US Treasury Deficit Doubles as Biden Bankrolls Multiple Foreign Conflicts
By James Tweedie – Sputnik – 23.10.2023
The US is going further into the red with as it arms its client states for a series of conflicts. Sergio Rossi, professor of macroeconomics and monetary economics at the University of Fribourg, Switzerland, said the strategies to avoid a default would only prove to be a “time-bomb.”
US President Joe Biden’s appeal for cash to arm Ukraine and Israel could meet resistance from Congress thanks to the runaway federal budget.
Treasury department figures released late last week showed the government deficit had hit almost £1.7 trillion, up from £1.37 trillion a year earlier, a 23 percent increase in the public debt — although lower than the $2.78 trillion left by the COVID-19 pandemic in 2021.
The news was worse than it sounded however. The 2022 deficit included the budget for Biden’s student loan repayment program, money that was never spent as the Supreme Court struck it down. The treasury then claimed those unspent public funds as a “saving” in 2023 — meaning the true deficit doubled from $1 trillion in 2022 to $2 trillion this year.
That news came a day before Biden asked Congress for a $106 billion emergency foreign military aid budget. The lion’s share, $61.4 billion, is earmarked for Washington’s proxy conflict with Russia in Ukraine, while another $14.3 billion is to arm Israel for its latest attempt to destroy the Hamas movement in the besieged Gaza Strip.
That request dwarfs the $77 billion in arms and cash gifted to the Kiev regime since the start of Russia’s de-Nazification operation in February 2022.
Economist Sergio Rossi told Sputnik that the mounting deficit would make it harder for Biden to persuade Congress to approve his $100 billion budget request for more arms to Ukraine and Israel “in light of the problematic economic situation and outlook for the US stakeholders, namely, households, firms, and a variety of financial institutions.”
“Usually, when the domestic economic situation worsens, these stakeholders and their political supporters reduce the volume of foreign aid, to focus on supporting their own national economy first of all,” Rossi said.
He said the funding the conflict in Ukraine — while preparing for a Pacific showdown with China over Taiwan — had already put too much strain on Washington’s finances before the Palestinian Hamas movement launched a surprise attack into southern Israel.
“The US government cannot continue financing two military conflicts, particularly if the latter will continue without any foreseeable peaceful agreement before long,” Rossi stressed. “There are already signs that the political consensus for such a financial support is diminishing across the US economy, notably where both the labour and the product markets are in a difficult situation for a number of middle-class workers and several small or medium-sized firms.”
The state of the US economy was “worrying,” he said, and the outlook for the next two years was “even worse,” thanks to “global macroeconomic issues related to different geopolitical problems.”
The “mushroom” of ensuing inflation has badly affected consumer purchasing power. “As a result, firms’ investment is discouraged, both because of this inflationary pressure and the Fed’s repeated increases in the policy rates of interest.”
“The US economy is even closer to a recession than it was one year ago,” Rossi warned, although “there is no potential risk of a default of the US federal government.”
He pointed out that Congress could simply raise the public debt ceiling and the US Federal Reserve could buy up government bonds as an effective loan.
“This, however, is a time bomb that eventually can burst, particularly once some viable and credible alternative to the US dollar will emerge across the global economy,” Rossi said. “The BRICS community could provide such an alternative in a not-too-distant future.”
Chinese Businessmen Literally Laughing at West’s Anti-Russian Sanctions
By Ilya Tsukanov – Sputnik – 21.10.2023
Chinese businessmen are literally laughing at the West’s sanctions packages against Russia, Russian Foreign Ministry spokeswoman Maria Zakharova has revealed.
Citing a media report from Friday indicating that the 12th package of EU sanctions may include a Lithuania-proposed ban on the export of European-made nails, tacks, drawing pins, sewing and knitting needles, radiators, and other odds and ends to Russia, Zakharova said that judging by past experience, she can hardly fathom how Russia’s Chinese partners will react to the news.
