The world is heading into troubled waters. Every feeling person senses it. Yet the Commission's paper curiously called EUROPE 2020 A strategy for smart, sustainable and inclusive growth seems to be living in a world of its own. Its authors live in a see-no-evil, hear-no-evil world. They sense no dangers.
It just wants to get over the financial crisis, and get back to normal. The Commission President Mr Barroso says in the introduction:
"2010 must mark a new beginning. I want Europe to emerge stronger from the economic and financial crisis."
All that assumes that Europe has dealt effectively with the CAUSES of the last crisis -- and there are no more financial crises coming. That is totally unrealistic. Everyone knows the banks and hidden speculators are up to their own tricks again. The report sees no problem.
Beware! The most logical attitude would be to tighten the belts for the next financial implosion. The combination of unrestrained financial gambling with investors' money (leveraged to the hilt) PLUS illegal energy cartels is a disaster waiting to happen -- AGAIN and AGAIN!
When are Europe's leaders going to do something about this continuing DANGER? When are they going to create a democratic, supranational Energy Community? I mean a real Community with active, open, democratic institutions with EUROPEWIDE ELECTIONS for Parliament, the EcoSoc, Committee of Regions and the Commission. It does not mean some pale apology like the Lisbon Treaty that has wearied the population first with its fraudulent consent process, then with its divisive, competing presidents. Europe should have one goal: clean production of energy to give Europe energy independence.
Back in the year 1999, Europe's leadership again closed its eyes to this Energy Danger. They blotted it out of their long-term forecast. Just look back to what happened. Some of the most powerful men in the world made industrial-weight predictions about the coming first decade of 2000. What did the captains of the biggest oil companies in the world say?
Both Europe's oil majors, British Petroleum and Royal Dutch Shell, confidently forecast a period of painless expansion and growth. The chairmen of both multinationals said that the 5 year oil price would be stable. Both majors said that for the next years as far as they could see, oil would be around 10 to 15 dollars a barrel, probably around 11 dollars. These CEOs have the most experience in the most vital resource for the world economy. They employ the world's best economists. They have every interest in getting their sums right. They have thousands of shareholders demanding that they show a reasonable profit from their predictions. They know all about supply and demand curves.
Were these long-term plans based on the best data, available to them, in the world: geology, refinery chemistry, marketing, risk analysis, meteorological trends, alternatives, innovations, ecology? Yes, but not on cartel activity. Why were Europe's two major oil multinationals so easily fooled?
What did independent economists predict? The Economist magazine with its international network of economic expertise said: ‘we may be heading for $5. … a normal price might now be in the range in the $5 - $10 range’. That made sense in terms of supply and demand. Again it was nonsense when it came to cartel activity. So three supposedly independent groups of economists came to the same conclusion -- and got it completely wrong.
Don't you smell something rotten with the so-called free market? The Commission, supposedly Europe's watchdog, detects no evil smell.
The era of cheap oil and the boom caused by the creation of the Community system are past. Gone for ever, unless Europe does something serious about it.
The ink was scarcely dry on these forecasts, when in 2000 the price of oil TRIPLED. Today we are no longer in the era of cheap oil of the 1950s. Nor that of 1999. Such violent changes in prices are sure signs of a cartel. And this is a whopper.
Europe's most vital ingredient for economic growth -- ENERGY -- is under the control of a CARTEL. And it is no ordinary cartel. It is leveraged by financial gamblers -- they are called banksters by some -- who managed to boost the price from around 9 dollars a barrel to a breath-strangling 147.27 dollars.
That is a massive increase of 1500%! It is the highest price for oil in nominal or in real terms since the 1860s when oil began to be produced commercially. That sounds exactly like cartel activity. It smells like a cartel. It looks like a cartel. The economists are right. Free market oil would be worth 5 to ten dollars a barrel. Europeans are victims of a TRILLION dollar rip-off.
Now don't tell me that this increase is just supply and demand. Don't tell me that the oil majors and all the smartest economists in the world who did not foresee the rocket-like changes in their curves were not the victims of a gigantic confidence trick by a cartel or cartels. The real victims were the European public. The oil majors made major profits.
In 1999, according to the International Energy Agency, expenditure on oil as a percentage of world GDP was about half a percent. When oil hit its peak price it was taking the equivalent of more than 10 percent of GDP. That amounts nothing short of sudden theft of trillions for the same black fluid that spurts freely in some countries for a few dollars a barrel. The IEA called it the THIRD oil shock.
