Australia’s ruling elite seems hopelessly tied to London and Washington as it slides towards decline. It is up to the working class to cut the apron strings and chart a new Asian future for our continent, writes Abe David.
Western Europe is sliding into a deepening crisis – political and economic. At its core lie two interlinked forces: a ballooning debt burden that is choking its economies, and a grinding proxy war with Russia that is in danger of bleeding them dry. The result is that the old centres of imperial power – Britain, France and Germany – are finding themselves in a world that increasingly no longer runs to their rhythms.
Britain: the fag end of Empire
Nowhere is this clearer than in Britain. Once the most powerful nation on Earth, it is living through the long shadow of imperial decline – the fag end of empire. Yet the British establishment still behaves as though it commands the world stage. Its entanglement in Ukraine is best understood as a hangover from that imperial past – another act in the centuries-old rivalry with Russia that played out across the 19th and 20th centuries, from the Crimean War to the Cold War.
Back then, the “Great Game” saw British and Russian interests collide across Central Asia and the Far East. Today, the same establishment, with its intelligence services, financiers and arms dealers, once again sees Russia as the natural enemy – and the Ukraine conflict as the latest front in a very old competition.
At the turn of the 20th century, the Rothschilds’ investments in Russian oil offered British capital a profitable foothold – until Bolshevik “banditry” led by Stalin in the Caucasus in pre-revolutionary Russia and the subsequent revolution that brought it all an end. A century later, when the Soviet Union collapsed, London became the magnet for Russia’s new oligarchs. The City’s banks and lawyers welcomed them with open arms, laundering fortunes and rebranding them as respectable global investors. “Londongrad” was born. Here, wealth could be shielded, displayed, and legitimised. Among the most prominent were Boris Berezovsky, a controversial power broker in post-Soviet Russia, and Roman Abramovich, billionaire businessman, former regional governor
Putin’s early years were greeted in London with enthusiasm. Here, it seemed, was a man who would reopen Russia’s vast energy reserves to Western exploitation. The carnivorous London-based financial oligarchs were licking their chops at the vast riches of Russia’s treasures.
In the 1990s the British feted Putin as the new Russian leader, and even granted him private audiences with the Queen. BP, Shell and others invested in Russia, reliving the dreams of bygone eras. As events turned out, Putin’s interests lay elsewhere; it was more important for him to look after Russian pensioners than British lords and ladies. He nationalised the Russian energy industry, keeping vast wealth in the hands of the Russian people. This denied the British elite the chance to buy more super yachts or horseflesh to race at Ascot. By reasserting national control over Russia’s energy sector, he locked Western investors out of the real spoils, keeping the wealth in Russian hands.
Putin made it quite clear that Russian oligarchs could keep their wealth as long as they obeyed the FSB state, as he rebuilt it. Those such as Mikhail Khodorkovsky, a fierce critic of the Kremlin, who did not do as they were told, were treated with brutality.
This historical antagonism partly explains the obsessive hatred of large parts of the British elite towards Putin’s Russia.
Having spent billions backing Kyiv, Britain is paying a different kind of price. Its debt-to-GDP ratio sits at 94 per cent, bond yields are surging, and The Telegraph warns of an impending debt crisis so severe the country could again find itself under the thumb of the IMF – a humiliation not seen since the 1970s.
If the Ukraine war ends in defeat for Western interests, it will amount to a major defeat for the British elite. The Labour government faces the daily grind of managing decline: cutting public services to fund war and lecturing a weary population about fiscal discipline while inflation erodes wages. Guns before butter – the old imperial logic returns.
France: grandeur and gridlock
France, for its part, is equally afflicted by delusions of grandeur. Once the rival to Britain’s empire, it remains stubbornly attached to its sense of global mission, still clinging to colonies in the Pacific and West Indies and wielding one of the five permanent seats on the UN Security Council.
Under Macron, Paris has thrown itself behind the Kyiv regime, taking a hard line against Moscow while ensuring no French soldiers die in the process. Yet at home, France is coming apart. The government is paralysed – three prime ministers in a year, no parliamentary majority, and social unrest on the streets. Macron himself is now among the most unpopular presidents in modern history.
The numbers tell the story. France’s deficit is running at 5.5 per cent of GDP, its debt at 114 per cent, and pensions alone consume 11 per cent of national output – twice Britain’s rate. In a nation already angry over inequality and eroding living standards, these burdens are unsustainable.
Germany: from powerhouse to casualty
Germany – the industrial heart of Europe – is also floundering. Once buoyed by cheap Russian gas, German industry now faces an existential reckoning. The Ukraine war has severed its energy lifeline, while Trump’s new tariff regime and demands for higher NATO spending have tightened the screws.
