According to a prominent contributor to Forbes magazine, the cause of this is the sanctions put in place against Russia due to the conflict in Ukraine.
According to a prominent writer to Forbes magazine, Europe has become “the third world of the Western world economies” as a result of the sanctions put in place against Russia due to the conflict in Ukraine.
According to Kenneth Rapoza’s piece from Tuesday, the European stock market is currently the poorest in the Western world and underperforms the US by ten basis points.
The most significant headwind” for such a state of affairs has been the “Russian sanctions on energy as punishment for its war with Ukraine,” Rapoza insisted. Those restrictions “set off a massive commodity price spike that’s hurt the European economy the most,” he added.
Investors were warned by the author to avoid investing in Europe, at least until Brussels determines how to make up for the drastic reduction in energy supply from Russia and how to lessen the negative effects of its own sanctions.
He predicted that if there is no cease-fire in Ukraine soon, “Europe will become so desperate this winter and supply chains will be so stretched that it will have no choice but to relax some sanctions or persuade non-EU partners to relabel and transship Russian commodities to look in [compliance] with their own rules, but really doing an end-around.”
Rapoza emphasized that until a solution is found, Europe would continue to be “the third world of the Western world economy,” referring to the way one investor recently put it to him on Twitter.
The author also asked Vladimir Signorelli the head of US-based consulting firm Bretton Woods Research to comment on the idea of Europe becoming “the Third World of Western economies.”
“They’re certainly heading that way,” Signorelli acknowledged. “And you have the Greens still opposing nuclear in Germany. I just don’t understand them. They are on the fast track to a third-world energy program.”
Rapoza asserted that only China is currently “worse as an investment” than Europe, noting Beijing’s “hot political conflict” with the United States, rivalry among the Chinese political elites, and the nation’s strict Covid-19 regulations.
