June 12, 2024

Athens News

News in English from Greece

Our last summer before the “Russian winter”?

“The last summer of Europe before the Russian winter”. No, this is not a work of Chekhov or Tennessee Williams, it is Politico summed up in the headline the foreboding of many Europeans before the coming winter. Which we all hope will be less “historical” than experts predict.

Let’s enjoy the sun and the sea this summer, because we are waiting for the Russian winter, says Politico. The consequences of the war in Ukraine this coming winter will be felt throughout the European continent. Worries about inflation, an energy crisis and a recession are already there, and Putin appears ready to continue to use food, fuel and even fertilizer as “weapons” as the West arm Ukraine and impose sanctions on Russia.

“The wild Russian winter stopped Napoleon,” recalls the intellectual and analyst Ivan Krastev. “And in 1941 she stopped Hitler. Now an idea [Путина] is to make the winter wild within Europe.”

Governments are already under pressure from the massive fallout from inflation and the energy crisis, and as fighting continues in Ukraine, analysts predict the pressure will increase as voters get “poorer and colder.” The riots are already here, and at the height of summer they are combined with the rise of populism. After the problems that Macron faced in France after the results of parliamentary elections in June, it was Italy’s turn and a new government crisis that erupted and continues after the resignation of Prime Minister Mario Draghi.

“Summer without government unrest in Italy is impossible,” comments Bloomberg , who believes that if Mario Draghi leaves for good and the populists (Five Star Movement and the Northern League) who support his government (before or after the elections) gain the upper hand, there is a risk of Italy clashing with the European Central Bank and causing a crisis in the eurozone, which will be worse than the crisis caused by the Greek default. Italian bond yields are already rising, but investors held their breath, hoping that by next Wednesday a compromise would be reached and Draghi would stay.

At the same time, as indicated Bloomberg in another article, Europe is stalling aid to Ukraine over fears of domestic gas shortages. The Nord Stream 1 pipeline, which carries natural gas from Russia to Europe, has been closed for scheduled maintenance until July 21, and the countries of the Old Continent are already preparing for the fact that it may remain closed.

And, as the international agency notes, although Ursula von der Leyen promised Ukraine 9 billion euros of assistance in the form of loans that will be issued immediately, the Europeans have so far managed to agree on an amount of about 1 billion euros.

Politico adds to Europe’s tricky winter equation “a possible surge in refugees due to the global food crisis, heat and drought on Europe’s farmlands, the risk of new COVID infections and disruption to supply chains.” And it is reasonable to wonder how long Western governments will be able to maintain their unity and resolve.

Krastev believes that pressure from European citizens to stop the war in Ukraine will be much greater. And to what extent are European governments ready to resist Putin’s “economic onslaught”? The leverage in his hands is important, says Politico, recalling that Russia is a major exporter of food, natural gas, oil and fertilizers to Europe.

Analysts do not see either energy or food prices falling before the end of 2023. Well, the “winter” is predicted to be long. Already 12 countries EU experienced a partial or complete cessation of natural gas supplies. Germany is bracing for a “political nightmare,” Economics Minister Robert Habeck described the situation, while French Finance Minister Bruno Le Maire said Putin’s final shutdown of flows is “the most likely scenario.”

As Germany gears up for energy rationing, local authorities are dimming lights at night to save money and lowering the temperature of heated outdoor pools. At the same time, the government is considering a bailout package for energy giant Uniper, the country’s biggest natural gas importer, brought to its knees by Putin’s tap-off game.

And everyone is looking at liquefied natural gas (LNG) transportation as an alternative, entering into global competition ahead of winter. If Putin does indeed cut off all the flows, the first step would be to call on citizens to reduce consumption, with supply disruptions starting from sectors that do not produce essential goods, that is, primarily from sectors such as like the automotive industry. It is easy to understand what this will mean for the economies of countries such as Germany, France and Italy, which have built their wealth on Russian raw materials and energy resources.

As for food, agricultural prices have risen by 30% since Russia invaded Ukraine. While inflation for food and non-alcoholic beverages was 10% in May, according to EU market research, and higher fertilizer prices mean that agricultural production will decline (because farmers will use it less), and the situation is already causing concern among experts on about the possibility of food shortages due to low production. Europe, as a food exporter, is in a better position to deal with such a crisis than Africa and the Middle East, where governments are more dependent on grain imports from Ukraine and Russia.

The aforementioned scale of this great crisis is bringing the danger of a recession in Europe ever closer, and if the “Putin attack” continues (and it certainly will not end soon), Europeans will have to, Politico notes, “travel less, eat more economically and wear a second shirt at home instead of to turn on the radiator. The Russian winter is coming, and it may last for a long time…

Source link

Verified by MonsterInsights