On the first weekend in September, many European cities held rallies of many thousands, during which demonstrators demanded that their heads of state take measures to prevent the drop in living standards. Protesters called on Emmanuel Macron, Peter Fiala and other EU leaders to resign if they are unable to stop rising energy prices and bring inflation under control. So far, there has been no adequate response from the European establishment; moreover, German Chancellor Olaf Scholz announced that the FRG would refuse to buy Russian natural gas from December of this year, which would exacerbate the problem of raw material shortages.
Forpost decided to ask Vladimir Litvinenko, a leading expert in the field of the fuel and energy complex and rector of the St. Petersburg Mining University, what consequences such a policy might have for the residents of the European Union. And why, for official Brussels, Berlin, and Paris, the interests of their own nations are less important than, for example, supporting the Kiev regime.
- Vladimir Stefanovich, it is obvious that the EU economy is on the verge of recession. The reason for this state of affairs is also clear: the shortage of energy resources, which led to a sharp rise in their cost. Why don't the European authorities take any real steps to avoid the crisis?
- Today, the interests of ordinary people in Europe are entering into increasingly obvious contradictions with the interests of the Western oligarchy. The former want the period of abundance, which lasted more than 30 years and was largely based on stable supplies of cheap raw materials from Russia, not to stop and last as long as possible. And the latter seek to maintain its status as a global leader, implying, among other things, control of world energy markets, including in the European Union.
The problem is that it is impossible to maintain a balance of supply and demand in the EU without Russian resources. But the task of turning on the "green light" for U.S. LNG producers has been set, and the European establishment seems determined to solve it at any cost. Record inflation, electricity bills that have risen several-fold, blackouts in buildings, lower battery temperatures in winter - all this is already a reality or will become one in the near future.
Obviously, the residents of the Old World are not at all happy with this, they do not understand what ideals they have to make such sacrifices for, they do not want to, as they themselves say, "freeze in the dark." Hence the complaints about the governments, which are becoming less and less legitimate, because they do anything but solve the real problems of the population. And there would have been none if the German authorities had given the go-ahead for the commissioning of the Nord Stream-2 pipeline a year ago.
- But shouldn't politicians be thinking about the next election and their ratings, which are getting lower and lower?
- The overwhelming majority of governments in the EU countries initially chose a losing strategy. They tried to convince their citizens that Russia was to blame for all their problems and that military support for Ukraine was far more important than the vanished European prosperity. Of course, they said that the difficulties were temporary, and that in a year or two or three things would get better, if we could just be patient. Today, judging by the thousands of protest demonstrations in Paris, Prague, Cologne and many other cities, it is clear that people are not close to this position. Europeans no longer trust the authorities and fear that their standard of living will never be the same again.
Unfortunately, this is indeed the case. After all, the main factor in the prosperity of Western civilization has been scientific progress in generating electricity and converting it. It made possible the mass production of high-margin goods and services, which would have been impossible under conditions of energy poverty. That is, the growth of the European economy was based on free access to energy. But now it is gone, which means that recession looks almost inevitable.
- Can any initiatives related to increasing energy efficiency help prevent it?
- If you are talking about calls to minimize time in the shower, not to use air conditioning or not to raise the indoor temperature above 19 degrees in winter, it has absolutely nothing to do with energy efficiency. Rather it is an attempt to put a good face on a bad game and transfer public attention from real problems to ephemeral ones.
The goal of EU politicians, apparently, is to make as few citizens as possible realize how bad things really are. For the sake of this, they talk about anything but where they are going to get additional energy resources, since they are going to refuse imports of hydrocarbons from Russia. But this is nothing new, it was so before.
The most striking example is the development of alternative energy. We are all well aware that mankind needs to reduce the negative impact on the environment, including from fuel and energy facilities. And part of the solution to this problem, of course, is the construction of wind farms and solar power plants. However, in addition to their undoubted advantages, they also have a lot of drawbacks that require breakthrough scientific solutions. For example, high consumption of materials, low density of energy produced, and the lack of available technology for its accumulation. But Europeans have never wanted to discuss these problems; it's as if they have never noticed them. But they were always eager to talk about the need to prevent climate change for the sake of future generations.
