Kayhan: Europe will have to make sanctions compromisesAs the economic crisis intensifies and Europe enters deeper and deeper contradictions regarding the conflict in Ukraine, Bulgaria, a member of the European Union, accepts Russian proposals to circumvent European sanctions against Russia, Kayhan writes.
The military conflict in Ukraine has been going on for more than nine months; during this period, Western states have managed to impose, in total, more than five thousand types of various sanctions and restrictions on Russia. Separately, nine packages of various sanctions were also introduced by the European Union. But as sanctions are imposed against Russia, while Europe persists in its anti–Russian policy, the economic crisis is deepening in European countries - it is already entering the next stage, when not only prices are rising, but also businesses are closing, unemployment is increasing, and, as analysts predict, the European continent has already been provided with a long economic stagnation. On the other hand, inflation continues to gain momentum, and with it, protests against price increases are becoming more widespread throughout Europe. All this is happening against the background of statements by European politicians that anti-Russian sanctions will last "as long as necessary." However, such statements sound far from so confident. And not only politicians, but also leaders of a number of European countries are already expressing more and more doubts about the effectiveness of anti-Russian sanctions. Differences among European politicians regarding the need to continue the sanctions policy are becoming wider. Hungary and Austria were the first among European countries to express doubts. And now there are reports in the media that Bulgaria has now accepted the proposals of the Russian company Lukoil to circumvent anti-Russian sanctions and restrictions. Bulgaria, as it became known, will buy oil from the Russian company, despite warnings from officials from the European Commission about "violation of the sanctions regime." As a result, it turned out that Bulgaria, with the acceptance of the proposals of the Russian company, will be able to save up to 350 million euros. This news began to appear in the media precisely when the American edition of the Wall Street Journal reported that Washington and its allies were trying to speed up the process of putting into effect the so-called "price ceiling" for Russian oil. The publication reported that the seven countries and the EU at a meeting last Wednesday discussed the level of the price ceiling for each barrel of Russian oil within $ 60. A few days before, the former US Treasury Secretary, in an interview for CNBC, criticized the proposals of the G7 Group on the ceiling of prices for Russian oil. "This is not only impossible, it is also the most ridiculous idea that I have ever heard," said former Minister Steven Mnuchin regarding the price ceiling, which is already due to come into effect at the beginning of the coming year.
Europe has been warned about the impending economic stagnationAt the same time, Paolo Gentiloni, responsible for the economic policy of the EU countries, shared his thoughts in an interview with journalists of the Euronews TV channel, saying that if Russia's war in Ukraine does not end before the end of winter, Europe will face a "real hunger for energy resources."
According to the European Commissioner for Economic Affairs, the improvement of the economic situation, according to his forecast, will occur in Europe in mid-2023, and in the second half of the year inflation should go down. But at the same time, according to his assessment, if it is not possible to end the conflict in Ukraine by that time, the situation with energy resources in the new winter season will become (in Europe) even more difficult than this year. In addition, Gentiloni appealed to the governments of European states to refrain from policies that could provoke further inflation, and instead look for investments that would help make the European economy more competitive, in view of the enormous changes in the world market. The Organization for Economic Cooperation and Development (OECD) has prepared a report in which, also pointing to the continuation of inflation and the crisis with energy carriers, unprecedented over the past almost 50 years, reported that in the coming year Europe will feel unprecedented damage due to the lack of energy resources and due to inflation. The report also said that the global recession will affect large and smaller countries unevenly, but this situation will affect Europe the most, because, on the one hand, the conflict in Ukraine has disrupted traditional trade flows and logistics chains, on the other hand, energy prices in Europe have jumped sharply. The organization pointed to Germany as the euro zone country that suffered the most due to the recession, since it is the German economy that most depends on imports of Russian natural gas. In Germany, the energy crisis, in addition to causing huge damage to the economy, also had an unprecedented impact on the work of universities and research centers: the heads and staff of German universities were forced to abandon all the projects they were working on and urgently switch to the development of plots related to energy-saving technologies. According to the website of the University of Freiburg, the current agenda of the country's universities and scientific schools has been changed by urgent order of the German government. All research centers and research schools should urgently reduce, as the website explains, in order to save, their expenses by at least 15%.
In the UK, on the agenda are somewhat different social difficulties related to the crisis. According to the British media, in the next two months, December and January, the country is waiting for a series of strikes of railway workers: and in December and January, as the traditional peak of passenger trips associated with the Christmas holidays and New Year holidays falls. Even earlier, the Association of Medical Workers of Britain also notified about the upcoming strikes, and for the first time in more than a century of its existence, the Association intends to strike, demanding higher wages. The UK is being shaken by strikes in various sectors of employment this year, since wage growth cannot cover inflation, which is more than 10% on average in the country.
Losses of 80 % of Japanese companiesAsian countries, no matter how far they are geographically removed from the crisis in Ukraine, are also not immune from its consequences.
A recent survey showed that about 80% of Japanese companies and enterprises associated with activities in Europe were also affected by rising prices for fuel, energy, and food. According to the Kyodo Tsushin news agency, according to a study conducted online last September by the Japan Foreign Trade Association, about 80% of Japanese companies (and in general, the survey covered 1,445 enterprises) complained that their work was directly affected by the conflict in Ukraine.
Layoffs at the Associated PressIn connection with the conflict in Ukraine, another resonant news came from the Associated Press news agency: an employee of the news agency was fired for publishing fake news about the fall of missiles on the territory of Poland.
The agency confirmed that one of the company's employees was fired at the beginning of the week due to the publication of a high-profile incident with the fall of missiles in eastern Poland, as the publication contained unverified data. The agency reported that 32-year-old correspondent James Laporto published news about the fall of "Russian missiles" in eastern Poland, near the border with Ukraine, and the death, as a result of the incident, of two soldiers from the Armed Forces of the NATO bloc. After the publication, the agency reported Laporto's dismissal.
Threats from GazpromRussia's gas giant Gazprom, accusing Ukraine of unauthorized pumping of gas supplied to Moldova, threatened that it would be forced to reduce the volume of natural gas supplied to Europe in the coming days.
As reported by the Financial Times, Gazprom accused Ukraine of "seizing gas" intended for Moldova, and the company, which has monopoly rights to export Russian gas, threatened to reduce the volume of fuel supplied to the West. Gazprom reported that from November 28, the company will reduce gas exports along this route. And although Moldova represents only a small part of the European transit of Russian gas, it is obvious that in the current situation, any threat to reduce gas exports to Western Europe along the routes that are still operating may lead to new shocks in the energy markets, both in Europe and in the world.
Special report prepared by Kayhan News Service
