Collapse on the EU Home Front 

The German military’s recklessness has been getting a lot of attention recently due to the leaked audio of German military officers casually discussing attacks on Russia.

You can draw a direct line from the foolishness of attacking Russia with a total of 100 Taurus missiles to the ongoing rapid economic decline at home. The incompetence evident in both continues to be on display as decisions in Berlin only make matters worse, and Germany’s insistence on austerity for the rest of Europe are helping to ensure the rest of the EU will be dragged further down as well.

The ramifications of such policies are likely to be substantial as Europe’s working class is increasingly opposed to the conflict with Russia and are becoming increasingly hostile to the EU, and in response elites are cracking down on democratic rights, threatening to ban parties and limiting speech.

The ineptitude – from Berlin to Brussels and across most European capitals – is so pervasive it’s enough to leave one wondering whether it’s intentional as part of some sort of targeted demolition with an ulterior motivel.

“Dramatically Bad” 

The economic growth forecast for Germany was recently slashed down to 0.2 percent in 2024, plunging from the previous projection of 1.3 percent. Germany’s economy minister Robert Habeck is now complaining about Germany’s elevated energy prices that are driving companies in Germany to move production out of the country. He recently said the country is performing “dramatically bad.” Habeck, from the Greens, has been economy minister since 2021.  And one doesn’t need to look much further than him and his team for why the situation is as it is.

Germany’s economic slump is now widely seen as structural rather than temporary, as the country is struggling with higher energy prices following the loss of cheap and reliable Russian energy. Habeck and the Greens were some of the staunchest supporters of the conflict with Russia and getting rid of Russian fossil fuels, as well as Germany’s nuclear power, so they must be ramping up clean energy, right?

Not exactly. According to a report released March 7 by the German Federal Court of Auditors. It found that the expansion of renewable energies and the electricity grid is way behind schedule, and that there isn’t enough generation capacity to meet demand.

Habeck, who is also the federal minister of climate action, dismissed the report, saying it “does not reflect reality.”

The reality is inflation continues to be problematic, the economy is contracting as industry shrinks, exports to China are declining and there is constant pressure from Atlanticists to self-impose a further reduction, living standards are declining, social spending is being scaled back in favor of more military spending, wealth inequality grows, and industry continues to leave the country.

Meanwhile, Berlin recently approved a 2024 subsidy plan worth 5.5 billion euros to help soften the blow of rising electricity prices. The government can’t do much more without continuing to take away from other German social spending. Germany’s Finance Minister Christian Lindner is opposed to any suspension of the country’s debt brake and instead wants to slash corporate tax rates, which would be financed with expenditure cuts.

Germany’s corporate tax rate is higher than global competitors, but there’s reason to believe lowering them while cutting public spending would not lead to economic growth and would likely make Germany’s economic situation even worse.

Economist Philip Heimberger, author of a 2022 study that shows there is little empirical evidence for positive growth effects from corporate tax cuts, believes Lindner’s plan is misguided:

Especially if government spending is cut elsewhere at the time of the corporate tax cut, weaker growth effects are to be expected. In view of the problems associated with complying with the debt brake and the resulting prospect of government spending cuts, caution is therefore required, especially as a corporate tax cut would lead to a (continued) decline in government revenue.

A loss of tax revenue in turn reduces the provision of public goods such as infrastructure and education. However, the quality of the location for companies and their business prospects are dependent on high-quality public goods.

For German companies to invest more again and for the economy to grow more strongly, the business case for investment must be right. The government would have to make it easier for decision-makers in companies to plan by combining a clear industrial policy strategy with public investment in order to attract further private investment. The turbulence within the federal government surrounding compliance with the debt brake and uncertainties as to whether even long-announced fiscal policy measures in favor of companies can be financed are counterproductive.

Germany’s corporate taxation is no longer competitive internationally, it is claimed. Positive effects from across-the-board profit tax cuts are mainly achieved, if at all, by companies relocating to Germany at the expense of other countries. Despite its current weak growth, Germany is Europe’s most powerful country both politically and economically. As such, its government should not promote a race-to-the-bottom in corporate taxation that does little for growth.

What does all this mean for Germans? For one, this year’s budget, which includes the highest military expenditure since the end of WWII (much of it for Ukraine) and massive cuts in the areas of healthcare, education, and social welfare, could be just a preview of what’s to come.

And it’s a model that is being forced on the rest of Europe.

Making a Bad Situation Worse 

Germany also continues to insist on stricter fiscal rules for Europe, which will likely only worsen the economic pain already being felt by millions across the bloc largely due to the economic war against Russia.

In February, a last-minute agreement between the European Commission and Parliament will force EU member states to slash debt ratios and deficits while maintaining investment in “strategic areas such as digital, green, social or defense.”

At the same time, according to Bloomberg, EU officials and investors are using the fiscal rules to push for an EU-wide bond program that would bring the investors bigtime profits while allowing the bloc to ramp up military spending without individual nations incurring more debt.

After years of using the escape clause in order to deal with the economic fallout of the pandemic, the return of fiscal rules in the form of the new “economic governance” framework might help the EU get its coveted war bonds, it will also mean more austerity. – especially for those nations with high public debt ratios, such as Italy, Spain and France.

Let’s not forget that the EU is pushing this despite its own polling of bloc citizens showing that nearly 80 percent favor stronger social policies and more social spending.

