Taking Stock: Former EU Commissioner Called for a 'War Economy' in 2022

Meet the apparatchik and party hack Günther Oettinger whose wet dreams, apparently, involve (even) more centralised planning by Brussels because Russia! Russia! Russia!

Revisiting some older legacy media pieces I’ve compiled on my machine is getting ever more…interesting™. Today, we’ll seek to combine the recent posting about peak oil & gas, EU energy dependence (on Norway instead of Russia), and the warmongering emanating from Brussels:

Peak Oil & Gas, Socialism, and the EU Energy Supply: Despite Staff Increases, Equinor Produces Less

In summer 2022, a piece published by Der Standard caught my eye. It came replete with the below headline:

Expert advises timely preparations ‘for a war economy’: Winter looks grim as Putin threatens to withhold gas. Ex-EU Commissioner Oettinger speaks of a war economy, rationing, and even higher prices

So, what did former EU Commissioner Oettinger say according to Der Standard? Here’s the opener of Günther Strobl’s piece, dated 8 July 2022 (as always, translation, emphases, and [snark] mine):

In Germany and increasingly also in Austria, nervousness is growing about what will happen to gas supplies from Russia. From Monday [today, 11 July], an important connection from the gas fields in Western Siberia will be cut off: the Nord Stream 1 Baltic Sea pipeline has to be serviced, and this maintenance work is scheduled to last ten days. While Russian gas monopolist Gazprom had announced this some time ago, experts doubt that gas will flow again as usual on 21 July. Some are already talking about a war economy, for which Europe must prepare as quickly as possible.

Günther Oettinger is one of those who uses the word war economy to refer to far-reaching interventions by European states into their economy and society. The former EU Energy Commissioner, who in his active time more than once acted as fire extinguisher in the repeatedly flared-up dispute between Russia and Ukraine, paints a black picture for the next winter.

Are you wetting your pants already?

Meet Mr. Oettinger

According to his Ministry of Truth™ bio (English vs. German versions), he received some legal training in the 1970s before he worked as a tax accountant, business consultant, and, from 1984-88, for a law firm. As early as 1977, Oettinger was a member of Baden-Württemberg’s Christian Democrat Union (CDU, the party formerly headed by Ms. Merkel).

There, he rose through the ranks, not without causing considerable head-scratching (e.g., in 1989 Oettinger argued that motorcycles should be banned, citing ‘security concerns’, while in 1991, he temporarily lost his licence for driving under the influence of alcohol) and outright scrutiny: Baden-Württemberg, after all, is the home state of former Finance Minister and current President of the Bundestag Wolfgang Schäuble, who is a convicted felon (Schäuble took illegal campaign contributions for his boss, former Chancellor Helmut Kohl, something Italians will certainly consider ‘part of the game’, but unlike their more advanced southern peers, the German judiciary never broke the Cold War party system).

Mr. Oettinger became Ministerpräsident (Governor) of Baden-Württemberg in 2005 and served until 2009. During his comparatively short time in office, he caused at least two major scandals: on the one hand, Mr. Oettinger proposed to sell medieval manuscripts and incunabula (early printed volumes dating from between 1450-1500) to the tune of up to € 70m—to the benefit of the former ruling House of Baden (see here, albeit in German only). On the other hand, Mr. Oettinger was crucial in setting up a construction project known as ‘Stuttgart 21’, a new infrastructure development plan whose ‘crown jewel’, a new main railway station in Stuttgart, is still unfinished. It’s basically a major grifting operation for Mr. Oettinger’s ‘friends’ (in The Godfather mould, although, arguably, the mob appears to have had a bit more in terms of backbone and morality): massive cost overruns, half of Stuttgart rising up in protest, and corruption too obvious to cover up, you know, ‘regular stuff’ for people coming out of Germany’s southwest.

Books have been written about these shenanigans, and I won’t add to that long list here. What I would point to, though, is the fact that such ‘honourable people’ are damaged goods, domestically, hence they are typically ‘promoted’ (exported)—to Brussels. It’s a tale as old as time, and it also describes almost perfectly how and why Ms. von der Leyen, the current Head of the EU Commission, ended up in this capacity (she ‘reformed’ the Bundeswehr so well that it is now an almost entirely worthless outfit, with much more useless equipment compared to actually working hardware, handed out ‘consulting’ contracts to external firms, thereby wasting hundreds of millions of public money, and, lo and behold, some of her kids later become employees of these consulting firms: if you’re surprised by that, maybe you’d like to meet one of my business associates: he’s a Nigerian prince…but I digress).

Winter is Coming

Returning to the fear-mongering piece, this is ‘the expert’ that was alluded to: Mr. Oettinger, whose only two talents are ‘party hack’ and ‘grifter’, is quoted as follows by Der Standard (my emphases):

‘Gas storage facilities will certainly not be filled by autumn, and we will experience emergency management’, Oettinger predicts [lolcatz, this is too stupid]. ‘Putin is playing with us, and he wants to divide us. He will send more gas, less gas, or none at all, just as he pleases.’ While the dispute between Moscow and Kiev was about different price expectations for Russian gas, the situation has changed completely since Putin’s troops invaded Ukraine.

