Economic failure of EU unavoidable: Greece's Varoufakis

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The German business model failed due to the ongoing crisis impacting the energy sector in the European Union, and the latter's economic failure is unavoidable, former Greek Finance Minister Yanis Varoufakis told Dutch broadcaster NTV during an interview.

Seeing the European economy with a highly pessimistic scope, the former Greek official explained how Germany's economy was built around "cheap energy from Russia, the sale of products in China, and low wages in Germany."

However, Varoufakis saw that the status quo was vastly different: "Inflation has made it impossible to lower wages, gas has become expensive and China is disappearing as a market for Germany due to a new cold war between China and the United States, which the Biden government is intensifying."

"The constant insistence of the current German federal government - and previous governments - to act unilaterally and thereby support the fiscal strategy to achieve an export surplus - is a neo-mercantilism that Germany prevents the rest of the eurozone from implementing," the financial expert underlined.

He also stressed that Germany was not taking into consideration the competitive equality within the European Union when it came to its own economic structure.

According to Varoufakis, Germany's €200 billion aid package for the German people is "a double standard. Germany insists on a single market and a supposed level playing field while pushing through state aid for its industry and consumers."

The German news agency Deutsche Presse-Agentur (DPA) reported earlier in the month that some 7,000 protesters took to the streets in more than 15 cities around the Mecklenburg-Vorpommern state of Germany, asking that the government provide an affordable standard of life and stop providing weaponry to Ukraine.

In an effort to get ready for a winter without Russian energy supplies, Germany announced on Friday that its gas reserves have been filled up to 95% faster than anticipated as the rest of the European Union struggles with energy resources.

To add insult to injury, Germany may have to temporarily curtail its electricity exports, including to France. The Financial Times quoted Hendrik Neumann, chief technical officer of Germany's main grid operator Amprion, saying that this could be Germany's "last resort", despite Berlin being a key electricity exporter for Europe.

"The problem with the European Union is that there is no European Union at all. As a name, yes, but not in reality. [...] Failure is guaranteed," Varoufakis underscored.

"We are already witnessing rapid deindustrialization in Europe. EU companies pay ten times more for gas than their US or Chinese competitors. Production is already down and very soon we will see factories looking for new locations in the US or elsewhere," he added.

According to the co-chair of the opposition right-wing party, Alternative for Germany party (AfD), Tino Chrupalla, Germany won't be Europe's gas hub for the sale of hydrocarbons - instead, it will have to purchase Russian fossil fuels from other countries, including Turkey.

Speaking to Sputnik, Chrupalla said "If Germany refuses Russian gas, then it is quite natural that Russia is looking for other partners, such as Turkey or China. And, in the end, we will probably have to buy gas from these countries, but at the same time, it was and remains Russian. We will never be able to compensate for it." 

"The EU is in a deep crisis. You will probably not see it this winter, only the next one. The gas storage tanks have been filled this summer, but this will have significantly higher costs only next summer," Varoufakis concluded.