A Gloomy Christmas

For Europe, everything is just beginning: from the economic crisis to the political crisis

Europe is getting ready to celebrate the merriest Christmas in the last half-century. Since the energy shock of 1973, when the oil-producing countries of the Arab world imposed an embargo on oil supplies to Western countries, the European layman has not seen anything like this.

Like the crisis of 1973, the current one revealed an absolute dependence of the European economy on energy imports – this time from Russia. It turned out that despite decades of development of energy-saving technologies and alternative "green" energy, dependence on external supplies of hydrocarbons and even coal remains critical.

It got to the point that, in fear of the coming cold weather, Europeans rushed to buy firewood. Its price has increased by 1.5-2.5 times. And not only in Eastern European countries, such as Poland, Slovakia or Bulgaria (in the latter, about half of households still use wood for heating, which was relatively cheap until recently) but also in rich countries such as Belgium and Germany. Moreover, there is not enough firewood at these prices.

Rising prices for energy and housing and communal services for households are only one side of the coin. The second is the loss of jobs that has begun against the background of production decreasing due to rising prices for raw materials. The upcoming large-scale layoffs were announced, for example, by Air France and Finnair, BASF, Henkel and Michelin, Siemens Gamesa and Alfa Laval, Philips, Husqvarna and H&M, Credit Suisse and Monte dei Paschi di Siena.

So far, the unemployment rate in Europe has been at a record low for many years – 6% in the EU and 6.5% in the eurozone, as of October. But in a crisis of this magnitude, it speaks rather of the potential for rising unemployment.

For comparison: after the 2008 crisis, unemployment rose to more than 10% within a couple of years. And the maximum – after the debt crisis of 2010 – was 11-12%.

A Gloomy Christmas
Good old Christmas − can Europe afford such a luxury?

Finally, the cherry on the cake is political instability. Preparations for a coup were revealed in Germany. Right-wing extremists planned to storm the Bundestag and make a coup d'état.

25 people were detained, and arrests took place in 7 federal states of Germany, as well as in Austria and Italy. According to the Office of the German Prosecutor General, 14 detainees belong to the "military wing" of the association, " while some are former servicemen. A total of 52 persons have been accused of being involved in the case.

It is alleged that if successful, the attackers planned to form an interim military government and create a new army in the country.

Members of the underground Reichsbürger ("Citizens of the Reich") organization believe that Germany is under the attack of the so-called "terrorist community", a secret society of governments, intelligence services and armed forces of various states, including at the same time, Russia and the United States. If, until recently, someone started talking about this, he would be accused of being adept of downright conspiracy theories. However, such are the realities of today's Europe.

For firewood

The energy crisis will last for years; we should not think only about next winter – at the end of October, Swiss Economy Minister Guy Parmelin warned the country's citizens. Switzerland is a vivid example of the extent of the problems that Europe faces. One of the world's most prosperous and flourishing countries turned out to be incredibly vulnerable to an energy blow.

"Energy security is no longer something taken for granted, and the risk of energy shortages is a bitter reality," reads a document recently published on the website of the Swiss Federal Council. And with reference to the report of the Association of Energy Companies (AES), it is added that at the moment, the country depends on energy imports by 79%.

In addition to importing raw materials for its energy sector, Switzerland has enjoyed a favourable location for many years, receiving energy from gas-fired power plants in Germany or nuclear power plants in France. Today, however, both options to cover temporary electricity shortages have become problematic: gas generation has become too expensive, and France needs electricity from nuclear power plants.

To avoid forced shutdowns of consumers, France plans to launch this winter or prepare for an emergency launch, if necessary, all 32 shutdown nuclear reactors (56 of them in the country).

Some were stopped due to mechanical damage and corrosion, and the rest – were for scheduled maintenance. But without an emergency restoration of their work, the French power system may be unable to cope.

The lack of electricity has already led to the fact that if, in 2022, the wholesale price of electricity was 85 euros per megawatt hour, then in 2023, it exceeded 1,000 euros.

EDF has committed to start all the shutdown reactors and initially estimated the expenses for urgent work on their repair at 29 billion euros this year alone. However, it is already clear that all the reactors could not be restarted by winter due to the risk of possible accidents from defects not identified in a hurry. Even in the forecast of the end of November, there is no plan to restore the power generation of the NPPs to the average level of January 2012-2021.

A Gloomy Christmas
In mid-December, an increased level of danger was introduced in the southeast of the UK due to low temperatures (-10°C) and snowfall.

Similar problems arose in early December in Sweden. The country's authorities urged citizens to consume less electricity. Moreover, if earlier it was proposed to save in order to pay less, now the main reason is the risk of blackouts.

"The situation is relatively acute. We don't want to create panic, but it is a serious problem, and there are significant risks," said Prime Minister Ulf Kristersson.

The Swedish power grid is experiencing an increased load, especially in the country's south. One of the reasons is the shutdown of power unit No. 3 of the Oskarshamn NPP. Preventive maintenance has begun at the reactor. Due to the reduction in electricity generation, the warning level about possible blackouts has now been raised from "low" to "real".

So far, the situation is saved by a relatively mild start of winter in Europe. According to Bloomberg, "Energy markets are so tight that only a few degrees Celsius or a few days of calm separate a Europe facing power outages from one with enough energy to survive the winter."

Like in the old days

It is absolutely clear that Europe's current problems will not be limited to energy and the economy. The case of preparing a coup d'état in Germany is a serious symptom. Such a development of events may seem unexpected only to those who do not know history, for example, the history of the radical left-wing group Rote Armee Fraktion (RAF), which terrorized Germany for three decades (1968-1998).

In 1986, the director of Siemens was killed by militants of the "third generation of the RAF". In 1989 director of Deutsche Bank Alfred Herrhausen was murdered. In 1991 - President of the Association of German Industry Detlev-Karsten Rohwedder. Even by modern standards, Germany was quite a troubled country.

During the 1970s and 1980s, radical and separatist movements terrorized such leading European countries as Britain (Northern Ireland), France (Corsica), Spain (Basques), and Italy ("Red Brigades"). Their activity started to decline only in the second half of the 1990s, on a wave of optimism about European integration and rising living standards resulting from the end of the Cold War and the growing export of cheap raw materials from Russia in exchange for products from European countries. However, the current disillusionment with the EU project, the breakdown in relations with Russia and a deep energy and economic crisis will bring to life the old ghosts.

A Gloomy Christmas
Sunny Corsica is not very concerned about energy problems. But it can become a problem for Europe itself.

Thus, in March of this year, Corsica was gripped by prolonged riots caused by an attack in prison on Corsican separatist Ivan Colonna. He was serving a life sentence in mainland France for the murder of Corsica prefect Claude Erignac in 1998. After the beating, Colonna spent more than two weeks in a coma and died from his injuries. To somehow reduce the degree of confrontation, French Interior Minister Gerald Darmanin even said that the government was ready to discuss the autonomy of Corsica. The protesters demanded that Paris recognize Corsica's independence.

It is not surprising that Bloomberg recently published an article with the idea that Russia can restore the status of the leading gas supplier to the EU. But even if it is theoretically possible in the long run, it will take enough time for Europe to plunge into a prolonged period of social and political instability.

In any case, the whole complex of reasons that determined the prosperity of the EU in the post-cold war period cannot be repeated. And Europe will have to adapt to this.

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