Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
President al-Mashat: Our armed forces, represented by our air defenses, will soon turn the Zionist enemy’s aircraft into a subject of ridicule.
President al-Mashat: Good news about the Zionist enemy’s aircraft used in aggression against our country will reach you soon, God willing.
President al-Mashat: Our armed forces will be able to deal with hostile Zionist aircraft without causing any harm to air or maritime navigation.
President al-Mashat: To ensure the safety of airliners, they must avoid navigating along the routes used by the Zionist entity to carry out aggression against our country.
Yemeni President Mahdi al-Mashat: For the safety of air and maritime navigation in areas where our armed forces operate, we have directed that the routes used by the Zionist enemy to attack our country be designated as dangerous.
Hamas official says despite this, Hamas leadership is currently undertaking a thorough review of the new proposal
Hamas official says the response fails to meet any of the just and legitimate demands of our people
Hamas official says it is clear that the Israeli response fundamentally seeks to entrench the occupation
Reuters citing Hamas official: Group received Israeli response to Witkoff proposal
Sources to Al Mayadeen: The news regarding a press conference tonight by the head of the Hamas movement in the Gaza Strip, Khalil Al-Hayya, is false.

'Imperial Desperation': Insisting on Deference, whilst Radiating Weakness

  • Alastair Crooke Alastair Crooke
  • Source: Al Mayadeen English
  • 16 Oct 2022 23:38
  • 8 Shares
7 Min Read

Europe stands amid schizophrenic tensions. On one hand, ‘the Normal’ (high-end ostentatious consumption) is very present, yet, on the other hand, increasing clusters of the ‘Abnormal’ also exist.

  • x
  • 'Imperial Desperation': Insisting on Deference, whilst Radiating Weakness
    This is a moment that evokes an earlier period of Great Power fragility: namely, the initial escalation leading into World War I 

Anyone visiting western Europe in recent days will have sensed its febrile cerebral quality. The overload of toxic, sneering propaganda against Russia, now fearmongered up to the threat of a tactical nuke ‘Armageddon’ against Ukraine, has taken collective Europe into a delusory trance.

In the US, the preoccupation with Ukraine seems to be fading (the ‘stats’ suggest), yet within a segment of the European leadership class, ‘war with Russia’ has ignited old revanchist passions (that would have been best left to their slumbers). Pulling Europe out of its deep Ukraine ‘trance’ will not be quick, or easy. Indeed, it may prove to be indeterminate in its outcome.

This Ukraine ‘bubble’, however, is deflating: It was always primarily ‘psy-ops war’ intended, at best, to fracture the Russian peoples’ resolve, and to trigger a backlash against President Putin; and at worst, to evolve into a protracted quagmire. Kiev now has sunk to terrorist-like, one-off military ops, and ‘show’ offensives, amidst implausible calls by Zelensky for NATO to bomb Russia. Dirty war however, exudes the whiff of weakness, rather than strength. 

Yet, this alone does not account for the jittery atmospherics in Europe today. The temper is undercut by palpable, but largely unsaid, fears. For, it is not just the Ukraine bubble that is slowly deflating -- there exist two separate other major bubbles which are bursting, too. 

As a result, Europe stands amid schizophrenic tensions. On one hand, ‘the Normal’ (high-end ostentatious consumption) is very present, yet, on the other hand, increasing clusters of the ‘Abnormal’ also exist: Violent civil clashes in big city outskirts, and examples of state decomposition that are visible as ‘things’ periodically cease functioning. No one knows to where this path leads -- hence the under-cutting mood of unstated foreboding.

One of these twin bursting bubbles is that of Europe’s ‘business model’: At the EU centre, is Germany. It has been the economic ‘engine’ both keeping the EU financially ‘liquified’, and at the same time, Germany has profited hugely from an Euro structurally uniquely conceived to give German high-value manufactured exports an otherwise unavailable competitive edge.

The alacrity by which the EU embraced Biden’s sanctions war on Russia, and then vented some unsuspectedly deep veins of Russophobia, has culminated with Germany’s – and by extension – Europe’s decades old, business model collapsing.

German high-quality export surpluses (which lubricated Brussels’ functioning) were only competitive because of the availability of cheap Russian piped Natural Gas. This is now gone (particularly after the sabotage of the Nordstream pipelines). And even were Germany to make a U-turn, it is not certain that Moscow would oblige by restoring the gas supply to Europe. Russia’s attention, maybe irrevocably, has turned East. 

The markets for both LNG and oil are tight (because of ‘Green’-promoted under-investment). And even if Europe can get any gas, it is only at nose-bleed prices. US LNG costs approximately seven and a half times more than piped Russian gas.

Much of EU industry simply is now uncompetitive. Simply put: the cost of energy is bankrupting Europe’s industry. And it is now dawning on leaders that energy scarcity may not be ‘transitory’ (to borrow a term from the financial markets' ‘hopes’ for transitory inflation).

Capping prices won’t work, and subsidising (i.e. protecting) EU industry inevitably will lead to distortions and dysfunctionality. No, Europe’s business model will have to be re-cast (if that is even remotely possible, given the rigidities of the EU political structures).

