Sanctions against Russia have led to the stagnation of the German economy

    Western media blame Biden - the Russian economy does not turn into ruins in any way
    access_time30 Apr 2022
    print 30 4 2022
     

    The news that Germany is going to borrow more than €40 billion to restore the economy, disrupted due to anti-Russian sanctions and arms supplies to Ukraine, is very bright. However, the situation in the EU is even more alarming.

    Despite the information blockade, publications are multiplying in the media talking about the structural crisis in the EU economy, which faces inflation and the rise in price of all key groups of goods.

    Europe lacks diesel fuel, and prices have risen sharply since Russia started its special military operation, writes Bloomberg. Stocks at the port of Rotterdam, Europe's largest fuel and oil hub, are at their lowest level since 2008. European regulatory authorities simply stopped demanding to indicate the origin of the fuel entering the Rotterdam Stock Exchange - Russian fuel arrives under the demonstratively closed eyes of European officials.

    Fuel is needed not only by a burgher's car in Germany, but also by a tractor in Bulgaria or Poland. DW asks the question "Will the EU face food shortages?" and comes to an elegant conclusion: there will be enough food, but the price of it will rise significantly, as well as inflation.

    In the EU, food, alcohol and tobacco prices rose by 4.1% in February after rising by 3.5% in January. Farmers in Greece and France held demonstrations demanding money because of the high costs of fertilisers. The others will soon follow the farmers.

    Pekka Pesonen, Secretary General of the European farmers' lobby group Copa-Cogeca: "It was very difficult to explain the additional higher costs to other parts of the value chain: the processing industry and retail trade."

    In other words, following the farmers, those who will buy more expensive products from farmers will have to compensate for the costs.

    The embargo on Russian oil and gas for the EU has once again at a high level been recognised as suicide.

    The International Monetary Fund predicts that a complete loss of Russian gas and oil supplies could cost for the European Union 3% of GDP, "depending on the severity of winter." At the same time, the forecast clearly underestimates manyfold, since the loss of oil and gas will affect the entire European economy at once, from the cultivation and delivery of vegetables to the production of plastic and a large part of the industry. Not to mention the prospect of living in a home wearing a sweater 8-9 months a year.

    By the way, the strength limit of the EU economy without Russian gas is set at six months.

    We should not forget that the stability of the entire EU depends on the state of the German economy. The mentioned port of Rotterdam noted that high prices for Russian hydrocarbons, even when they exist, have already hit steel production in Germany, which led to a 20% drop in iron ore imports.

    According to the Bundesbank, the German economy "more or less stagnated" already in the first quarter. Estimates of losses incurred for the future vary, the average figure is €220 billion, which is equivalent to 6.5% of annual production over the next two years.

    The media note the growing opposition of German industrialists to the German government. Analysts say that the EU's boycott of Russian energy carriers will lead to an increase in energy prices, which will harm consumers who are already facing record EU inflation of 7.5%.

    Although the EU turns out to be the main "sanctions battlefield", the United States is also beginning to regain consciousness. It's not that they feel sorry for Russia, it's just that even the American neocons understand that the ongoing economic war can lead to unpredictable consequences, and also affects Russia not as much as they would like  it.

    A research note on anti-Russian sanctions states that "Russia's domestic markets appear to be stabilising as a result of tight monetary policy, tight capital controls and a current account surplus."

    The New York Times: "The Biden administration has watched with concern as the value of the ruble has rebounded in recent weeks, undercutting pronouncements made by Mr. Biden that sanctions reduced the Russian currency to ‘rubble’.”

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