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"On Point"
MINSK, 11 September (BelTA) – The root cause of the deteriorating economic situation in the European Union is the rejection of cheap Russian energy resources, independent military analyst Aleksandr Alesin said in the latest episode of the V Teme [On Point] project on BelTA’s YouTube channel.
“Recently, the economic situation in the European Union countries has been rapidly deteriorating. The root cause is that Europe has stopped being fueled by cheap Russian energy resources. Europeans received energy at prices much lower than the world market to produce their goods, which they, in turn, sold at prices much higher than the world market. This margin was the foundation of their prosperity,” Aleksandr Alesin said.
Thus, the expert explained, the leadership of European countries could share this margin with the population, although a significant portion also went to big capital. Nevertheless, the EU states had sufficient funds for the middle class to live quite comfortably.
“Then the Nord Stream pipeline was blown up, an embargo on cheap Russian energy resources appeared, and the situation changed dramatically. Europe began to receive energy resources at prices often higher than the world market. Moreover, there is now high competition on world markets. Goods that were previously produced in European countries are now being produced by China, India, Brazil, and others. It is no longer possible to sell European products at prices above the world market. This margin, these super profits, have disappeared,” Aleksandr Alesin emphasized.
For this reason, among others, he believes Europe is spinning up the flywheel of its military industry, which helps support related enterprises, for example, metallurgical plants. "But the money they divert from civilian sectors and invest in the military industry also does not return. It would only return if all the weapons they produce were sold at a profit,” the expert concluded.
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