Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Europe Page 3 of 17

Why Are the British Race Riots Happening?

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On August 6, 2024

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We’ll start with the proximate:

As mobs attempt to burn down hotels housing asylum seekers, don’t forget Nigel Farage led a campaign to publicise these hotels. He recorded himself turning up at a series of them in 2020 and asked his followers to identify more hotels, saying some residents “might be ISIS”.

Then let’s move backwards:

First there’s been a lot of anti-Muslim propaganda thru the years, including entire TV and movie eras where the most common villains.

Second is a sustained right wing campaign complaining about demographic replacement and stating that immigrants are more likely be criminals than natives.

Third is the fact that Britain has been bringing in massive numbers of immigrants when there isn’t enough housing, driving up prices and leading to homelessness.

Fourth is that the the UK has been in decline for over forty years. A lot of people are hurting. There aren’t enough good jobs, yet somehow the government is allowing in record numbers of immigrants.

When I was young I said to my father that I didn’t see a lot of racism. He, a child of the Great Depression, replied, “wait till times are bad.”

The “other”, the immigrant, is always an easy target. The actual villains are the UK’s ruling class and if violence is the method then the correct response would be to Bastille them, but people are rarely capable of understanding that their most profound enemies are those who rule them. Putin is not a significant danger to Americans or Brits: their own politicians and corporate leaders are responsible for their poverty, increasing death rates, sickness and homelessness.

If you want a good country again, figure out a way to replace your leadership class wholesale. Nothing else will work, certainly not burning hotels with powerless immigrants in them. That’s pathetic and stupid, on top of being immoral.

Be better and be smarter.

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The Left’s “Victory” In France

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On July 8, 2024

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The left coalition has won the most seats in France, but failed to get a majority. Macron’s party is second, with LaPen third, though with more seats than ever before.

This is a result of candidates who were in third or worse place dropping out so as to not split the vote.

As a result it’s unclear who will form the next government, and how. La Pen is correct in saying:

“National Rally leader Le Pen, expected to make a fourth run for the French presidency in 2027, said the elections laid the groundwork for “the victory of tomorrow.”

“The reality is that our victory is only deferred,” she added. But Le Pen’s older sister, Marie-Caroline, was among her party’s losers Sunday, defeated by a leftist candidate and just 225 votes in her district.

It’s clear that the Center can’t stop the right. Policies like increasing the retirement age and various other austerity measures aren’t popular and can’t fix France’s economy. Macron’s reign has seen repeated mass protests and strikes, often violent.

For the Left to take over in the next election they need to deliver at least a bit. It may not be impossible: the right might vote with them on some issues, such as rolling back the  pension age increase (which they opposed) and they may be able to convince the center to vote with them on other issues.

In addition, when they are stopped from pursuing popular policies like taxing the rich to pay for social programs, they need to scream to high heavens and make the case that with a majority they will be able to deliver their entire program.

Much of the problem in France has been that when Neoliberals want to do the right thing, like fight climate change, they do it in the most regressive way possible, hurting workers and farmers, rather than making the rich pay. Outlawing private jets and taxing the rich, then using the money to pay farmers to make necessary changes rather than forcing farmers to take the hit is a winning policy.

France now has a real chance to avoid fascism. Let’s hope the left can maneuver well enough to make it happen.

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Le Pen Is Delusional But Macron Deserves To Lose

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On June 10, 2024

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So, Macron has dissolved his government and a French legislative election is on. The Harris Interactive June 9/10 poll shows La Pen with the highest support at 34%, with the left wing Nantes coalition at 22% and Macron’s ENS coalition at 19%. Macron is not on the ballot, but if his party loses power, the Prime Minister of whatever group has the majority will be in control of French domestic policy, leaving Macron to foreign affairs.

Macron has been a terrible President. He got in only because of strategic voting. In the second round, people were too scared to give Le Pen a chance, so they went for him. During his tenure France has been rocked by repeated and massive protests. Economic performance has been bad and his signature move was to increase the age at which people can retire.

This is the Brexit/Trump/Javier problem. To whit, when things are bad for a long time and nothing seems to help, people reach for something extreme. They know the status quo isn’t working and that things keep getting worse no matter who they vote for among the mainstream, so they look for someone or something completely different. Trump is a billionaire, but he doesn’t parse the same as normal politicians. The EU was adopted around about the time Britain went into a severe multi-generational slump manufactured to hurt the working class. The EU wasn’t mostly responsible for it, but the status quo was “things are going to get worse, but if you stay in the EU more slowly than if you leave” and people were willing to throw the dice.

