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Saturday, January 28, 2023

We should also learn from successes

By: Dr Andrej Umek

There is no doubt that the European Union has found itself in a severe energy crisis. Partly and to a lesser extent, this is the result of bad energy policies and a mismanaged green transition both in the EU member states as well as here in Slovenia.

However, this crisis, which can seriously threaten the standard of living of Europeans and the global competitiveness of the European economy, is mainly the result of Russian aggression against Ukraine and the justified response of democratic countries to this aggression. It would be morally unacceptable for the latter not to defend the basic values of every humane society. Therefore, in this column, I am not questioning whether sanctions against an aggressor are yes or no, because I am convinced that sanctions against any aggressor are necessary, but whether these sanctions were thoughtfully and sensibly introduced.

As a model, at least I think, we can use past conflicts between the democracies of Western Europe and North America and the predecessor of today’s Russia, the Soviet Union, especially the last period of the Cold War, which ended with the collapse of the communist regimes in Russia and Eastern Europe. Even then, the price of oil or energy products, as it can be today, was an important factor in putting pressure on Russia, but it must be integrated into a broader concept and must have broader international support. An isolated embargo on the import of Russian oil may do more harm than good to the EU, as it will reduce the competitiveness of its economy on world markets. In my opinion, proponents, and advocates of falling oil prices and thereby putting pressure on Russia should follow the example of the Reagan administration (1981-1989) and its war against the evil empire (Ware on evil Empire). This strategy, which led to the collapse of the Soviet Union and communism in Eastern Europe at the end of the 1980s, was perfectly described by Peter Schweizer in his book Victory.

The Reagan administration’s pressure strategy on the then communist bloc was based on three factors. The first thing I would mention is the ban on the export of high technologies to the Eastern bloc, known as the Cocom list. This was also carried out in a somewhat milder form against Yugoslavia at the time, and somewhat older generations certainly still remember how Slovenia was also affected by this. Another factor was the accelerated use of high technologies for military purposes, the so-called Star Wares. The Soviet Union’s response to this was unsuccessful precisely because of the lack of high technologies, although it invested a significant part of its GDP in it. And the third element was a significant drop in oil prices on world markets, not a unilateral embargo, as implemented by the EU. However, in order for the USA to achieve this significant drop in oil prices, which greatly affected the Soviet economy at the time, an agreement with OPEC and primarily with Saudi Arabia was necessary. In order for this significant drop in oil prices to occur, these countries had to significantly increase the amount pumped and offer it to the global market at a significantly lower price. This significant 75% drop in oil prices really hit the Soviet economy hard and contributed decisively to the collapse of the Soviet Union and other communist systems in Eastern Europe – the evil empire collapsed.

It is senseless and counterproductive that the EU and the US did not react to the recent decision by OPEC to reduce the amount of oil pumped and thereby maintain or even increase the price of oil on global markets. At least I understand it, and in the light of the war of evil, others, especially leading EU politicians, should understand it as direct support for Russian aggression in Ukraine. The EU and the USA should, in the sense of good stewardship, respond diplomatically and economically to this OPEC decision.

Measures that proved successful at the time in the Cold War may not necessarily be successful in the modern multipolar world. But they should be an example and a consideration for us. Of course, I rightly expect the reaction of democratic countries to a military attack by one sovereign country on another. However, this response must be well thought out and must be based on an in-depth analysis of the actions and consequences in the circumstances in which this time is sacred. The measures must not cause more damage to the one who stands for peace and coexistence than to the aggressor. Past experience and the media, with an in-depth analysis of possible measures and their consequences, can greatly contribute to a meaningful response by democratic countries.

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