European Union: Energy Crisis Forces Reality Check
The perfect storm of hyperinflation, energy shortages, a resurgence of COVID and industrial layoffs is now starting to hit the EU. It could have been fully avoided, had governments: 1. prevented the ECB from bailing out the bankrupt financial system with hyperinflationary monetary expansion; 2. avoided the flight forward out of fossil fuels; 3. carried out at the very least a feasibility study before imposing suicidal sanctions against Russia.
Once Moscow decided it would not “turn the other cheek” and progressively reduced the gas flows, the bold Europeans began to chicken out. Thus, hours before the Nord Stream 1 pipeline was closed for maintenance on July 11, sanctions were lifted on the delivery of a gas turbine which had been blocked in Canada, adducing Gazprom to reduce its gas flows by 60%. Stanislav Mitrakhovich, an expert of the Russian National Energy Security Fund, commented that “The West had to admit that it had gotten caught up in its own sanctions. That it wanted to eat more than it could swallow.”
This, however, does not guarantee that Moscow will resume full delivery of supplies through Nord Stream 1 after the scheduled ten-day pause for maintenance, nor that, even if it does, Germany and other EU nations will mange to fill their gas reservoirs for next winter.
In constitutional systems, governments are elected to pursue the nation’s interests and the common good of their populations. In the current crisis, that means ensuring abundant and cheap energy for the economy and for households. EU governments, however, are bombarding the population with psy-war messages on the inevitable rationing of energy for heating and electricity in the coming months. Plans for cutting energy to large industrial customers are being drafted and announced; households are told to expect heavy increases in their bills; and plans are floated for “heated halls” to shelter the elderly and the poor who cannot afford heating at home.
In Germany, this horror scenario has already opened a crack in the government majority, which is rapidly losing popular support. The FDP, a coalition partner in Berlin, has demanded a reversal of earlier decisions to exit from nuclear power, proposing in particular to extend operation of the three remaining nuclear plants set to be taken off the network at the end of the year. The CDU has a similar demand, while the certification agency (Tüv-Sud) declared in addition to maintaining those three, another three that were deactivated last year, could be reactivated, even at high cost. Moreover, some politicians, such as leftist icon Sahra Wagenknecht, but also former Hamburg mayor Klaus von Donhanyi, have broken a taboo to demand that the Nord Stream 2 pipeline be opened to guarantee natural gas supplies to Germany.