West’s new cold war on Russia & China crushes EU’s economic heart: German industry

NATO’s new cold war on Russia and China is destroying Germany’s industrial base, devastating Europe’s economy, and destabilizing its politics, fueling the rise of the far-right, as neoliberal austerity policies exacerbate the ongoing recession. Ben Norton analyzes the evidence.

Cited videos:
– EU confesses ‘our prosperity was based on China & Russia’: cheap energy, low-paid labor, big market: https://youtube.com/watch?v=ajIRkk1FOkM
– German lawmaker denounces Ukraine ‘proxy war’ and US ‘terror attack’ on Nord Stream pipelines: https://youtube.com/watch?v=NYn0ODIL0Qg
– How corporate profits are driving inflation, not workers’ wages: https://youtube.com/watch?v=qdZbq1iw-ho

Topics
0:00 Crisis in EU’s economic heart: Germany
5:04 EU admits “our prosperity was based on China and Russia”
6:51 German industry
8:09 US-NATO “vassalization” of Europe
10:09 Cheap Russian gas or expensive US LNG?
13:37 Corporations and speculators profit
17:08 Greedflation
19:08 Neoliberal austerity is back
21:24 US Inflation Reduction Act (IRA)
23:52 Economic war on China backfires
27:01 Rise of far-right
29:46 Germany’s leftist anti-war alternative
33:01 Environmentalist policies are not the problem
34:56 Outro

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The Western powers are increasingly engaged in conflict with Russia and China and what we’re essentially seeing is a new Cold War however not every country is being affected in the same way and Europe in particular is suffering economically from this new Cold War while the United States benefits it is essentially destroying

Germany’s economy today I’m going to be looking at a series of reports that demonstrate how the heart of the German economy which is its heavy industry is being devastated by this geopolitical conflict and Germany is at the center of Europe’s economy so this is going to have significant reverberations across

The continent Germany is officially in recession its GDP shrank by 0.3% and this article in the guardian notes that Germany is on track to be in recession for at least least two years and it attributes this recession to higher energy costs weaker industrial demand higher interest rates and elevated living costs the financial

Press has been warning that German industry is being destroyed and as Bloomberg put it quote Germany’s days as an industrial superpower are coming to an end Bloomberg noted that manufacturing output in Europe’s biggest economy has been ending downward since 2017 and it quoted the CEO of a German company that creates machinery for

Manufacturing and he said quote there’s not a lot of Hope if I’m honest and Bloomberg isolated three particular factors being the main reasons driving the de-industrialization of Germany one the US is drifting away from Europe and is seeking to compete with its European allies for climate investment I’ll be

Speaking about the US government’s policies and in particular the trillions of dollars worth of subsidies and tax breaks that the US government is offering through the inflation reduction act furthermore another significant factor is that China is becoming a bigger rival and is no longer an insatiable buyer of German goods and as

The West’s economic War on China as part of this new Cold War as that heats up that’s also backfiring hard on German industry and finally I think the most important factor is the end of huge volumes of cheap Russian natural gas which has significantly increased the cost of manufacturing production in

Germany it’s also significantly increased the costs of living in Germany and energy prices electricity bills have skyrocketed in Germany which have really hurt purchasing power and that has also depressed local demand which is another reason fueling the recession because people are spending more and more money simply on paying their bills which means

That there there is significantly decreased aggregate demand in the economy people are not going out to restaurants as much and buying products and consuming and then finally the loss of cheap Russian gas means that the cost of manufacturing has increased a lot and that means that German exports are much

Less competitive and its exports have been declining furthermore Bloomberg noted that other factors include decreasing investment public investment in infrastructure and education and this reflects that the Western governments have been moving more toward neoliberal policies for decades decreasing social spending on things like Health Care education and investment and now we’re

Seeing that this is backfiring because as the state invests Less in Social Services that means that workers have to spend more of their paycheck on things like education and Healthcare and that means that there once again is a decrease in aggregate demand in the economy but again the issue of energy is

Of the utmost importance Bloomberg noted that the energy crisis in the summer of 2022 was a major Catalyst and they say the energy crisis as if we can’t explain what happened what happened in 20 22 of course the war in Ukraine and the Western sanctions on Russia which have

Backfired hard and hurt European economies there’s a chart in this Bloomberg article that shows how power bills have skyrocketed across the European Union but especially in Germany you can see that energy prices have more than doubled and furthermore Bloomberg notes that one of the hardest hit sectors has been chemicals which is a

Direct result of Germany’s loss of cheap Russian gas and this recalls a very revealing comment that was made by the EU foreign policy Chief Joseph Burell back in 2022 he admitted that for decades the low inflation enjoyed by European economies was largely a product of cheap Russian gas and also access to the

