Mecklenburg-Vorpommern Economy

Economic failure of the EU inevitable: Greece’s Varoufakis

The European Union, following US directives, has led them into a deep rift that will see the bloc collapse with the exception of Germany.

  • Former Greek Finance Minister Yanis Varoufakis

The German business model has failed due to the ongoing crisis in the European Union’s energy sector and its economic failure is inevitable, former Greek finance minister Yanis Varoufakis told the Dutch broadcaster NTV during an interview.

The former Greek official saw the European economy with a very pessimistic horizon, explaining how the German economy was built on “cheap energy from Russia, selling products in China and low wages in Germany”.

However, Varoufakis sees the status quo very differently: “Inflation has made it impossible to lower wages, gasoline has become expensive and China is disappearing as a market for Germany due to a new Cold War between China and the United States, which Government is strengthening.”

“The constant insistence of the current federal government – and previous governments – on going it alone and thus supporting the fiscal strategy to achieve an export surplus – is a neo-mercantilism that Germany is preventing the rest of the eurozone from implementing,” the financial expert emphasized.

He also emphasized that Germany’s own economic structure does not take equal competition within the European Union into account.

According to Varoufakis, Germany’s €200 billion aid package for the German people is “a double standard. Germany insists on a single market and a supposed level playing field, while pushing through state aid for its industry and its consumers”.

The German news agency German press agency (DPA) reported earlier this month that some 7,000 protesters took to the streets in more than 15 cities in Mecklenburg-Western Pomerania, calling on the government to ensure an affordable standard of living and to stop supplying arms to Ukraine.

In an effort to prepare for a winter without Russian energy supplies, Germany announced on Friday that its gas reserves have been replenished up to 95% faster than expected, while the rest of the European Union struggles with energy resources.

To make matters worse, Germany may have to temporarily limit its electricity exports, including to France. That financial times Quoted Hendrik Neumann, chief technical officer of Germany’s main grid operator Amprion, that this could be Germany’s “last resort”, even though Berlin is a major electricity exporter for Europe.

“The problem with the European Union is that there is no European Union at all. As a name yes, but not in reality. […] Failure is guaranteed,” stressed Varoufakis.

“We are already experiencing rapid de-industrialization in Europe. EU companies pay ten times more for gas than their US or Chinese competitors. Production has already dropped and very soon we will see factories looking for new locations in the US or elsewhere,” he added.

According to the co-chair of the opposition right-wing party Alternative for Germany (AfD), Tino Chrupalla, Germany will not be Europe’s gas hub for selling hydrocarbons – instead, it must buy Russian fossil fuels from other countries, including Turkey.

Speaking to Sputnik, Chrupalla said: “If Germany rejects Russian gas, then it is quite natural for Russia to look for other partners like Turkey or China. And in the end we will probably have to buy gas from these countries, but at the same time it was and remains Russian. We will never be able to compensate for that.”

“The EU is in a deep crisis. You probably won’t see it this winter, but next. The gas storage facilities have been filled this summer, but that will not entail significantly higher costs until next summer,” concluded Varoufakis.