The Potential Consequences

The piling of crisis upon crisis – all of which reduce the standard of living of the majority of Europeans – has predictable consequences. A paper last year titled The Political Costs of Austerity details what’s already happening:

Fiscal consolidations lead to a significant increase in extreme parties’ vote share, lower voter turnout, and a rise in political fragmentation. We highlight the close relationship between detrimental economic developments and voters’ support for extreme parties by showing that austerity induces severe economic costs through lowering GDP, employment, private investment, and wages. Austerity-driven recessions amplify the political costs of economic downturns considerably by increasing distrust in the political environment.

Brussels has managed to keep a lid on anti-EU parties across the bloc despite their increasing vote share. The Chega Party in Portugal is just the latest “far-right” winner from voters’ disgruntlement with the erosion of their economic standing and democracy. Case in point, plans were immediately implemented to freeze Chega out of any coalition.

In Europe’s second-largest economy, the presidential election isn’t until 2027, but Marine Le Pen is already making herself more acceptable to the transatlantic permanent state:

While this tweet refers to Italian Prime Minister Giorgia Meloni’s abandonment of her and her party’s past positions on NATO and the EU, the case of Europe’s second largest industrial economy, Italy, is instructive in many other ways, as it is a harbinger of what’s to come for other EU nations like Germany. Three points there:

1. Italy is reeling from the energy crisis, but it has been reeling for more than two decades with declining living standards since its joining of the single currency:

Annual net income of the Italian household, which was €27,499 (at constant 2010 prices) in 1991, declined to €23,277 in 2016—a drop in median living standards of 15%. Mean net household income fell by €3,108 between 1991 and 2016 or by about 10%. Italy is the only major Eurozone country that, in the past 27 years, suffered not stagnation but decline.

2. Then the economic war against Russia made things worse as energy prices surged more than 50 percent in 2022 and have yet to decline. Inflation, real wages, and industrial activity are all heading in the wrong direction.

In January, an Italian court allowed energy companies to cut off gas supplies to steel company Acciaierie d’Italia (ADI), majority owned by multinational steel giant ArcelorMittal, over mounting debts.This is the company’s main plant, which is in the southern Italian city of Taranto and is one of the largest in Europe. It employs about 8,200 people and many other jobs depend on the plant.

The response from Italian and Brussels elites is always the same: more wage suppressions, more market-friendly reforms, more social spending cuts, and more privatization. It was only a few months ago that the New York-based private equity firm KKR, which includes former CIA director David Petraeus as a partner, reached a controversial agreement to buy the fixed-line network of Telecom Italia. Now the Italian daily La Repubblica is declaring that “Italy Is For Sale,” in which it describes plans for 20 billion euros worth of privatizations, including more of the state rail company Ferrovie dello Stato, Poste Italiane, Monte dei Paschi bank and energy giant Eni. The plan is reportedly necessitated by the country’s tax cuts. The roughly 100 billion euros Rome has burned through in order to address the energy crisis surely hasn’t helped either. And this was happening with the suspension of the EU debt brake.

3.  Now, according to Breugel, the new EU fiscal rules will for Italy translate into a structural primary balance requirement of over 4 percent of GDP. That will mean ongoing public service cuts and the privatization of just about whatever hasn’t been strip mined yet. And it will mean that Brussels’ neoliberal austerity policies will continue to increase the gap between rich and poor.

How does all the economic carnage translate at the political level? At the end of 2022, voters already went with the candidate (Meloni) who fashioned herself as an EU- and NATO-skeptic. She turned out to be neither.

Where do voters turn to now? As of now, one third of Italian voters rate the economy as their top concern, and most have nowhere to go:

This helps explain why the turnout in Italy’s 2022 election was the lowest since WWII. Similar low levels are being seen in France, Germany, and elsewhere. This is probably the way Ursula von der Leyen and the European Commission like it, but for how long can it last?

Working class Europeans are increasingly waking up to the fact that the EU is a project of class warfare on labor. Trust in EU institutions continues to decline while 66 percent of the EU working class feel their quality of life is getting worse.  In short, Brussels’ policies are creating a groundswell of opposition to the EU.

As is the case across much of Europe, support for the EU in Italy is already largely divided along class lines:

Recent survey evidence suggests that support for the euro has a clear income and class bias. The perception of having benefited from the euro grows with income and is highest among self-employed professionals and large employers, technical (semi-)professionals, and associate managers, while production and service workers and small business owners are much less likely to report that they have benefited from the euro. In brief, in Italy support for the euro is concentrated among the economically better off and, with regard to partisan choice, among voters of the centre-left. In turn, the more a person has benefited from the euro, the more likely she/he is to report that she/he would vote to remain in the euro in a hypothetical referendum. Importantly, the majority of Italian voters report that they have not benefited from the euro, which makes support for the single currency rather fragile.

While there is ongoing escalation against Russia and China abroad, so too we’re seeing escalation at home. While the likes of von der Leyen lecture countries on the dangers of electing anyone they consider a threat to what they call the “liberal consensus,” they increasingly use warnings of “tools,” threats to ban parties, crackdowns on speech to arrive at that consensus.

There is more pushback – whether farmers’ protests, political parties calling for new direction, or simply individuals or groups airing unwanted viewpoints. As of now, they are smeared as far right or as personifications of Russian propaganda, but at what point does the number of those being smeared reach critical mass?

Or to put it another way: As capital continues to gobble up the European welfare states and living standards decline, citizens are asked to sacrifice even more for the wealthy’s economic wars, which they are told are fights over democratic values. Meanwhile, those values are increasingly trampled at home in order to silence opposition to said economic wars. That does not seem like a sustainable model.

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  1. caucus99percenter

    A 16-year old schoolgirl is subjected to a very public visit and warning from the police for posting a video of the Smurfs and texting “Germany isn’t just a place, it’s my home”?