“A year ago I was at a meeting with representatives of Chinese business circles in Moscow. We were talking, and suddenly a message popped up on my phone with news that the US had adopted yet another sanctions package banning the supply of elevators and related equipment to Russia. According to the sanctions’ authors, this measure would ‘paralyze the construction industry in Russia.’ When I read this news to my Chinese colleagues, they burst out in Homeric laughter. They literally howled and roared with laughter,” Zakharova recalled in a Telegram post on Saturday.
“After the ‘sanctions hara-kiri’ of the Japanese automobile industry on the Russian market, the most incredible dream of Chinese automotive manufacturers came true. Within six months, they confirmed the veracity of the saying ‘nature abhors a vacuum’,” the spokeswoman added.
“It’s scary to imagine what kind of hysteria will begin among Chinese manufacturers of knitting needles and buttons if they learn about this Lithuanian plan to ‘destroy Russian industrial capabilities.’ Where will Lithuania put its wares if such a decision is made? I don’t know, they could put the inscription ‘to spite Russia’ on their highway made of buttons, nails, sewing and knitting needles,” Zakharova summed up.
Russian-Chinese trade has hit back-to-back-to-back record highs in recent years, reaching the equivalent of over $176 billion by the end of the third quarter of the current year. The Asian industrial giant has taken to importing record quantities of Russian energy and other natural resources, and has helped fill the gap left by European and Japanese finished goods manufacturers after their exodus from Russia in 2022.
Speaking with Chinese media ahead of his visit to the Belt and Road Initiative forum earlier this week, Russian President Vladimir Putin reported a “32 percent growth” in Russia-China trade turnover over the past year, and said that “there is every reason to believe that we will reach the $200 billion mark” by the end of 2023.
The reorientation of trade from Europe to China, India and other countries in the developing world has helped Russia weather the storm of Western sanctions and trade restrictions, with the country’s GDP growth expected to reach up to 2.5 percent in 2023 after contracting by 2.1 percent a year earlier.
Shipping of Cargo from Arkhangelsk to China via Northern Sea Route to Become Regular
PortNews | October 20, 2023
The first ship with a load of more than 300 containers with lumber for China partners is about to depart from the Port of Arkhangelsk. The load will be delivered along the Northern Sea Route (NSR) to Shanghai in a few days, the governor and government of the Arkhangelsk Oblast said.
Alexander Tsybulsk, Governor of the Arkhangelsk Region commented: “Chinese furniture manufacturers are interested in the products of our timber processing enterprises and are ready to purchase annually up to 1 million cbm of lumber in Arkhangelsk.”
“The first shipment including more than 300 containers of lumber will soon leave for Shanghai. Shipping of cargo along the NSR between Russia and China will become regular. Our new partners plan for the next shipping season to load two vessels here per month, and in the future provide six vessel calls per month,” the official said.
The volume of cargo transported from Arkhangelsk along the Northern Sea Route will be growing in the coming years. This will support forestry enterprises in Russia’s north-west regions through government measures, including subsidizing the timber products transport.
The growth of trade volume with Chinese partners also contribute to the implementation of Vladimir Putin’s May decree to boost cargo flow along the Northern Sea Route, which should reach 80 million tonnes per year by 2024.
“The planned sailing of a containership along the Northern Sea Route is an important event for us, since China is the main direction of cargo transportation. We see great interest from Chinese partners in our products and the desire of local manufacturers to cooperate,” says Evgenia Shelyuk interim minister for economic development, industry and science of the Arkhangelsk Oblast.
Hungary warns of ‘knockout blow’ to EU economy
Hungarian Trade and Foreign Minister Peter Szijjarto. © Omer Taha Cetin/Getty Images
RT | October 21, 2023
The EU should pursue cooperation with China and Asia as a whole, which have already become more competitive than the bloc in economic terms, according to Hungarian Foreign Minister Peter Szijjarto.
Speaking at an informal meeting of EU trade ministers in Valencia on Friday, Szijjarto emphasized that the global economy has turned upside down over the past few years, resulting in a fall in the bloc’s economic position, which Brussels is making worse with its indiscriminate sanctions policies. He reiterated that recent sanctions against Russia and the drive to abandon Russian energy “shot the European economy first in the foot and then in the knee.”
