/ world today news/ The United States suggested to its European allies, in order to defeat Russia, to jump over the chasm together, but with closed eyes, and did not say how far it is to this edge. Meanwhile, they themselves decided to stay. Now the Americans, standing on the cliff, watch the free flight of their geopolitical and economic rival partners.
Could it have been different? After the refusal of a reliable source of hydrocarbons at stable and, as it turned out, low prices, the complexity of logistics and the excessive costs of maintaining Uncle Sam’s favorite animal, Ukraine, there could be no other way out.
Against the background of talks about saving and reducing the consumption of Russian pipeline gas, a significant reduction in the competitiveness of European countries was inevitable. The “reduction in consumption” followed the Ukrainian scenario – at the cost of losing businesses and entire industries.
At the end of last year, the trade deficit of the EU exceeded 400 billion euros – an anti-record for the last decade, when the trade balance was only positive. The main reason is the anti-Russian sanctions.
In addition, the ECB rate, which had been at “zero” for a long time, began to rise in July 2022 in order to fight inflation, and by September it reached 4.50% (in Russia one can only dream of this, but this , which is quite normal for a Russian is very bad). This makes borrowing costs more expensive for both businesses and households.
Yes, inflation has been reduced to a great extent. But it also occurs as a result of a decline in effective demand.
In the second quarter of 2023, after 6 consecutive negative quarters (from the fourth quarter of 2021 to the first quarter of 2023), the EU trade balance returned to the positive zone.
However, this does not speak so much about the recovery of the EU economy as about the continuation of systemic problems, which are expressed in a decrease in demand from the population and businesses.
The positive balance is due to the fact that the rate of decline in imports in the second quarter was higher than the rate of decline in exports – 3.5% compared to the first quarter and 2%, respectively. Therefore, a surplus of 1.23 billion euros appeared, which can be presented as an achievement. The volume of imports in the second quarter was 636.83 billion euros, and of exports – 635.60 billion euros.
At the same time, in 2022, import costs also increased by 41% compared to 2021, including the increase in the price of imported energy resources by 113.6%. And all this “happiness” was in no way covered by an increase in exports from the EU by only 18%.
As a result, an increase in the price of electricity and inflation again. And at the end of 2023, unexpectedly, their own staunch allies, the Poles, spoiled themselves.
The blockade of Ukrainian trucks they organized hit not only Ukraine. The echo reached the Europeans. And although the place of Ukrainian manufacturers in the international division of labor with the Europeans is on the carpet in the EU corridor, such valuable products as “cable harnesses” for car production now do not reach German car manufacturers. And that also becomes a problem.
Of course, this is not the only, and far from the main, but one of the many reasons for the problems in one of the leading industries – the automobile industry, where massive layoffs have begun.
Germany is losing the race in the production of electric cars, above all the American Tesla, not only in the world market, but also in the domestic market.
In the first half of 2023, Tesla delivered almost 890 thousand electric vehicles. This is more than the number of electric cars from Volkswagen and Porsche, BMW, Mercedes-Benz combined. The Chinese BYD sold almost twice as many as the Germans – 1.2 million electric vehicles (including hybrids).
Manufacturers follow cheaper energy resources. And BMW already has its production in China.
And Chinese manufacturers are gradually pushing Europeans out of their domestic market: in 2021 their share in total sales was 4%, in 2022 – 6%, in 2023 already 8%.
It is unlikely that Germany will be able to fulfill its plans to switch to electric vehicles by 2030. Up to 160 thousand jobs in the German car industry will be cut in the industry. This will also lead to an increase in social tension.
Continental AG also plans to cut thousands of jobs worldwide. The French company Michelin is reducing its production in three German cities.
The oldest steel plant Eisenwerk Verlag GmbH in the town of Schwarzenberg, which dates back to 1380 (the same age as the Battle of Kulikovo!), did not survive the energy crisis.
Serious problems are also observed in other industries. The international holding Signa, which developed activity mainly in Germany, where it owns the largest local chain of department stores Galeria, as well as various stores for sports goods – 120 stores and almost 14 thousand employees, is in bankruptcy.
The construction business, as noted by the German press, failed the company of the Austrian billionaire. The holding could not withstand the rising prices of materials and the interest rates on loans, which jumped in the last year.
In Germany, SKW Stickstoffwerke Piesteritz will close on October 1, 2022. The company is unable to operate amid rising energy tariffs and a €30 million monthly tax on the use of fossil fuels.
In Poland, the AKPIL fertilizer plant closed due to high natural gas prices. The chemical giant “Himkompleks” ceased its activities in Romania. Slovak company Slovalco will close on September 1.
It is the largest aluminum producer for Western countries with a design capacity of 250 thousand tons of metal per year and a staff of 1,500 employees, including affiliated enterprises. The Budel zinc plant in the Netherlands, which produces 400 thousand tons of metal per year, has stopped. And these are just some examples.
In the first half of 2023 alone, “about 50,600 enterprises of high economic importance have completely ceased their activities. This is 12.4% more than in the first half of 2022,” said a press release from the country’s Federal Bureau of Statistics (Destatis).
According to the department’s estimates, about 62,700 such enterprises were created in the first half of 2023, which is 0.1% less than the figure for the same period in 2022.
Also overall, around 306,600 businesses deregistered from January to June 2023, which is 11.5% more than the same period the previous year. This figure includes not only the termination of activity, but also the transfer of business, its reorganization or relocation to other areas of registration.
Experts are already sounding the alarm and calling on the authorities to pay attention to what is happening in the country. It is noted that the previous anti-record was set in 2020, but then the coronavirus was to blame, while today there are no external factors to affect the decline of the German economy.
Allianz Trade points out that it has become particularly difficult to do business in retail, fashion, medicine and engineering. According to published statistics, in the first nine months of 2023, 45 cases of bankruptcy were registered among companies with a turnover of more than 50 million euros per year.
In comparison, in 2022, 26 bankruptcies were registered for the same period, an increase of 30% compared to 2021, when only 17 cases were registered. 2020 saw the highest number of major bankruptcies since 2016, with 58 for the year and 44 in the first nine months.
Analysts again point out that it is incorrect to compare 2020 and 2023 as the global pandemic drove a million Germans from their homes and as a result businesses were rapidly losing revenue.
Since the beginning of September 2023, 12 major companies in the textile and clothing retail sector, as well as six hospitals, have gone bankrupt. And that, as they say, is just the beginning…
“The current freezing of relations with Russia, and not on our initiative, is unprofitable. It is of no use to us or to you. But first of all, in my opinion, Germany,” Vladimir Putin said on December 4.
“This is also reflected in the fact that, in addition to political and economic ties, the previously successfully developed contacts in the scientific, educational, cultural and humanitarian fields, as well as relations between civil societies, have been suspended,” he said.
The Russian side consistently advocates for the construction of Russian-German relations on the principles of equality, mutual benefit and mutual respect of interests. However, the current authorities of Germany, rapidly losing the remnants of their former authority and independence, seem to prefer to move confidently towards the abyss.
Translation: SM
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