Europe angry that US profits from Ukraine proxy war while destroying EU economy

EU leaders are furious that the US is profiting from the proxy war in Ukraine by selling weapons and expensive natural gas. Meanwhile European industries are being destroyed by high energy prices.

(Se puede leer esta nota en español aquí.)

---

Cracks are emerging in the NATO alliance. Numerous Western corporate media outlets have published reports showing growing political divisions between the United States and European Union.

EU leaders are angry that the US is making lots of money from the proxy war in Ukraine, both by selling vast quantities of weapons and by making Europe reliant on its expensive liquified natural gas (LNG), instead of Russia's significantly cheaper pipeline gas.

Meanwhile, European economies suffer from high inflation rates and an energy crisis that make manufacturing so expensive and uncompetitive it could bankrupt entire industries.

Politico published an article in November detailing precisely this, titled "Europe accuses US of profiting from war."

An unnamed "senior official" in Europe told the publication, "The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons."

Politico wrote:

French President Emmanuel Macron said high U.S. gas prices were not “friendly” and Germany’s economy minister has called on Washington to show more “solidarity” and help reduce energy costs.

Ministers and diplomats based elsewhere in the bloc voiced frustration at the way Biden’s government simply ignores the impact of its domestic economic policies on European allies.

When EU leaders tackled Biden over high U.S. gas prices at the G20 meeting in Bali last week, the American president simply seemed unaware of the issue.

The escalating US-EU conflict recalls the notorious maxim of former Secretary of State and imperial planner Henry Kissinger: "America has no permanent friends or enemies, only interests."

The Biden administration's passage of the Inflation Reduction Act this August has sent the EU "into full-blown panic mode," and even threatens to bring about a "transatlantic trade war," according to Politico.

The law pledges up to $369 billion in subsidies to support companies that claim to be environmentally friendly, as part of a "green" transition.

These huge US subsidies "threaten to destroy European industries," the outlet reported, and have led Brussels to "draw up plans for an emergency war chest of subsidies to save European industries from collapse."

An unnamed EU diplomat told Politico, “The Inflation Reduction Act has changed everything," asking, "Is Washington still our ally or not?”

Top US priority is new cold war on China, Europe is 'afterthought'

A similar article by a staunchly pro-NATO columnist, also published by Politico, insisted "Biden keeps ignoring Europe. It’s time EU leaders got the message."

The column emphasized that the US government's top priority its its new cold war on China.

"The U.S. remains steadfastly focused on what most perceive to be its main existential challenge: China," Politico wrote. "In that equation, Europe is often an afterthought."

The media outlet concluded:

But what the Europeans are discovering is that the Ukraine war is just one facet of the U.S.’s larger strategic duel with China, which will always take precedence over EU interests.

That was true under Trump, and it remains true under his successor. It’s just that the message is delivered in a different style.

In the long run, Biden’s polite indifference may prove more deadly.

Energy prices in Europe rise 500%, threatening to bankrupt industries

As recently as the beginning of 2022, Russia was the largest exporter of both gas and oil to Europe. But in response to Russia's invasion of Ukraine in February, the US and EU imposed harsh sanctions on Moscow and vowed to boycott its energy.

This has blown back on Europe, and hard.

In August, Bloomberg published an article titled "European Power Prices Reach Records as Industry Starts to Buckle."

It noted that electricity prices in Germany have risen as much as 500% in the past year.

The report warned the "magnitude of the crisis isn’t comparable to anything in the past few decades."

"Countries across Europe are planning for possible power shortages this winter, with some considering rationing supplies to certain industries to ensure essential demand can be met," Bloomberg said.

These historically high energy prices were already painful enough. But Washington's proposed subsidies have only further incentivized European companies to move to the United States.

Companies leaving Europe for United States

In a November report titled "European industry pivots to US as Biden subsidy sends ‘dangerous signal,’" the Financial Times reported the same: the Inflation Reduction Act "is moving momentum a lot from Europe to the US."

The FT wrote:

The combination of the Biden Administration’s $369bn package and high energy costs in Europe, where even after recent declines gas prices remain five times more expensive than in North America, is sounding alarm bells in EU capitals.

“I think we need a European wake-up on this point,” French president Emmanuel Macron told executives from domestic industrial companies such as glassmaker Saint-Gobain and cement maker Lafarge in a speech last week.

Germany’s economy minister, Robert Habeck, described the US support as “excessive” and “hoovering up investments from Europe”.

The EU has accused Washington of breaching World Trade Organization rules and set up a task force with the Biden administration to resolve their differences.

The Wall Street Journal published a similar article in September, titled "High Natural-Gas Prices Push European Manufacturers to Shift to the U.S."

"The Ukraine war is driving up energy costs in Europe, while relatively stable prices and green-energy incentives are luring companies to the U.S.", the newspaper wrote.

"Battered by skyrocketing gas prices, companies in Europe that make steel, fertilizer and other feedstocks of economic activity are shifting operations to the U.S., attracted by more stable energy prices and muscular government support," the Wall Street Journal added.

The report predicted that Europe "could face high prices, at least for gas, well into 2024, threatening to make the scarring on Europe’s manufacturing sector permanent."