    In the name of tamping down “extremism,” the (pro-war, pro-migrant, anti-AfD) uniparty in government really is showing its own totalitarian overtones.

    1. Ignacio

      Important stuff caucus. The collapse Conor mentions is coming with a very significant regime change. We believed that our democracies were rock solid. No longer they are.

      1. vao

        Did you really believe that?

        Haven’t you considered how brutal and authoritarian were the methods applied by democracies (UK, France, Netherlands, Belgium) during their various colonial wars and decolonization processes post-WWII?

        Haven’t you considered how widespread the turn to authoritarian regimes, amongst democracies young and old, occurred from 1919 to 1940, and how brutal and authoritarian were the methods applied by democracies during the same period of history?

        1. JonnyJames

          And: The only country to use nuclear weapons (on civilians no less) was the good ol’ USA, a so-called democracy. We can then add the current funding of genocide, torture, murdering journalists, regime change, bombing entire countries into the Stone Age, brutal authoritarian policies, etc. all being done by so-called democracies.

          “Democracy” has become a cheap PR slogan. The US is clearly an oligarchy, and Elections Inc. are a cruel joke: just look at the so-called “choices”

          1. undercurrent

            The enemy of the overwhelming majority of people has always been the rich and the powerful. They use capitalism like mobs use fear; if you step out of line, they come to take you away. Charlton Heston, then the leader of the nra, famously said that if anyone wanted to take away his gun, they would have to pry it from his cold, dead hands. If the rich and powerful won’t give up their hold on the world, then it must literally be pried from their cold, dead hands. This is a revolutionary moment in history. Carpe diem.

          2. KLG

            Take your pick…

            “If voting changed anything, they’d make it illegal.
            – Emma Goldman (1869-1940).

            “If voting made a difference, they wouldn’t let us do it.”
            – Mark Twain (1835-1910).

    2. Feral Finster

      Why does this surprise you? If the rulers can get their way only by use of naked force, then that is what they will do.
      You don’t get to be a ruler by being a nice person.

  2. Michaelmas

    Conor G. : the return of fiscal rules in the form of the new “economic governance” framework might help the EU get its coveted war bonds, it will also mean more austerity. – especially for those nations with high public debt ratios, such as Italy, Spain and France.

    Between a totally self-created rock and a hard place. From the FT —

    Europe faces €56bn Nato defence spending hole: Many EU countries with biggest shortfalls have high levels of debt and budget deficits

    archived —

    original —

    ‘…many of the EU countries with the biggest shortfalls in Nato’s target for defence spending to hit 2 per cent of gross domestic product — including Italy, Spain and Belgium — also have among the highest levels of debt and budget deficits in Europe …

    ‘“Countries with high debt levels and high interest costs do not have much room to raise more debt, so the only real way to do it is to cut spending in other areas,” said Marcel Schlepper, an economist at Ifo….

    ‘…New EU fiscal rules applying from next year are set to usher in more budget cuts as countries seek to comply with a 3 per cent limit on annual deficits and a 60 per cent debt-to-GDP threshold. More than 10 countries in the bloc are expected to breach the annual deficit limit, which will probably result in sanctions by the European Commission….

    “’The Russian threat is not perceived as sufficiently dangerous to justify, say, welfare spending cuts to make room for weapons,” … Nato polling found low public support for increasing defence spending in some countries with the largest shortfalls. Only 28 per cent of Italians think their country should raise military spending, while 62 per cent want it to spend the same or less.

  3. Ignacio

    Habeck, who is also the federal minister of climate action, dismissed the report, saying it “does not reflect his reality.”

    He omitted that single word in italics in that declaration. The alternative world where these guys live on, their “reality”, at odds with everyone’s else.

    1. renard

      My favourite quote by Habeck is “We are encircled by reality” (“Wir sind von Wirklichkeit umzingelt”) which of course he meant as a complaint…

      1. AG

        ha! I didn´t know that one.
        Note: the peculiarity of the word “umzingeln” which in fact would be incorrect grammar in the context of the word “reality”.
        But as errors often do – it uncovers the truth much better than intended truth-telling.

        For non-German speakers: “umzingeln” means “surrounded/encircled” only in reference to numerable entitites i.e. humans. If it is an abstract term like “reality” the correct word would be “umgeben”.
        But using “umzingeln” in this context personifies the “evil” of the reality he complains about.

      2. gk

        Doesn’t beat “turning 360 degrees” (Baerbock; from last year’s warmongers conference in Munich).

    2. DanB

      I’m only spitballing here, but I reckon the concepts of Limits to Growth, Peak Oil, and degrowth (Postwashctumbewegungen) are significant here. My speculations is that in a deeply cynical, perverted, and debauched way the German Greens welcome economic decline as a noble and necessary process -as long as they stay on top. To hell with the working class and the poor.

      1. hk

        FWIW, that does align closely with Branko Milanovic’s critique of degtowth: basically, people like growth (for themselves) and they won’t give it up willingly. So “degrowth,” in actual politics, can only become “degrowth for you, righteousness for me” type shtick. I always got the sense that he and proponents of degrowth kept talking past each other.

      2. Dermot O Connor

        I’ve had the same thought about the German Greens – for them, war is great, as eveyr person killed reduces their ‘carbon footprint’ to zero. Don’t see any German Greens volunteering for early death, however. For them, it’s “Let’s you and him fight”.

        God, they’ve fallen far from the likes of Petra Kelly. And like the far right parties, I’d bet money that they’ve been totally infilatrated/compromised.

