ONE of the puzzling phenomena in world capitalism today is the bellicosity displayed by Europe vis-à-vis Russia. The claim that Russia has imperialist designs towards Europe, which the European ruling circles keep repeating, is clearly absurd. It is NATO that moved eastwards, in violation of a promise made by the US administration to Gorbachov, and provoked Russia; and it is NATO members, notably US and UK, that torpedoed the Minsk agreement reached between Russia and Ukraine which would have prevented the war. NATO’s objective clearly was to subjugate Russia and control its rich natural resources, by recreating the relationship that Western imperialism had developed for a while with that country when Boris Yeltsin had been its president. The claim that it is Russia that wants to over-run Europe, like the earlier Cold War claim that it was the Soviet Union that wanted to subjugate Europe, is so absurd that it is almost childish.

The question however is this: after the US has decided to bring the Ukraine war to an end and thereby implicitly denied this claim of Russian aggressiveness, why does Europe still persist in propagating this myth? This question is particularly relevant for Germany whose losses owing to the stand-off vis-à-vis Russia have been quite substantial. Being forced to rely on the import of US energy in lieu of Russian gas that is cheaper, its costs of production have gone up, encouraging firms to shift their production elsewhere and start a process of de-industrialisation of Germany; and high energy prices have also raised the cost of living, bringing greater distress to the workers. The natural thing for Germany should be to welcome an end to the Ukraine war and seek to bring about an improvement in its economic performance. Why is it still persisting with its bellicosity?

This difference between Europe and the US cannot be attributed to a revival of inter-imperialist rivalry; it concerns a divergence in imperialist strategy towards Russia, but that is not the same as inter-imperialist rivalry fuelled by the contradiction between rival financial oligarchies. In a world of globalised finance capital, such rivalry over what Lenin had called “economic territory”, remains muted; besides, as we have just seen, the interests of Germany and Europe should generally dictate peace with Russia rather than confrontation, especially in view of the fact that Russia cannot be defeated (in any sense of the term “defeat”) in the Ukraine war.

Of course it may be argued that even in the absence of any intensification of inter-imperialist rivalry, European ruling circles, faced with the threat of a withdrawal of the American-provided “security” umbrella they have enjoyed until now, are keen on stepping up their armaments expenditure in order not to be “left behind”; this can be financed partly through a larger fiscal deficit and partly by cutting down on welfare expenditure that Europe had been incurring in the post-war period, and both these become easier to achieve by invoking a Russian threat.

Globalised finance is opposed to larger fiscal deficits, and its opposition arises from the fact that government expenditure financed by such deficits for raising the level of activity and employment delegitimises capitalism; this argument however, it is assumed, would not be as compelling when such a larger deficit is used for building up armed might in the face of a perceived external threat (even though it may still enlarge activity and employment). The opposition of finance to a larger deficit in other words may be muted through an invocation of a Russian threat. This is what is hoped by the recent Constitutional amendment enacted in Germany for enabling larger government borrowing. Likewise, the opposition of the people to a reduction of welfare expenditure and a further dismantling of whatever remains of the post-war welfare state, it may be hoped, would get muted if they believe that there is a serious Russian threat. In other words, the Russian threat is invoked to step up arms expenditure deemed necessary by European ruling circles in the new situation.

Even if some validity is recognised in this explanation, it is obviously inadequate. For a start, Europe’s anti-Russian bellicosity long predates Trump’s ascendancy and hence the European ruling circles’ perceived need for re-armament. Besides, the anti-Russian rhetoric is stronger in the centrist liberal-bourgeois political circles, comprising both centre-left and centre-right, than even in the extreme right, neo-fascist, formations. The extreme right German AfD for instance, while it is all in favour of German re-armament (and even favours the acquisition of nuclear weapons) is less strident on the Ukraine war than the ruling coalition of the Social Democrats, the Free democrats and the Greens, or the newly victorious Christian Democrat-Christian Social Union of centre-right. Similarly, Meloni of Italy or Orban of Hungary are not among the most bellicose of European leaders arrayed against Russia, though they would be firmly categorised as extreme right or neo-fascist.

One can therefore discern the following pattern: while the neo-fascist formations create an internal “other”, some hapless ethnic or religious group, and foment hatred against it, in order to bolster the hegemony of big capital in a period of crisis by shifting the discourse away from issues of unemployment and living conditions, the centrist political formations seek to bolster the hegemony of big capital by fomenting hatred against an external “enemy”, which in the European case happens to be Russia.

This of course is a relatively new phenomenon, which has emerged because of the centrist political formations’ utter inability to get the European economies out of the crisis through the standard methods of Keynesian demand stimulation. They have been hamstrung by the objections of globalised finance to both methods of financing larger government expenditure that could stimulate aggregate demand, namely larger taxation of the rich or a larger fiscal deficit. The centrist political formations which have been in power in Europe for decades are losing political ground both because they are held responsible for introducing the neoliberal regime that has brought great distress to the people, and also for being unable to overcome the inevitable crisis that such a regime runs into which brings even greater distress. They obviously would not stand quietly in the face of such loss of electoral support; they would seek to recoup it in some way. And they do so by presenting themselves as the main bulwark against an external “enemy”, Russia. Domestic electoral compulsions in the face of the economic crisis of neo-liberalism thus contribute to the drumming up of Russophobia on the part of centrist political formations in Europe.

In addition there is the pressure of the arms manufacturers’ lobby. The Ukraine war has brought them substantial orders, and large profits. A continuation of the war would mean a continuation of these profits. The leading German arms manufacturing company Rheinmetall, for instance, has had its order books full for quite a while; the recent German decision to amend the Constitution to spend more on arms, while it would not lead to any greater capacity utilisation at Rheinmetall, would entail a continuation of that “happy” state of affairs, while an end to the Ukraine war could end it. Drumming up Russophobia is a way of legitimising its continuation.

There is an irony here. Post-war capitalism had taken pride in the fact that it had re-fashioned itself into a “humane” system. It claimed to have promoted democracy by introducing universal adult franchise over its entire domain (though this had been achieved a little earlier in Britain, in 1928, when women had got the vote); it had witnessed substantial welfare expenditure, especially in Europe, to keep economies close to full employment and provide social security; and it had undertaken decolonisation so that it could no longer be accused of the horrors of colonial exploitation. On the basis of these, it was claimed that capitalism had “changed”.

Contemporary capitalism has witnessed a reversal of every one of these developments; capitalism is back to its horrendous and unadulterated past, with social democracy being actively complicit in this reversal. The repression unleashed by neo-fascism that has characterised much of the capitalist universe now has attenuated democracy; the increase in arms expenditure at the expense of welfare spending in the very heart of Europe is attenuating the welfare state; and the reacquisition of metropolitan control over much of the natural resources of the Global South under the neoliberal regime, which is now buttressed by Donald Trump’s brazen plan to take over the mineral riches of Greenland and Ukraine, and to develop Gaza for real estate and tourism; are all indicative of this reversal. And to believe that capitalism can get back to its so-called “humane” avatar is a chimera.