European Union is entering the twilight zone

The EU has started this year in deep crisis, where farmers are just the tip of the iceberg

The deindustrialisation process is gaining momentum in Europe. Enterprises are reducing their activities and looking towards Asia and America, where the investment conditions are more favourable. Consumer spending is falling, and the economy is entering a recession. Brussels’ policy is assessed by experts as a failure. What is next?

From the garden to the jungle

Last year was marked by fictitious economic growth in the EU, whose GDP rose by only 0.5 percent, which is a statistical error. The insignificant growth became possible due to the countries of the Iberian Peninsula — Spain (+0.6 percent) and Portugal (+0.8 percent), which are remote from the conflict in Ukraine. At the same time, Germany (–0.3 percent) and France (0) entered recession. 
According to the official data last year, consumer spending in Germany decreased by 0.8 percent, government spending fell by 1.7 percent for the first time in almost 20 years, while fixed asset investments dropped by 0.3 percent. German exports fell by 1.8 percent, and imports plummeted by 3 percent. The German manufacturing sector shrank its activity by 2 percent, including in the processing industry — by 0.4 percent. The total deficit of general government budgets in Germany amounted to 82.7 billion Euros.  
The EU’s ongoing collapse is due to the preposterous severance of ties with Russia and the sanctions war arranged by European bureaucrats — not only with Russia and its allies, but also with China. This is added by an increase in EU defence spending, indicating that the pillars, which once supported the miracle of the European garden, are being destroyed with the hands of the European elite. 

The global trend

The unfavourable conditions that Brussels has put the European economy in are hitting the entire industry. As noted by Eurostat, the industrial production volume in 27 EU countries last October fell by 0.5 percent on a monthly basis. The annual figures are even more impressive — a decrease of 5.5 percent. Ireland has become the record holder for deindustrialisation — minus 7 percent per month, and the staggering minus 34 percent in annual terms. This is due to changes in the activities of large multinational companies, such as Apple and Pfizer for example, which decided to limit their presence in the EU. Industrial production also declined in Slovakia (–13.1 percent) and Estonia (–11.5). They are followed by Luxembourg (–8.4 percent) and Lithuania (–8.2). There has been significant production shrinkage in Slovenia (–7.3 percent) and Romania (–7.1). 

Special attention is riveted on Germany — the EU’s economic driving force. Gunnar Groebler, CEO of the German steel conglomerate Salzgitter AG, stated the problem of ‘creeping deindustrialisation’ in Germany. In his opinion, the greatest threat looms over energy-intensive industries — primarily steel and chemical ones. This, in turn, can result in the loss along the entire value chain in Germany. Goebler’s words are confirmed by statistics — the industrial production volume dropped by 2.9 percent in December after a 0.1 percent decline in November.

Washington is rubbing its hands

Economic competitors such as China, India, the United States, Japan, and South Korea benefit from the fatal energy policy of the EU elites. Gas prices in Europe have skyrocketed to become nearly 6 times higher than the average cost over the past 10 years, and 4-5 times higher than current prices in the United States. 
The protectionist policy in the United States in its current form was started by Trump with his tariffs on aluminum and steel, and import duties. The Biden administration, in its turn, did not even think about abandoning it — on the contrary, it even deepened and expanded this trend, consistently adhering to the ‘Buy American’ slogan. 
Subsidies to the energy sector, which keep domestic American prices within reasonable limits, and the Inflation Reduction Act, which includes $369bn in investments to promote clean-energy programmes, are doing their job ― European production is lured to the United States. On top of that, the Biden administration is shifting the burden of financial and military assistance to the Kiev regime to Europe. 

Ritual sacrifices

The decrease in spare cash in the EU has led to a reduction in subsidies to agriculture. The fact is that small and medium-sized farmers play a more social than economic role for the European Union, creating and retaining jobs in the countryside and hence, mass employment. 
However, the EU has now begun to shrink from helping certain segments of agriculture. Another ideology is being promoted. It requires farmers to cultivate less land and use less intensive methods in order to curb harmful emissions. This means reducing agriculture and producing less food. 
This explains why farmers in the EU rebelled against the current policy of Brussels, which leads to imminent bankruptcy and redistribution of the agricultural market in favour of multinational companies that will quickly buy unprofitable farms for a song. 
The consequences of mass protests by farmers include not only the blockade of Ukraine borders, but also the blockade of huge logistics hubs. For example, farmers in some areas of Germany used tractors to block entry roads to highways. This, in particular, caused the shutdown of production at the Volkswagen factory in northwestern Germany. Furthermore, members of the union representing Germany’s train drivers are about to go on a warning strike across the country due to disputes with the Deutsche Bahn state-owned railway operator over working hours and wages. 

Growing dependence 

The current actions of the European elites are completely opposite to the original idea of the EU’s ‘strategic autonomy’, which became part of its Global Strategy doctrine of 2016. By the way, the document envisages strengthening the military–political and economic independence of the EU from NATO. In 2020, the European Parliament even began to use the concept of ‘strategic sovereignty’, focusing on the interaction of Brussels with the main centres of power — the United States, Russia and China.
However, there immediately arose contradictions between the desire for the EU autonomy and the Euro-Atlantic solidarity of Europeans and Americans. Despite the obvious crisis in Euro-Atlantic relations and the US aspiration to absorb Europe in pursuance of its interests, Brussels bureaucrats abandoned a balanced and independent foreign policy. 

The rating is going down

Failures both in the foreign arena and in domestic politics cannot but affect the growth of public discontent in Europe, which is especially important in light of the election campaign to the European Parliament and the national elections in nine EU countries this year. The most interesting ones are expected to be the regional elections in Germany, where the Alternative for Germany (AfD) right-wing opposition party has every chance of winning in the eastern lands; and the parliamentary elections in Austria and the Czech Republic, where Eurosceptics who seek to restore relations with Russia have great chances to lead the governments.
The European Parliament is also expecting changes. According to the Euractiv forecast, European bureaucrats in ruling parties, despite retaining the majority, will be seriously pushed back by Eurosceptics.  
The most intriguing part of the forecast is the fiasco predicted to the globalist forces of the Greens and the Liberals. Even though one should not expect that the elections to the European Parliament will drastically change the situation, the recorded year-over-year decline in the ratings and authority of the ruling elites increasingly demonstrates the intensification of the EU legitimacy crisis in the eyes of ordinary citizens.

By Piotr Petrovsky, political scientist