That sort of cartel activity makes utter nonsense of major political efforts by the European Community to save money. It extracts extra trillions out of the European economy for exactly the same amount of oil needed for the same goods and services. The great gains made by the Single Market of 1992 were wiped out many times over.
Why doesn't the EUROPE 2020 report WAKE UP the public to the series of disasters in the past? Why does it ignore repetitive coming dangers? Europe 2020 seems more directed at lulling people to sleep. Do the authors of the EUROPE 2020 report remember the first TWO oil shocks? They came after years, in fact, after decades of warning. Real Europeans cried out that EUROPE NEEDS TO BE COMPLETELY INDEPENDENT IN ENERGY in order to have an independent foreign policy. The founding fathers said so. Parliamentarians in Europe's first assembly said so.
Energy was the driving purpose of Europe's first Community. Europe's first supranational Community was an Energy community to make sure that all had equal access to the fuel that supplied three-quarters of Europe's needs: coal. In the 1950s the picture changed dramatically. Coal declined; imports of oil grew exponentially. In 1957, the Louis Armand report sounded a warning to the European leaders. His report called An Objective for Euratom dealt with the energy danger. Euratom's main objective is non proliferation of nuclear arms. That too is asleep, 'chloroformed' by de Gaulle.
In 1959 when Robert Schuman was President of the European Parliament, a special group was formed composed of members of Europe's three supranational Communities to make proposals for a common energy policy. De Gaulle seized power in France and binned everything. The five other Member States did nothing.
In the Near East, they have a war every decade. Those wars against Israel were another series of warnings. The Suez Crisis of 1956 led in Europe to rationing, higher taxes, and banning of some private car driving. During the 1967 Six Day War, Arab oil, the source of three-quarters of Western Europe's oil, was cut by 60%. Coincidently civil war broke out in Nigeria, a major alternative supplier, making matters worse.
That wasn't the oil shock. That first oil shock came in 1973. In 1973 Europe suffered the impact of a violent quadrupling of energy prices. Posted oil prices of $1.80 a barrel in 1970, rose by half to $2.90 in early 1973. The price hit $11.65 by the end of the year. World petroleum earnings went up from $23 billion in 1972 to $140 billion in 1977. The UK Stock Market crashed by as much as the 1929 crash but twice as fast. By 1974 the effect on Europe was as devastating as a military assault. With the first shock, oil costs were increasing at a rate of more than an extra trillion dollars a decade.
Europe continued to act like a dumb sheep, getting shorn and fleeced at regular intervals. Was anyone in Brussels listening to the miseries of the Europeans thrown out of work, to old-established firms that went bankrupt, to pensioners who suddenly had no income? Europe had no mandate for an energy policy. There was no legal framework in the treaties. Nor is there today. (The lamentable Lisbon Treaty has a couple of confusing paragraphs, written to cause dissent not policy.)
In 1979 the second severe oil shock struck, quadrupling prices again: spot prices hit the $40 to $50 range. It peaked in 1983 at $53. Europe's huge trade surplus was wiped out. The Werner plan for the single European currency, the euro, was postponed two decades.
In the war against Israel, Arab oil-exporters exploded the Oil Weapon on a sleepy European public. They wanted Europeans to change their foreign policy. They instigated a TOTAL oil embargo against The Netherlands, Denmark and Portugal. What was their crime? They were too democratic and too strong in their support of the only democracy in the Near East. All European democracies were attacked. The Arab oil-exporters threatened to cut oil step by step to the other Member States by a steep percentage each month. It was only through innovative means based on Community solidarity that Europe did not enter the new dark age where all the lights went out.
In 1957 the Armand report warned: in the post-war years, 'Europe has suddenly discovered that its favourable situation is completed changed and that a new factor dictates all perspectives for the future. From now on, we run the risk that lack of energy will apply the heaviest brake on all economic growth."
That was more than half a century ago. Europeans ignored, even despised, that warning. The result? Europeans have suffered energy crises every decade. The economy was crippled and broken by two Oil Shocks, leaching trillions from its resources. We are now well into the THIRD oil shock.
Today we cannot hope to use oil to get out of our woes, or any climate-polluting energy source. Europeans need to mobilize their native intelligence and genius for invention to exploit new creative, ecological ways to survive. If Europe had acted decisively in the past each European would be thousands of euros richer off. The world would today be a better place.
Europeans need to set an immediate goal.
ENERGY INDEPENDENCE BY 2020! Europe must wake up and see the light or it will be left in the dark!
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