as Europe’s top gas supplier. Although LNG from the US is sold to Europe at a much higher price than pipeline gas from Russia, EU countries have no choice.

With Russian supplies via the Nord Stream at only 40% capacity, and deliveries completely halted for annual maintenance on 11-21 July, the outlook for Russian gas supplies to Europe for the near term appears bleak. .

Germany warns of the risk that Nord Stream gas may not return at all after maintenance. At any rate, Russian supplies to Europe are at a record low and “set to remain constrained through the third quarter” according to S&P Global.

Germany is heading towards a major economic crisis. The head of the German Federation of Trade Unions has been quoted as saying over the weekend, “Gas constraints put entire industries in danger of collapsing forever – in particular, the chemical, glass-making and aluminum industries, which are major suppliers of are the major automotive sectors.” There is a possibility of huge unemployment. When Germany sneezes, of course, Europe gets a chill – not just in the Eurozone but in post-Brexit Britain as well.

Welcome to the “ban from hell” of the European Union. America literally put the Europeans in the Ukraine crisis. How many times did Foreign Minister Antony Blinken travel to Europe during those crucial months in the run-up to the Russian invasion of Ukraine to ensure that any meaningful talks with the Kremlin remained closed! And American energy companies today are making windfall profits by selling gas to Europeans. Wouldn’t Europeans have the common sense to realize that they had?

Now Biden has washed his hands off the gas crisis. He ruthlessly told a news conference in Madrid on June 30 that such a premium on oil prices “will continue for as long as it seems, so Russia can’t really beat Ukraine and overtake Ukraine.” An important, important situation for the world. Here we are. Why do we have NATO?”

Biden’s counterfactual narrative is that sanctions against Russia are eventually going to work and that a protracted war in Ukraine would be Russia’s undoing. The American narrative is that if you look under the hood of the Russian economy, it may not be resilient and resourceful enough to develop an entrepreneurial bunker spirit and adopt new business models to neutralize sanctions. Biden is convinced that the Russian economy is vulnerable to industrial mafia who are not very innovative and, therefore, do not have many options for Russia under Western sanctions.

Biden said in Madrid: “Look at the effect the war in Ukraine has had on Russia… they (the Russians) have lost 15 years of profit in terms of their economy… they can’t even – you You know, they’re going to — they’re going to have trouble keeping up with oil production because they don’t have the technology to do that. They need American technology. And they’re also going to have a problem in terms of their weapons systems and some of their military systems. They are in a similar situation. So they are paying a very, very heavy price for it.”

But even if it is, how does all this help the Europeans? On the other hand, President Putin’s strategic calculations regarding the war are pretty much on track. The Russian army made undeniable progress in establishing complete control over Luhansk. On Monday, Putin approved a proposal by army commanders to launch an “aggressive campaign”. Five months into the war, the Ukrainians are staring at defeat and the generals of the Russian army know it.

Russia did not stray into Ukraine without preparation. Obviously, it took precautionary measures to protect its economy before and after the war. And it enables the Russian economy to settle into the “new normal”. Washington’s options are quite limited in the circumstances. Basically, Western sanctions do not address the causes of Russian behavior, and therefore, they are doomed to fail to address the problem at hand.

To be sure, Putin has some nasty surprises in store for Biden as November’s midterm elections near. Biden ruthlessly believes that he controls all variables in the situation. Schadenfreude is never a rational basis for state-of-the-art.

Yesterday, the strategically important Kherson region bordering Crimea formed a new government with the First Deputy Prime Minister of Russia’s Kaliningrad Region leading his duties between the cabinet and Russian citizens. Now that the HIMARS multiple launch rocket system, contrary to Biden’s promise, is destroying Russian cities, expect some major Russian retaliation.

In addition to the Donbass, Russia’s offensive is being rerouted to include Kharkov and Odessa. Influential Kremlin politician and chairman of the Duma Vyacheslav Volodin said on Tuesday,

“Some people are asking what is our target and when will all this end. It will end when there is no shelling on our peaceful city and town. What they are doing is forcing our troops not to stop at the borders of Lugansk and Donetsk Republic (Donbass) because attacks (on Russian territories) are coming from Kharkov regions and other regions of Ukraine.

How long does Biden think Europeans will want to engage in a protracted proxy war with Russia? Bild reported on Sunday that 75% of German respondents saw the recent price hike as a heavy burden, while 50% said they felt their economic situation was getting worse; Every second German fears a heating shortage this coming winter due to short Russian gas supplies and rising inflation in the European Union.

Still, Biden says the war will last “as long as it takes” and that fuel shortages will continue “as long as it takes”. The European economy is expected to start contracting during the second half of 2022 and the slowdown could continue until at least the summer of 2023.

Analysts at the US investment bank, JPMorgan Chase, said last week that Russia could also raise the price of “stratospheric” oil if it used production cuts to retaliate. “The tightness of the global oil market is in Russia’s favour,” it said. Analysts wrote that if Russia cuts production by 5 million barrels a day, prices could more than triple to $380 a barrel.

Putin’s decree last week is ominous – the Kremlin is taking full control of the Sakhalin-2 oil and gas project in Russia’s Far East. State-owned Gazprom had a more than 50% A-share stake in the project and its foreign partners included Shell (27.5%), Mitsui (12.5%), and Mitsubishi (10%). The decree states that Gazprom will keep its majority stake, but foreign investors must ask the Russian government for a stake in the newly created firm within a month or be evicted. The government will decide whether to grant a request or not.

EU economies are on their knees - Indian punchlineAn aerial view of the liquefaction plant, part of the Sakhalin-2 liquefied natural gas project in Sakhalin, Russia, described as one of the world’s largest integrated oil and gas project.

This would further destabilize energy markets and put more pressure on the LNG market, and as a move to put more pressure on the West by concurrently restricting gas supplies in Europe and creating more demand for LNG in Asia Which can be seen will turn off the supply of current. going to Europe. Sakhalin-2 supplies approximately 4% of the global LNG market!

The only part of the American agenda that seems to be going well seems to be the untold part of it: the same Anglo-American objective that Lord Ismay once predicted as the rationale behind NATO’s existence – “to keep the Russians out.” For, the Americans in, and the Germans down.”

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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