If labour discontent over rising food and fuel prices across Europe looks bad today, wait for the winter months. It could turn really ugly. Alarm bells are already ringing across Europe with Germany leading the list of countries that could suffer the most with declining industrial output as major industries teeter on the verge of collapse, and shut off of gas supplies to homes and cold showers for people.
Riots cannot be ruled out in many European countries with unpredictable consequences. Even the usually sedate New York Times carried the headline: “Britain gears up for summer of labour discontent.” Wait for the cold, damp winter months!
Britain, dubbed the sick man of Europe, is faced with a leadership crisis that is the direct result of massive inflation that hit 9.1 per cent in May. It has since risen further. The Governor of the Bank of England Andrew Bailey admitted last month that the country is facing the biggest economic contraction in 300 years.
Railway workers including train drivers, school teachers, hospital staff and even lawyers are out in protest demanding higher wages. There is looming threat of a general strike across Britain. This is not surprising given that 20 percent of the population is short of basic foods and fuel. While Shell made a whopping £10 billion profit in the three-month period from April to June, ordinary people were hit with huge gas and fuel cost increases.
When asked about the company’s soaring profits amid punishingly high bills and skyrocketing inflation faced by households, Shell’s Chief Executive Ben van Beurden was dismissive. He said the company could not “perform miracles”. It could slash prices to provide some relief to the already suffering masses. That, however, would go against the holy grail of maximizing profits regardless of how much suffering it inflicts on ordinary people.
Other countries are also facing the threat of labour unrest including Italy, France, Slovakia and Finland, again the result of rising food and fuel prices. Some European countries, such as Hungary, Spain, Estonia, Greece and Poland have sought exemptions from European restrictions on gas imports from Russia and are working to strike their own separate deals.
The situation has arisen as a direct result of US-led sanctions against Russia over its invasion of Ukraine. While American warlords sit across the pond watching Ukraine being pulverized, they insist that sanctions are hurting Russia. They are not. High oil and gas prices have brought windfall profits to Russia, surpassing its earnings from those before the war on Ukraine started. Moscow has also demanded payments in rubles, resulting in the Russian currency soaring to new heights against the US dollar.
American weapons manufacturers love wars. They are salivating at the prospects of selling more weapons to Ukraine. More than $50 billion worth of weapons have been delivered to Kiev since Russia launched what it calls a “special military operation” on February 24, 2022. While Ukraine has no money to pay for them, America is pushing Kiev to continue fighting. Washington knows it can secure payment in the form of Ukrainian assets—minerals and other commodities—once the war ends.
What Ukraine might look like after the fighting stops is uncertain. Russia has expanded its war aims and has threatened to continue until it has taken over large swathes of Ukrainian territory beyond the Donbass region that it had declared as its initial war aim.
Far from hurting Russia, sanctions have devastated the economies of most European countries. This is because they are dependent on Russian oil and gas. Germany, the leading industrial power in Europe, is most severely affected because it imports more than 40 per cent of its gas from Russia. Both the IMF and Rabobank analyses paint a bleak picture of German economic outlook. Rabobank analysis predicts “Gas shortages will make a German recession inevitable.”
As a result of reduction in Russian gas flow, German cities have been forced to turn off lights on official buildings at night to save energy. Hanover became the first German city to shut off lights. Berlin, the capital city, Munich and Lower Saxony followed suit. With longer summer days, this can be tolerable but when winter approaches the situation would become grim.
While the European Commission asked member states last month to make plans in the event of a complete gas cut off from Russia, this is easier said than done. There are no alternative sources of oil and gas available for European countries immediately to make up the shortfall. Even in the medium term, this is not possible because of lack of infrastructure.
With European populations starving and freezing this coming winter, it is not inconceivable that there might be a flood of European refugees fleeing across the English Channel and the Mediterranean to appear on the shores of Middle Eastern countries. If that were to happens, one thing is certain. European refugees will be treated far more humanely than the treatment western regimes have meted out to refugees fleeing wars in West Asia and Africa.
Welcome to the dawn of the new world order!