Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Friday Stock Market CRASH Following Israel Attack on Iranian Nuclear Facilities - 19th Apr 24
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Small Man Europe Is Now In “Effective State Of War” With Russia

Politics / European Union Aug 31, 2014 - 06:33 PM GMT

By: Andrew_McKillop


According to Some Interested Parties
These are easy to identify. Among them we can note David Cameron's UK, Hollande's France, Tusk's Poland and the president of formerly Soviet Lithuania,  Dalia Grybauskaite who has said, August 30, that Moscow was “effectively in a state of war against Europe”. All of these EU28 leaders who at present do not include Angela Merkel amongst them, are not only calling for more sanctions against Russia, but in some cases also for larger supplies of military aid to the Kiev government.

Backing down from that, even in the Europe of “soft power” is becoming difficult.

Europe is on the cusp of a Triple Dip recession. Being aggressive with Russia, and trading with Russia, make difficult bedfellows. French president Francois Hollande knows this well, like the others. Last week he stressed that a failure by Russia to reverse a flow of weapons and troops into eastern Ukraine would force the EU bloc to impose new economic sanctions, but then he went on to say:"Are we going to let the situation worsen, until it leads to war? Because that's the risk today. There is no time to waste."  France's sale to Russia of Mistral-class “invasion platform” fighting ships could soon be collateral economic damage, and it will hurt.

Amusingly, Germany has been a leader in calling on France to cancel its Mistral contract, worth more than 1.25 billion euros including training and allied services, for reasons that could include the recent lack of success by German weapons exporters to Russia. Germany has been a laggard, even extremely so, in upping the ante in the EU sanctions game against Russia, to include mainstream manufactured and industrial products of the type enabling Germany to run a trade surplus with Russia, in this sector, of more than 20 billion euros-a-year

What a surprise.

David Cameron's deindustrialized UK running a massive deficit with the rest of the world, including Germany, on manufactured products therefore prefers additional financial and banking sanctions against Russia. His latest call is to “kick Russia out of the SWIFT payment system”.

Economic Winter Is Coming
In summer, the Europeans could handily forget they get around 33% of the natural gas they consume, from Russia. As the days get colder, this will be a reminder that their fragile talk about “energy independence”, or even a magical gas pipeline from Qatar across Syria to serve them, by about 2025, does not apply to the real winter of 2014. Russia also supplies them about 33% of all the oil they consume, also.

Making war against Russia would rather certainly and surely lead to a total cut-off of both.

Commission president Manuel Barroso, this weekend, again said there is “political will [in Europe]”  to find a political solution to a crisis that he says is due to President Putin blaming Kiev for attempting to “turn the ex-Soviet state away from its former master”. Barroso also said he was “not looking for foreign military intervention” and that he expected progress toward peace as early as Monday – but he added that failure to do so could push the conflict to a point of no return: "Let's not try to spark the new flame of war in Europe”.

The key term is Cold War – without Russian gas and oil, this winter, it would be cold. The Cold War meme or theme is also totally unrelated to the deliberate attempt to incite Vladimir Putin to send the Red Army into eastern Ukraine – which is a Hot War.

Making that unfortunately more possible, this weekend the European Council elected “war hawk” Polish prime minister Donald Tusk as the new president of the European Council and EU, to replace Belgium's Herman Van Rompuy. With the unknown quantity of Italian Foreign Minister Federica Mogherini replacing Britain's Catherine Ashton as Europe's foreign affairs supremo, the replacement of Barroso as President of the Commission by the arch-conservative former Luxemburg premier Jean-Claude Juncker, completes the unknowns, but the conservative imprint is clear.

As also underlined by analysts and commentators, horsetrading for jobs in the new Commission, Council and Executive is now frenetic.  Germany, France, Britain, Italy and other countries are competing to see their nominees secure important portfolios in Juncker's team, such as economic affairs, trade, and energy. Apart from this being able to cause “policy paralysis” concerning Ukraine, and as Italian prime minister  Matteo Renzi said on Friday, there is an urgent need to tackle “the really worrying economic situation” across Europe, with the implication that the strong euro currency may be heading for a fall.

The Short Man Syndrome
Not unrelated, a Sunday 31 August leading article by Henry Kissinger, published by 'Wall Street Journal' accused Europe of making its “soft power” approach to foreign relations an attempt at creating “a vacuum of authority internally and an imbalance of power along its borders”. He meant Ukraine.  Kissinger did not use the term “Napoleon complex” to deride the Europeans, but came close to it.

Also called the “Short Man Syndrome” this concerns basic overcompensation for being small and being taken as unimportant. Some historians and psychologists say that France's Napoleon, who stood 5 foot 2 inches high, or low, compensated by extreme aggression.  In fact, research at a large number of universities and centres tends to show that this supposed complex or syndrome may be a myth. Smaller persons are often more discreet, timid, and less likely to lose their tempers than tall and large persons. In the specific case of Napoleon, however, he was naturally aggressive – whether tall or short.

The downsized “soft power” European Union is therefore likely programmed to stay what it is in foreign affairs – timid to the point of cowardliness – whatever it might be encouraged or incited to do by the uber-aggressive and small-sized John McCain of the US, and his likeminded ilk. Americans are always more courageous when it concerns a war that is not fought on their own homeland territory. Such is greatness!

We therefore have to ask why the Short European Man is being so aggressive with Russia over the Ukraine? On current trends, with already existing sanctions, the EU already shot itself in both feet. The supposed prize of “anchoring Ukraine to Europe” is a sure and certain loser for the economy.  Upping the ante with new economic sanctions will cause further hardship – including the real possibility of pushing Germany into recession, with a massive ripple effect across Europe..

To be sure the Small Man Napoleon was also suicidal – because of his insane aggressivity – but the European Union is in no way obliged to commit suicide.

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2014 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor.

Andrew McKillop Archive

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in