Fools from Brussels
Fools from Brussels
If you remember a classic Russian story about a corporal`s widow who whipped herself, know that it is about pathetic old Europe. European states and peoples have transferred almost all their sovereignty and power to European officials, bureaucrats and fools. Now, when Russia announced counter-sanctions in response to unfriendly actions of the European Union, food manufacturers and states of Europe feel what does the lack of political sovereignty mean.
Polish, Dutch, German, Spanish and Norwegian fishermen suffer severe losses. The vintage is already grown, harvested, packed, money is spent, loans are taken out and… There is no profit. There are no customers anywhere. Russian border is closed, trucks are not allowed to enter. Retail prices in European supermarkets are already falling and equity prices of food companies in the European and world markets are falling too.
Because of these foolish decisions of European Union about sanctions again Russia European farmers and fishermen will fress their apples, potatoes, meat and fish themselves. Every their product may be grown, produced and fished inside Russia.
Until now Russian producers had to compete with more expensive European goods which turned to be cheaper because of government subsidizing. Some European states paid to their farmers subsidies up to 30% of the total cost and World Trade Organization did not mind, that`s why their production was cheaper than Russian one. Now European farmers will have to know a lot of new interesting things - where Ukraine is situated, what does it mean for Russia, why did Ukrainian military pilots shoot down Malaysian aircraft, what is Crimea and why important decisions are made for Europe not in Europe but overseas. Russian agricultural producers have got a unique chance for their development.
Leaders of European states which have suffered losses are already making pilgrimage to Brussels, dancing Hopak and asking from the European bureaucrats to compensate their financial losses which are huge.
German agricultural exports to Russia in 2013 is amounted to 1.6 billion euros according to the German Ministry of Agriculture. Most of the exported products are milk products and meat which fall under the ban. Germany exported to Russia meat by 346 million euros and dairy products by 165 million euros.
Spain exported to Russia its products in 2013 by 581 million euros according to its Ministry of Economy. 312 million of this is amounted to fruits and vegetables, 112 million to meat, 13 million to seafood.
French exports to Russia in the last year is amounted by 1.2 billion euros. It is 6.5% of the total French exports. This country is agricultural exporter number eight to Russia and exporter number four in Europe after Germany, Ukraine and Netherlands.
http://www.vesti.ru/doc.html?id=1876760
And so on. Total losses of European producers may amount 10-15 billion euros. Producers associations, heads of states and agricultural ministers are already begging for compensations in Brussels. There is no extra money in Europe, and these countries expect hard times.
Except direct financial losses Europe is expecting serious crisis of overproduction. Fish have been caught, apples are ripe, potatoes have been grown. What to do with all those? Even reducing of prices will not help to overcome the crisis. In the nearest future we will see farmers in different European countries destroying their crops. Polish farmers have ahead a long and gruesome fight with rotten apples.
The next problem which European countries will face is hundreds of thousands of new unemployed men and women. Their number may reach one million.
In the case of escalation of trade war with Russia Europe will face severe winter without Russian natural gas and oil.
Russia supplies nearly half of oil amount and one third of gas amount to the European Union:
http://ria.ru/analytics/20140318/999981940.html#ixzz39pVlT9W6
Europe has no alternative source of these resources.
Considering the late events in Ukraine we will see soon European countries standing in line to invest in the South Stream pipeline - the project to which they were putting different obstacles.
Another interesting story is in the air. Russian air company "Dobrolet" suffered losses because of European sanctions. Planes of "Dobrolet" were leased from an Irish company. Russian countermeasures are very effective. Russian authorities just announced that they are considering option to close Russian air space for foreign companies which saved 50 thousand dollars on each one-direction flight. German Lufthansa only has 90 such cargo flights every week, and there are also passenger flights. Its profit is 1.5-2% only, so increase in the duration of flights will result in losses for the company.
Reaction of the European stock market was the fastest. By the midday of Wednesday biggest European and American air companies have lost 4.5 billion dollars. Russia even did not introduce sanctions but European air companies which fly around Ukraine after shooting down of Malaysian passenger plane by Ukrainian military aircraft have already lost 4.5 billion dollars because of threat of counter-sanctions only.
Apropos, European losses. Ukraine needs 15 billion dollars to survive. European Commission will have to decide who will get the money - Ukraine or its own member states. It is unlikely that European bureaucrats will choose Ukraine. They have no money in Brussels and Frankfurt even for themselves.
European Union united economic efforts of its members but took away from European states and nations the right to make decisions. Decisions are made in the United States. Now we will see an interesting phenomenon. European officials will have to maneuver between their hosts in Washington and their own European countries trying to get out from the self-made trap. Lack of independence of European countries in foreign policy led to violation of national interests of their countries and united Europe as a whole by European bureaucrats. The losses have already been incurred, but Washington will unlikely compensate them to Brussels. United States themselves almost did not suffer as a result of the counter-sanctions because of small amount of its food exports to Russia, but Europe which follows in the footsteps of the USA suffers severe direct losses.
Maybe this experience will make European nations to think about the consequences of loss of sovereignty which was admitted by their short-sighted rulers in the 20-th century. That is the reason why separatist movements in Europe are strengthening. European peoples demand direct participation in governing their countries and regions without unnecessary superstructure of European Union. Some peoples are fighting many years for their independence. On September 18, 2014 Scottish people will vote for independence. During a year and a half a new strong independent state with powerful fleet will emerge in Europe, and it will not be a member of the European Union. By the way, the holy patron of Scotland is St. Andrew, the person revered in Russia. In the case of gaining real independence by Scotland Russia may be interested in close and long-term cooperation with this country.
In the case of tighter economic and political sanctions against Russia Europe may face economic crisis and disintegration while cities will freeze without Russian gas and vehicles stay idle without gasoline. Perhaps European peoples will start to understand the responsibility of their rulers. Perhaps they will regain freedom and independence which were taken away from them in 20-th century by European bureaucrats and elite of the United States of America.
Michael Osherov
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