Massive Chinese market as China was growing very significantly in the s and 2000s and had an insatiable appetite for exports from Germany and other European economies and now with the growing geopolitical tensions and the new cold war that the West is waging against both Russia and China the EU is destroying

The very base of its economy this is that very revealing comment from Joseph brell the EU foreign policy Chief so our prosperity was based on China and Russia energy Market you us takes care of our security you China and Russia provide the basis of our prosperity this is a

World that is no longer there our prosperity has been based on cheap energy coming from Russia Russian gas cheap and suppose affordable and secure and stable which has been proved not the case and the access to the big China market for exports and imports for technological uh transfer for investment and for having

Cheap Goods I think that the Chinese workers with their low salaries has done much better and much more to contain inflation that all the central banks together now specifically in the case of Germany it would be difficult to overstate how important exports are to the German economy

For decades Germany was one of the world’s leading industrial powers and despite the fact that manufacturing production has been significantly declining since 2017 it still is a major part of German exports according to the latest data from the German government in 2023 17.2% of its total exports consisted of

Motor Vehicles and parts and of course the German car industry is very prominent internationally with big companies like Volkswagen and BMW Machinery represented 14.3% of Germany’s total exports and chemical products represented around 9% so together cars and car parts machinery and chemicals made up 30% nearly onethird of Germany’s exports in

2023 but as Energy prices have increased substantially in Germany it’s become more and more difficult to produce these products at a low price and with the cost increasing that decreases the competitiveness of German exports and I don’t think it’s a coincidence that this comes at the same time when Germany is

Being more and more politically subordinated to the United States and Europe as a whole and in fact a very mainstream European Think Tank called the European Council on Foreign Relations which is based on the US Council on Foreign Relations they published an article back in 2023 in which they warned that Europe is

Becoming a vassel of the US they said that the war in Ukraine has revealed Europeans profound dependence on the US for their security despite EU efforts at achieving so-called strategic autonomy and they warn that Europe is becoming an American vessel now of course this European Think Tank blamed Russia but in

Reality it’s not really Russia it’s actually the United States States and NATO the stronger NATO becomes and the more unified it becomes the more European nations have subordinated themselves to the United States following orders from Washington and it was in fact the first Secretary General of NATO the British colonial General who

Oversaw colonial war crimes in Somalia and and other parts of the British Empire Lord Isme he famously said that NATO was created to quote keep the Soviet Union out the Americans in and the Germans down and of course replace the Soviet Union with Russia today and

It’s the same thing I mean this slogan is on the NATO website they don’t hide this they say the goal is to keep Russia out of Europe the Americans in the alliance with Europe and the Germans down and we can see that NATO is contributing to the destruction of

Germany’s economy and this has very serious consequences Al will discuss later it’s also feeling the rise of the far right in Germany and we should all be very afraid when the far right is back on the rise in Germany of all places and in terms of de-industrialization in Germany let’s

Look back at the issue of energy now in 2022 with the war in Ukraine we saw a massive shift in the sources of energy that that Germany was importing in the first 6 months of 2022 Germany imported about 35% of its gas from Russia and that has

Gone basically down to zero and that much of that has been replaced by Norway but meanwhile Germany is spending billions of Euros building terminals to import liquefied natural gas LNG and where is that LG coming from the United States in fact in 2023 the United States overtook Qatar as the world’s largest

Exporter of LNG and Europe is spending a lot of money on that LNG in fact Russia estimated that us LNG costs 40% more than the Russian Pipeline gas that was previously being sent to countries like Germany and that was powering much of this industry in fact this even LED some

Of Washington’s allies in Europe to criticize the United States for profiting from the war in Ukraine while Europe has been hurting economically Politico published an article titled Europe accuses us of profiting from war it notes that top European officials are furious with Joe Biden’s Administration and now accuse the Americans of making a

Fortune from the war while EU countries suffer and they Politico quoted an anonymous EU official who said quote the fact is if you look at it soberly the country that is most Prof in from the war is the us because they are selling more gas and at a higher price and

Because they are selling more weapons Politico also quoted the eu’s Chief Diplomat Joseph Burell who called on Washington to respond to European concerns and said quote Americans our friends take decisions which have an economic impact on us here we can see this vassalization that European think tanks are warning about top EU officials

Are saying why are you doing this to us we love you we’re your friends of course it was the US Imperial strategist Henry Kissinger who infamously said America has no permanent friends only interests and Europe is learning that the hard way and of course let’s not forget the

