MICHAEL HUDSON, AMERICAN ECONOMIST
As published in El Berliner Zeitung. The dismantling of German industry from 2022 is collateral damage in the US geopolitical war to isolate China, Russia and countries whose growing prosperity and self-sufficiency is seen as an unacceptable challenge to US hegemony.
To prepare for what promises to be a long and expensive fight, American strategists took a preemptive step in 2022 to distance Europe from its trade and investment relations with Russia.
In fact, they asked Germany to commit industrial suicide and become a dependency on the United States. That made Germany the first and most immediate target of the United States’ New Cold War.
Upon taking office in January 2021, Joe Biden and the national security services declared China to be America’s number one enemy and considered its economic success an existential threat to American hegemony.
To prevent European investment in China, while building its own military defense, Biden’s team sought to lock Europe into the United States’ economic orbit as part of a campaign to isolate the PRC and its supporters, hoping that This would disrupt their economies. creating pressure for countries to abandon the creation of a new multipolar economic order.
This strategy required European trade sanctions against Russia and similar measures to block trade with China to prevent Europe from being drawn into the emerging China-centered sphere of mutual prosperity.
To prepare for war between the United States and China, American strategists attempted to block China’s ability to receive Russian military support. The plan was to drain Russia’s military power by arming Ukraine and dragging Russia into a bloody struggle that could lead to regime change.
The unrealistic hope was that voters would resent the war, just as they had resented the war in Afghanistan that had contributed to the end of the Soviet Union.
In this case, they could replace Putin with local oligarchic leaders willing to pursue pro-American neoliberal policies similar to those of the Yeltsin regime.
The effect has been quite the opposite. Russian voters have done what any attacked population would do: they have rallied around Putin. And Western sanctions have forced Russia and China to become more self-sufficient.
This American plan for a global New Cold War had a problem. The German economy enjoyed prosperity by exporting industrial products to Russia and investing in the post-Soviet market, while importing Russian gas and other raw materials at relatively low international prices.
It is axiomatic that, under normal conditions, international diplomacy responds to the national interest. The problem for American cold warriors was how to persuade German leaders to make the uneconomic decision to abandon their profitable trade with Russia.
The solution was to foment war with Russia in Ukraine and incite Russophobia to justify the imposition of a wide range of sanctions blocking European trade with Russia. The result has been to lock Germany, France and other countries in a relationship of dependency of the United States.
Americans use NATO-sponsored trade and financial sanctions with Orwellian doublespeak; While Europe has “freed itself” from dependence on Russian gas, EU countries have been forced to import American liquefied natural gas (LNG) at prices three or four times higher.
By shedding their trade ties with Russia, the Germans have no alternative but to move some of their main industrial companies to the United States (including China) to obtain the gas necessary to produce manufacturing and chemical products.
Joining the war in Ukraine has also led Europe to deplete its military reserves. Now it is being pressured to turn to American suppliers to rearm, with equipment that has not worked well in Ukraine.
American officials are promoting the fantasy that Russia may invade Western Europe. The purpose is not only to rearm Europe with American weapons but also to exhaust Russia as it increases its military spending in response to NATO’s millionaire budget.
In the West, the refusal to see Russia’s policy as defensive has prevailed, a defense against the threat of NATO that is now planning how to intensify attacks to take over the Russian naval base in Crimea, in pursuit of the dream of dividing Russia.
The reality is that Russia has decided to turn eastward as a long-term policy. The world economy is fracturing into two opposing systems leaving Germans stuck in the middle as their government has decided to lock the nation into the American unipolar system.
The price of this decision by the German elite will be to maintain a hegemony centered on the United States and inevitably suffer an industrial depression. What Americans call “dependence” on Russia has been replaced by a dependence on more expensive American suppliers, while Germany has lost Russian and Asian markets.
The cost of this choice is enormous. It is wiping out German employment and industrial production, which has long been an important support for the eurozone exchange rate. If this continues, the future of the EU seems to be heading towards an irremediable downward trend.
So far, the loser in America’s New Cold War has been Germany and the rest of Europe.
What Germans are asking themselves right now: Will the economic vassalage to the United States be worth it? Will this economic vassalage be worth losing emerging countries’ fastest-growing global markets?
Crisis Observatory