“Today we pay four times as much for gas in Europe as Americans do at home and three times as much for electricity as people pay in China,” he pointed out, noting that while distancing itself from Russia has already caused problems, doing the same with China would be even more destructive for the EU economy.
Szijjarto noted that China has already surpassed the EU in terms of gross domestic product (GDP): its share of global GDP jumped from 9% in 2010 to the current 18%, while the EU’s share dropped from 22% to 17%.
“The overall structure of the world economy is being transformed, and this great transformation also means that the West’s automatic competitive advantage has ended. The Eastern world has strengthened significantly, they have at the very least caught up with the Western world from a financial and technological point of view, while they have always been ahead of us in terms of human resources,” he stated. Szijjarto added that the Eastern and Western economies are more strongly interdependent nowadays than ever before, and said the EU should not shy away from this trend.
“Whether we like it or not, it’s a fact. Whoever denies all this can cause very serious damage to the European economy,” he warned.
Szijjarto noted that the basis of the EU’s economic growth previously lay in the combination of advanced Western technologies and cheap Russian energy, but this line of cooperation has now been severed.
“Unfortunately, there are Western Europeans… who strive to cut off economic cooperation between Europe and China in the same way. If this were to happen, it would practically be a knockout blow to the European economy. That is why we are against any effort to isolate the Chinese and European economies from each other,” he stated.
The minister said the consequences of such actions would be especially felt by the European automotive industry, which relies on Chinese suppliers.
“This would practically suffocate the car industry. And if we strangle the European car industry, we will destroy the European economy,” he declared.
“Everyone in the economy understands this, but Western European politicians don’t want to see the reality, they don’t want to hear the facts, but rather they politicize out of ideology and anger.”
The EU relationship with China has been strained over the past several years, with Brussels viewing Beijing as an economic rival, and each side increasingly unhappy with the other’s policies.
Biden Speech on Aid to Israel, Ukraine Embodied ‘America Last’ Policy, Says Ex-US Diplomat
Sputnik – 21.10.2023
WASHINGTON – The president made a rare address to the nation on Thursday in which he argued that funding Israel and Ukraine was a matter of US security.
President Joe Biden’s nationally broadcast speech seeking broad support for stepping up already huge levels of US aid to Ukraine and Israel was another unthinking, reflexive expression of the globalist mindset that has been destroying the US economy and society over the past several decades in pursuit of crazed international goals, former State Department diplomat James Carden said.
“The speech will be remembered, if at all, as a perfect encapsulation of the ‘America Last’ mindset of our ruling class, which privileges foreign countries over middle and working class Americans,” Carden said.
The US president said he was requesting that Congress fund renewed supplies of weapons and other aid to President Volodymyr Zelensky’s regime in Ukraine and he was linking that goal with pushing through a parallel enormous increased aid package to Israel as it prepares to invade Gaza to eliminate Hamas.
However, Carden pointed out that Biden paid no attention to the out of control crime, security, economic, social and drug crises now sweeping the United States.
Biden spent no time at all addressing the sufferings of the domestic communities that have been destroyed over the past three decades by free trade agreements, endless wars and an open border policy that has flooded the country with fentanyl and opioids which are killing what little remains of their communities, Carden said.
The almost-81-year-old president gave no hint of new thinking, moderation, compromise or flexibility in his address, Carden added.
“Biden’s speech signals that there will be no rethinking US policy toward Ukraine or the Middle East,” he said, adding that instead, the “strategic assumptions in the speech were absurd and obsolete”.
Biden’s comments “validated George Kennan’s view that the United States is similar to one of those prehistoric monsters with a body as long as this room and a brain the size of a pin,” Carden added.
The Biden administration is requesting from Congress funds in the amount of $106 billion, primarily for the defense needs of Ukraine and Israel, but also for strengthening the United States’ position in the Indo-Pacific and for operations on the southern US border. Of the total sum, the administration is requesting more than $60 billion for Ukraine.
Israeli economy plunges into recession
The Cradle | October 20, 2023
Israeli economists have reported a major recession due to the ongoing war against the Palestinian resistance factions.
“Israel has entered the war, and it is in a recession, and trade is currently zero,” Israeli daily business paper, The Marker, noted.