  4. The Rev Kev

    There is this idea that because the war in the Ukraine is going sideways, that this is leading to more censorship, repression, restriction on individuals and political parties, etc. but I do not believe that this is the case. I fully believe that this was the EU plan all along and the war gave them the “justification” for bringing in these measures much earlier than planned. The ideal for the EU is to have more control over their diverse populations than the Chinese do with theirs – but without the modern infrastructure and lack of poverty. The blowback of this war though is gutting many of the economies of the EU and even Germany is reckoned not to be able to meet their 2% NATO target in next year’s military budget.

    The big story may be those EU war bonds here. The guys at The Duran estimate that those bonds will have to be backed by some sort of collateral and the ideal solution – and which just happens to be a long term EU desire – is to have EU wide taxation. The EU has a population of some 450 million people so that is quite a tax base that has yet to be tapped and those EU war bonds may just the perfect excuse. So not only will the citizens of each EU country have to pay taxes to their respective governments, they will also have to pay a share to the EU on top of that.

    1. Feral Finster

      I would say that Ukraine was a pretext. That said, much of the dissent relates to the decline in EU standards of living, which can be laid at the feet of the war.

    2. spud

      agreed on taxation. you can only imagine whats going on in the minds in the whacky world of free traders.

      they will see free trade as a entitlement of the deplorable, and tax the Vat tax, because the vat tax helps enable free trade, which is a entitlement.

      to the pearl clutchers in the U.K. mourning brexit, i bet a lot of italians would like to trade places with you right now. and as bad as the U.K. is being run, its only one layer of government to over come, and they still have their own currency, vs. many layers of government in the E.U., and they lost their sovereign currency.

  5. DJG, Reality Czar

    As Conor notes, “The ineptitude – from Berlin to Brussels and across most European capitals – is so pervasive it’s enough to leave one wondering whether it’s intentional as part of some sort of targeted demolition with an ulterior goal.”

    It’s intentional. It is also designed to (1) destroy sovereignty and (2) destroy the labor unions. In Italy, the Fratelli d’Italia and Lega regularly send members to CPAC conferences in the United States, where they pick up seriously bad ideas like the flat tax. Meanwhile, it is widely acknowledged that the Partito Democratico was created and modeled after the U.S. Democratic Party so as to destroy the Italian left. Both of these tactics have succeeded–anything to avoid class-based political parties. It’s self-colonialism.

    Historically, the U S of A has meddled in Italian politics for years, largely out of a panic over the Partito Comunista Italiano. Italians often refer to such meddling–there is a whiff of Americans even in the murder of Aldo Moro. Now, Italians are referring to U.S. enforcement of its own interests in Ukraine, the EU, and Palestine. The Italians, at least, have noted who blew up the NordStream gas pipelines.

    All of this is complicated by the gradual collapse of the Lega, which had as its goal the creation of Padania, a state that would be like Austria, a nation in retirement, living off the fumes of Sachertorte.

    And the death of Berlusconi leaves Forza Italia in a swamp of its own making. What does one do with a party that was a fiefdom of a billionaire?

    Turnout in the recent Sardinian elections was high. Turnout in the recent elections in the Abruzzi was low. Low turnout in Italy is worrisome, but it is not clear what the causes are.

    And as for all of those pressures from the EU to cut the Italian budget and further wreck the social state–the EU may be in for some surprises. Only the newspapers that are mouthpieces of the alta borghesia, like La Stampa and Corriere della Sera, have fallen into line.

    1. Maxwell Johnston

      Many Italians are indeed no longer eating the dog food being served by their PMC masters. “Il sorpasso” (when Italy’s GDP briefly exceeded that of the UK in 1987) is a distant memory, and joining the Eurozone has only made things worse. But Italy has a serious labor movement (unions are still a powerful force), and strikes are becoming more common (as I’m sure you’ve noticed up north in Chocolate City). I’m not sure if many people outside Italy are aware that the unions here celebrated International Women’s Day nine days ago by conducting a nationwide general strike. So far the unions have been very polite by announcing their strikes in advance (beginning in 2022, I always check for strike info before planning any train travel). Will Italians revert to the bad old days of unannounced strikes and political violence (Red Brigades)? For time being, I doubt it. But everyone has a breaking point. “If something cannot go on forever, it will stop.” — Herbert Stein (1986)

      1. gk

        > the unions have been very polite by announcing their strikes in advance

        That’s the law. German trains these days are much worse than North Italian.

        1. playon

          A friend of mine who often travels around the EU said the same – the German trains at one time were very good, it’s sad to see them devolve.

          1. Scramjett

            YouTuber Not Just Bikes in his recent video (Dinosaurs and Trains) talked about this. He and his family booked a sleeper train from Brussels to Berlin but it was cancelled at the last minute. He might be oversimplifying the problems behind German trains, but he attributes the problem to devoting most of Germany’s transportation budget and resources to car and highway infrastructure while reducing investment into maintaining rail infrastructure (let alone a lack of investment to improve rail infrastructure).

            Based on what I’m reading here, I can’t help but wonder if the problem is not as simple, but is still a contributing factor.

    2. gk

      > Padania, a state that would be like Austria,

      Though presumably without the Communists, who currently rule in Graz, and just came a very close second in Salzburg. (Main issue is housing prices)

  6. Camelotkidd

    The EU sounds just like Boeing with its “targeted demolition with an ulterior goal.”

