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Iberdrola

Opinion

Rulers phagocytised by war

G7

We are in a war economy. Stock markets are foreseeing a blackened scenario ending in recession... that curse again. On Tuesday 5 July, the stock markets plummeted again in the face of bad short-term forecasts: in Spain, the IBEX-35 fell 2.48%; in France, the CAC-40 plummeted 2.68%; in Germany, the DAX30 lost 2.91% and in the UK, the FTSE 100 lost 2.86%. 

Faced with inflation, fuel prices, soaring electricity costs and uncertainty, 43% of families in Spain have cancelled their summer holidays. They are all dreading the end of the summer season and the arrival of autumn and winter because they sense that it will be a very complicated end to the year. 

There is a turning point with the invasion of Ukraine; it is a return to the Europe of a lifetime: the Europe of war, rationing, blood, sweat and tears that have marked the immediate generations of grandparents and parents who experienced the ravages of the wars of the last century. The younger generations of this competitive and fiercely contested 21st century are seeing the worst of the spectres rising before their eyes once again. They will be the hardest hit, the biggest victims.

There is no optimistic prognosis. In Spain, 600,000 companies could go bankrupt if the energy crisis worsens and, ultimately, the Russian dictator turns off the gas tap completely in order to choke mainly the countries of Eastern Europe.

Citizens all over Europe are nervous because another economic slowdown - after the sudden blow caused by the outbreak of the pandemic in 2020 - will have serious economic and, of course, social consequences. And certainly not unscathed will be the politicians who will pay for this disaster at the ballot box

On the subject 

Yes, there is disquiet and public opinion will not forgive it. I find highly worrying the remarkable weakness of the rulers who are taking all the decisions - without referendums - on how to respond to Russia's atrocious invasion of Ukraine, as decided by the United States, in their own interests.

In the UK, Prime Minister Boris Johnson is pinned to Downing Street. Weakened by the day, he is not even wanted by his own Conservative Party colleagues; the resignation of his Finance and Health Ministers at almost the same time reveals the weakness in which he is mired.

Personally, I find this very striking: I do not remember a stronger consensus among NATO member countries to confront Russia's military appetites, and I do not remember so many countries applying a series of tough sanctions against Russia in order to make the Kremlin understand that it must return to the path of dialogue, negotiation and respect for a country's sovereignty by withdrawing its troops.

The outbreak of the pandemic has already created a dilemma for the rulers between deciding between the stock market or life in confinement; now, with the invasion of Ukraine, they are faced with a new dilemma: the economy or stopping Putin. And the answer is clear because many have decided to shoot themselves in the foot to tell the Russian dictator that he cannot go about invading countries without facing strong consequences. 

What is happening is that, inwardly, these measures in the form of sanctions bombs are leaving serious economic consequences for all countries. And they are already proving quite unpopular

It is very unlikely that Johnson will finish this year without another motion of censure, this time driven by the Labour Party and supported by the Conservatives who no longer want him, because they no longer feel represented by him or his decisions.

In this Titanic, in which we are all involved, no politician can be seen to have solid leadership. In France, President Emmanuel Macron has lost his majority in Congress and faces a scenario of ungovernability for the next five years; and on top of this he faces the discontent of a broad bloc made up of various leftists, socialists, communists, ecologists and France Insoumise, who converge in the need to submit Macron to a motion of censure and remove him from the government.

In Spain, President Pedro Sánchez has a coalition government between the PSOE and his ultra-left partners in Unidas Podemos that is pure dynamite; the most recent decision to approve a billion euros in an extraordinary credit to increase the defence budget has opened a government crisis because there are two equidistant visions of how to handle the current military conflict. For Sánchez, it involves realigning with sanctions and NATO over arms and support for Ukraine, and UN Podemos is totally against such a position

In Germany, as soon as the economy goes into recession, Chancellor Olaf Scholz will face a serious political crisis - in addition to the socio-economic crisis - because of all the sacrifices he will have to make to the population in a winter without heating. 

And in the United States, the Democratic Party will take a beating in the November elections as proof of the people's dissatisfaction with Joe Biden's decisions. The Americans did not want to get involved in another war and that is why they left Afghanistan. It is true, Russia is the aggressor, it decided to invade another country and has unleashed enormous fear in Europe because Putin might not stop in Ukraine. What will happen when Johnson, Macron and Scholz are gone? What will happen if in 2024 the war continues and Trump returns to the White House?