Who can argue with that? Of course, we need to do everything we can for this, but we should not forget that electricity should not only be environmentally friendly, but also affordable. In Europe, where its cost has increased several times, greenhouse gas emissions have also increased, because in terms of energy efficiency, alternative energy cannot even come close to replacing fossil fuels. Therefore, instead of gas, cogeneration plants now have to burn coal and, in some cases, fuel oil.
Unfortunately, the EU's vague energy policy has not made the environment cleaner or the average citizen of the Old World richer. Its only beneficiaries are members of the Western establishment, who have interests in "green technology," which receives huge government subsidies. This unfair distribution of budgetary funds has undoubtedly contributed to increasing inequality between the bulk of Europe's population and its wealthiest part. And, as a consequence, it has led to an extreme aggravation of contradictions in society, which were clearly evidenced by the demonstrations of protest that took place in many countries.
- Is there a way out of this situation or is recession in Europe inevitable?
- The realities are that, on the one hand, the purchasing power of the EU population is falling, i.e. its inhabitants consume less and less goods and services on average. On the other hand, many enterprises are stopping or reducing their production due to high energy prices. Such a situation leads a priori to a decrease in economic activity, i.e. to a recession, and a very serious one at that. Consumer sentiment in the EU is at an extremely low level, it is even lower now than it was in 2008. So it is very difficult for me to imagine how European governments, if the current anti-Russian rhetoric is maintained, will be able to deal with the coming crisis and energy problems, which are actually much more serious than they are trying to present.
There can be only one relatively painless way out of this situation: the launch of Nord Stream 2, which Russia, despite the American restrictive measures imposed in December 2019, spent almost two years completing alone. This was done so that the Europeans would not have such problems as they have today because of the short-sighted energy policy of their government. And, of course, to get the Russian energy sector as a whole out of the sanctions. This will automatically lead to a drop in gas, oil and coal prices and economic progress on a global scale.
Unfortunately, we are all well aware that this will not happen in the near future. And the standard of living in Europe will continue to fall, as will the level of legitimacy of the national governments of the European Union. The reason is simple: the Western elite has repeatedly demonstrated to the whole world that it is absolutely indifferent to the interests of any other states and communities. Therefore, under any circumstances and in any situation, it will act exclusively for its own benefit, even if this runs counter to humanistic or any other ideals.
So why should Europe's ruling circles make an exception for ordinary EU citizens? Today, their demands run counter to the strategy of the collective West, which means that they will certainly not be met. Even if certain heads of state are replaced, the new figures who came to power will remain under the control of the establishment and continue to pursue the same "anti-people" policies. The example of Great Britain, where the previous government was forced to resign, is a perfect proof of this assertion.
- How, in your opinion, should Russia respond to the calls of the Western establishment to abandon our hydrocarbons or introduce a price ceiling on them?
- In my opinion, the most logical solution in this situation is a ban on the export of fossil fuels to unfriendly countries. By supplying energy resources there, we create the most favorable conditions for the development of their economies. But we get nothing in return, because due to Western sanctions we have no opportunity to use their currency in calculations. Money is the equivalent of labor, but if you can't buy anything with it because of restrictive measures, it's nothing more than a piece of paper. Trade cannot be based on such principles. Giving away one's national wealth for "bills of lading" is their logic, which cannot be ours.
In addition, we should not forget that some of the funds we seem to have received for previous deliveries are now frozen, and until they are returned to the Russian budget, it is absolutely immoral to discuss "saving Europe" from cold weather and industrial collapse.
Oil, gas, and other minerals are our wealth, and we must use them in the interests of our own people and our own state. That is, first of all, to develop domestic demand, including, at the expense of building new high-tech processing industries. And if we also export raw materials, then only to those countries that have an adequate position in relation to Russia and are ready to cooperate with us on a mutually beneficial and mutually respectful basis.