  7. Tom67

    I don´t know about the rest of Europe but here in Germany things might be approaching a breaking point. Allensbach, the German equivalent of Gallup has asked since WWII whether you can voice your opinion openly in Germany. For the first time in 70 years the majority says you can´t. The government is putting a lid on things but the presure is growing all the time. I know as a fact that in the 20% of the population that still works in industry there´s dissatisfaction like never before. Workers don´t buy the whole Russia rhetoric, the green agenda, the LGBTQ nonsense a.s.o. There´s no represantation at the factory floor level as the unions use the fig leaf of woke identity politics to hide their connivance with management. People feel mistreated and misrepresented. Add to that the small businessmen, the butchers, bakers and all the craftspeople, the truckers and the farmers and there is widespread dissatisfaction like never before.
    Unfortunately for the government they are boiling the frog at too great a speed. If and when people realise that actually the vast majority of the population is as disgusted as they are you might get a sudden outpouring of anger of a kind that has not been seen since the fall of the GDR. When that might happen is anybody´s guess. The government and the EU are constantly thightening the screws and it will be interesting to see to what lenghts they will go yet.

    1. caucus99percenter

      Even the state-financed ZDF TV network can’t avoid reporting growing unease:

      The domestic affairs minister, Social Democrat Nancy Faeser, is seen as instituting censorship and cracking down on individuals’ constitutionally-guaranteed freedom of opinion.

      The current president of the Office for the Defense of the Constitution, Christian Democrat Thomas Haldenwang — rather than, you know, actually defending the constitution — instead backs her up, arguing that some criticisms of government amount to “delegitimization of the state” and cannot be allowed.

      No wonder both legal experts and common people alike voice alarm that all this smacks of the old GDR ideology. It’s a revival of rule, East German style.

    2. Futility

      Interesting, but not what I see at Die Zeit or Spiegel. Any criticism of Israel, Russia/ energy policies is met with cries of “antisemitism” or Putin troll. Most of their readers seem pretty much on board with our government’s policy. I do notice, however, a slight uptick in comments critical of the mainstream which was virtually absent a few months ago.

  8. J_Schneider

    Natural gas price is back to 25 euros at TTF, CO2 price is going down, French nuclear power plants running and electricity prices down to 70 euros spot price. This is not that bad and some EU companies will get more competitive. What is really crippling businesses is idiotic regulation and energy insecurity (you don’t know what happens a month or two later, will you have energy or not). Regulation – have anybody heard about German Supply chain due diligence Act ? Managing human rights and environement risks in one’s supply chain. It is not about availability of components. Add to this acts like CABM and CSRD. Does anybody think that it makes sense to send questionairs to European suppliers whether they use child labor and asking to prove it? That’s what some companies do. And now imagine that a German Mittlestand company with 500 employees located in a village in Black Forest has to deal with all this nonsense. One can survive higher energy price but small companies can’t survive tsunami of crippling regulation. So they vote with their feet – let’s go to Asia.

    1. IMOR

      “have anybody heard about German Supply chain due diligence Act ?”
      That’s the entire new accounting process and complete second set of books which every business over a specified size must keep, intended to simultaneously account for CO2/carbon impact AND compliance with any and all EU/U.S./imperial sanctions at each step of the chain?

      1. Bugs

        Yep, and then there’s the upcoming harmonisation of the ESG Regulation. The noose will do nothing but tighten until all has been choked.

  9. Trees&Trunks

    Well the model described in the last paragraph is quite sustainable. What are the Europeans doing? Show me some signals about the Europeans not taking it anymore. The farmers? One reason why farmers’ have never run any successful revolutions is because they are only concerned about land or the production of their stuff. The solution to farmers’ protests is very simple, just give them a piece of land and, now, don’t touch the subsidies. Then they calm down. Or they are simply put down.

    Are they channelling any energy into self-sufficiency and other system-changing ideas? No. Also, the rest of the population don’t care. A couple of likes on Facebook or wherever doesn’t chance much, does it?

    Until proven otherwise, the model is very much sustainable.

      1. Don

        No fan of the Liberal Party of Canada and can’t even stand the sound of Trudeau voice, but the whole freezing bank accounts thing was an irrelevant nothingburger that happened to just about nobody and was all thawed out before anyone knew it happened. The so-called truckers convoy was a moronic, far right punk, anti-masker, Christian fundamentalist piece of theatre that had pretty much zero support amongst working people, and the hearty endorsement of the lumpen proletariat. The only thing stupider than the whole destructive show was the governments shambolic self-serving response to it. Generally, everyone with any brains was so pleased when it was crushed that they were almost ready to forgive the Liberals for dithering for weeks until they left themselves no other option.

        The “Freedom Convoy” crowd are the same people that fill the Globe and Mail comments sections with pro-Israel, pro-genocide, racist anti-Russian and anti Palestinian vitriol. If you have the stomach for it, and have access, read the comments on the Globe’s coverage of the Russian election today.

        1. ambrit

          The “account freeze” most certainly was not a “nothingburger.” It most definitely was a “proof of concept” test run for a seriously dangerous new tool for the State. If, as you aver, the ‘victims’ this time of the tactic were ‘deplorables’ etc. is of no utility outside of propaganda uses. The important fact here is that the tactic is viable, and can be used against anyone and everyone.
          Rights are either universal, or they are no rights at all.

