Towards Armageddon?

The EU, the Ukraine war, and its collaterals

By Klaus Dräger

The invasion of Ukraine by Putin’s army heralds a global ‘turning point’, so western pundits and politicians claim. How is the EU dealing with this? And what about the EU’s aspirations to become a leading independent world power? 

Not so long ago, the EU grandees were startled by the policies of U.S. President Donald Trump: punitive tariffs on EU trade goods, ‘Nato is obsolete,’ support for Brexit, etc. . They were getting very worried about the stability of the transatlantic alliance between the US and the EU. From now on, they proclaimed, the EU would strive for becoming an independent world power: militarily, economically and trade-wise on par with the U.S., Russia and China. EU Commission President von der Leyen propagated this vision with pithy catchwords: geopolitical commission, common army of Europeans, strategic sovereignty of the EU.

Strategic sovereignty should not only be achieved in the military field, so major EU think tanks recommended at the time. The EU should also quest for global leadership in so called ‚future technologies‘ – such as chip production,  data, digitalization, artificial intelligence, platform economy, bio- and nanotechnology, genetic engineering, neuroscience and ‘human enhancement‘.

As far as armament, military build-up and capacities are concerned, the EU has made rather slow or modest progress – e.g. concerning the ‘Permanent Structured Cooperation’ (PESCO) or the EU Defense Fund. Neither there nor in the field of ‘future technologies’ does it come close to reaching a level ‘on par’ with the U.S. or China. The  EU’s dream of strategic sovereignty is a mirage.

After Biden: re-alignement of the global West

Putin’s invasion of Ukraine has once again rallied Nato and the global West behind U.S. geopolitics. The northern expansion of Nato to include Sweden and Finland is symbolic of this.

Just a few years earlier, France’s President Macron declared NATO “brain dead” and also rejected further EU enlargement to the east. He called for an independent EU balancing policy toward Russia and pledged for increased EU geopolitical-military engagement in the Sahel. There is now an interesting silence in Paris about all this.

This is also because of the failure of the Mali operation (in which the Bundeswehr was also involved). The declining ability of major EU-powers such as France and Germany to keep control over African client states – it tells a lot.

Concerning the EU’s quest for strategic sovereignty at large, a different scenario is developing:

  • the previous fault lines within the EU  – the ‘frugal five’ (the Netherlands, Austria, Denmark, Sweden and Finland ), the EU South, the Eastern European Visegrad states – these still subsist and get mixed with new lines of conflict. The Berlin-Paris leadership axis has only been kept together in a makeshift way, facilitating agreement on the EU’s ‚recovery programme‘ Next Generation EU.
  • the Franco-German leadership duo now subordinates itself to US geopolitics (proxy war in Ukraine between Russia and Nato). France’s government remains a bit hesitant, Germany’s acts with increasing verve in support of the U.S. and Nato.
  • S. President Biden uses the loyal governments of Poland, the Czech Republic, the Baltic states (and increasingly Sweden and Finland) to press the rest of the EU into its geopolicial line and thus weaken the Franco-German tandem. This is reminiscent of the strategy of U.S. President G. W. Bush in the second Iraq war: to position ‘New Europe’ (EU-Eastern Europe) in his coalition of the willing against ‘Old Europe’ (Germany, France);
  • the EU’s energy boycott against Russia is not supported by some of its member states that are particularly dependent on Russian gas and oil supplies –  not only Hungary and Bulgaria, but e.g. also Austria and Italy.
  • French President Macron and more than a dozen other governments of EU countries were calling for an EU-wide gas price cap, while Germany and the Netherlands were opposing it. The recent EU-Summit could only agree on a ‚face saving compromise‘ on this. They do not want to introduce a binding price limit, but merely a ‚temporary dynamic price corridor‘ for emergencies. In order not to restrict the market forces’ too much, and to leave it to national governments (according to their financial means) how to act …
  • the well-known conflicts of the EU with the governments of Hungary and Poland about ‘rule of law and democracy’ are boiling up again in the media. Ursula von der Leyen threatens Orban with financial sanctions, but keeps all back doors open for an ‘amicable settlement’ with Hungary.
  • in the eastern Mediterranean, the conflict between Turkey and the Greek government over Erdogan’s territorial claims to some Greek islands in the Aegean Sea and exploration rights to undersea gas and oil fields is narrowly scraping past military confrontation.
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The Franco-German leadership currently is not only broke on issues such as the gas price cap. Macron is dissatisfied with German chancellor Scholz’ decision, that the German governement will buy a great portion for its € 100 bln rearmament programme for the Bundeswehr from the U.S.. The upshot: so called national interests remain central to EU policy making at large. These are at the core of the strategies & tactics of national bourgeois leaderships – in a spirit of ‚dog eats dog‘.

Meanwhile, Josep Borrell, the EU’s High Representative for Foreign Affairs, radically reinterprets the previous EU vision. The ‘geopolitical Commission’ now aims to strengthen the ‘strategic sovereignty’ of Nato and the global West as a whole – not that of an independent EU. Von der Leyen, on the other hand, is doing her best to dress up this fragmentation of the EU with flowery speeches. But it is obvious that the EU’s independent ability to steer and act is diminishing. It is increasingly acting as a subordinate and devoted vassal of the U.S. empire

Towards a ‚GreaterEUrope’?