‘Wheat, seeds and energy, along with tanks, artillery, missiles and biochemical weapons, are the main instruments with which Russia’s president wants to make the West compliant’, Oettinger said at a German-Austrian expert meeting organised by Verbund [one of Austria’s major public-private energy companies] in Berlin. He added that it was all the more urgent to save gas wherever possible in order to alleviate the foreseeable hardship in winter. Flats heated at 18 degrees Centigrade and two sweaters is better than having to shut down large parts of the industry because there is not enough gas.

While this entire piece is making my head spin, I’d like to briefly point out that, when former Central Banker and SPD politician Thilo Sarrazin pointed out that deferred consumption would help (albeit in the context of integrating foreigners into German society in the early 2000s), he was chastised by the media and chased out of the party. Now, these notions have been normalised, as the new spirit of the age appears to be: it can’t be to outlandish and/or stupid, but as long as it may be sold vs. Russia, anything goes.

In addition, all efforts must be made in Europe to initiate the joint purchase of gas from alternative sources, i.e., not from Russia. Such a joint acquisition platform is under construction, and according to [Austrian] Energy Minister Leonore Gewessler (Greens), Austria has already registered requests for quantities to be acquired via such a platform, which is not yet operational. When it will be ready is written in the stars.

In fact, there are 27 different sets of energy policies in Europe, which is compounding this problem. No member-state has ever allowed energy issues to be taken out of their hands. Yet, when former Commissioner Oettinger calls for ‘the Europeanisation of energy policy’, as he did at the event in Berlin, he finds many supporters against the backdrop of the current gas crisis.

‘No country can do it alone, EU-wide solidarity is necessary’, says Verbund boss Michael Strugl. While Karoline Edtstadler (ÖVP), as Minister for European Affairs, is optimistic that the right lessons have been learned from the Covid situation to overcome the gas crisis, too, Oettinger holds that things are moving too slowly: a demand survey is needed to determine who needs how much energy and in what form in the short, medium and long term. In addition, a plan on how these demands can be met, would also be required. Before the end of the summer, the EU-27 should agree at a Council meeting on how the much-vaunted solidarity between the member states can and should function in an emergency.

Is this still to be considered ‘predictive programming’? Here’s the rest of the Standard piece:

In the meantime, energy prices continue to soar, and as long as the war does not come to an end soon, there is probably no end in sight—on the contrary. Wifo [Austria’s premier pro-business think tank] head Gabriel Felbermayr pointed out in Berlin that inflation could double to 18% if gas supplies were cut off in winter. While this would have hardly any effect on the economic trend for the year as a whole, from December on things could ‘possibly get very bad’, he added.

Wait a second: is this an admission that (official) inflation is at 9% right now?

A war economy could be in store, replete with distribution struggles, people protesting in the streets, and furloughs [paid for by the state, just like during the Covid Pandemic] that could see hundreds of thousands of people out or short of work in Austria, a number that would run in the millions in Germany. One-off payments, as initiated by the federal government to dampen the first wave, would no longer be sufficient since, as Verbund boss Strugl noted, only about half of the price increases for electricity have yet reached the end customer, and even less for gas.

Oh, when was it the last time there were millions of unemployed, desperate people in Germany? If memory serves, that would be the Great Depression, in particular the acceleration of the catastrophe in 1931/32, brought about by the collapse of the Vienna-based, Rothschild-affiliate Creditanstalt (the biggest lender east of Berlin) which was bailed out by the government while harsh austerity measures for the masses were implemented. The bank’s collapse triggered a wave of financial crises throughout Central Europe and, eventually, wiped the floor with all ‘establishmentarian’ politicians. The situation in Germany, which was virtually identical, fuelled the triumph of Hitler’s Nazi party, and the rest is history, as the saying goes.

Sure, history won’t repeat itself like that (it does rhyme, though), yet nothing has been learned from it, apparently. The Standard piece concludes like this:

Whether a price cap on gas could help to slow down inflation in the long term remains controversial among experts. The best way to fight inflation is to expand renewable energies. Electricity from wind and solar power plants, because it is produced comparatively cheaply, would force the expensive electricity from gas-fired power plants out of the market. But that won’t happen quickly either.

Bottom Lines

We’re headed ever deeper into Pippi Longstocking territory: wishful thinking will not change anything about reality.

Note that ‘a war economy’ is a bad thing: Germany’s WW1 economic policies (sic) meant massive dislocation and deprivation, and while it kept ‘the system’ going for some four years, output decreased by about 25%. It’s also the model for the Soviet ‘planned economy’, for Lenin and his ilk learned their ‘economics’ from WW1 Germany.

The only modern parallel would be the massive economic collapse of Greece during the 2010s, which saw output decrease by about 1/3, i.e., a much larger fraction in total.

Yet, keep in mind that WW1 Germany was an industrial, i.e., manufacturing, powerhouse while Greece today is way less so.

Furthermore, Greece is a Mediterranean country, and while this doesn’t mean it’s never cold in the Levant, it does get much, much colder in Central Europe.

Get ready for more ‘emergency management by the experts’, which means: be prepared to be left alone and act accordingly.

Of course, we shall talk about that kind of technocratic folly before too long.