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TM, ®, Copyright © 2021 Piero Scaruffi All rights reserved.

TM, ®, Copyright © 2022 Piero Scaruffi All rights reserved.

The New Byzantium: The European Union
Europe's Many Crises
Articles on Europe before 2022

  • (january 2022) The New Byzantium: The European Union.
    During the Middle Ages, Byzantium (Constantinople), which ruled over the remnants of the Eastern Roman Empire in the Balkans, Middle East and northern Africa, was still one of the richest countries in the world. It was, however, torn by internal strive, with many restless regions that were unhappy with the central government. It was surrounded by "barbarians", Slavs in the north and Muslims in the south. But still much richer than any of its neighbors. Sometimes, instead of fighting them, Byzantium would simply pay bribes to maintain the peace. To the west there lay nominal Christian allies: the Holy Roman Empire (Germany), France and Aragon (eastern Spain and southern Italy). However, France was busy fighting England in the "Hundred Years' War", the Habsburg emperors were busy quelling a rebellion in Bohemia, and Aragon was sailing towards union with Castilla. Britain (the real rising power, although not obvious at the time), Portugal and Castilla were too far to care. The Slavs used the money paid by the Byzantines to build better armies and eventually seceded. The Ottoman Empire methodically conquered the lands of the Byzantine Empire until in 1453 sultan Mehmed II laid siege to Byzantium itself. Egypt and Middle East had already been captured by the Turkic-speaking Mamluks, and Iran had been captured by its own Turkic-speaking rulers, descendants of Timur. In retrospect, the strategic weakness of the Byzantine Empire looks obvious, despite the fact that it had a much higher degree of science and technology.

    Fast forward to 2021 and most of Europe has been united into the European Union, today's equivalent of the Byzantine Empire, a Christian empire surrounded by "barbarians": Russia, Turkey and Arabs. Europe is much richer and keeps peace by paying tributes to all of them, in one form or another. Europe also depends on two of them (Russia and Arabs) for its energy needs. Russia, whose economy is smaller than Italy's, uses the money that Europe pays to maintain and improve a very powerful army. Russia and Turkey are routinely blackmailing the European Union: Russia owns the natural gas that Europe needs for its energy needs, and Turkey controls the flow of refugees from the Middle East and Central Asia. The EU has kept peace at its borders through a policy of concessions to violent neighbors, whether the warlords of Libya, the dictator of Belarus, the semi-dictator of Turkey (Recep Erdogan) or the new czar of Russia (Vladimir Putin). In 2004 Europe de facto accepted Russia's annexation of Crimea, a sign of weakness that didn't go unnoticed around the world. Russia is also successfully meddling into European affairs through its cyber-attacks, disinformation campaigns, support for right-wing anti-European parties, and fueling Slavic nationalism in the Balkans. Arabs are already "invading" Europe at the tune of millions per year: 2.7 million in 2019, before the covid pandemic forced European countries to close borders. 23 million people (5%) of the 447 million people living in the EU are non-EU citizens. It's a deluge that Europe doesn't know how to stem.

    Meanwhile, China is using the money it accumulated thanks to trade with Europe to buy companies in Europe and to expand its new Silk Road into Greece and Italy. It will be hard for European countries to resist the temptation to sell out to China which is the only country willing to buy their debt-ridden industries.

    To the west of Europe there lies the Christian ally, the USA. But the USA is increasingly distracted by its own wars and strategic containment of Chinese expansion, and increasingly engulfed in its own civil war. Europe is torn by internal discord, with countries like Poland and Hungary increasingly indifferent to the rules, and many of its members are torn by their own internal discord (Catalunia would like to secede from Spain, and perhaps Scotland from Britain). England already seceded from the EU (it was just England that voted to secede, not the whole of Britain, with Scotland and Northern Ireland forced to follow England). While Europe is still far richer than Russia, than Turkey and than the Arabs, most European economies are in shambles. These four factors seem to be accelerating at the same time: external threats, internal divisions, economic decline, and weakening alliances.

    The strategic weakness of the European Union looks similar to the strategic weakness of Byzantium six centuries earlier.