The government of Chancellor Friedrich Merz, a former BlackRock executive, is pouring billions into rearmament and infrastructure while trying to prop up an ailing industrial base. But deindustrialisation is accelerating. Giants such as BASF, ThyssenKrupp and Volkswagen are losing ground as energy costs soar given the loss of Russian gas. The old model – cheap inputs, high-value exports – no longer works.
Germany may soon be called upon to bail out Europe once again, whether by underwriting Eurobonds or absorbing the debts of weaker economies. But with its own fiscal position deteriorating, that role looks less credible by the day.
A continent under strain
The malaise extends beyond Europe’s core. The so-called PIGS – Portugal, Italy, Greece and Spain – remain trapped in high debt and low growth. Eastern Europe, once touted as Europe’s new frontier, has become a forward base for NATO and a flashpoint for confrontation with Russia.
Meanwhile, the social fabric is fraying. Amid the fraying, the ageing continent is importing younger labour from Africa, the Middle East and Asia – regions Europe once colonised and exploited – which is being successfully exploited by far-right parties. Yet without migrant labour, Europe’s economies would grind to a halt. The contradiction is unresolvable within the imperial system of nation-states.
An ageing population, collapsing welfare systems, and the mounting costs of climate change – floods, fires, heatwaves – are straining public finances to breaking point. Add the technological revolution, which is hollowing out traditional industries and displacing workers, and Europe faces a perfect storm.
Washington’s grip and the debt trap
Europe’s predicament is compounded by its subservience to Washington. Under Trump’s renewed “America First” strategy, the United States has tightened its hold over the continent through energy, trade and defence.
The destruction of the Nord Stream pipeline and the forced pivot to American liquefied gas have crippled Europe’s competitiveness. German factories now pay double for energy what they did under Russian supply. At the same time, Trump’s 15 percent tariff blanket on European goods, plus higher duties on steel, cars, chemicals and machinery, is hammering exports.
Adding insult to injury, Europe is being browbeaten into buying more US weaponry. Trump is happy to provide (limited) weapons for the proxy war in Ukraine, provide Europe pays for it. NATO countries are urged to increase military spending to 3.5 per cent of GDP – with most of the contracts going straight to American defence contractors. War, it seems, has become the business model of empire.
Besides being under pressure from America in trade, Europe is under increasing pressure from non-Western countries that are all rapidly industrialising. They are led by China, which is leading the world in industrial manufacturing.
The coming debt crisis
The broader debt picture is grim. Across Europe, borrowing is at levels unseen since the Second World War. Governments are spending heavily on defence and subsidies while tax revenues stagnate. The United States can sustain its deficits only because the dollar remains the world’s reserve currency. Europe has no such privilege.
Britain, France and Italy are already testing the limits of market tolerance. Germany, once the creditor of the continent, may soon become its reluctant guarantor. Should one of the major economies falter – particularly France – the European Central Bank could face the impossible task of backstopping the entire system.
Under these pressures, the European Union risks reverting to its historic norm: bickering, fragmentation and conflict among competing national interests. The veneer of unity conceals deep fractures.
Implications for Australia
For Australia, the unravelling of Europe’s old order poses a profound question: where do we stand as the imperial powers stumble?
Australia’s economic and political establishment still sees itself as part of the Western “club”, tied by sentiment and capital to London and Washington. But as those economies slide deeper into debt and dysfunction, those ties may become liabilities rather than assets.
British and European corporations hold vast stakes in Australia – from BHP, Rio Tinto and Glencore to Shell, BP, Total, AstraZeneca, Unilever, HSBC, and BAE Systems. As European debt forces these firms to sell assets or retreat from overseas operations, there will be a rush of capital reshuffling. Private equity funds, “hanging around like flies around a garbage truck”, are already circling, ready to scoop up distressed assets.
At the same time, Asian investors – from Japan, Korea, China, India and Southeast Asia – are increasingly active, seeking energy, resources and agricultural investments. Australia, with its immense superannuation pool, could partner with Asian capital to rebuild domestic control over its productive sectors. But Asian capital will expect Canberra to dance to a different tune, opening up to further immigration from India, Indonesia and the Philippines. Can Australian capital be that bold, or does the working class need to grasp the opportunity for new engagement with Asia?
For Marxists, the lesson is unmistakable. Europe’s crisis is not just financial or geopolitical – it is the crisis of a decaying imperial system whose historic centres of power can no longer sustain their dominance.
Australia’s working class cannot afford to be chained to this sinking order. Our future does not lie with the bankrupt oligarchs of London, Paris or Washington, nor in serving as a junior partner in imperial military blocs like AUKUS. It lies in solidarity with the peoples of Asia – our neighbours and our future.
As Europe and the old Atlantic powers descend into debt, division and militarism, Australia must chart an independent course. The working class has the historic task of reorienting the nation – away from the ruins of empire, and towards the emerging world to which we truly belong.