The Israeli economy has taken a serious hit at the hands of Operation Al-Aqsa Flood, losing $3 billion in damages on the first day of the war alone, a state that some economists say is worse than it was during their 2006 war with Hezbollah.
The Marker report went on to say, “the second week of the war is about to end, a week when there is almost no trade in Israel, and many are trying to stay with their heads above the water, afraid of the future – and they still don’t know who will compensate them and when?”
US economic risk analysis firm Moody’s has put the Israeli A1 rating, a high rating attractive to any investor, on hold, given the current crisis.
Fitch Ratings had also negatively reviewed Israeli economic status, placing their credit score on a negative watch earlier this week.
“While not our base case, such large-scale escalation, in addition to human loss, could result in significant additional military spending, destruction of infrastructure, sustained change in consumer and investment sentiment and thus lead to a large deterioration of Israel’s credit metrics,” Fitch Ratings wrote in a statement.
No previous war or global economic crisis has downgraded Israel’s rating by any of the major economic rating companies. These downgrades can make future trade more difficult for Israel.
Interest rates are at the highest they have been since the 2006 war with Lebanon.
According to a Bloomberg report, the shekel is among the world’s worst-performing currencies this month despite a $45 billion package of emergency measures.
Two days after the start of the current war, on 9 October, the Bank of Israel sold off $30 billion in foreign reserves in an attempt to prevent the currency from further falling under the dollar.
This increasing economic decline is an addition to the already faulty economy.
War with Hamas deals ‘severe economic blow’ to Israel
The Cradle | October 17, 2023
Eleven days into its war with the Hamas-led Palestinian resistance, Israel is paying a heavy economic toll, Maariv reported on 17 October.
The Israeli newspaper reported that “the Israeli economy appears to have already begun to pay a heavy price for the war,” which began on 7 October with the start of Hamas’ Al-Aqsa Flood Operation.
The newspaper explained in a report published Tuesday that “4.6 billion shekels [$1.1 billion] is the price paid by the Israeli economy as a result of workers not coming to work and low productivity in Israeli institutions.”
According to the analysis of the economic department of Israel’s Manufacturers Union, the closure of the education system, blocking of traffic routes, and the extensive mobilization of the army reserves has also hurt economic productivity.
In total, it is estimated that about 1.3 million Israeli workers did not go to work this week.
In southern Israel, some 85 percent of workers were absent from their jobs, along with about 20 percent of workers in the rest of Israel.
The head of the Manufacturers’ Union and the head of the Employers and Companies Association, Ron Tomer, said after the harsh assessments that “there is no doubt that the war constitutes a severe economic blow to the economy.”
According to Maariv, this estimate does not take into account “additional and very significant financial damage, which will only be assessed economically at the end of the fighting, such as direct damage to factories and damage to profitability.”
In addition to decreased productivity, Israel will see indirect damage, such as the damage to the reputation of Israeli companies with customers abroad, cancelled transactions, failure to adhere to schedules, and the depreciation of the shekel.
Should the conflict widen to include not just Hamas but also Iran, a key backer of the Palestinians, Bloomberg estimates oil prices could climb to $150 a barrel and cause a global recession that takes about $1 trillion off world output.
Iranian involvement on the Palestinian side could lead to a cut in Iranian oil output and a tightening of western sanctions hindering Iranian oil sales.
Bloomberg notes further that an oil shock of this size would also derail the worldwide effort to rein in inflation. In the US, the Federal Reserve’s 2 percent inflation target would not be met, and costly gasoline would be a hurdle for President Joe Biden’s re-election campaign.
Another possibility is that Iran could close the Strait of Hormuz, the world’s single-most important energy corridor. Globally, over one-sixth of oil and one-third of liquefied natural gas passes through the narrow strait
“The gas market is calm but tense,” Henning Gloystein, director for energy, climate and resources at the Eurasia Group think tank said.
“It doesn’t take much to go into a fever pitch. We had the Ukraine war, Russian gas supply cuts, oil cap sanctions and now you have war in the Middle East as well — that’s a problem,” he said.