    It is shocking that the European Union, whose GDP is more than 13 trillion dollars, has to be constantly afraid of Russia, whose GDP is 1.5 trillion dollars, i.e. eight times smaller. China is indeed and economic giant and specializes in setting "debt traps" around the world; but Russia has virtually no economic power. Russia is a technological and scientific midget. It hasn't created any major high-tech company. The last Nobel prize won by Russian scientists working in Russia came in 2003 for work they did in the 1950s. Compare with China that has created the likes of Alibaba, Baidu, Tencent, Huawei, and many others. China is publishing more papers than the USA on new technologies like Artificial Intelligence and Blockchain: Russia has virtually disappeared from conferences on A.I. Russia leverages oil, China leverages data, the oil of the 21st century.

    Just like the Slavic "barbarians" kept harassing the Byzantine Empire and eventually contributed to its downfall, while the Western powers (the Holy Roman Empire) looked indifferent and despite the fact that the real rising power was on the other side (Britain), today's Slavic neighbor, Russia, is harassing the European Union and may contribute to its downfall, irrelevant of the fact that the European Union is much richer, that the European Union theoretically has the ally that matters (the USA) and that the real rising power is elsewhere (China).

    TM, ®, Copyright © 2022 Piero Scaruffi All rights reserved.
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  • (january 2022) Europe's Many Crises
    The most democratic countries are now the countries of Western Europe (the old colonial powers). It is a pity that they are under siege on so many fronts.

    Here is a quick rundown of the challenges facing an increasingly dis-united Europe:

    • The rise of far-right populism
    • North-south divide about economy
    • West-east divide about democracy
    • The refugee crisis
    • Inconsistent covid responses
    • Energy dependency on Russian and other non-European imports
    • Russian cyber and military subversion
    • Instability in the Sahel and Libya
    • Relations with Turkey, currently run by a mad autocrat
    • Austerity programs that push bankrupt countries to sell major infrastructure to China (austerity programs that become business opportunities for China)
    • China's "Wolf Warrior" diplomacy, likely to gain influence over some member states and use them as Trojan horses, e.g. for proxy veto-power diplomacy
    • The unreliability of the US alliance (the USA is an unreliable and sometimes embarrassing partner - coordinating foreign policy with the USA made sense when there was a common enemy, i.e. communism - now it's not clear who the enemy is)
    • The unreliability and perhaps obsolescence of NATO
    • Islamic terrorism (still out there plotting against Christian Europe)
    • Brexit (although this is more a british problem than a european problem)
    Towering among european problems is the steady loss of high-tech industries. The USA has silicon valley and China has created many similar hubs of innovation. where's Europe's Silicon Valley? In a word: it doesn't exist. Ironically, it does exist in european countries that are not part of the european union but not in the countries that are members. Britain has the area around Cambridge University, which spawned ARM and DeepMind. Switzerland has Lausanne (where the EPFL is), Zurich (where the Swiss Federal Institute of Technology is), Basel (around Novartis and Roche) and Zug (which has become the center for blockchain technology).

    Apple, based in California, and Samsung, from South Korea, make the most popular phones in Europe. Europe's wireless networks still rely heavily on Huawei equipment for the existing 4G networks. Google dominates online search and video sharing (YouTube). Its Android is the standard operating system for non-Apple phones and Maps is the most used navigator. Facebook owns both the most widely used social network (Facebook) and the most widely used messaging app (Whatsapp). Amazon controls e-commerce. European companies run their businesses on cloud infrastructure from Amazon and Microsoft. During the pandemic, as businesses moved online, Europe adopted Skype (now owned by Microsoft), Zoom, Google Meet and Microsoft Teams. And so on. Europe is increasingly, massively dependent on foreign technology, mostly from the USA, but also from South Korea and even from China.

    Angela Merkel once openly said that European laws indirectly helped the USA, South Korea and China to create global high-tech champions at the expense of European startups. Unfortunately, nobody listened. The European Union is unable to create "European champions" and in the long run this will cost dearly.

    Berlin, Barcelona and Paris have vibrant scenes but have not produced a single major innovation in modern technology. Germany is an industrial powerhorse, but not in software. The fact is particularly striking in the case of Berlin and Paris, cities that, one century ago, were at the forefront of the electrical revolution.

    It took the covid pandemic for Europe to produce a major innovation: the mRNA vaccine, developed with European funding by a German company (BioNTech) founded by a Turkish immigrant (Ugur Sahin) and based on the research of a Hungarian biochemist (Katalin Kariko). Could this be the template for a European resurgence?

    TM, ®, Copyright © 2022 Piero Scaruffi All rights reserved.
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  • Articles on Europe before 2022
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