Nordstream pipelines the two sets of pipelines that Germany had built with Russia in order to provide cheap pipeline gas to power German industry and those pipelines were blown up and the Pitzer prizewinning journalist sear H reported that the United States blew up those pipelines and the German Member

Of Parliament seim dodelin a leftist from a new political party which I’ll talk about later she accused the US of blowing up the pipeline she called it a terror attack and she said that the US is is turning the EU into vassel States and condemn the NATO proxy war in

Ukraine svim Dogan is part of a new leftist party that is trying to push back against some of these policies I’ll talk about that in a bit but before that I should also point out that there are some other people who are benefiting from these higher energy costs in Europe

Which is importers and Politico published a very interesting article titled why cheap us gas costs a fortune in Europe the article noted that many of the companies that are making a fortune selling cheap us gas to the continent at eyw watering markups are in fact European they know that the liquefied

Natural gas loaded onto tankers at us ports costs nearly four times more on the other side of the Atlantic and they note that it’s not just us companies the LG exporters that are making a fortune on this it’s also European importing companies that are also making huge

Profits Politico wrote it’s a big markup for whoever is reselling those LG cargos into Europe’s wholesale Market profiting from fears that there may not be enough gas to last the winter and in fact there have been many reports that speculators are making huge profits in Europe off of

The massive increases in Energy prices in fact Bloomberg published an article that is quite frankly shocking showing how speculators in Europe are making billions of dollars profiting as their fellow citizens in in Europe are suffering economically of a cost of living crisis and this article noted that in Denmark there are these new

Companies that have been set up that use computers and complex trading algorithms with minimal human intervention they buy millions of Euros worth of electricity cont contracts and they’re basically betting they’re gambling with these Futures contracts they’re putting shorts out and they’re essentially making billions of dollars speculating guessing

Betting on where Energy prices are going to increase if gas prices are going to rise or fall and Bloomberg quoted a consultant who said quote it’s ridiculous the amount of money they are making there are billions being made trading electricity in Europe and I mentioned that this is largely a product

Of these neoliberal policies these right-wing economic policies pursued by Western European governments and this article notes where state-owned utilities once dominated today highflying startups full of terribly smart phds and young Engineers sporting hoodies are running things call it the Silicon Valley of European energy trading so we see this Neo liberal

Technocratic propaganda oh look how smart they are but in reality what we see is that these Western governments privatize state-owned power utilities what were previously were these natural monopolies that were owned for public benefit through their privatization policies they created these speculation rackets and just 5 years ago the industry was

Small with the top firms making a combined net income of about $100 million per year at best today the same companies made $5 billion in profits in 2022 and they have a chart showing this incredible increase so European governments are further fueling the cost of living crisis with these neoliberal privatization policies

Allowing energy speculators to get rich while their people suffer and here we see another factor that is leading to the economic crisis in Europe which is greed inflation as it’s been called ex exorbitant excessive corporate profits that have fueled inflation because of course there was an inflation crisis

That actually is still going on in the in Europe and this originally was caused largely by the supply chain disruptions due to the pandemic but as we’ve gone come out of the pandemic and economies have recovered inflation has remained persistently high in Europe and one of those reasons is because of the energy

Crisis which I’ve been discussing and the loss of cheap Russian energy but also another significant factor is corporate profits I published a video in an article which I will link to in the description below looking at a study that was done by the international monetary fund I IMF economists found

That corporate profits contributed for nearly half of all of the inflation in the Euro Zone and of course Germany is at the heart of the Euro Zone’s economy IMF economists estimated that 45% of the inflation in Europe was caused by excessive corporate profits 40% of the inflation was caused by

Rising import prices which is largely due to energy so between the rising import prices and the excessive corporate profits that was 85% of the increase in inflation and and they only estimated that 15% of the increase in inflation came from increasing wages but meanwhile many Western neoliberal economists and

Politicians blamed inflation on worker wages and tried to bring down workers wages and drive up unemployment in order to try to crush demand to try to bring down inflation and as if that weren’t enough meanwhile the German government is imposing austerity policies these neoliberal economic austerity policies that are further exacerbating the

Recession I mean this is the exact opposite of what even mainstream Keynesian economists say that when you have a recession the government should be doing the opposite of austerity it should be spending more providing a stimulus to increase aggregate demand well Germany the neoliberal economists the ordoliberals as they’re called the

Neoliberals who are running German Economic Policy are imposing austerity measures which are fueling further recession further de-industrialization and hurting workers because they have this dogmatic Milton Freedman esque worldview that inflation is always and everywhere a monetary phenomenon and they have to depress workers wages because supposedly it’s demand pole inflation but they’re

