By: C J Atkins
“It’s going to be a choice many of us will have to face when winter comes: freeze or starve.” So says Günter Pohl, a glassworker from the town of Sprockhövel in Germany’s industrial Ruhr region. “The sanctions are supposedly targeting Russia, but they’re hitting us a lot more than they are Russia.”
He was referring to the economic penalties Western governments have imposed on Russia in response to its invasion of Ukraine. Though supposedly intended to cripple the Russian economy and pressure Vladimir Putin to bring his troops home, there are signs it’s the working people of Germany and other European countries who are bearing most of the punishment.
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Pohl spoke with People’s World in Berlin on the sidelines of the UZ-Pressefest, a mass cultural and political festival hosted annually by UnsereZeit, a socialist newspaper affiliated with the German Communist Party (DKP). His sentiment is shared by many here – understandable given that paychecks are covering less and less these days.
Inflation clocked in at 7.6% for Germany in summer 2022, a near 40-year high. At the core of the problem? Energy costs, which are up an astounding 38% according to official statistics. Before the war in Ukraine, Germany secured the natural gas that heats its homes and powers much of its industry from Russia. It had been that way for decades, even during the Cold War.
But in the wake of Putin’s invasion, construction on the nearly-finished $9.5 billion Nord Stream 2 pipeline – which would have transported more gas from Russia to the German coast by going under the Baltic Sea – was abruptly canceled. Gas flows through the existing Nord Stream 1 pipeline to Europe have already slowed by more than 60% and will go to zero by the end of August, at least for a while.
That shutdown presents a special problem for Germans. More than half of them – over 40 million people – use natural gas to heat their homes. During the summer, many still hoped the worst of the gas price hike might be avoided. Perhaps Ukraine and Russia would negotiate a ceasefire and the pressure on world energy markets would ease.
But now, fall can already be felt in the air in Berlin, and the prices of everything from food to transport to fuel continue to climb. Many are beginning to worry about what will happen when the temperatures really begin to drop.
“We expect prices to double,” Pohl predicts. “And no one will be spared…it’s not just the heating of homes, it’s also the cooking, and the hot water for bathing…all of it.” Making the stained glass windows which are his specialty also consumes a lot of energy, so the same problem is repeating in manufacturing and throughout the economy.
Even those Germans who use electricity or oil for their homes won’t be able to avoid the rising costs. “A lot of people don’t earn enough money to do it,” he argues. “It’s going to be at least €2,000 more [$2,000 USD] for a family of four this winter. How will they pay?”
Wera Richter shares Pohl’s skepticism for the cold season ahead. “With prices shooting up, even people who have what are considered ‘decent’ incomes are going to have difficulty paying and surviving.” Richter is the editor-in-chief of Unsere Zeit and covers the latest developments of the war and its economic fallout for Germans in the pages of the newspaper.
She says the DKP and UZ were warning earlier this year of what lay ahead for working-class Germans if a reckless sanctions regime was the West’s response to the war. The continued flow of Russian gas at the tail-end of last winter and the warm weather of summer kept public discontent in check for a time, but when the choice becomes food or heat, will public opinion begin to change?
Richter’s chief concern is that there has so far been “nearly a total lack of resistance” to the ill-conceived structure of the sanctions against Russia. The peace movement is weak, and images of the brutality of the war in Ukraine along with German leaders’ declarations of solidarity with Volodymyr Zelensky’s government have kept most people on side with the NATO campaign to back Kiev to the bitter end.
In the eastern part of Germany, the areas which made up the former German Democratic Republic, anti-war feelings are stronger, according to Richter. But the call for a negotiated ceasefire, which the DKP and UZ advocate (vs. an all-out military defeat of Russia which NATO says is the goal), is still a tough sell almost anywhere right now, Richter admits.
Eagerly waiting to step into the energy void left by the sanctions, of course, are US-based corporations looking for new customers. Before the scuttling of Nord Stream 2, their share of the European gas market topped out at around 30%. But Russia’s war changed everything – essentially overnight. Soaring prices made expensive-to-produce gas from the US more competitive on world markets, and European leaders could rely on sentiment for Ukraine among the general public to accelerate the turn away from Russia.
“Now they say we will buy fracked gas from the US -ecologically the worst kind – but there’s not even enough ships and terminals to get it here,” Pohl says. American natural gas largely comes from the environmentally-damaging process of fracking, and getting it across the Atlantic requires liquefaction, huge tanker ships for transport, and specialized loading and offloading facilities.
“Maybe you can assemble a terminal pretty quickly,” Pohl grants, “but the number of ships they will need could take years to build.” So although US gas is on the way, it could be a long time coming.
In the meantime, keeping up the economic charade of anti-Russia sanctions is leading to some pretty absurd tactics.
“The German government says we will not buy Russian gas because they are killing Ukrainians and conducting an illegal war, so instead we’ll buy gas and oil from Qatar and Saudi Arabia,” Pohl explains. But Qatar and Saudi Arabia (which is doing plenty of killings of its own in Yemen) can’t supply enough output to fulfill Europe’s needs. “So where do they get it? Russia! Russian oil and gas goes to places like Saudi Arabia, which then turns around and sells it to Germany.”
In this middle-man mark-up system, Germany still ends up buying the same Russian energy supplies it has sanctioned and forbidden – but at higher prices. “It would be funny if it wasn’t all so tragic,” Pohl muses.
In Russia, the oil is still flowing, but now more of it is heading east to customers like India and China. In fact, Russia is selling more oil than ever, and revenues are through the roof. The whole sanctions regime is boomeranging back on Europe; it’s estimated Germans will be paying over €5 billion [$5 billion USD] more for energy.
“Asia has saved Russian crude production,” said Viktor Katona, an energy analyst at the firm Kpler, told the New York Times last month. “Russia, instead of falling further, is almost close to its pre-pandemic levels.”
The biggest beneficiary in the whole affair, Pohl argues, has been US imperialism. Its energy companies are breaking into the European market, and the costs of achieving its long-term goal of weakening Russia are being paid for, in part, with West European workers’ earnings and Ukrainian lives. “The winner of this war and sanctions will be the United States.”
How long this state of affairs can go on is an open question. Will the labor movement leadership continue to sleep at the wheel while the economy heads for the ditch? Will the public’s willingness to pay for the costs of war hold out when the mercury drops? Will Russia and Ukraine work out some kind of peace? (IPA Service)