Javier is a libertarian loon who looks and talks nothing like a normal politician, so Argentinians gave him a shot: neither ordinary right nor ordinary left had been able to fix Argentina.

Of course, Javier is a loon, so:

La Pen is delusional, and not a solution. As an illustration:

Le Pen – who calls wind turbines “horrors that cost us a fortune” – would end all subsidies to the solar and wind energy sector, apply a moratorium on both and dismantle already existing turbines.

Solar is substantially cheaper than fossil fuels. Wind varies, in France it seems to be slightly more expensive than fossil fuels, but prices continue to drop, and thanks to Europe’s geopolitical stance the price of fossil fuels is higher than it once was. Even if you don’t want to build more turbines, dismantling already existing turbines is expensive stupidity.

Ending subsidies is questionable, in the sense that if you want to end subsidies and allow “true” competition, you’d also have to end fossil fuel and nuclear subsidies.

But a moratorium is beyond stupid. If solar is cheaper, why not build it?

There’s a lot of this sort of nonsense on the right, “liberals and left wingers like renewable energy and acknowledge climate change, therefor we must oppose renewable energy and deny climate change.”

It’s driven by tribal nonsense, science denialism and desire to keep things the same.

But sticking your head in the sand doesn’t change the fact that climate change is real and happening, or that solar is now cheaper than fossil fuels in most cases.

We can’t fix our problems is we deny reality. It’s that simple. It afflicts the center as well, with their “we’ll win in Ukraine” nonsense and their complete unwillingness to recognize the consequences of austerity and neoliberal politics. They want lots of rich people, so anything that would mean less rich rich people is anathema.

But the right, like Le Pen, are equally delusional. She may do some good things. Perhaps she’ll undo the increase in pension ages, for example. I hope so.

But the right isn’t the answer to real problems. Everything but climate change and ecological collapse, in 20 years, will seem like a sideline, completely meaningless. Any politician who isn’t taking it seriously and preparing for it shouldn’t be in office. Macron was not doing enough, not even close. Le Pen wants to make it worse.

France’s only real chance is to go left: fix the social and economic problems at the same time as dealing realistically with environmental problems.

Perhaps that will happen. If it doesn’t, as with Britain rejecting Corbyn, they will pay a frightful price. The European era is over, but how well France adjusts to its new place in the world will matter a great deal to those who live there, and, indeed, to all of Europe.

Right now the French seem determined to accelerate their decline rather than adapt to new circumstance in a way which is beneficial to them.

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EU Delusion on Sanctions and Europe’s Future

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On April 22, 2024

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While the EU was considering more sanctions against Iran because it attacked Israel in retaliation for Israel bombing its embassy, Russia is sending Iran:

Meanwhile America is threatening China that if they don’t stop sending Russia “dual use” goods, the US will slap on more sanctions.

Boo hoo.

Let us remember the results of chip sanctions. China now owns the legacy part of the industry, and is making progress western “experts” said would take decades in years. Huawei has recovered from the sanctions and created its own OS. It is now a massive electric vehicle manufacturer in addition to everything else. BYD will soon become the largest EV manufacturer in the world, eclipsing Tesla. Something about its cars being cheaper, and Tesla gave up on building a cheap version of their cars. Maybe Tesla will survive because the US keeps all Chinese EVs out, but my guess is that if Musk stays CEO, Tesla’s best possible future is as a luxury EV manufacturer. Their “Cyber Truck” is a disaster.

Iran has built a formidable military with hypersonic missiles while under sanctions, sanctions which started at the same time the Islamic Republic was created. But now, what I’m sure happens, is that China sells Russia goods and Russia trans-ships them to Iran. That hasn’t undone the sanctions completely, but as the world moves away from using the dollar as the medium of trade and routes around US, EU and anglosphere banks, the effects of the sanctions will continue to diminish.

There’s very little that Iran needs (though still some) that China and Russia don’t make. And anything sold to Russia by, say, India, can also make its way to Iran. Cutting Russia off almost entirely gives it no reason to play by Western rules, and it doesn’t.

This is especially true now that America has taken Russian reserves and will be giving them to Ukraine. Anyone who trusts the US with their money who isn’t a complete ally, or satrapy, is a fool. There’s a reason why money used to be frozen before, but not actually taken. There’s a big difference between the two.

But let’s move back to Europe. This article from FT is to the point, German gas prices are two-thirds higher, structurally, than they were before the Ukraine war.

