EU in a Shambles as Economic Tsunami Approaches
Among the narratives most used by western war propaganda, in addition to “Kiev is winning the war”, is praise for “Europe’s extraordinary cohesion”. Reality demolishes both of them. The truth is that the EU has never been so disunited. Conflicts among member states on sanctions, EU enlargement and NATO have escalated, while the underlying economic, social and political situation is about to explode.
The inflationary dynamic hitting western economies is the driving force of the expected tsunami. The EU Commission has revised “growth” estimates to 2.7% on average this year, with a 6.1% inflation rate. Which means real growth is estimated at minus 3.4%. But those estimates will soon be reviewed again, judging by the figures on producer price inflation for the month of April in Germany: +34%. This will inevitably be transferred to consumer prices, at the latest in Autumn. Which means double digit inflation.
German political scientist Andreas Zick of the Institute for Interdisciplinary Research on Conflict and Violence at Bielefeld University has warned that “inflation is already having the effect” of increasing mistrust in politics, as reflected in the abysmal voter turnout at the recent regional elections. “Cohesion is crumbling, precisely because it is based on prosperity and economic justice,” he notes.
And it will collapse further, as the EU attempts to stem inflation with wrong-headed measures. Instead of eliminating the root of the problem by cutting liquidity to the speculative bubble, Brussels is increasing economic injustice. An example is the pressure on the Italian government to implement “reforms” in the form of conditionalities to the so-called Recovery Fund money, which include include liberalization of state property concessions and an update of the land registry, in order to raise taxation on home property.
“This is the typical way in which the EU makes itself hated”, former Italian Finance Minister Giulio Tremonti commented in a television interview. The EU is in a “devastated” state, he said. One example: “Illustrious statesmen go to the European Parliament [Draghi, ed.] and say, in front of a half-empty room; let us change the unanimity rule. Fourteen member states say immediately: No, let us keep the unanimity rule.”
In the same vein, the Commission says that they will put Kiev’s accession demand on a fast track. The next day, members of the French government say the normal procedure must be followed, which takes years. As for the EU policy on sanctions, it has already collapsed. The sixth package, which was supposed to be approved May 18, is still up in the air because of Hungary’s opposition to an oil embargo. Moreover, the veto on payment of Russian gas in rubles is being ignored by all major purchasers.
While the stalemate in the EU governance is good news, insofar as it prevents further self-damage, on the other side, nothing is being done to stop the hyperinflation tsunami and ongoing collapse of the physical economy, or to protect household incomes and prick the mega financial bubble with LaRouche’s “Four Laws”.