If Afghanistan is the graveyard of empires, Ukraine is the graveyard of Super Empires. The Super Empire consisting of U.S., Britain, the E.U. and NATO will die in Ukraine. The European Union is a major failure as is the European Central Bank and the Euro. The E.U. has been wracked with infighting, threats of defection and bitterly harsh austerity for the citizens of the participating countries. An article in Russia Times entitled: Nobel Prize winners: Eurozone recovery is 'dismal failure', lays out the failures.
“Stunningly destructive” and “dismal failure” is how Nobel laureates describe growth in the European Union after destructive austerity policies and the euro crisis.
Economists are casting doubt on the effectiveness of monetary policy in the 18-member Eurozone, which is yet to fully shake off recession and produce sustained growth.
Data from earlier this month shows that economies have broken down, and growth has come to a standstill. The three largest economies- Germany, France, and Italy- all failed to grow.
Yes, the harsh austerity measures they want to impose on Ukraine have proven to be abject failures worldwide, but Germany, France and Italy are all willing do double down on their own death. I wonder why?
Nobel laureate and Princeton University economist Christopher Sims warns that the euro countries hit worst by the crisis may be looking for an exit from the failed currency experiment.
“If I were advising Greece, Portugal, and Spain, I would tell them to prepare contingency plans to leave the euro,” the 2011 Nobel Prize winner said.
Economist and Professor at Columbia University Joseph Stiglitz called the Eurozone’s efforts to recover from the debt crisis a “dismal failure” in an interview with Bloomberg TV on the sidelines of a conference in Lindau, Germany “Now we see the enormous price that Europe is paying,” Stiglitz said, adding, “hopefully the reality of this failed policy will strike...”
Inflation has dropped dangerously low to 0.4 percent sparking fears about deflation, or falling prices. The European Central Bank’s goal is to have 2 percent inflation. Unemployment in the Eurozone is down slightly, but at 11.5 percent still near the record 12 percent figure from last year.
MIT Economics Professor Peter Diamond, who won the Nobel Prize in 2010 – warns that work may be more and more difficult to come by.
“It is a terrible outcome, and it is surprising how little uproar there has been over policies that are so stunningly destructive,” Diamond said.
The stagnation is attributed to the failed recovery from the Eurozone crisis, and is also in part affected by the local Ukraine-Russia crisis.
Sanctions and trade wars between Russia and the EU could cut 2 percent off Eurozone GDP in the next two years, according to Gabriel Sterne at Oxford Economics.
So, have the three largest economies- Germany, France and Italy begun to face the financial price of being a Super Empire? Are these kingpins of the European Union going to change from job killing austerity and make radical changes to increase GDP? From Bloomberg:
Counting Drugs and Prostitution in GDP Makes a Mockery of Budget Rules
By Peter Coy May 23, 2014
The Italians have a word for it: sprezzatura, or studied nonchalance. The news that Italy plans to include prostitution and illegal drugs in gross domestic product sounds like a joke. But it’s not just an Italian initiative. New European Union rules require member states to include in GDP the value of all income-producing activities, including prostitution, the production and consumption of illegal drugs, and black market sales of cigarettes and alcohol.
The beauty? By counting prostitution and drugs in output, Italy will raise its GDP and thereby lower the ratio of debt to GDP, which will make it easier to comply with European Union rules on indebtedness. The same will go for other countries. That’ssprezzatura.
Governments of European Union members are not supposed to let their annual deficits exceed 3 percent of GDP or accumulated debt exceed 60 percent of GDP.
Well, with all that lemonade they’re making from the lemons, they should open a global lemonade stand. The sanctions against Russia pushed by the lunatic cabal in control of U.S. foreign and domestic policy will kill Germany’s economy and really puts Merkel in a tough spot.
As early as March 2014 German exporters have been sounding the alarm for Germany. According to Testosterone Pit:
It wasn’t as bombastic as US Secretary of State John Kerry’s blast to lawmakers that the Ukrainian debacle could “get ugly fast,” and “in multiple directions,” but it had the heft of the German export industry.
