European Zugzwang: Or Perhaps Political Acalculia
By Janosh Neumann, Skytop Contributor / November 15th, 2022
Janosh Neumann is a former Russian FSB counterintelligence officer who was appointed by the Russian government to supervise internationally the multibillion money laundering operation for the state. He later defected and was brought to the United States by U.S. government agencies. After that he was a consultant for a variety of U.S. government agencies, helping them with investigations related to Russian intelligence, money laundering, and the fight against Eurasian organized crime groups.
For Janosh, joining the State security was a given. Both his parents had worked for the KGB and other elements of the state security apparatus, so it was effectively the “family business.” But once you’re in this line of work, there’s no way out. As the saying goes, “there’s no such thing as an ex-spy.”
Zugzwang (German for compulsion to move, pronounced /tsuːktsvaŋ/, is a situation found in chess and other turn- based games wherein one player is put at a disadvantage because of their obligation to make a move; a player is said to be “in zugzwang” when any legal move will worsen their position).
War Against the United West
Planned as a swift and victorious special operation on the territory of a neighboring state, the Kremlin turned into a long, bloody, full-fledged war against the United West. The underestimation of the enemy’s ability to resist and the failure of Russian intelligence became the main leitmotif of the first act of the Ukrainian tragedy for Moscow.
Miscalculations or What May Not Be Known
At the same time, the United States and, in particular, the European Union also made mistakes in their calculations of the stability of the political regime and the Russian economy. The West assumed that after several waves of “killer” sanctions, the Russian economy would collapse, a wave of mass protests would rise, and the peoples of Russia themselves would demolish the regime that had made fatal mistakes. But after a short-term shock, the Russian economy began to recover, and the Kremlin began to methodically transfer Russia to a mobilization track – this applies to both the economy and society as a whole.
Kremlin Quashes the Mass Protest Threat
The regime also began a systematic ousting and squeezing out of the systemic and non-systemic opposition from Russia, which allowed the Kremlin to practically nullify the threat of mass protests. Russia did not stop the escalation of hostilities on the territory of Ukraine, and the conflict began to develop into an economic and political confrontation between the West and the East.
China Eclipses the West
China has also become one of the main factors of Russia’s stability. Chinese companies rapidly began to replace Western manufacturers in the Russian market. And Russia, in turn, redirected the supply of its hydrocarbons and other resources to China, which made it possible to practically level the damage from the loss of the European market.
According to the General Customs Administration of China, the trade turnover between Russia and China grew by 32.5% in the first three quarters of 2022 and amounted to $136 billion. During the reporting period, China imported goods to Russia worth $52.2 billion, which is 10.3% higher than in the same period in 2021. Russian deliveries to China increased by 51.6% over the same period, amounting to $83.8 billion. dollars. Deliveries of LNG from Russia to China in January – September increased year on year by 29%, to 4.23 million tons. In addition to China, Russia is rapidly increasing trade with India, Iran, and Turkey, which makes the Kremlin regime more resilient and less susceptible to Western sanctions.
The Debate on the Effectiveness of Western Sanctions
The failed sanctions blitzkrieg against Russia began to have a catastrophic reverse effect, primarily on the countries of the European Union. Sanctions against Russia forced Western companies to leave Russia. The losses of Western companies leaving Russia amount to about $240 billion, which is in addition to the frozen assets of Western companies in the Russian market.
Economic Warfare and the European Union
In addition, Europe was overwhelmed by the energy and inflationary crisis. Inflation in the European Union and the Eurozone has already exceeded 10%. This is a historical record. This has never happened in the history of both the European Union and the Euro as a currency. Double-digit inflation in 18 EU countries, in 4 EU countries, has already exceeded 20%. The EU trade deficit also jumped to a historical record of €64.7 billion in August 2022. And most likely this is far from the limit. The European economy is already on the verge of recession and deindustrialization, which, combined with record inflation and a record foreign trade deficit, are driving the EU economy into the most powerful economic crisis in its history.
The Potential for a Catastrophe
The largest European companies have issued statements regarding the coming catastrophe.
In particular, Martin Brudermüller, CEO of the world’s largest chemical concern BASF, said that anti-Russian sanctions would lead the German economy to the worst crisis since 1945. At the same time, industrial inflation in Germany has already reached 45.8% – a record since 1949. Europe’s largest steel company, ArcelorMittal, is idling blast furnaces in Germany. Global aluminum producer Alcoa is cutting production at its plant in Norway by a third. The largest German manufacturer of toilet paper, Hakle, has filed for bankruptcy. A mass exodus of manufacturers from Europe to other regions, in particular to the USA, began. The Danish jewelry company Pandora and the German Volkswagen have already announced the expansion of their activities in the U.S. Tesla has abandoned plans to manufacture batteries in Germany. BMW is investing in the US economy and will invest $1.7 billion to build a plant in the U.S. to produce electric cars. Serious money loves silence and stability, which at the moment Europe cannot guarantee them.
The stoppage of production, the transfer of activities to other regions and the bankruptcy of European companies will lead to mass unemployment and a landslide drop in living standards for EU citizens. Already, about 3/4 of Europeans are forced to reduce their daily spending on goods and food due to rising inflation and the crisis in the economy. More than 65% of shoppers in six key European markets have significantly changed their shopping and eating habits. At the same time, 58% of residents reduced spending on essentials, and 35% began to use savings or took out loans to pay current bills.
Rallies, Protests, Political and Social Instability
In Italy, France, the Czech Republic, Holland and Germany, spontaneous rallies and protests against rising energy prices and a sharp deterioration in living standards have begun to take place. And this is only the beginning of a period of political and social instability in Europe. Naturally, it would be naive to deny, or even worse not to notice, the fact that Russia’s special-intelligence services will not take advantage of this situation. The emerging turbulence and uncertainty in Europe is possible and most likely will be used by Moscow to achieve its geopolitical goals.
The Kremlin and Time
The Kremlin hardly needs to make any special efforts because time is on their side. For Moscow, it is absolutely indifferent who the left or the right will be the main driving force of the protests in European countries. The economic collapse of Europe will lead to the deepest political crisis, which can cause a chain reaction – the collapse of the European Union as a single political association and the exit of countries from the control of Brussels, which is the main goal of the Kremlin. And already now we can observe growing tensions and disagreements within the European Union regarding the advisability of continuing sanctions against Russia. The well-founded fear and panic of the European industrial and financial elites for their future and the sharp growth of the protest movement among European citizens can make the process of the collapse of the European Union irreversible.
Quest for a Solution
The geopolitical crisis around Ukraine has escalated into a war of attrition between West and East. Europe is in the most vulnerable position. Brussels ended up in ZUGZWANG. Each next step can only worsen an already catastrophic situation. The European Union cannot afford to withdraw from the game, but it cannot continue this game either. I do not want to exaggerate, but what is happening in Europe can be described as – there is no solution to the problem, there is only hope.