From dominance to disunity: The West’s sanctions missteps and global realignments

By Elijah J. Magnier:

 In a move that signals a shift in global dynamics, Russia has temporarily halted gasoline and diesel exports to countries outside its narrow circle of Belarus, Kazakhstan, Armenia and Kyrgyzstan. Meanwhile, China has severely curtailed exports of two critical rare earth elements essential for producing semiconductors and solar panels. The move is widely seen as a direct response to US export controls, with Beijing citing the need to ‘safeguard its national security and interests’. These economic manoeuvres follow a significant statement by Russian Foreign Minister Sergei Lavrov at the United Nations General Assembly. Lavrov declared the emergence of a ‘new world order’, suggesting a reshaping of global power dynamics. 

Europe, already grappling with the effects of a proxy war on its doorstep, faces mounting economic challenges. Rising inflation, sluggish interest rate hikes and a weakening euro have added to the continent’s woes. The surge in oil prices and a general increase in commodity costs have added to the strain. Amid these challenges, divisions are emerging among European leaders over the viability of the ongoing conflict. 

The recent unsuccessful counter-offensive by Ukraine orchestrated by NATO, the European re-evaluation of its failure and the reluctance of the US Congress to approve a $24 billion aid package for Ukraine raises questions about the sustainability of the war. 

Europe re-evaluates its stance on Ukraine:

In a recent turn of events, Slovakia’s left-wing populist Smer party, led by former Prime Minister Robert Fico, swept to victory in Saturday’s elections. The party’s win came with pledges to halt arms shipments to Ukraine, oppose Kyiv’s potential NATO membership and resist sanctions against Russia. With this triumph, Smer is poised to lead in forming a majority in the 150-seat parliament. Meanwhile, Poland declared it would suspend arm flow and delivery to Ukraine. Also, countries such as Hungary and Austria remain steadfast in their decision to continue energy trade with Russia, underlining the complexity and the disunity of the European response to the Ukraine conflict. 

Despite sanctions on Russian energy sources, European countries’ dependence on them remains evident. Data shows that between January and July 2023, European countries procured 22 million cubic metres of liquefied natural gas from Russia, a significant increase from the 15 million cubic metres purchased during the same period before the start of the war. These developments highlight the delicate balance European nations try to strike between political posturing and economic realities. 

Moreover, Germany has historically been a powerhouse in global markets, particularly in sectors such as automobiles and machinery, producing glass, paper and metal coatings used in architecture and vehicles. This industrial prowess has driven German exports and cemented its position as the wealthiest nation within the European Community. Under the leadership of Olaf Schulz, however, Germany’s political trajectory has undergone a significant shift. Moving away from Angela Merkel’s relatively independent stance on US decisions, the obedient Schulz government became more involved in the US-Russian conflict in Ukraine. 

One notable consequence of this policy shift was Germany’s decision to halt the Nord Stream 2 project, a pipeline to transport cheap Russian gas. In a significant departure from its previous stance, Germany agreed to suspend the Nord Stream 2 project, a pipeline designed to bring cheap Russian gas to Europe and financed by Russia, Germany and several other EU nations. This decision came amid US sabotage of the gas pipeline, which allegedly led to one of the worst environmental disasters in European history. Interestingly, Germany’s Foreign Minister, Annalena Baerbock, the Greens leader, appears to agree with the environmental and economic consequences of the US-engineered disaster. 

Baerbock’s position raises questions about the party’s commitment to its environmental ethos and the broader implications for German diplomacy and energy security. German Interior Minister Nancy Faeser hopes the German public prosecutor will find enough evidence to charge the perpetrators. Nothing has been done to bring those responsible to justice, and the EU’s northern member states have dropped the investigation. Revealing the truth would have embarrassed all EU leaders and forced them to act against the perpetrators. There are no imminent plans to allow Russia to repair the damaged pipeline or for Germany to regain its gas import.

This move has had a profound economic impact. The lack of affordable Russian natural gas has dramatically affected Germany’s industrial sector and previously robust economy. Germany and many European countries are struggling with the high cost of liquefied natural gas imports, almost four times the price of Russian gas. These imports come mainly from countries such as the US, Qatar and Norway. 

Russia’s resilience to sanctions: A surge in military production