Ignoring the elephant in the room which is the Empirical research that shows that the vast majority of the inflation is caused by the energy shock due to Rising import prices and in particular as a consequence of the western sanctions on Russia Germany could end its sanction on Russia if it wanted to

Germany is the de facto leader of the EU it could end those sanctions which are causing economic destruction in Germany and across Europe but they don’t want to end the sanctions on Russia they want to continue waging this economic war on Russia this proxy war against Russia because they want to strengthen the

Us-led imperialist order NATO being the primary instrument of us hegemonic domination not only of the world but of Europe in particular which which keeps Russia out the US on top and Germany down and meanwhile German corporations European corporations speculators they are all profiting from this toxic mix of Neo liberal economics and imperialist

Foreign policy and the people of Germany the people of Europe are suffering The Economic Consequences but on the issue of de-industrialization in Germany and Europe as a whole there’s also another significant factor which is the US government’s policies Goldman Sachs published research in 20123 that looks at the effects of the US inflation

Reduction act the IRA and how it’s fueling trillions of dollars of subsidies and tax breaks for companies and incentivizing companies including in Europe to move over to the US so this is exacerbating de-industrialization in Europe Europe Goldman Sachs estimated that the US inflation reduction act will spur about $3 trillion of investment in

Renewable energy technology and of course this is because the US is trying to compete with China and I’m actually working on a separate video and article separate report which which I will publish soon looking at how China has become the world’s leader in renewable energy technology and how this is

Driving the West’s new Cold War against China not only the us but also the but Europe is also waging an economic war on China which is further fueling deindustrialization in Germany but Goldman Sachs estimated that the US Ira will provide 1.2 trillion dollars of incentives including subsidies and tax breaks by

2032 and this includes many incentives that make clean technology and storage profitable at a large scale and these are many of the companies that are competing with German manufacturers and they note that the Ira’s impact could encourage 11 trillion do of total infrastructure Investments by 2050 by 2032 their analysts estimate

There will be $2.9 trillion of cumulative investment opportunity an average of $29 billion annually so this means that the US government is providing all of these incentives for companies to instead invest in the United States to build factories in the US why would they invest in Germany when

They know that it’s going to be extremely expensive due to the high energy costs why would they do that when they can invest in the US so here we see another example of the US hurting the economy of its so-called European allies and now finally this brings me to the

Last factor that is fueling de-industrialization in Germany and that that is the significant decline in German exports to China which had long been the most important market for German exports the financial times published a very revealing article titled big drop in German exports to China raises fears over eu’s economic

Powerhouse it noted that a double digit drop in German exports to China has rattled Europe’s biggest economy with an 11.3% drop in German exports to CH in the first 4 months of 2023 car makers which remember are the number one export in Germany car makers are losing market share in China

Chemical producers which are the third biggest exports chemical producers and other energy intensive companies are reeling from high power prices and the Euro’s appreciation against the dollar has also made German Goods less competitive and the fincial times quote this analyst who said quote Germany is now considered to be allies with the US

Which has led to more explicit or implicit discouraging of purchases of German products so we see that also the Western new Cold War against China and the economic aggression against China have also fueled this decrease in trade between Germany and China so this is really a perfect storm fueling de-industrialization in Germany

And of course it also comes at a time when China has become the world’s leading industrial superpower in fact I recently published a video in an article precisely about this I will link to that in the description below China now represents 35% of the world’s gross output of manufacturing production the

US is in second place Japan is in third place and Germany is in fourth place and that is declining more and more by the year and by the way it’s not just China in general as the global South has been economically developing and gradually trying to free itself from Western

Neocolonialism we see that several other nations in the global South along with China have become significant manufacturing producers this is a list of the 20 largest manufacturing countries in 2023 and we can see that Russia has been reindustrialize it’s the ninth largest manufacturer Mexico is the 10th biggest Indonesia is the 11th

Biggest and Indonesia is growing very quickly it’s it’s a country you should definitely keep your eye on it has a huge population a lot of economic potential turkey Tura is the 12th largest manufacturing producer Brazil is the 15th largest and Thailand is the 17th largest so there is more

Competition now so why would people spend more and more on extremely expensive German Manu manufacturing products when they have other options to choose from so in short the situation in Germany is very dire and this is fueling political radicalization in fact the far right is on the rise once again in Germany and

The farri afd alternative for deutan party has hit record highs in polling in December of 2023 support for the far-right afd hit an all-time high of 23% that puts it at the second highest of out of all parties in Germany as context the current government which is

Led you know as a coalition which is essentially the Centrist Coalition of the Centrist Social Democratic party which has very very much become neoliberal they only have 14% support the greens which are a Centrist party really neoliberal proar party they only have have 133% support and then the the