That’s after prices dropped massively. The simple fact is that US natural gas costs a lot more. Russia was selling Europe and Germany oil and gas for bargain prices. Russia’s still willing to sell, but Europe has its head up its ass.

The recent history of European industry is simple. When the Euro came into effect, it raised everyone’s prices except Germany’s, pretty much. Industry in all of Europe except Germany was badly damaged (this was especially bad in Italy which was more of an industrial power than most realized.) Germany, in effect, received a subsidy: the Euro was worth less than the German Mark.

Germany has (had) a lot of heavy industry: a lot of energy intensive industry. To get energy for this, Germany got cheap, below market Russia oil and natural gas. Russia got bulk sales of one of the few things it had to sell and Germany kept its industry competitive.

Those days are over, essentially permanently.

And the problem is that Germany’s dominance was in legacy heavy industry and automobiles. They aren’t creating a lot of new tech and science. They don’t have large new industries developing. They don’t have scale costs like China does. They relied on being very efficient and already dominating industries.

But those industries are leaving. A lot of them are going to America, the actual company facilities, but the production is, effectively, also moving to China and other countries.

I know I’m a bit of a stuck record on this (do youngs understand that simile?) but Europe is walking into its decline with its leaders acting as if it’s no big deal, indeed as if they are, to use my father’s crude insult still “King shit of turd island.” Sanctioning Iran, lecturing Africans and acting as if they are superior in every way: the only truly civilized people in the world.

Even as they do, the foundations of their prosperity, their “garden” are eroding out from under them at the speed of soil blowing away during the Dust Bowl.

They’re insane. Completely detached from reality, and some of the stupidest elites in the world, even exceeding America’s very high bar.

The Sun always sets. European leaders seem determined to make it set as soon as possible.

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The Most Likely “War” With Russia Scenario

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On February 28, 2024

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Russian troops are now advancing across almost the entire front. It’s slow, but steady. There are no defensive lines built to stop them, the best they’re likely to get is the use of rivers.

Ukraine clearly no longer has enough men or ammunition.

Macron and some other European leaders have discussed sending troops, but sending them to fight Russia is insanity, and hopefully they can see that, since WWIII will suck.

But there’s one play they may feel they can get away with.

Send in “Peacekeepers”. Have them advance to the borders of Russian areas, and use them to secure Odessa and say “we are just separating the combatants.” It’s a way to limit Ukrainian geographical losses and avoid it becoming a land-locked country and the Europeans just bet that Putin isn’t willing to risk or start a war with Europe and/or NATO.

How likely is this? I don’t know. But of the various insane options, it seems the most likely.

 

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Macron & Many European Leaders Call For WWIII?

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On February 27, 2024

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So, French leader Macron thinks Europe should send troops to Ukraine to fight Russia. (This is colloquially known as “declaring war on Russia.”)

rench President Emmanuel Macron said on Monday that sending Western troops to Ukraine should not be ruled out, as European leaders concluded a summit on supporting Kyiv.

“There is no consensus today to send ground troops officially but … nothing is ruled out,” Macron said at a press conference in Paris, where the meeting had just wrapped up. “We will do whatever it takes to ensure that Russia cannot win this war.”

“The defeat of Russia is indispensable to the security and stability of Europe,” the French president added.

…

The subject was first raised publicly by Slovak Prime Minister Robert Fico, who said a “restricted document” ahead of the summit had implied “that a number of NATO and EU member states were considering sending troops to Ukraine on a bilateral basis.”

…

Macron also announced that leaders agreed to set up a ninth capability coalition on deep strikes that will focus on medium- and long-range missiles. Other coalitions include artillery, air defense and de-mining.

This is, in effect, an acknowledgment that Europe knows Ukraine is losing.

So, there are two main possibilities here. First, it’s a negotiating ploy, to get a better deal for Ukraine. Second, they’re serious.

Let’s point out a couple things: Russia is outproducing the entire West in artillery shells and ammunition and Western armories are bare: they’ll run out in two weeks to a month of real war, at most. Second, China is not going to let Russia really lose a war, because they know who’s next and Europe has mostly been very willing to follow the US in anti-Chinese actions.

Iran, obviously, will support Russia as well. They know they’re on the list.

It’s actually not clear that the West would win this war: Russia is out-producing the West in terms of war materials, China is the undisputed largest industrial power in the world and it’s not clear that if other powers step in, China and maybe Iran won’t step in on Russia’s side. They really, really don’t want to: but the defeat of Russia, as already noted, is an existential threat to them.

Next, if either side starts losing, there will be a strong temptation to reach for the nukes.

