Panic in the EU/UK
Sanctions have backfired, Europe's economies are failing and Ukraine is losing
Sir Keir Starmer is in Brussels to dine with the 27 EU state leaders following their emergency summit meeting on defence today. He’s expected to call for additional sanctions against Russia and an increase in defence spending to “to crush Putin’s war machine” because he thinks “that is what will bring peace closer.”
He clings to the narrative that sanctions have crippled the Russian economy and Putin is “rattled” by President Trump’s threat to impose more, although it’s difficult to think of what else the US could possibly sanction. Last May, Congress banned imports of Russian uranium products that the US nuclear industry relies upon for 20% of its enriched uranium needs, which will drive up US inflation.
The EU is also having trouble finding additional areas in which to levy sanctions on its arch nemesis. It has cobbled together a package to be announced later this month that targets imports of Russian aluminium, fertiliser, and even playstation consuls.
European farmers are up in arms about another fertiliser price spike that could ignite fresh protests in European capitals and send food prices soaring.
And Antwerp’s diamond sector has been pummelled by import restrictions on Russian diamonds.
Tellingly, the EU sanctions don’t touch imports of Russian LNG. Since cutting off the flow of cheap Russian pipeline gas, Europe has been relying on more expensive Russian LNG, although nations like Germany are loathe to admit it. It has been importing increasing volumes from France and Belgium whose ports continue to accept Russian LNG. In fact, Germany brought in six times more Russian LNG in 2024 than it did in 2023. (Fun fact: in 2023, the UK imported £2.2bn of Russian oil via India, China and Turkey despite having banned it.)
And recently Denmark has allowed Gazprom to carry out preservation work on the damaged Nordstream II pipeline in the Baltic Sea that the CIA blew up in 2022. It seems it’s hoping to switch it back on. The FT reported the EU is debating a return to Russian gas as part of a Ukraine deal.
That’s because expensive LNG is causing a competitiveness crisis for Europe. But opening the Russian gas spigot is anathema to the unelected Brussels bureaucrats who are more driven by Russophobia than reason. And would Russia even be willing to switch it back on?
The dire state of Europe’s economies contrasts with the relative robustness of Russia’s economy, now the world’s fourth largest. Last year, Russia’s budget deficit was 1.7% of GDP and it grew 3.6%, while the UK recorded a deficit of 4.8% and grew just 0.9%.
Over the last two years, Russia’s civilian economy has experienced an investment boom. Since western imports have fallen off, Russian companies have been investing heavily to meet rising consumer demand driven by higher real wages.
It’s also reducing the share of oil and gas revenue in the federal budget, bringing it down from around half to 29% in 2024, in an effort to have a more balanced economy, less reliant on volatile commodity prices.
The bottom line is that the Russian economy is in good shape. The western sanctions that were supposed to devastate it have instead boomeranged back onto Europe’s economies and Russia has easily replaced exports lost to the west by trade with Asia - mainly China, Turkey, India and Brazil.
As for Ukraine, things are going from bad to worse. Last Thursday, the Russian Ministry of Defence announced there were 60k Ukrainian injuries and deaths in November, 55k in December and 52k in January. That’s over 150k in just 3 months while Ukraine’s replacement rate is just 20-30k men per month.
The Russian army continues to make rapid advances and recently took the eastern Ukrainian strongholds of Valyka Novosilka, Toretsk and Chasiv Yar.
The Ukrainian intelligence service, the SBU, opened an investigation into its chief Kirill Budanov for warning of serious consequences for Ukraine’s existence if negotiations to end the war don’t begin by the summer.
The Trump administration’s stop work orders on foreign aid (Israel and Egypt are exempted) are having a devastating impact on the Ukrainian government since it depends on the US for paying salaries, overheads and pensions, as well as topping up Zelensky and his henchmens’ slush funds. Biden’s State Department even paid for Ukrainian media outlets which explains why Ukraine’s dire straits have been concealed from the western public.
European leaders and Sir Keir are in a panic. They believe that ginning up defence spending will keep the US engaged in Project Ukraine and hence engaged in Europe.
But Trump has threatened tariffs on EU and UK exports and has said he wants to negotiate a deal to end the conflict.
There’s a way out of this mess if only Starmer and European leaders were wise enough to take it, which is doubtful. First, they’d try to stop, not stoke, the conflict. Second, they’d understand that the only rational way forward is to restore diplomatic, economic and commercial links with their largest neighbour. If they fail to do these things, they will face continuing decline and worse, irrelevance.
EU and UK, even US, are arrogant and ignorant to think they are the be-all and end-all! Russia has thrived through sanctions because they have deals across the rest of the globe! The EU, UK ego will be their downfall.
Some folks may feel shocked or fearful now that they see openly how little they are valued by their own governments, for me, although the current consequences are terrible for the people, I’m personally more hopeful than EVER, now that they’ve finally exposed themselves, it means they are weak, there’s never been a better opportunity for REAL change! The veil has been lifted, even “normies” 😆 can see it now!
C’mon folks, ride the wave, and please, for the love of god, make far better choices now you have this knowledge! You may not have believed the rest of us, but now surely you trust your own eyes and ears 🙏😅
P.s helpful tip: take a breath, research, make a plan of action (whether getting behind a new brand of political party or how to get out of current system, whatever 🤷🏼♀️), ACT, dont just REACT! 🤝
It's an interesting coincidence and at the same time irony that the UK and other European countries are still able to buy oil and gas from Russia via other country outlets such as Turkey and India while advocating a political ban on Russian energy supplies. Politics is never straight forward.