Related News

News from Nowhere: Far from the madding crowd

How Berlin police marked International Women’s Day by beating women who stood up for Palestine

This prospect would be bad enough on its own -- but then there is the third ‘bubble’ that has begun to burst in tandem.

And what is that?

It is the ‘zero inflation – zero interest rate – massive government spending’ bubble that has begun to burst. And it is huge. 

For two decades and more, western economists believed they had both the bust-and-boom trade cycle and inflation licked.

It just required Central Banks to operate the monetary policy levers of interest rates, QE and QT appropriately to keep the ‘magic’ of endless deficits, financed through money printing (endorsed as Modern Monetary Theory), chugging the spending out.

It was great while it lasted, but inflation has killed it. The West had enjoyed a period of unparalleled consumer abundance, thanks to low inflation and ultra-low interest rates. Just to be clear, western economic hegemony has rested on these two pillars of low inflation and low or zero interest rates.

The reality is that this comfortable prosperity did not rest on Central Bank wizardry, but owed firstly to China’s cheap manufactures (its export model), and secondly, (for Europe) to Russia’s cheap energy.  So when these two pillars fell, the inflationary monster was back.

First came ‘de-coupling’ and US tariffs on China. Then Europe at Biden’s behest sanctioned Russia’s cheap energy (before securing any alternatives).  Commodity prices soared, and inflation dug in deep -- and we are on an escalatory track.

However, as interest rates spike, asset valuations inversely tumble, and markets risk at best a painfully-hard ‘landing’ as Central Banks have trapped themselves with little alternative but to fight inflation -- even at the risk of a market bust.

Is there a way out? Maybe -- maybe the EU could revoke sanctions and ask for Russian energy to be restored. Maybe Moscow would agree, but very possibly not. And would the US permit its’ EU acolytes to cosy up to Russia? What happened to Nordstream suggests very strongly it would provoke a ‘no’ from the US. And a ‘no’ -- even if it tanks the economy of its closest ally.

This is a moment that evokes an earlier period of Great Power fragility: namely, the initial escalation leading into World War I (as Malcom Kyeyune has noted (see below)) that saw an array of nations dragged into the conflict -- all of them disastrously underestimating the length and severity of the conflict. (Sound familiar?):

“The parallels go deeper. The immediate pre-war period saw a structurally weakened Great Power - Austria-Hungary - beset on all fronts… In other words, Austria-Hungary was slowly falling apart. Outside it were various rivals plotting the empire’s demise, and inside, lurked a plethora of nationalist malcontents - each hoping to gain freedom or glory from blowing it up. The result was that Austria-Hungary felt it had no choice but to act extremely tough, especially in the Balkans, and especially against the Serbian nationalists. The Austrians didn’t dare let any enemy be successful.”

“The lead-up to World War I was less a story of hubris [as today] and more one of imperial desperation. There were simply too many leaks that Vienna was trying to plug at the same time. The parallels to the contemporary United States should be obvious at this point … it’s a fine line that the United States is walking. It isn’t easy to permanently scare your enemies while you are also giving off clear signs of weakness. Washington is trying to do just this on two fronts. Sooner or later, bellicose rhetoric may end up backfiring, inspiring not deference but defiance from its intended targets”.

 

The views expressed in this article are solely those of the author and do not necessarily reflect Al Mayadeen’s editorial stance.
  • Europe
  • Russia
  • US
  • inflation
  • EU
  • Ukaine
Alastair Crooke

Alastair Crooke

Director of Conflicts Forum; Former Senior British Diplomat; Author.

Most Read

All
Although the background information does not indicate direct US involvement, considering the broader geopolitical context, it is plausible that the US would have an indirect impact. (Al Mayadeen English; Illustrated by Zeinab El-Hajj)

Did 'Israel', US fight a proxy war with China in South Asia during the India-Pakistan escalation?

  • Feature
  • 19 May 2025
The two countries need to sit down and resolve the crisis with maturity, to consider carefully that they could be being manipulated to be easily dominated. (Al Mayadeen English; Illustrated by Batoul Chamas)

Algeria and Mali, divided and almost conquered

  • Opinion
  • 25 May 2025
The spirit of Bandung: 70 years on

The spirit of Bandung: 70 years on

  • Opinion
  • 18 May 2025
Trump and Biden both pretended to be fighting Netanyahu

Trump and Biden both pretended to be fighting Netanyahu

  • Analysis
  • 28 May 2025

Coverage

All
The Ummah's Martyrs

More from this writer

All
The Nakedness of EU ‘Geo-political’ Ambitions Will Be Revealed - As the Ukraine War Melts Away

The Nakedness of EU ‘Geo-political’ Ambitions Will Be Revealed - As the Ukraine War Melts Away

The Slow-Motion Advance to the Edge of the Abyss

The Slow-Motion Advance to the Edge of the Abyss

Already, "Israel" has the White House committed to support an Israeli military operation against Hezbollah. (Al Mayadeen English; Illustrated by Zeinab El-Hajj)

Does 'Israel' want war?

The European Mutiny: The Consequences are Just Beginning

The European Mutiny: The Consequences are Just Beginning

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS