Interview by Orkhan Sattarov, head of the European Bureau of Vestnik Kavkaza
European sanctions against Russia have a negative impact on EU economic interests and may turn into a factor for destabilization in Russia, says Professor Wilfried Furman from Potsdam. In his opinion, the U.S. will be the main winner of the standoff, while the European economy falls into a mass crisis.
- Professor Furman, the EU has imposed another package of sanctions on Russia, though with a proviso that they can be cancelled depending on the situation in Ukraine. Are there any "red lines" the EU will not not cross in its policy of penalizing sanctions against Russia?
- There are no such "red lines." There is a geopolitical struggle now, an all-in game where the stakes are such issues as further NATO expansion. Such a geopolitical struggle follows the principle of "all or nothing." We can state that the sanctions hardly affect the American economy, while Western European economies have suffered a great impact. It concerns southern member-states of the European Union. In the light of anti-Russian sanctions, Greece's efforts to improve the competitive potential of its economy seen lately have basically been ruined. The same concerns other crisis states of Southern Europe.
We, Europeans, lose a lot in this confrontation. Including us, Germans, we lose trust because we do not follow the agreements we made ourselves and politicize trade. In the German mass media there are publications about the problems of our concerns caused by sanctions against Russia, for example, the Volkswagen car manufacturer. It all means that economic development in the European Union will have a severe regression, This, in its turn, will aggravate the demands within the EU to form programs to employ the population, expenses to support the inner conjuncture will grow. In the end, such a scenario will bury the EU stability pact and will become the cause of new debts. In my opinion, Europe has fallen into a crisis, and in 3-4 years the crisis will overshadow the mass crisis we have been in.
- Can the EU act independently, without looking at the U.S., according to it's own economic interests?
- Not a single European functionary would agree with the opinion that the EU was following U.S. orders in its actions. At the same time, the European Union harms itself greatly with its actions. I will say a seditious idea: doesn't the EU make a certain profit from the actual crisis?
- What profit could that be?
- The point is that the European Union encourages inner consolidation of European states by creating the image of a common enemy represented by Russia. "We are all Europeans, beyond the borders of the EU lies the evil represented by Russia." Now, in the condition of confrontation with Russia, we can boost consolidation within the European ranks better than before. It is especially evident in processes on the energy market. Now, two-three months before winter, with vague prospects of Russian gas shipments, we got a powerful impulse to form a European energy union, something that European Commissioner Gunther Oettinger has not managed, by the way. So, in the end, we will have a centralized network distributing energy resources equally among EU countries and providing shipments from the West to the East. We will consume fewer resources from Norway, the Netherlands, Scotland, and a lot fewer from Russia and Azerbaijan. So, if necessary, Europe could supply Ukraine with gas. Scotland has significant potential to increase shipments of energy materials. The switch of Germany to renewable energy sources should be viewed in the context of providing energy security in the region. And other countries will follow the German example. In addition, the Americans still need to buy oil in the Middle East in volumes they do not need, according to contracts they have signed. We can imagine deliveries of those surpluses to Rotterdam by tankers. Finally, there are discussions about shale gas.
Despite the mentioned factors, Europe doesn't have the absolute energy security it had 15 years ago. Now, many in Europe consider the chances of short-term power shutdowns, which could have a negative impact on European industry, encouraging it to move to the U.S. Recently, the volume of direct European investments in the American economy has been rising, much more than in the eastern direction.
We need to understand that a lot depends on the position China chooses at this stage. Can Russia replace products Europe will no longer send? If this happens, then finally, together with increasing European investments in the U.S., we will get stronger competition in the east, represented by China and the European Union. Now, when it is "a fight for life or death," it is hard to predict the way the crisis will be resolved and what consequences there will be.
- We have mentioned the problem of European consolidation. Isn't the resistance of some national governments growing to the growing sanctions against Russia?
- To suppress the grievances of some national governments, for example of Slovakia, Brussels has another good tool - money. And when Slovakia speaks out about its disappointment in figures, the problem will find a solution.
- How do you think the sanctions can threaten Russia?
- The current regime of sanctions against Russia increases the pressure in it. On the one hand, pressure from the oligarchs, whose access to the financial markets of Europe and the U.S. is growing. Their growing concerns may be expressed in lower support for the political course of the Russian state. On the other hand, disappointment among the Russian population will rise when it becomes less supplied than it got used to in the last ten years. Remember 1988, when Moscow was technically unable to supply the South Caucasus at the required level. It is this economic factor that galvanized activation of old differences between Armenians and Azerbaijanis. This is the financial catastrophe in Moscow that provoked the centrifugal movements and conflicts in the South Caucasus. The current sanctions policy against Russia has the same goal: to worsen the situation around supplying Russia and to destabilize it.