Right-wing neoliberal party the free Democrats center right but but very you know so-called Pro business neoliberals they have 5% support now like many of the far-right parties in Europe the afd has been trying to downplay its radical politics and claim we’re just a right-wing populist party we’re just conservatives but in reality that

Narrative is is not true many of its longtime leaders in afd have been linked to Neo Nazi groups in Germany and in fact there was a huge Scandal recently in which the German media exposed that leaders of the afd were meeting with neo-nazis and other fascists and white

Supremacists in order to plan Mass deportation of immigrants in Germany but meanwhile support for this far-right party has been increasing in Germany and in the past year afd’s membership increased by 37 % and it’s not a mystery why it’s easy to explain it’s because the other mainstream establishment

Political parties in Germany are all completely the same they’re neoliberal centrists they basically all agree including the so-called left-wing Social Democratic party which is not in any way left-wing it is a Centrist neoliberal party the greens are a right-wing pro-war neoliberal party they’re implementing neoliberal austerity policies right now right-wing economic

Policies and meanwhile the so-called left the Dinka party in Germany also supports the proxy war in Ukraine the proxy war in Russia supports the new Cold War on China they are completely pro-imperialist they support NATO they’re not in any way actually a left-wing party the only real

Alternative in Germany is a new party that was created by a socialist Member of Parliament who split off of the Dinka party her name is Sara vagen knock and she recently formed a new party and in fact a a poll showed from January that she could get up to 14% of the vote

Which would be a game Cher because if you go back to the poll published in Reuters in December they noted that the Social Democratic party the SBD only has 14% support which is the same 14 and meanwhile the SPD currently has the chancellor Olaf Schultz who’s the

Current head of state of Germany Reuters noted that Sara vag’s new left-wing party could also deal heavy blows to both the conservatives and the far right so she is taking votes away from the right-wing and farri forces in Germany this poll found that Sara vag’s new leftwing party which is actually

Anti-war which opposes NATO imperialism opposes the proxy war against Russia in Ukraine that this party could take four percentage points away from the farri right afd and it could take three points away from the conservative party putting them at only 27% that’s the Christian Democratic party which is the party of

The former longtime Chancellor Angela Merkel and by the way earlier I mentioned another leftist Member of Parliament in the bundestag in Germany seim dodin she also left the she withdrew from the left party the so-call party which is actually not a left-wing party and she also joined this new real

Leftist party led by Sara vagano which is actually anti-war Anti-Imperialist and also proposes socialist economic policies and I did an interview with svim dodelin in which she condemned the NATO proxy war against Russia in Ukraine she condemned the US terror attack on the nordstream pipelines and she said

That Europe is becoming a vassel of the United States so there are a few Alternatives that are emerging in Europe and this is in response to the severe crisis that Germany is in and in general all of Europe is in and people are waking up and realizing that this is a

Product of the West’s new Cold War against both Russia and China as EU foreign policy Chief Joseph Burell said back in 2022 Europe’s economic Prosperity the the base of its economic model was China and Russia cheap energy from Russia and the big Market in China and now this new

Cold war is eroding that economic base and it’s fueling political crisis in Europe and what’s most concerning of all is that across the continent we see the rise of farri parties which are exploiting this economic discontent but they’re scapegoating immigrants they’re scapegoating environmentalism and green policies which are not responsible for

This crisis everything that I’ve detailed today it’s not because of green policies and environmentalism climate change is a very serious problem but it’s Europe’s political subordination to the United States in these imperialist wars that are backfiring and hurting Europe in fact the claim that Germany is pursuing green policies is actually

Contradicted by the government’s decision to bring back calf fired power plants in the winter of 2023 in in particular because it did not have enough natural gas to meet demand Reuters reported on this saying that it was a result of a sudden drop in Russian gas Imports to Germany not mentioning

The Western sanctions on Russia and of of course the destruction of the nordstream pipelines but here we can see the hypocrisy of the German government’s supposed commitment to Green policies once again the Western governments that talk about fighting climate change are very hypocritical it’s actually China

That is leading the world in the fight against climate change and in the transition toward renewable energies and green technologies I’m going to be explaining that in a separate video I’ll be posting soon but here you can see that people trying to blame the energy crisis and de-industrialization in

Germany on green policies are missing the forest for the trees the problem is not the green policies the problem is the suicidal geopolitical decisions taken by the European leadership which has voluntarily cow toow to the United States and outsourced all of their policymaking to Washington allowing the

US to basically control them so so it’s difficult to be optimistic about what’s going on in Europe but I will always be here reporting on the geopolitics and economics of the situation so you can actually understand what’s going on and if you like this kind of reporting that

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