Hungary PM Orbán meets with Putin in Beijing
BY THOMAS BROOKE | REMIX NEWS | OCTOBER 17, 2023
Hungarian Prime Minister Viktor Orbán met with Russian President Vladimir Putin in Beijing on Tuesday to discuss ongoing bilateral agreements between the two nations.
The pair were snapped shaking hands in the Chinese capital — the first photographed handshake between Putin and an EU leader since the Russian invasion of Ukraine in February last year.
Orbán told the Russian president that “Hungary has never sought to confront Russia” and has always and will continue to “pursue the goal of building and expanding the best communication,” reported Russia’s state-run news agency TASS.
“In Europe today, one question is on everyone’s mind: Will there be a ceasefire in Ukraine? For us Hungarians, too, the most important thing is that the flood of refugees, the sanctions, and the fighting in our neighboring country should end,” Orbán posted on X following the meeting.
Budapest has maintained relatively close relations with Moscow and faced the wrath of the European Union for steering its own course through the conflict in Ukraine and refusing to present a united front with other EU leaders.
Orbán’s administration has long opposed the provision of arms to Kyiv, which it claims is prolonging the conflict and increasing the death toll, and has advocated for an immediate ceasefire and peace talks.
The rendezvous exerts further pressure on Brussels, which requires Hungary’s approval for proposed budget reforms in order to unlock further funding for Ukraine.
“Given the fact that in today’s geopolitical conditions the opportunities for maintaining contacts and developing relations are very limited, it can only cause satisfaction that our relations with many European countries are maintained and developed. One of these countries is Hungary,” Putin told Orban.
The meeting was criticized by U.S. Ambassador to Hungary David Pressman who accused Orbán of “pleading for business deals” while Russia continues its aggression in Ukraine.
“Hungary’s leader chooses to stand with a man whose forces are responsible for crimes against humanity in Ukraine, and alone among our Allies,” he posted on X.
This interpretation of the meeting was questioned by the Hungarian prime minister’s political director, Balázs Orbán, who claimed that Budapest was “fed up” with Pressman’s “hypocrisy.”
“If the question is who’s doing business with the Russians, the Americans should turn down the volume. They are buying more than twice as much nuclear fuel alone as they used to, and we have a whole list of them,” he added.
“Since your president refuses to talk about ending this war, someone has to,” quipped Koskovics Zoltán, a geopolitical analyst at the Budapest-based Center for Fundamental Rights.
Both leaders arrived in Beijing at the invitation of Chinese President Xi ahead of an international forum on China’s Belt and Road Initiative.
Earlier on Tuesday, Orbán met with the Chinese leader to discuss the strengthening of Hungarian-Chinese relations.
“Connectivity instead of decoupling: This is the Hungarian model. Our aim is to strengthen Hungarian-Chinese relations. This is good for Hungary and good for the European economy,” he said in a statement.
EU wants to increase Ukraine aid by €50 billion despite corruption concerns
MAGYAR NEMZET | October 17, 2023
The European Union plans to set up a fund called the Ukraine Facility, under which a new credit line for Ukraine would be opened in the amount of €50 billion for the period 2024-2027, but there are growing concerns about corruption.
The facility would provide assistance to Ukraine in three pillars. The first pillar would provide financial assistance to Ukraine, the second would support and finance investment, and under the third pillar, Brussels would help Ukraine plan the reforms needed to join the European Union. A specific feature of the Ukraine Facility is that frozen Russian assets would be confiscated and incorporated into the assistance model.
However, support for Ukraine remains a divisive issue in Brussels. Although the EU is keen to continue providing aid to a country at war, it is undeniable that Ukraine features sky-high levels of corruption and the “rule of law” fell far short of EU standards even before the war broke out, let alone during it. This came to the fore in Strasbourg during Monday’s plenary session when the Ukraine Facility was debated.
MEPs Michael Gahler and Eider Gardiazabal Rubial, the proponents of the report, said that the €50 billion credit line is a significant commitment by the European Union. They argued that Ukraine needs to improve corruption rates, the independence of its judiciary, the fight against oligarchs, and the fight against organized crime, but these efforts can be successful if complemented by the private sector.