Germany’s chancellor Olaf Scholz and Commission President von der Leyen are now pleading for a ‘big bang’: the states of the Western Balkans as well as Ukraine, Moldova and Georgia should be swiftly admitted to the EU. Also, they (and Macron) want to tie Great Britain and Turkey into a loose ‘geopolitical community’.

Just how utopian this is can be seen in the fact that the governments of the UK and Turkey are pursuing independent agendas that run counter to the EU. Even according to the EU’s economic accession criteria, Ukraine in particular – and also the other envisaged candidates for Eastern enlargement – are not equipped for this. But that hardly counts anymore, because geopolitics now has absolute priority.

Ex-Bundestag President Wolfgang Schäuble dreams of a new EU leadership triumvirate of Germany, France and Poland and a European ‘communitarization’ of the French and British nuclear weapons potentials. Other German commentators rightly consider this unrealistic and increasingly call for an independent German nuclear armament. So – lets all make a bomb?

The ‘GreaterEUrope’ project coincides with NATO’s well-known strategy for its eastward expansion. If it were realized, those forces within an enlarged EU that further cement US dominance over Europe would be strengthened with Ukraine, Moldova and Georgia. Scholz and von der Leyen may think that they can keep ‚GreaterEUrope‘ essentially under German leadership – in friendly co-operation with the U.S. – but not only in my view this equally is a mirage.

Shock Therapy 2.0 in Ukraine

The EU has already recognized Ukraine as a candidate for EU membership – initially more of a symbolic act. Ursula von der Leyen has further promised Ukraine easier access to the EU’s internal market. What is this all about?

Ukrainian President Selenskyj put the costs of a reconstruction program for Ukraine at $350 billion. Germany’s Minister for Economic Affairs Robert Habeck had to swallow at first in view of this demanded sum. This could not be raised by the ‘community of democratic states’ – private investments would have to play a decisive role.

These have long been underway –  an internal land grab by Western investors in Ukraine, in the field of agriculture, raw materials, especially also in ‘rare earths’. This is to be exacerbated by an even more extensive privatization program. The labor market in Ukraine has already been drastically deregulated by the Selensky regime along neo-liberal lines.

Ukraine’s ‘facilitated access to the EU single market’ is a project about which capitalists from the EU and the USA in particular can rub their hands: low labor costs, gagged trade unions, using the selling off of sectors of the Ukrainian economy as a springboard for cheaply exporting to the EU.

All that told: that Ukraine could preserve or achieve its sovereignty via a ‘victory peace’ over Russia is also a mirage. It is firmly in the financial grip of the IMF, the G7, the US and the EU. Whoever might govern that country will feel the effects.

From Aspiring EU Free Trade with China to Open Enmity

As recently as 2020, the EU wanted to conclude a free trade agreement with China under pressure from Angela Merkel – which did not materialize. It is well known that German capital in particular invests heavily in China and that Germany is the largest exporter of goods (especially for manufacturing) to China.

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The U.S. governments since Obama were different: They set their sights early on economic ‘de-coupling’ from China and striving for a global leadership role for the U.S. in the aforementioned ‘future technologies’. They have always been concerned with containing, if not destroying, China’s economic rise. This was militarily flanked, for example, by Obama’s ‘Pivot to Asia’ strategy (expansion of US military bases in the Indo-Pacific region), by Biden’s Aukus pact or by Trump’s punitive tariff policy.

Meanwhile, at the Madrid summit, NATO classified China as a ‘systemic challenge‘ (= potential enemy). Complementary to the US ‘de-coupling’, a military investment programme for ‘future technologies’ was also launched (DIANA – Defense Innovation Accelerator of the North Atlantic).

Biden now calls for ‘pre-emptive economic sanctions’ by the West against China. The German government in particular is puzzling over how it can support this verbally, but circumvent it practically. The debate about Germany withdrawing from business with China has been raging for some time. The German government – it seems – is most probably ready to bow to Biden’s pressure.

What is the ‘other side’ doing?

A new global bloc confrontation is emerging: the global ‘West’ against the rest of the world. Antipode to the West is the perhaps emerging ‘Eurasian bloc’ led by China – with Russia in tow as an energy, raw materials and weapons supplier. Russia’s GDP is smaller than Italy’s, but its status as a nuclear power remains. As Perry Anderson analysed early on: ‚Incommensurate Russia.

China and Russia are the core of a potentially enlarged East-South bloc that is still very heterogeneous. Even if there are the BRICS or the Shanghai Cooperation Organization (SCO), with which Erdogan is now also flirting.

The Chinese leadership does not want to completely spoil things with the West, just as the ‘progressive’ governments in Latin America or the African regimes do not. They are playing for time to build an alternative financial, trade and investment regime to the global ‘West’ and escape the already devastating consequences of the Western sanctions regime. For Erdogan’s Turkey, Saudi Arabia, Qatar, Iran, India (and perhaps Israel), their scope to pursue more independent ‘regional’ strategies is widening. These regimes’ policies were already reactionary when (more or less) aligned with the Global West in former times, and their current policies do not promise anything ‚progressive‘.

