Gas, Semiconductors and War

New readers should know that my Substack posts are dedicated to surveillance of matters related to a central premise, and that premise, put at its simplest, is that the collective West, made ever more desperate and ruthless because of its unsustainable debt load, is attempting to beat back the multiple forces of multipolarity. It is currently doing this on three main fronts: against Russia over the proxy excuse of defending Ukraine; against Iran over the proxy excuse of defending Israel; against China over the proxy excuse of defending Taiwan. But there is no limit to the number of fronts that the West will entertain.

The Quest to End Russian Gas Supplies

Today, first day of 2025, marks the discontinuation by Ukraine of the distribution of Russian gas to customers in Europe. Slovakia is the country most immediately impacted, but Hungary may follow. It would be in the EU’s interest if these countries were to run into political difficulties as a result of any economic turbulence caused by the discontinuation of Russian gas, since they are the principal opponents in the EU to the EU’s obsessional and impoverishing war against Russia over Ukraine.

Implications for Pro-Russian Sentiment in Europe

In Hungary the EU’s man is Peter Magyar, a European Parliament member and lawyer, incumbent President of the the Respect and Freedom Party (Tisza), Hungary's largest opposition party. He will be Viktor Orban’s main challenger in the 2026 Hungarian parliamentary elections.

In Slovakia where there is substantial pro-Russian sentiment, the opposition PS leads the polls and may soon get the opportunity to challenge Fico’s Smer party if, as Fico has suggested, there is a snap election.

In addition to these possible set-backs to pro-Russian sentiment within the EU, there are rumblings of potential color revolution in Serbia and in Bulgaria a distancing of public sentiment away from Russia.

In Serbia, Aleksandar Vucic’s Serbian Progressive Party (SPN) faces the threat of what many consider a new color revolutionary impulse from the thousands of opposition demonstrators who assembled outside the Belgrade City Assembly last Sunday. They were there to express their dissatisfaction with SPN’s victory over the pro-EU Serbia Against Violence (SPN) coalition in last week's parliamentary elections. The protest escalated into violence when a faction of protesters tried to force open the doors of a government building, leading to their dispersal by the police. Vucic considers that the demonstrations are financially supported by Western powers aiming to oust him from office due to his amicable ties with Russia and his refusal to relinquish Serbia's territorial claim to Kosovo.

In Bulgaria, President Rumen Radev faced comparable opposition in October when he endorsed a legislative amendment banning LGBTQ+ “propaganda” and “gender ideology” in schools. On October 27, Bulgaria held its 7th parliamentary election since April 2021. It is widely anticipated that the country is heading for an eighth election in spring 2025. given that the most recent election did not result in any significant reshuffling of seats in parliament, perhaps moving the country to a repeat of previous few snap elections.

In his New Year’s address Radev called for unity as the path to safeguarding the Fatherland, stressing the need to bolster the country’s sovereignty and prosperity within Europe. A recent Wilson Center report claims that Bulgarian society is starting to feel the effects of prolonged political gridlock as the government struggles to work effectively.

“This is increasingly affecting its citizens. Many of them place the blame for their misfortunes on the EU and the West, and some even express nostalgic sentiments toward Russia”.

A piece in Intellinews today noting that Bulgaria is independent of Russian energy, claims that the country is turning against Russia. It cites a poll finding from Alpha Research that one of the most serious barriers against the influence of anti-European rhetoric remains the perspective of Bulgaria exiting the EU. It notes that:

“In 2024, just 22.1% of Bulgarians approve Putin versus 24% last year and 25.2% in 2018. At the same time, 31.8% of Bulgarians have a positive attitude towards Russia this year, down from 36.5% last year and 60.1% in 2018.

In this context, Bulgarians become more oriented towards the EU and Nato. The support for the EU is 60.9% in 2024, up from 57.4% last year and 60.6% in 2018. 62.5% of Bulgarians believe that their country is benefitting from the EU membership, up from 56.5% in 2024 and 58.8% in 2018.

The support for Nato, which was 28.4% in 2017, increased to 40.4% this year. It was also above last year’s 39.1%. Just 26.4% have a negative attitude towards Nato, down from 26.6% last year and 28.4% in 2017.

48.5% of Bulgarians believe their country has benefitted from Nato membership, up from 46.9% last year and 36.6% in 2017”.

In Romania, as I have discussed in a recent post, the win in the first round of the country’s recent national election campaign of a candidate, Călin Georgescu, echoed support for his antagonism to the war with Russia over Ukraine provoked. And for this very reason, most likely, his victory was countermanded in what was essentially a pre-coup. This was spearheaded by the country’s intelligence services in the form of an annulment of the results of the election on the highly dubious if not downright false pretext of Russian interference in the election. Thus was Romanian democracy destroyed in the name of democracy.

To return to the matter of Ukraine’s shut-off of the supply of Russian gas, and how this might most immediately impact Slovakia and Hungary and, possibly incite greater political unrest in other countries, we should note first that these countries do have other alternatives and, second, that the setbacks they face over the shut-off of Russian gas will also affect other EU members who have been allowed to continue importing Russian pipeline gas, including Austria and Italy. Ensuing inflationary impacts of higher energy prices caused by Ukraine’s action (surely blessed by the EU and by Washington) may be global.

