Anti-Russian sanctions are killing the European economy

Anti-Russian sanctions are killing the European economy

Sergey Savchuk

The Western press enthusiastically lists the sanctions imposed against Russia, predicting extremely difficult times for our economy, and some publications generally agreed that a guaranteed default awaits our country. Plunging deeper and deeper into their own dreams of the collapse of Russia, foreign publications for some reason do not bother to thoughtfully analyze the state of their own financial and industrial system. And there is something to see there.
Last Thursday, the German steel mill Lech-Stahlwerk in Meitingen announced a complete shutdown of production, as did the Spanish cement plant Portland Valderrivas Cementos. More than a thousand employees of the only steel plant in all of Bavaria and their Spanish counterparts from several cement factories have been sent on indefinite leave. The management of the companies has officially notified the authorities that the factories will not be able to resume production until the cost of electricity for industrial consumers falls below two hundred euros per megawatt.
The news of the day did not end there, because the German paper mill Delke-skamp Packagingwerke w-as also notified of the im-possibility to continue wo-rk. The owners sent a letter to the federal government asking them to resume normal electricity supplies as soon as possible and to revise the pricing policy for industrial consumers.
A few days earlier, the Norwegian company Yara, the world’s second largest producer of agricultural fertilizers, came out with a statement that due to record high prices for natural gas, which along the chain leads to equally record prices for electricity, two of its key enterprises in Italy and France are reducing output by up to 40 percent. Plants located in the Italian city of Ferrara and Le Havre, France, annually produce more than a million tons of ammonia and about nine hundred thousand tons of carbamide, which are used as fertilizers in the agro-industrial sector. To understand the depth of the problem, you need to remember that the same Yara at the turn of November-December last year already reduced the pace and scale of production, also by forty percent, and also due to unbearable energy prices. In fact, now we are talking about the likelihood of a complete shutdown of production.
Last week, the Italian trucking association Trasportounito announced an indefinite truckers’ strike. The reason, as you might guess, is also most directly related to the sanctions war unleashed against Russia. The cost of gasoline and diesel specifically in Italy has already exceeded two euros per liter, which puts the profitability of road freight transport under a very big question. The owners of transport companies face a simple choice: either work at a loss, or sharply raise prices for the transportation of goods, which will immediately lead to a decrease in the number of orders. Dead end. A real storm is approaching European countries that have barely got out from under the first wave of the energy crisis caused by the pandemic, which not everyone can survive. This is not a figure of speech or an exaggeration.
On March 9, a collective letter signed by representatives of all key sectors of European industry was sent to the European Commission. European Steel Association (EUROFER), European Cement Association (CEMBUREAU), European Associa-tion of the Ceramic Indus-try (Cerame-Unie), Assoc-iation of European Ferroa-lloy Manufacturers (EUR-OALLIAGES), Association of European Non-Ferrous Metals Producers (EURO-METAUX), European Me-tal and Mineral Mining As-sociation (EUROMINES ), the European Expanded Clay Association (EXCA) and the European Glass A-lliance (Glass Alliance Eur-ope) demand that Brussels take urgent measures to stabilize the energy market.
Industrialists warn that if the European Commission does not stop the rise in energy and electricity prices, this could lead to a total collapse of European industry and, as a result, an economic collapse. It is noteworthy that the letter specifically mentions alternative sources. Representatives of big business, unlike enthusiastic Western journalists and environmentalists, do not consider renewable energy sources reliable sources of energy and ask the government to provide an exhaustive explanation of how and to what extent natural gas, oil and coal will be purchased, including supplies from Russia.
We repeat once again, there is not a single letter of our fantasies here, only dry numbers of statistics.
The British press reports that the cost of futures for the supply of oil for April increased twenty times compared to the same period last year. Since the start of the special operation on the territory of Ukraine and the ensuing sanctions war against Russia, the price of natural gas on European exchanges has skyrocketed by 79 percent. A barrel of Brent oil is trading at $140, that is, in just two weeks, a barrel has risen in price by ten percent, coming close to the historical record of 2008, when a barrel was given $147. It is logical that if primary sources become more expensive, then the price of electricity cannot remain the same either. In Britain last week the cost of a megawatt-hour reached 345, and in Germany exceeded 220 euros.
Against the backdrop of prices flying to the zenith, European leaders have sharply lowered the degree of anti-Russian rhetoric. For example, Olaf Scholz said that Europe had exhausted all possibilities to impose new sanctions on Moscow, and Boris Johnson even admitted that no one had ever questioned the greatness of Russia and its people.
By the way, in relation to Britain there is one most interesting fact.
According to the British Daily Mail, exactly one month before the start of the Ukrainian special operation, the UK set a kind of historical record by spending 2.6 billion pounds on the purchase of Russian energy. £911.5m was purchased for large volumes of gasoline and diesel, another £32m was used to purchase thermal coal, metallurgical coke and coal briquettes, £590.4m for crude oil and £289.1m for Russian natural gas. gas.
We don’t know if Britain has its own sources of information in the Russian defense department, but the emergency and record-breaking purchases of energy resources from Russia, towards which London has taken a centuries-old extremely unfriendly position, look somehow very suspicious. However, as we can see, the creation of a safety resource cushion did not help either Britain or the EU countries. In an attempt to punish Russia, the alliance of Western countries, if not knocked out its own industry and economy, then sent them into a deep knockdown.

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