Due to the corruption situation, several MEPs also expressed concerns about whether EU funds will go where they are supposed to. Roman Haider of the Austrian Freedom Party (FPÖ) complained that while sanctions are not working and the European economy has failed, it is worth considering whether it is worth investing another €50 billion in Ukraine, a country that is corrupt at all levels.
At the end of the agenda point, Johannes Hahn, commissioner for budget and administrative affairs of the European Commission, spoke on behalf of the commission, reminding the critical voices that “we Europeans must clearly support Ukraine.”
The politician also said that so far €80 billion in aid had been made available to Ukraine in various forms, including military assistance, and that the EU would support Ukraine as long as it needed it.
Detente climate poisoned as US congressional report hypes China, Russia’s ‘nuke threats’
By Wang Qi | Global Times | October 13, 2023
Despite a recent climate of detente between China and the US, a US report by a congressionally mandated panel hyped “threats” from China and Russia, urging Washington to prepare for possible simultaneous wars with Moscow and Beijing and enhance its already formidable nuclear arsenal.
Analysts said Friday that the report will harm the fragile thawing in relations between China and the US. As the report is likely to be reflected in the future National Defense Authorization Act, it will also poison the global strategic environment for the next decade, they said.
Citing a senior official involved in the report by the Strategic Posture Commission, Reuters said the panel members are worried about “ultimate coordination” between China and Russia, which will get the US into a two-war construct.
The US and its allies must be ready to deter and defeat both adversaries simultaneously, the Strategic Posture Commission said, urging Washington to expand or restructure its nuclear arsenal to tackle the “existential challenge.”
The panel’s vice chair, Jon Kyl, a retired Republican senator, said that the US requires huge defense spending increases, and both the White House and Congress need to tell the US people that higher defense spending is a small price to pay “to hopefully preclude” a possible nuclear war involving the US, China and Russia.
It is very rare that this quasi-official report suggests the need to prepare for simultaneous war with China and Russia, including nuclear deterrence and counterattack, Lü Xiang, a US studies research fellow at the Chinese Academy of Social Sciences, told the Global Times on Friday.
The report is perhaps the boldest vision from the US strategic community since the Cold War, endorsing the interests of the military-industrial complex, and seeking to influence the US decision-making community, Lü said.
The report came at a time when Beijing-Washington ties showed signs of warming, after a slew of meetings between high-level officials. On Thursday local time, the US accepted China’s invitation to attend the Xiangshan Forum, a top security forum in Beijing this month, according to the media.
This report undoubtedly poisons the current climate of warming ties between China and the US, and will inevitably poison the strategic environment for the next decade, said Lü, noting the report’s recommendations are likely to be embodied in the National Defense Authorization Act, and the US will most likely significantly expand its nuclear forces in the next decade.
It means that the US is going to maximize the “challenges” and then respond to the “worst possibilities it has assumed,” he noted.
Although China has always emphasized an active defense strategy, we must also be prepared for a risky US posture on nuclear weapons, Lü said.
In February, Senior Colonel Tan Kefei, spokesperson for the Chinese Ministry of National Defense, stressed that even though the US has the largest nuclear arsenal in the world, it is still investing heavily in upgrading its nuclear triad. The US has been repeatedly hyping up the so-called “China nuclear threat,” only to seek excuses for expanding its own nuclear arsenal and maintaining military hegemony.
In 2020, Fu Cong, then director general of the Department of Arms Control and Disarmament, cited statistics from renowned international think tanks, pointing out that the US nuclear arsenal stands at about 5,800 nuclear warheads, which is almost 20 times that of China’s.
The US report is still asking for more defense spending, but how much more the US economy can afford to raise its defense budget remains doubtful, Lü said.
For fiscal year 2024, the US defense budget request hit another record high of $842 billion, more than the gross domestic product of Saudi Arabia for the entire year of 2021, and 20 percent higher than the combined defense budgets of nine countries, including China, Russia, India, and the UK, According to Xinhua.
US strategic circles should clearly understand that if a nuclear war between China, the US and Russia really breaks out, it will be disastrous for the world. Moreover, if the US assumes that a nuclear war will break out, others will look at the US as a participant, which poses risk to the US as well, analysts said.