          1. Don

            I would completely agree with you if the subsequent enquiry into the use of the Emergency Act (I think that’s what it is called — but am not certain, because it has never been used before) hadn’t determined that its use was neither justified nor appropriate. It will probably not be used again — until the revolution — and I doubt that frozen bank accounts will be top of mind under those circumstances. It was used, granted, inappropriately, because millions of dollars of funding were pouring in from the US. The bank accounts in question were not the bank accounts of participants, but the bank accounts of the far-right organizers. Regarding ‘deplorables’ I took it that the people HRC referred to as such were generally just plain working class people who were too savvy to buy what she was selling, and for them, it was a badge of honour (and note that therefore I would not and did not use her terminology). These were folks that were coughing and spitting on people who were wearing masks, people who were blockading hospital access, people who hold the belief that individual freedom trumps the common good, people who started a fire in a high-rise lobby because people in the building had told them to stop leaning on their air-horns all night and f-off, people who were physically and verbally assaulting ethnically Chinese Canadians on the west coast, including my spouse and members of our extended family, because she/they brought the f-ing “Chink” virus here.

            Canada currently is a mess, worse, I think, than the US, but these people are amongst the very worst of us and to characterize them otherwise is naive.

            1. Feral Finster

              So who was punished for this illegal and unjustified action? What redress were those affected entitled to? Of was this just “whoopsies!”?

    1. jsn

      Demographically speaking it’s a straight forward argument to make that the American, French and Russian revolutions were fought, to the extent they were fought, by farmers.

      Farmers may not have been the intellectual framers or political guides, though in the US case a number of the key Revolutionaries were in fact farmers, but farmers direct experience of the means of production, particularly their relationship with live stock, has make them sanguinary to revolution. They know how to do what needs to be done and aren’t squeamish about doing it.

      Once connected to an intelligent and focused counter-elite, farmers can make quite an impact. You may well be right, neo-liberalism may have succeeded in making collapse more likely than revolution, but the ferment is getting pretty interesting: the more you look for the more you find. Wine or vinegar remains to be seen.

  10. ISL

    Interestingly, the increase is military spending is likely to lead to a decrease in military readiness, as the US gargantuan military spending (and Europe will buy its battle failure proven weapons from the US). This mismatch increases the likelihood of a mistake as MICC-owned politicians pretend money well spent was not thrown off a pier (into a wealthy pocket) in going to a Euro-war somewhere – probably north Africa if the shiny allure of invading Russia again is avoided in the next year (nothing improves the economic outlet like hypersonic bombardment).

    1. digi_owl

      Because it is far too easy to spend a lot on a few choice items, like say nuke capable F-35s rather than rifles, bullets and uniforms for the grunts in the mud.

      Norway just announced it will meet its 2% commitment this year. Likely it will involve ordering up new artillery and such that has been on the back burner for 20 years.

      It is all an accounting sleight of hand, as the Norwegian army is at a tenth of what was during the cold war, the air force lack technicians to maintain the fancy new F-35s, and for years the navy has used “mall cops” at the gates.

      You do not correct that kind of rot with a few extra zeroes added to the spreadsheet.

    2. chris

      You’re right. The big con the US has bought into from the MICC is that the volume of spending correlates to both quantity and quality of the weapons. In the US at least, it means neither. I would expect the same to occur with the EU if it attempts to meet its commitments for defense spending.

      But really, I want to understand who it is that the US, the EU, and NATO, think they’re fighting. Is it Russia? Is it China? Is the inexorable flow of time leading to the decay of the western empire? Lately there’s been too much evidence that none of those are the targets. The real enemy of our governments is the people. Which is just bonkers. But then you have people like Vicky Nuland and others who seem to earnestly believe that if they weren’t in control the awfulness of the peasant class would overwhelm all that is good in the US and the world. So, crazy or not, these fools are sincere.

  11. Skip Intro

    I didn’t see any mention of the Yemeni sanctions on genocide-supporting nations’ shipping in the Red Sea and environs. This ‘transitory’ cause of inflation still seems to be escalating. I expect the increased shipping times and costs hit Europe harder than anyone.
    Similarly, the rush to censor information coming from Gaza, and clamp down on opposition to Western/Israeli occupation policies is also leading attacks on TikTok, and other power grabs in the self-styled democracies of the west.
    Between Ukraine and Israel, WW3 is really taking the EU down.

  12. ilsm

    What “order of battle” does 2% buy?

    Is it the necessary order of battle? Is it enough?

    What happens when the adversary does not worry about F-35’s?

    EU needs a military industry complex to make these issues defer to profit like in USA.

  13. Feral Finster

    “Why, of course, the people don’t want war,” Goering shrugged. “Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece. Naturally, the common people don’t want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship.”

    “There is one difference,” I pointed out. “In a democracy the people have some say in the matter through their elected representatives, and in the United States only Congress can declare wars.”

    “Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.”

  14. Chris Cosmos

    History has proven and current events continue to prove that “the people” throughout the West have little interest in agency. Democracy as we understand it is largely finished not because the ruling class is nasty and evil but because “the people” want, deeply, to be ruled and not rule because democracy has to be based on communities not individuals. “The people” have chosen hedonism, entertainment, gaming, porn, drugs (particularly in the USA) over citizenship and community. Thus the West continues, as usual, to blunder from one crisis to the other. The governments simply lie, cheat, and steal to aid its sponsors/clients in increasingly obvious ways.

    For example, Ukraine has always been know (since its “independence” that it is the most corrupt country in Europe yet Ukrainians die for this corrupt regime because the citizens have been given a sense of meaning and have shown as Victor Frankl wrote that meaning, not food, is the most important aspect of life. The propaganda organs, i.e., the mainstream (entertainment and news) media throughout the West supply the peasants with meaning not unlike the Church did when it was a dominant force in Europe they will believe even the most ridiculous lies. In the USA it is obvious that all the forever wars were supported by most people. The elites took note of this reality and did not care to even add more that a teaspoon of truth and sometimes not even that in more recent years (Russiagate anyone?) because they know people will swallow any lie willingly and gratefully so that some semblance of a coherent narrative can be maintained. So we must repress opinions not in the narrative to “maintain our democracy.”