Anton Börner, president of the German Association of Exporters (BGA), which represents 120,000 companies, the lifeblood of the economy, warned at a press conference in Berlin that further escalation of the crisis in the Ukraine could hit exporters very hard. He said that the BGA expected exports to rise 3% to €1.13 trillion and imports 2% to €914 billion for a trade surplus of €215.6 billion – the highest in history. But “if the crisis in the Crimea escalates further,” these wondrous forecasts of endlessly growing exports and surpluses “could turn very quickly into a mal-calculation.”
The sanction spiral
Further intensification of “the most serious political crisis in Europe since the end of the war in former Yugoslavia” would degrade bilateral economic relations between the EU and Russia. He warned not to underestimate the drag of secondary and tertiary effects on the world economy. “Russia itself, Europe, Germany, and the whole world have a lot to lose,” he said. “But if there’s a sanction-spiral, Germany has the most to lose.”
About 6,200 German companies were trading with Russia or had invested there. The bilateral trade volume was over €76 billion last year. And German companies have invested €20 billion in Russia. The “sanctions-spiral” that is currently gaining momentum could have “unforeseen consequences,” especially for Russia, he said. They’d be “painful for the German economy, but life-threatening for the Russian economy.”
So did the E.U. listen to warnings that Russian sanctions threatened to bring down E.U. economies? Nope, they doubled down and imposed further sanctions on Russia to which Russia responded by imposing bans on the import of perishable goods, that are vital to E.U. economies.
From Russia Times:
Who is hit hardest by Russia's trade ban?
Published time: August 08, 2014 15:20
Edited time: August 09, 2014 16:34
Edited time: August 09, 2014 16:34
Germany and Poland will lose the most trade with Russia, and neighboring Finland and Baltic States Lithuania and Latvia will lose a bigger proportion of their GDP. Norway will see fish sales to Russia disappear, and US damages would be very limited.
Do you really think the Kerry/Biden/Nuland cabal gives a rip if the entire E.U. economy collapses because of sanctions against Russia? Don’t forget, one of the architects of the overthrow of the government of Ukraine, Victoria Nuland said “fuck the E.U.” and that is the official Obama Administration policy on E.U.
|China will start selling fruit and vegetables directly to Russia|
Russia has banned imports of fruit, vegetables, meat, fish and dairy products from the 28 countries of the EU, the US, Canada, Norway, and Australia for one year.
EU trade is heavily dependent on Russian food imports. Last year Russia bought $16 billion worth of food from the bloc, or about 10 percent of total exports, according to Eurostat.
In terms of losses, Germany, Poland and the Netherlands- the top three EU food suppliers to Russia in 2013 - will be hit hardest. Food for Russia makes up around 3.3 percent of total German exports.
French Agriculture Minister Stephane Le Foll said his government is already working together with Germany and Poland to reach a coordinated policy on the new Russian sanction regime.
Last year, Ireland exported €4.5 million worth of cheese to Russia, and not being able to do so this year is a big worry, Simon Coveney, the country’s agriculture minister, said.
Farmers across Europe could face big losses if they aren’t able to find alternative markets for their goods, especially fruit and vegetables.
Some are already demanding their governments provide compensation for lost revenue.
“If there isn’t a sufficient market, prices will go down, and we don’t know if we can cover the costs of production, because it is so expensive,” Jose Emilio Bofi, an orange farmer in Spain, told RT.
Hey you farmers across Europe, do you really think governments of the E.U. care? They are all for austerity, and insuring farmers against financial destruction due to government imposed sanctions aren’t likely to happen. However, bank profits lost due to sanctions more than likely will be reimbursed by the crooked governments of the E.U. The best bet for any of the E.U. country is “get out.”
The largest opposition party in Greece is urging its government drop sanctions against Russia, even if the move isn’t supported by other EU states.
In 2013, Denmark supplied Russia with $628 million worth of products which are now banned.
European Agriculture commissioners will set up a task force to address Russia’s sanctions, on Monday...
Yes, the E.U. is, in Victoria Nuland’s words “fucked”.
America not bothered
For the US the effect will be very limited, as agricultural exports to Russia are about one tenth of one percent of total US gross domestic product of about $144 billion, according to the US Department of Agriculture.