Former German chancellor slams increased military spending due to unrealistic Russian threat
By Ahmed Adel | October 16, 2023
The German government needs to invest mainly in infrastructure, education, and housing instead of the military because the danger allegedly coming from Russia is unrealistic, said the country’s former chancellor, Gerhard Schröder, in an interview with the Suddeutsche Zeitung newspaper. His statement comes as the popularity of German Chancellor Olaf Scholz continues to decline, along with the economy.
“Do you really believe that Russian medium-range missiles will be fired at Germany?” he said, commenting on the government’s increased spending on the German Army’s combat capabilities.
Schröder criticised Scholz for creating a special fund for the German Army despite other problems existing in Germany that require considerable investment.
“Scholz said: €100 billion – and nobody knows what for,” he highlighted.
Instead of investing mainly in rearmament, the former chancellor called for infrastructure, education, and housing investments because, according to Schröder, German citizens are miserable.
The Bundestag and the Bundesrat (both chambers of the German parliament), in turn, in June last year and by a majority vote, supported Scholz’s initiative to create a special fund for the Bundeswehr worth €100 billion. The current chancellor believes that the German military will have the largest regular army in Europe after modernisation.
Scholz formed a coalition of his SDP party, the Greens, and the Free Democratic Party (FDP) to gain power. However, at the halfway point of his term, the popularity of his party and coalition is looking grim, and news of wasting €100 billion on the military is not improving the situation.
A poll by DEUTSCHLANDTREND at the end of August found that if a federal election were to be held, the SPD would gather just 16% of the vote — nearly 10% lower than when it secured power — and, more importantly, behind the Alternative for Deutschland (AfD) party, which seeks reconciliation with Russia and end of support for Ukraine.
Meanwhile, a poll by German broadcaster ZDF, also conducted in the second half of August, found that 51% of Germans are dissatisfied with Scholz’s leadership for the first time since he took office in 2021. Only 43% of respondents said they were satisfied with Scholz’s work.
If these same polls were conducted now, Scholtz’s popularity would likely be even lower, considering the government announced on October 11 that the German economy is expected to shrink by 0.4% this year.
“We’ve had a difficult year economically, at a difficult time,” said Economy Minister Robert Habeck. “[The cause is] the energy price crisis, the need for the European Central Bank to fight inflation and the weakening of important global economic partners [, such as China].”
Berlin’s new forecast contrasts with the 0.4% growth initially predicted in late April. “We are emerging from the crisis more slowly than expected,” Habeck added, but “we have reached the low point and will be moving forward again.”
Only a day before Berlin’s economic revision, the International Monetary Fund forecasted that the German economy would shrink by 0.5%, while a group of leading German economic think tanks in September predicted a 0.6% contraction.
The Economy Ministry expects the economy to pick up in the winter and then accelerate because of recovering consumer demand. The Ministry also explained that the “necessary fighting of inflation” by the European Central Bank has been a factor in Germany’s economic difficulties, which resulted in higher borrowing costs.
Germany’s main issues include an ageing population, lagging use of digital technology in business and government, excessive red tape, a shortage of skilled labour, and, most importantly, crushing energy costs due to the self-depravation sanctions regime imposed on Russia. It is for this reason that Germany is slowly and quietly returning to Russian energy sources after it was revealed recently that Securing Energy for Europe GmbH — a former unit of Russian gas giant Gazprom PJSC — plans to load LNG produced by the Yamal plant in Siberia early next month.
Although the EU has imposed sanctions on Russia following the announcement of a special military operation against Ukraine, the bloc still allows the import of Russian LNG. This has not stopped European politicians from criticising Russian LNG shipments’ approval, which increased after Gazprom suspended Nord Stream pipeline deliveries, but it does show how Germany struggles to balance its economic interests with its false moralising of Russia.
For this reason, Schröder is absolutely correct in his assessment that decision-makers in Berlin should start prioritising domestic matters rather than trying to build Europe’s largest military force at the massive price of €100 billion despite no credible threat existing against the country and other issues needing priority.
Ahmed Adel is a Cairo-based geopolitics and political economy researcher.