    My impression of modern Europeans who, unlike USA-ans should know better, is that they too have decided to ditch Enlightenment values and returned to a fascist mind set (i.e., hatred of the “other” and worship of brute force). Ironically it is mainly in the USA that there are lare parts of the population who are opposed to the permanent State and their numbers are increasing on both the cultural “right” and “left.”

    In my lifetime I have never seen the level of mendacity that I’m witnessing today by the powers that be. Every major institution and industry in the USA is more corrupt everyday and the same is true of Europe. The question now is now are we going to face the truth that democracy is dead without hope of resurrection or are we going to maintain the lies to be comfortable pschologically? It’s all up to the oligarchs and autocrats in the world we not only don’t have agency we don’t f***ing want it.

    1. JonnyJames

      Yes, and one question that often comes up: why do European politicians and govts. seem to serve the interests of the US/NATO rather than the national interest, or the “will of the majority” of the so-called electorate?
      Are the interests of the domestic oligarchy convergent with the interests of US imperialism? Or are they coerced, and/or bribed? Or maybe it is a combination of several of these?.

      1. vao

        Two explanations come to my mind:

        1) It is much, much easier to be a comprador for some foreign power than to be a genuine statesman/stateswoman.

        The current crop of European politicians are pampered PMC members who never truly worked, never studied hard (how many have been embroiled in scandals about plagiarizing their PhD or faking their University titles?), never lived through hardships. For such people, being given directives and the roadmap to follow is more convenient than having to figure out themselves what to do — and making their way against internal and powerful foreign opposition.

        Hence: natural inclination to become compradores.

        2) “To understand the man you have to know what was happening in the world when he was twenty.”

        Most of the most virulent atlantists in European governments can be divided in two categories:

        2.a) They were 20 when the USSR-led Eastern block had collapsed, the USA had become the hyperpower, NATO was moving against Yugoslavia, and the major setbacks/quagmires of Afghanistan and Iraq had not yet taken place: e.g. Macron, Meloni, Kallas, Frederiksen (all born 1977), Sanchez (1972), Habeck, Orpo (both 1969), Michel, Silina, (both 1975), Sunak, Baerbock (both 1980).

        2.b) They were 20 at the height of the Cold War, when the USSR seemed to be on a roll in Africa, moved into Afghanistan, with Iran upturning the cart in the Middle East, and the USA seemingly the only and last ally buttressing Europe against a growing set of enemies: e.g. v.d.Leyen, Scholz (both 1958), Tusk (1957), Orban, Sikorski, Kristersson (all 1963).

        Hence: the USA tropism.

        My two sapèques.

        1. JonnyJames

          Ah yes, the psycho-social element of the political leadership. Thanks for adding that.

          1. vao

            I would like to add that, regarding your question: “Or are they coerced, and/or bribed?” I strongly suspect the answer is “both” in the case of Olaf Scholz.

            People have been finding so many corpses in his cupboards:

            1) When mayor of Hamburg, he intervened in a process so that the Warburg-Bank would get scot free from the impact of the “cum-ex” tax fraud scandal, in which it was involved, and that resulted in defrauding Hamburg of tens of millions of € of taxes.

            2) When mayor of Hamburg, he made sure the Elbtower mega-project was awarded to René Benko (the Austrian real-estate moghul whose all empire collapsed under debt and shady accounting recently) rather than to better placed submissions.

            3) When in the board of the RAG-Stiftung, he made sure that organism invested in the subsidiaries of René Benko.

            4) As a minister of finance under Angela Merkel, his ministry worked to cover Wirecard, just as incontrovertible evidence of massive fraud committed by that firm was piling up and becoming public.

            It therefore appears that Olaf Scholz must be eminently corruptible, and that, as a consequence, there must be a considerable amount of kompromat about him.

  15. CA

    Arnaud Bertrand @RnaudBertrand

    Fascinating: now we know what the French think of Macron’s new warmongering attitude vis à vis Russia… and they absolutely hate it! *

    IFOP, France’s leading polling company, sees Macron’s popularity go down to an appalling 28% and comments: “The very strong discontent towards the president is mainly focused on Ukraine and the issue of sending Western troops on the ground”.

    Who knew that calling for France to go to war with Russia would be so unpopular?

    Anyhow, we therefore have yet another instance of a President of a Western liberal “democracy” going in the total opposite direction to the will of his people, which is almost becoming synonymous with liberal “democracy” at this stage…

    * La popularité d’Attal et de Macron en baisse, d’après des enquêtes

    5:47 AM · Mar 17, 2024

    1. JonnyJames

      Yeah, Macron’s pathetic warmongering is ill-suited. Maybe he fancies himself as a new Napoleon figure, or is he just pandering to the Anglo-Saxons?

    2. CA

      There is of course a choice for France, and that is partnering with China:

      ShanghaiPanda @thinking_panda

      President Xi told a story to President Macron:

      Chinese ancient musicians Yu Boya and Zhong Ziqi’s friendship was strengthened by music. Boya played a piece of music that only Ziqi could understand, demonstrating that true friendship requires mutual understanding and appreciation.