Western Sanctions Policy, Global Economic Warfare: ‘Blowback’.

Already, sanctions policies are having disastrous effects, especially in the global South (increasing food shortages and energy price hikes). The latter also heavily affect the EU. Those who suffer are the wage earners and the poor: the loss of purchasing power due to high inflation and of jobs due to company insolvencies are increasingly being felt. Germany’s Minister of Economics Robert Habeck estimates the loss of prosperity in Germany alone due to war and Russia sanctions at 160 billion euros. This is the social and ecological ‘blowback’ of this economic war, which harms ordinary people in the EU far into the so-called ‘middle class’ more than Putin’s Russia.

The previous official declarations of wanting to fight climate change and biodiversity loss: these are now being set back in the face of LNG (liquefied gas) imports from USA/Qatar, the extension of coal use and nuclear power plants. The EU Green Deal and also Biden’s program in the US (Clean Energy Revolution & Environmental Justice) are in any case totally inadequate to meet the Paris climate goals. Global climate protection programmes are pushed furhter into the background, although the timeline to take bold action on this is only 10- 15 years.

The global ‘poly-crises’ (eg. pandemic, increasing refugee flows, climate collaps, recession) are rather aggravated by this policy. A new (global) economic recession is widely expected. The interest rate policies of the major central banks (US Fed, Bank of England, ECB) have a crisis-reinforcing effect. Inflation is essentially driven by higher energy prices, not by a wage-price spiral of the trade unions. General interest rate hikes can do little against this.

There is a threat of a new euro crisis, because financial market players are again targeting highly indebted euro states in the EU South. This is also ‘politically’ motivated, as Georgia Meloni’s right-wing bloc with Berlusconi and Salvini won the recent election in Italy. The new Italian government intends to drastically lower taxes (for the rich). As recently ousted UK Prime Minister Liz Truss tried to do (posing as a new incarnation of Margaret Thatcher) – from this  followed financial turmoil and a steep fall of the British pound. Spreads of Italian government bonds (compared to German Bunds) could increase again. It remains to be seen whether the ECB, with its TPI (Transmission Protection Instrument), has a suitable means at its disposal to contain a renewed fragmentation of the eurozone and keep the smoldering euro crisis under wraps, as it has done so far.

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Review and Outlook

U.S. economist Thomas Palley is one of the early critics of the monetarist architecture of the European Economic and Monetary Union and the euro regime. In his recent study on the global dollar hegemony he also provides a remarkable analysis of the ‘geopolitical incoherence of the EU’.

„ … it can be argued that the euro (and the European Union) suffers from over-expansion that has incorporated Central and Eastern European countries that are politically alien and have divergent political interests. Additionally, Europe has chosen to play camp follower to the US as regards geo-politics and conflict. (…)

That has been visibly on display in the Ukraine conflict from which Europe has suffered enormously, whereas the US has been a net geo-political beneficiary. Europe has suffered huge economic costs in the form of energy supply disruption, inflation, and loss of the huge Russian export market for luxury and capital goods. Contrastingly, the US has gained new energy markets in Europe, ensnared Europe in even greater subservience to the US military, and created permanently heightened tensions with Russia that benefit the US geo-politically. Those factors are reflected in the 2022 surge in the value of the dollar and fall in the value of the euro.“

For decades, the EU propagated a self-image of itself as a ‘peace union’. Certainly, the arch-enmity between Germany and France from two world wars was overcome. But Western European integration (EEC, EC, EU) was in fact a product of the Cold War. The project of a peace union – if it were seriously pursued – is incompatible with economic and military great power politics.

Russia’s partial mobilization, the annexation of territories occupied by the Russian army, and the threat of a nuclear strike already raised the Ukraine war to a new level of escalation. This has become evident with the latest Russian missile & drone attacks on ‚critical infrastructure‘ of Kiev and other Ukrainian cities. As in any real war – for the opponents there is no distinction between ‚civilian‘ and ‚military‘ targets. This is also true for the Ukraine governments since the emerging civil war after the 2014 Euro-Maidan – bombarding since then ‚civil‘ targets in the separatist Donezk’ self-declared ‚peoples repblics.

The antagonistic bloc formation – the global West against an emerging East-South alliance – does not bode well for the future. There is a much bigger wheel being turned than ‘only’ the Ukraine war ‘in the heart of Europe’. The governments of the USA, Nato and Russia consider a nuclear war (with mini-nukes and hypersonic missiles) to be feasible. The devastation of a nuclear exchange between US & Russia would be worse than that of WWI & WWII combined.

What we need instead is a policy based on détente, cooperation and peaceful coexistence. (…) Because peace is not everything, but without peace everything else is nothing“(Peter Wahl). Building pressure from below for freezing the Ukraine war, establishing an immediate ceasefire, and returning to the primacy of diplomatic negotiations – these are the order of the day. Even if initially there are only small minorities campaigning for this.

Remember 1969: Edwin Starr (War, what is it good for?) – absolutely nothing!

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