Featured Video
Russia and China quietly take over natural gas markets in Asia, with Qatar gone
or go to
Aletho News Archives – Video-Images
Book Review
Palantir CEO Calls for Draft to Fight the Empire’s Wars
Involuntary servitude is good for business
By Kurt Nimmo | Another Day in the Empire | April 20, 2026
In 2025, Alex Karp, the CEO of government and military tech contractor Palantir, published The New York Times best-seller, The Technological Republic: Hard Power, Soft Belief, and the Future of the West. The Wall Street Journal praised the book as a cri de coeur, a passionate appeal “that takes aim at the tech industry for abandoning its history of helping America and its allies,” while Wired praised the book as a “readable polemic that skewers Silicon Valley for insufficient patriotism.”
On April 18, 2026, Palantir posted twenty-two points to social media summarizing the book. In addition to taking Silicon Valley to task for insufficient patriotism, advocating a role for AI in forever war, and denouncing the “psychologization of modern politics,” the Palantir post on X declares: “National service should be a universal duty. We should, as a society, seriously consider moving away from an all-volunteer force and only fight the next war if everyone shares in the risk and the cost.”
National conscription, a form of involuntary servitude, and the wars it portends, is good for business, especially for corporations within the orbit of the Pentagon, the CIA, and the national security state. Palantir fits comfortably within this amalgamation. … continue
Blog Roll
Aletho News- Israeli army blows up school in southern Lebanon in violation of ceasefire
- The desalination front: Water as Israel’s Achilles heel
- Washington cuts flow of US dollars to Iraqi central bank until ‘acceptable’ government formed
- China blames US for diplomatic impasse with Iran, urges it to show ‘sincerity’ in talks
- Iran announces new Hormuz restrictions after US ceasefire violations
- After Islamabad: How the Global South Is Reshaping Eurasian Geopolitics
- Is Trump Going for Armageddon?
- Palantir CEO Calls for Draft to Fight the Empire’s Wars
- Iran War fallout: Russia and China quietly take over natural gas markets in Asia, with Qatar gone
- Hamas dismisses US-backed disarmament plan as ‘collective suicide’
- If Americans Knew
- 5 times Israelis desecrated Christian sites in the past two years
- US running out of weaponry for Israel’s war; Iran has plenty – Daily Update
- Israel is (still) killing aid workers in Gaza
- Catholics finally splitting with Trump over Iran war and Israel
- Israel’s “Black Wednesday” Massacre Leaves Lebanese Families Giving DNA To ID Loved One’s Remains
- ‘I Felt I Was a Monster’: IDF Soldiers Talk About the ‘Moral Injury’ – and the Silence
- ‘I thought I might die’: A Palestinian mother’s account of Israeli detention
- Mom whose daughter was killed by Israeli bulldozer 23 years ago pleaded with Congress to finally stop funding
- Israeli soldier takes sledgehammer to Jesus statue in Lebanon – Daily Update
- Israel employs ‘Gaza tactics’ in Lebanon, destroying 1,000 homes per day – Daily Update
- No Tricks Zone
- New Study: The Climate May Be 5 Times More Sensitive To Solar Forcing Than Commonly Assumed
- EV Industry Reached $70 Billion In Losses In 2024 Due To Delusional Green Ideologies
- Reality Check: Maldives Have Actually Grown In Size Or Remained Stable Over Recent Decades
- Abrupt Climate Change Also Occurred NATURALLY In The Past …25 Times During Last Ice Age
- Cave Discovery Reveals Today’s Desert Climates Were Recently Far Warmer, Wetter, Teeming With Life
- German Expert: Heat Dome Led To Record Temps In Western USA…Warmer In 1934, 1936
- New Study: No Linear Warming Or Glacier Retreat Along Northern Antarctic Peninsula Since 1980s
- An Inconvenient Tree: Uncovered In Alps… Europe Much Warmer Than Today 6000 Years Ago
- New Study Reports A 60% Slowdown In Greenland’s Ice Loss Rate In The Last Decade
- Low Intensity Tornado Wrecks Major Solar Farm, Creating A Potential Toxic Dump
Aletho News 