On a smaller note, if Europe supplies long range missiles and those missiles hit something that matters (say the Kremlin, or the Bolshoi) things could get ugly fast. Seeking to expand the war further into Russia is certainly “legal” but it’s not wise. It won’t change the outcome of the war, it will merely make the war more likely to expand, which is why the German Scholz is correct to oppose it.

All my life, the charge against people outside elite circles has been that we are “un-serious”.

This is extremely un-serious behaviour.

I will note, further, that the reason Europe and the US can’t compete with China and Russia is that they simply refuse to reduce economic rents, lower living costs and make their rich less rich in order to reduce operating costs and oligopolies and monopolies sufficiently to ramp up production, both of war materials and, well, everything else.

They want to live like Kings, our elites, having the South send them materials and the Chinese and other nations send them manufactured goods, while using their populations for rent extraction so they can become richer and richer.

They have confused money with power. Money is only power when it can buy power. And increasingly, in the West, it can only buy power domestically, not internationally.

This is a grave mistake, and the graveyard of Empires.

Fools. And worse than fools.

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Reversing European Decline

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On November 18, 2023

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Europe is in significant decline and has been for some time. The standard chart compares European GDP versus American but I won’t use it, because I don’t believe in GDP at this point, the numbers are both manipulated and unrepresentative of actuall national economic ability which matters. That Russia with its tiny GDP was able to massively ramp up weapon production and the US and the EU with much larger GDPs were not is a good example.

But what is clear is that European innovation has fallen far behind, as measured in patents, and that industry is leaving the EU, especially energy intensive industry. China and the US, both, are eating Europe’s lunch, and they are losing export customers, especially in the third world. Europe is not resource rich, they need imports and they aren’t going to be able to afford them. De-industrialization looms, and service industries aren’t going to carry the load, which will leave them with agricultural exports, which will also start declining.

So we’re going to do a thought exercise about what’s required to reverse the decline. As will quickly become evident, it’s theoretically possibly but politically impossible.

Europe needs to do one thing in order to maintain a high standard of living over the medium to long term: it must manufacture enough of what it needs and, more importantly, enough of what others will buy from it, to pay for the imports it needs of what it doesn’t make and raw resources it doesn’t have.

If it continues to de-industrializes it will inevitably slide down the value add chain, and into second, then perhaps even third world status.

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This means in needs cheap resources, the most important of which is cheap energy for its industries. In the short term, the next twenty years or so, that still means petrochemicals, and there’s only one place the EU can get them from: Russia. The US is willing to sell, oh yes, but at much higher prices. (If Europe was truly going to turbocharge to alternative energy, it’s going to need China, see below.)

Unfortunately, the EU has burnt their bridges and the pipelines have been sabotaged. To get back to Russia being willing to sell at discount prices the EU will have to make its bones: it has to give Russia ironclad security guarantees, and that means leaving NATO and creating its own armed forces. It probably means ditching the incurably anti-Russia eastern block nations like Poland (who are a drain anyway and should never have been let in.)

Forming their own military, with nukes, by the way, is not protection against Russia, it’s protection against the US and its allies.

Now, Russia might cut a deal anyway, without Europe leaving NATO, but the problem is that what Europe needs from China is a cartel deal: it needs China to agree to let it keep some high tech industries. Europe can only keep such industries if it either innovates far faster than China and engages in subsidies to keep prices lower or if China agrees: China is innovating far more quickly than Europe. and it has a lower cost structure. Foolish sanctions have sped up its progress in fields it had previously been willing to leave alone, like the lithography, required for creating chips.

If Europe is a lockstep US ally, China will not be willing to make cartel deals because in that case Europe is an enemy and sanctions can always be used against China in a time of crisis (as opposed to pre-emptively and stupidly) to try and hurt China. But if Europe is neutral or friendly, and a customer, well, smart people to don’t improverish their customers, they let them have some industry.

The last thing is that Europe has to significantly increase its rate of innovation, and the steps involved include bringing a lot more manufacturing back to Europe and some significant changes in law and custom, enough to be an entire other article.

However the point of this exercise is to show why Europe is going to continue its decline. It has a high cost structure and a slow rate of innovation, and it can’t fix either given its politics. (Be clear, innovation is related to the manufacturing floor, it can’t recover if you’re losing that.)

This is similar to climate change, where no major country can fix it, even if it is theoretically possible, because it is politically impossible. A bigger, global problem, but the same dynamic.