Ukraine itself will be badly hit because (1) the cut-off will also involving the drying-up of the “reverse flow” mechanism by which European customers for Russian gas in effect paid for Ukraine to siphon off the gas that it needed; (2) in retaliation, Slovakia may very likely cut off its electricity supplies to Ukraine; (3) Ukraine will grow more dependent on the US supply of LNG gas which is much more expensive than pipeline gas and is vulnerable to US decisions to reduce its availability in order to, prioritize domestic consumers.

The Turkstream gas route is an alternative souce of supply of Russian gas through the Istanbul gas hub (note the importance, once again, of Turkiye to crucial Russia interests in energy distribution) which could reach Slovakia and Hungary. But pro-EU and anti-Russian countries that lie upstream, between Istanbul and both Slovakia and Hungary, could conceivably decide to cut of this supply. Were they to do so, this could impact other customers further downstream. They would almost certainy raise the ire of Turkiye’s President Erdogan in counter productive ways: they would be attacking Turkish export revenues. Such action might be restrained by fears that Turkiye could at any time renege on the deal whereby it hosts four million refugees from previous Western-instigated havoc in the Middle East (including Syria) and prevents them from travelling further north.

Drone Warfare

The extremely rapid evolution of drones has radically transformed the nature of warfare. Although written from a viewpoint sympathetic to Ukraine, a long New York Times Magazine piece contributes to our growing understanding of this topic. See here: (Drones)

Preparing for War with China

An opinion piece today in the New York Times (China) laments that the US is not, after all, quite prepared enough to go to war with China over Taiwan, which the US still recognizes as a part of a China. Noting China’s recent military exercises around its own territory, it claims that a full-scale invasion by China of its own territory is a possibility and that China is preparing for such an eventuality to take place in 2027.

Or China could impose an effective quarantine that would allow commerce, but on China’s terms which the NYT says would mirror what Beijing is already doing in the South China Sea over waters and atolls that the NYT claims are a part of the Philippines (but which China of course would say are Chinese). The authors urge the incoming Trump administration to size up the problem of China’s threat to Taiwan. They note Taiwan’s importance as a major source of semiconductors for the rest of the world.

“The most obvious economic implications relate to semiconductors. Taiwan Semiconductor Manufacturing Company produces about 90 percent of the world’s most advanced computer chips. Some are now made in Arizona, but T.S.M.C.’s most cutting-edge chips are still produced in Taiwan. Industries from autos to medical devices depend on these chips; if Taiwanese chip production is disabled, the global economy could be plunged into a deep slump. If T.S.M.C.’s factories fall into China’s hands — it relies on T.S.M.C.’s chips, too — Beijing could seize a competitive edge, including in the development of artificial intelligence technology, and have American and European manufacturers over a barrel”.

Could the US wheel in the artillery of economic sanctions? Apparently, doing so would undermine “the international economic system that the United States is uniquely positioned to protect” (so why doesn’t a similar logic apply to US sanctions against Russia and Iran?). The authors recognize “the huge costs of compliance for their own economies” and that “many Americans would find the probable rise in prices of consumer goods untenable.” That is to say, the authors realize that Taiwan and many other Asian economies are doing very well precisely because of their trading relationships to China, which are in many cases of greater current or future importance than their trading relations with the US.

The authors propose solutions in (1) Federal Reserve coordination with other countries’ central banks to provide liquidity to prevent global financial collapse (that the authors argue would result from a Chinese invasion though, were it to occur, would be provoked, I would argue, only in response to a credible threat from the US and its allies), and (2) the establishment of an Economic Security Cooperation Board, that would be open to all nations “except rogue states.” This would, amazingly, impose a “framework for enforcing trade policies rooted in American national security interests” (my italics) and (3) crash reshoring of critical products from China on which America and other countries have become heavily dependent, by means of a system of predictable, incrementally increasing tariffs on Chinese import which would move production out of China without inflationary consequences. Of course, China might retaliate against foreign companies in China. But that would be no problem because “a U.S.-led coalition would need to aid all countries that are the target of Chinese economic coercion”.

US Empire vs the Houthis

The New York Times today (see Yemen) reports multiple US precision strikes on Houthi targets in Sana, Yemen’s capital, and coastal sites. These included a command and control facility and centers for weapons production and storage. Missiles were fired by F/A-18 Hornets and a F-35 Joint Strike Fighter and from an Arleigh Burke-class destroyer, which typically carries Tomahawk cruise missiles for strikes on targets ashore.

A Houthi spokesman yesterday said that his group had conducted a drone and cruise missile attack on the United States aircraft carrier Harry S. Truman, preventing an aerial assault that American forces were preparing to execute. The Houthis had also just launched their fifth missile attack on Israel in a week, despite increasingly strong warnings from Israeli officials. Isrseli sources acknowledge that Houthi missiles have reportedly hit a school, playground and residential buildings. Houthis say (but Israel denies) that their strikes have hit the international airport near Tel Aviv and a power station in the Jerusalem area. While Israeli threats against Yemen are becoming increasingly dire, the NYT claims that Israel lacks intelligence on the group, noting also that the distance between Israel and Yemen is more than 1,000 miles, and Yemen has a mountainous terrain that can offer Houthis an added layer of protection.