Russia, Germany and the Rest of Europe: What's Happening?

As a business consultant, both domestic and international, and also as an inhabitant of the earth with a high level of curiosity, I pay attention to trends, and I have opinions about what is happening in the world. Sometimes my geopolitical opinions are ill informed, but often things have come to pass as I expected them to. Yesterday I started posting brief summaries of what I think is going on in various regions of the world, beginning with the Far East. Moving northwest…..

Russia: I think Russia is broke and wants nobody to know. Natural resource income is 40% of what it was in 2000. The USA has kept oil prices low: vast new production coming online and more than that, RUMORS of new production have depressed oil prices.  I don’t see Russian enmity of the USA, real or imagined, as significantly effective as some Americans make it out to be. The Russians just don’t have the capacity to be a world power.

Russia’s problem is that it is losing its buffer --- that line of countries that run from the Baltic to the Balkans. To us in North America, this may not seem significant, but to Russia it’s a big deal. It is trying to hang onto the Ukraine, at least to the extent of Ukraine being neutral, but the Ukraine is getting very cozy with NATO. I think that Russian nervousness over the proximity of Germany and even Turkey will have repercussions down the road, but I don’t know what they are.

Europe: The EU dream is coming to a close. It has devolved into a trade union similar to the Common Market from whence it was forged. When Brussels issues edicts, countries can choose to listen or not.

Nationalism is alive and well in Europe. Most people think of themselves first as Germans, French, Italians, Greeks, or some other nationality rather than European.  Germany, that enigma, has shaped outcomes in Europe, but not to the extent she has wanted. Germany, with its largely open and useable terrain, has been able to have a powerful economy that is not reflected in its military strength/weakness. On account of World War II, it is ashamed to be German. Immigrants are not encouraged to be German, and Germany has a lot of them. In Canada, with our multi-culturalism, second generation children of immigrants feel a part of the Canadian culture. In Germany, a Turk may be fourth generation before he feels part of the country.

On top of that issue, there are many Muslims in Europe who believe that Islam will take over the continent. Their birth rate is high and indigenous Europeans have a very low birthrate. Demographics will turn France into a Muslim republic by 2050, but one wonders if it will be a republic or a caliphate then.

Germany exports about 50% of its GDP.  This means that a 20% decline in exports would mean a 10% decline in GDP. An economic disaster in a country like that. So the Germans have to keep producing and exporting. Their customers aren’t always flush with cash, with the result Germany finances them. Countries like Greece. And then when the chickens come home to roost and the Greeks can’t pay the debt, the German answer is for the Greeks to adopt an austerity program. But don’t stop importing our goods!  How can the Greeks curtail consumption without reducing imports unless they stop consuming their own production?  No wonder youth unemployment is ridiculously high there. The millennial generation in Greece is a generation that has largely had to abandon its dreams. Greece is in a depression which is blamed on the Germans, and it is characterized by young people not working…..for years.   And those young ones unemployed 8 years ago are now 8 years older and many are still unemployed. Countless thousands of young Greeks have no prospects of employment for the next 10 or 20 years. No wonder they don’t see themselves as European. 

And no wonder they want rid of the euro. If Greece had the drachma still, she could have devaluated it. A devaluation effectively reduces the price on domestic assets and allows foreign debt holders to lay claim to Greek assets at a lower cost. This means a transfer of wealth from Greece to outsiders who have a claim against Greece on account her debts to them. That way, through reduced imports and increased exports on account of the devaluation, Greece pays off its debts. But being shackled to the euro, it can’t do this. Greece wants its youth working; Germany wants them to know austerity.  Now, replace “Greece” with the names of numerous other client countries receiving German exports: same comments.

No, Europe is rife with internal conflict and resentment.  Further, the Islamic issue threatens the continent with eventual civil wars in my opinion. I expect a repeat of the cascading revolutions of 1848. The upcoming ones won’t be the same, but they will lead from one to another just like the Arab Spring. This time it will be a white European spring as native Europeans seek to be rid of the threat of an Islamic majority. Dutch women want to be safe on any street in Amsterdam with their faces uncovered. Same with the French in Paris. German families don’t want their sons attacked by Muslim gangs. Eventually immigration friendly governments will be toppled.  It is easy for Chancellor Merkel to invite immigrants by the million. They don’t move to her street any more than Syrian immigrants to Canada move to Sussex Drive. I respect Merkel. I think she’s a great leader. But I do think that she would have a different policy about immigration if she was directly and personally affected by the immigrants.