Anyway, Europe is in decline and will continue its decline. You can only live on legacy innovation for so long and Europe is running out.

Europe should, above all, avoid war with China at all costs. Germany essentially created the chemical industry in the 19th century. In WWI, when the US entered the war, they broke the German patents, and much of the industry moved to America. After WWI, well, the US didn’t reinstate those patents and the chunk of the industry now in America never moved back.

Do that and Europe might eke out an extra decade or two.

Oh, and now that they are nobodies, with no military and industry that barely matters and which they have sanctioned China on, they should shut their mouths and stop insulting China and interfering. The only major thing they have to offer now is consumers, and that’s going to keep going away.

Essentially, Europe needs to stop thinking they are the Europe that once ruled the world, or even that they are important American satrapies. Both Korea and Japan outproduce them in patents, and it’s not close. They’re just has-beens, and if they want to change that, they need to take radical steps.

They won’t.

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German Dependence On China

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On September 26, 2023

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So, the German central banks noted that 29% of German companies import essential parts and materials from China.

Multiple industries. Germany, much like the US, but even more so, let China pick up, among other things, much of the tool making industry, especially those related to auto manufacture.

 

Ouch.

When you consider this is an absolute terms and not relative, it’s even worse.

This comes on top of anti-Russia sanctions and the sabotage of the Nord Stream pipelines cutting off Germany’s access to cheap energy.

Germany is a relatively small country without a lot of natural resources. To be wealthy it needs to produce high value goods, and to do that it needs inexpensive inputs for its industries, or it needs to have much higher industrial productivity than everyone else.

Outsourcing so much of the supply chain for its manufacturers was an understandable mistake: it made those inputs cheaper.

But if you’re a small country without a lot of resources, you have to keep your supply chains and trading relationships stable. German leaders at the start of the Ukraine war expressed the most doubts about massive sanctions and they were right.

Germany is, as predicted at the time, in real trouble. Their model had flaws, and was a mean one, impoverishing and de-industrializing other EU nations, so there’s a certain irony to EU consensus Russia policy now screwing them over, but at this point if Germany goes down it’ll take the entire EU’s economy with it.

Germany cannot afford to follow the US into a cold trade war with China.

Moreover, this is a demonstration of something simple: what is good for Western EU countries and what most Eastern EU countries want (anti-Russia policies and NATO expansion) are two different things. Germany needs good relations with cheap resource suppliers and the only practical one was Russia.

It’s all very well to say, as many have, that this is the price of standing up for “freedom”, but if Germany goes down, so does the EU.

Likewise, what is “good” for the US, is not good for most European countries, and especially not good for Germany. (Ironically, Macron is the only major EU leader to be honest about this.)

The EU, if it continues on this course, will be reduced to an even weaker American satrapy than it was is the cold war period, and one with a lot worse living conditions.

China’s moving up the value chain. Sanctions against China, rather than slowing this down are speeding it up. Correct industrial policy would have been to negotiate with China about what industries or segments of industry each country is going to specialize in.

Incorrect policy is to have a cold war against both your cheapest energy supplier and the country that is now the world’s manufacturing floor.

Damn near suicidal policy, in fact.

Europeans need to get thru their heads that the European/American near monopoly on tech and high productivity is broken and that Europe, in particular, is coasting on legacy industry, without a great number of natural advantages. It was a backwater for most of history, and is reverting. The job of European leaders is to keep that reversion from happening for as long as possible and to slow down whatever reversion occurs.

Now, it could be that full commitment to a “US and Europe+Anglo countries” trade block, with full re-shoring would be a viable policy, if aggressively pursued, but that’s not what’s happening, the US is, instead, taking advantage of EU and German weakness to grab up high energy cost industries.

As for Europe’s elites, they should remember that owning overseas resources is dangerous. Britain’s “hidden empire” — its overseas investments, was a huge part of its strength, and essentially liquidated in WWI. Germany’s chemical patents and electrical patents were broken by the Allies in WWI and they didn’t reinstate them after the war was over.

Anything you own in another country doesn’t really belong to you unless you have the troops and willingness to occupy that country and the ability to then administer the country.

Germany in specific, and Europe in general, if they don’t change their policies and their commitment to being American satrapies, are on the path to ruin.

(Oh, and as I said at the time, most of the Eastern European countries should never have been let into either NATO or the EU. They offer little but vulnerability; are economic soaks, and have interests contrary to those of Western European countries. The only way they could have been absorbed effectively was if the EU decided to become a real federal nation with former countries reduced to provinces at most, and in most cases divided into multiple provinces.)

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