Hmmm, the U.S. is not be bothered? Yes, just wait until American businesses start getting hurt. Wait, what’s this from CBS News?
Branson, business leaders seek Ukraine solution
By Alanna Petroff @AlannaPetroff August 20, 2014: 8:24 AM ET
Billionaire Richard Branson and 15 major business leaders from around the world want an end to the Ukraine-Russia conflict.
As concerned business leaders from Russia, Ukraine and the West, we encourage our governments to compromise and find a peaceful solution to the current conflict," they said in the letter. "We would like to offer whatever support we can to help resolve this violent conflict."
Besides Branson, others signing the letter include Indian businessman Ratan Tata, Nobel Laureate Muhammed Yunus, former eBay president Jeff Skoll and 10 high-ranking Russian and Ukrainian businesspeople.
The signers say they hope to avoid a new Cold War scenario and encouraged all business leaders around the world to start dialogues to end the conflict. "Conversations, not armed conflict, are critical at this juncture," it said.
Will the EU, US and Britain drop their plans for a neocon, Zionist caliphate in Eurasia? These tone deaf idiots in the Obama Administration are so ignorant. They have no support in the world for their bloody, unending wars and even if they were able to kill every insurgent in Ukraine, they would never win over the hearts and minds of a captive people. From The Guardian,
Steven Seagal plays at concert for pro-Russia separatists in Ukraine
Actor, musician and Vladimir Putin's friend performs with band at pro-'Donetsk People's Republic' show in Sevastopol, Crimea.
Hollywood actor and musician Steven Seagal played a weekend concert in the Crimean peninsula, appearing on a stage adorned with the flag of pro-Russia separatists in Ukraine.
Seagal and his blues band played on Saturday at a bikers' show held in the city of Sevastopol, home to Russia's Black Sea fleet. The star has come under fire for supporting Russia's March annexation of the peninsula from Ukraine, a view that saw him bounced from the lineup at an Estonian blues festival this summer.
At the corner of the stage hung the black, blue and red flag of the self-proclaimed "Donetsk People's Republic" (DNR), declared independent by pro-Russia rebels fighting to break away from Ukraine. Fans waved Russian and DNR flags as Seagal performed.
The US and EU have imposed sanctions on Russia over its annexation of Crimea and for allegedly providing weapons and support to the rebels in eastern Ukraine.
Seagal said he had travelled to Crimea because music unites people, Russia's RIA Novosti news agency reported. In a March interview with a Russian newspaper, Seagal was quoted as saying that President Vladimir Putin's desire to protect Russians in Crimea was completely reasonable.
Crimea's largely Russian-speaking residents voted in March to become part of Russia in a hastily organised referendum held as Russian troops patrolled the Black Sea peninsula they had occupied only weeks before.
Obama's Russia Sanctions: Corporate America Has Much More To Lose Than Washington Realizes
Almost everyone in the American establishment seems to support President Obama’s new round of sanctions against Russia. Almost everyone, that is, except U.S. exporters…
Largely overlooked by the American press, Japanese officials could hardly be less sympathetic to the Obama administration’s Russia policy.
Already IBM IBM -0.43% and Hewlett-Packard HPQ -0.43% have been identified as big losers from Obama’s sanctions. Thanks to America’s cultural commitment to the rule of law, such corporations will have little choice but to toe Obama’s line. The question is whether Japanese regulators will expect a similarly conscientious level of compliance from corporations like Hitachi , Toshiba, and NEC. The betting is that far from honoring U.S. sanctions, these latter corporations will have a field day taking their American rivals’ place.
The crisis also poses serious problems for U.S.-based oil majors. Exxon’s chief executive, Rex W. Tillerson, has so far been one of the few U.S. chief executives publicly to object to further sanctions. He has plenty to worry about. If Exxon is required to back away from its efforts to penetrate the Russian oil industry, there are plenty of other oil companies — based outside the United States — that will be happy to take its place. These notably include Statoil of Norway and Total of France.
My, my, my what a tangled web we weave. This lunatic fringe in America that came to power December 12, 2000 is drowning and now it’s just a matter of who will go down with them.
If Afghanistan is the graveyard of empires, Ukraine is the graveyard of Super Empires, good riddance.
By Patricia Baeten