Shock and awe: Europe froze in anticipation of Great Depression

Elena Karaeva

The cost of a cubic meter of gas sets new records, and a shortage of goods, including basic necessities, is beginning to be felt in European supermarkets and shops. Is the Great Depression Reaching Europe?

The events of recent months, including the pandemic, the uncontrolled migration of illegal immigrants, and, most importantly, the rise in prices that began in the summer, inevitably bring to mind the fall of 1929, when the West faced the hell of an economic crisis. Later, this terrible decade would be called the Great Depression, but at the moment when factories and plants were closed, people who lost their jobs were thrown out of their homes, and residents of New York, Paris and London stood in line for free soup, everyone was not up to metaphors.

Even now, the West has no time for metaphors – energy prices in Europe have just updated records of twenty years ago, the storage facilities where gas and oil are pumped before the start of the heating season are empty, the cherry on the cake – interruptions in the supply of food (primarily pasta, various types of wheat groats, well, sugar), as well as parts of building materials and even cars. The reason is not only that during the pandemic the supply chains were severed, and not only that this year’s grain harvest due to weather conditions was significantly lower than expected, but also in the management system of the global economy.

As it turned out, the decision-making Brussels bureaucrats overlooked the moment the demand for energy began in Asia, where the industry began to work with triple strength, and gas supplies went to China and South Korea. In July alone, the EU countries received half as much fuel and lubricants supplied by tankers as in the same period last year (then the European economy shrank by almost 10% due to a series of lockdowns). And they got less because the “Asian tigers” used to turn to suppliers and sellers.

The second point, and no less significant – having spent tens of billions on transferring the economy to “green rails”, including obtaining renewable energy (wind turbines and solar panels), European officials found that they had not taken into account such a factor as weather conditions: there was not enough wind as well as the number of sunny days to supply the capacity with the required amount of “green” energy carriers. And where there was a breakthrough in production, hydrocarbon fuel was also needed.

Thirdly, in France, some of the reactors at nuclear power plants have started maintenance, that is, the supplies have narrowed here as well.

One can argue for a long time about what to do in such circumstances, but the most sensible economists already say that this situation will persist for at least a year, or even several years. They also believe that a sharp rise in prices for almost everything cannot be avoided, and the high cost will “cover” everyone.

Indirectly, these words confirm the actions of the authorities of several European countries: in order to cushion the blow and the future impoverishment of the population, in Madrid they announce an increase in taxes on the profits of energy companies and on dividends that they intend to pay to shareholders, in Rome they report a reduction in taxes on individuals, and Paris announces on the payment of additional benefits to the poorest (and there are almost five million families in wealthy France) so that they could partially pay the bills for heating and hot water.

Another classic question in a crisis situation, which Euromonikers like to ask – who is to blame? And the answer to it is known in advance – it turns out that in a situation where Brussels and other European capitals turned out to be (not again, but again) intellectual impotent, there is “Russia’s responsibility.”

What exactly this time our country was “guilty of” before “the entire civilized world”, these characters, however, are also unable to formulate. The only answer that can be considered detailed came the day before from the Paris-based International Energy Agency. Local officials recommended that Russia increase gas supplies to EU countries.

How many screams, indignation, how much slop was poured, how many sanctions were imposed, how many baseless accusations were made – but when it really hit, when it got scared, when a real threat loomed, all this “civilized community” again turned to us for help. These people – and the current acute moment illustrates what is happening especially vividly – are not able to learn neither from others, nor from, let alone, their mistakes.

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