      11:56 AM · Apr 7, 2023

  16. Irrational

    Thanks for this piece, Conor, and some intriguing links.
    I note some of the commenters quote worsening opinion polls in Germany or France. However, there really is nowhere to channel a protest vote: Meloni in power is towing the line, Le Pen is heading down that path. In the Netherlands and Germany, Wilders’ party and AFD are mostly successfully ring-fenced and Germany is toying with an AfD ban. So the polls can continue worsening, but frustration will likely be pent up until the lid comes off with a bang. When that will be is anyone’s guess, but it won’t be pretty.
    Just one small quibble: Taranto is possibly ADI’s biggest plant, but I doubt it is Arcelor’s largest. It is – per Wikipedia – the largest Arcelor plant in Italy.

    1. Feral Finster

      Of course. For that matter, Trump and Zelenskii both were protest votes, but once in office, both were quickly housebroken.

  17. Mikel

    “It found that the expansion of renewable energies and the electricity grid is way behind schedule, and that there isn’t enough generation capacity to meet demand..”

    And hilariously it’s “priced in” some of the market shenanigans that the world is going to have infrastructure that is meticulously maintained and fresh water replenished at a fast enough rate for all of its uses in various manufacturing processes to promote financial growth and its use as a basic element of survival for masses of people.

  18. Sub-Boreal

    When I saw “Breugel” cited above, I immediately thought of this!

    This interview on ““Liberal Blindspots” is relevant to this discussion. Some excerpts:

    Why is it so hard to stitch together a cross-class coalition for climate policy? One part of the answer may be that, for generations, electorates have been sold a political vision of modernity that is centered on the carbon economy. Legitimizing decarbonization with powerful electoral mandates to move sclerotic parliaments will require political leaders to persuade voters not just of its necessity, but also its desirability. It can’t just be a recipe for pain and sacrifice. The investment-based programs will have to differ from country to country. Worryingly, this is a task in which leaders in Europe and beyond are coming up drastically short.

    Fossil energy provides individuals with a great deal of independence from other people. Fossil fuels give individuals the ability to make choices and buy items without relying on others. One doesn’t have to work as part of a group to hunt for food each day. Instead I can go on my own in my car down to the supermarket and buy what I want. That is a lot easier than having to work with my neighbors to build a different world. And one’s consumption can be used as proof of one’s status. So fossil fuel-enabled individualism in the West is seen as sacrosanct, as it enables freedom from constraints of social obligations.

    It is very difficult to bring about climate action in a world that prioritizes individuals and in which we are so alienated from each other. Technology is intimately related to markets; one can define it as the practical application of science in the service of markets. I argue, much like the sociologist and philosopher Jacques Ellul, that technology changes culture, and the introduction of new technologies hinders the emergence of other ways of thinking and acting on climate change.

  19. sausage factory

    Well, if youve been following the WEF for the last 4 or 5 years you already know what that ‘ulterior motive’ is. Once again we have the ‘conspiracy theory’ becoming conspiracy fact. The likely contrinued impacts of the Wests defeat in Ukraine will limit the WEFs desires to the west which will become a degrowth economy (for the many of course, not for the few) The world will grow and expand but the west will end up as some poverty ridden third world authoritarian enclave where the proles are told to ‘eat ze bugs’ and be trapped by facial recognition and social credit in their 15 minute Cities. All that happens now and the swift slide into authoritariansm, legally and societally is preparation for this WEF paradise..

  20. Mikel

    “Germany’s insistence on austerity for the rest of Europe are helping to ensure the rest of the EU will be dragged further down as well…”

    People were pointing that out in many different debates from what happened to Greece to Brexit (where they were often impugned in the media for just pointing it out.)

  21. Mikel

    “…The ineptitude – from Berlin to Brussels and across most European capitals – is so pervasive it’s enough to leave one wondering whether it’s intentional as part of some sort of targeted demolition with an ulterior motivel…”

    What is there to wonder about when this is the case:

    “…The response from Italian and Brussels elites is always the same: more wage suppressions, more market-friendly reforms, more social spending cuts, and more privatization. It was only a few months ago that the New York-based private equity firm KKR, which includes former CIA director David Petraeus as a partner, reached a controversial agreement to buy the fixed-line network of Telecom Italia. Now the Italian daily La Repubblica is declaring that “Italy Is For Sale,” in which it describes plans for 20 billion euros worth of privatizations, including more of the state rail company Ferrovie dello Stato, Poste Italiane, Monte dei Paschi bank and energy giant Eni. The plan is reportedly necessitated by the country’s tax cuts. The roughly 100 billion euros Rome has burned through in order to address the energy crisis surely hasn’t helped either. And this was happening with the suspension of the EU debt brake….”

  22. Susan the other

    Didn’t KKR used to be a big military logistics company that provided all sorts of infrastructure for the US military all around the globe? So now it’s billed as a PE company investing in Italy by buying up Telecom Italia? A “hardline” network. That’s curious. And (gag me) David Petraeus is a KKR partner? What exactly qualifies someone as a PE fund partner? Do hardline networks suffer outages from satellites like internet providers? Well, nobody is better at corporate raiding than US PE but this sounds like something new – PE taking over an SOE? I wonder how long it will take the French to sell out. Sounds tragic.

  23. Rubicon

    We have Italian friends who live in Italy. They explain the reason WHY people don’t vote anymore: it’s because all politicians don’t represent Italian citizens. They represent the financial interests of those who are holding Italy captive.

    As for the bedlam we see in the EU, on the part of Germans, and others, it’s because all W. European countries are OWNED by the US Financial/Military Hegemon & the EU wealthy who are ALL in league with the US Financial Empire.

    Go back and read or listen to Dr. Michael Hudson’s take on what has happened to the EU structure. He explains the behavior of these folks – because their Master is the US Financial Empire.

    It’s as simple as that.

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