Russia and Ukraine war’s impact on EU
The European Union (EU) and its member states are likely to suffer an economic setback as a result of the Russia-Ukraine conflict, which would necessitate a rethinking of a variety of economic policies.
The EU has responded to the war, the surge of migrants, and concerns about energy supply disruptions with exceptional unity, resolution, and speed. However, Russia’s invasion of Ukraine will have a long-term impact on Europe’s goals and policy choices in the coming years and decades.
The supply shock induced by rising oil and gas prices, Europe’s reliance on Russian energy, and the impact of geopolitical concerns on consumer confidence and investor sentiment are the primary immediate risks to the European economy.Europe also has a responsibility to welcome millions of people fleeing violence and provide them with essential aid. Here are a few consequences on EU and the crisis:-
The European Union And The United States Have Imposed Strong Sanctions On Russia.
The United States announced sanctions against Russia’s Central Bank on February 28th (CBR). The European Union has followed suit. By preventing the CBR from converting assets held in US dollars and euros into rubles, these restrictions will prevent the CBR from accessing roughly half of its US$643 billion in foreign-exchange reserves. The law also bars Russia from accessing the National Wealth Reserve, its emergency sovereign wealth fund (NWF). Furthermore, the United States and the European Union have announced that some Russian banks will be shut off from the global payments system SWIFT.
This Year’s Global Inflation Rate Will Surpass 6%.
Global inflation will be fueled by higher commodity prices this year and possibly in 2023 as well. It has been predicted worldwide inflation of roughly 6% this year, but given the recent rises in commodity prices, that figure is now projected to be exceeded. The beneficial effect of higher commodity prices for manufacturers will be negated by rising inflation.
Central banks will face difficult questions as a result of rising prices. They had begun a monetary tightening programme to combat inflation, but they may now be concerned about the impact of the Russia-Ukraine conflict on the post-coronavirus recovery process.
Prices Of Commodities Will Remain High For Months.
As a part of the worldwide impact of sanctions is expected to be limited, it is predicted that the most damaging effect of the Russia-Ukraine conflict on the global economy would be higher commodity prices. Concerns about supplies, the destruction of physical infrastructure, and sanctions might cause commodity prices to rise. We believe that neither the EU nor the US will impose an embargo on Russian hydrocarbon exports.
Supply Chains Will Be Thrown Off.
Companies will struggle to establish financial channels through which to conduct trade with Russia, which will have an impact on supply chains and trade. Furthermore, the potential damage of key transportation infrastructure (particularly ports in Ukraine) may exacerbate current supply-chain issues.
EU Membership For Ukraine
After the United Kingdom left in January 2020, the EU became a club of 27 countries, with Croatia being the most recent addition in 2013. The EU’s expansion was slowed by the deep financial crisis of 2008 and the accompanying national debt crises.
Poland, Slovenia, and Lithuania, on the other hand, have argued that Ukraine’s accession to the EU should be accelerated by providing its candidacy status, which is an official recognition that a nation wants to join the EU and is making the required reforms to do so.
NATO’s Rush To The East
NATO’s rush to the east has resulted in the Baltic states of Latvia, Lithuania, and Estonia becoming a hastily agreed-upon advance post for NATO soldiers.
Finland’s public opinion has abruptly transformed after a citizen petition forced a parliamentary debate on the topic. Non-NATO Sweden, like the Finns, has been given unique access to NATO intelligence to assist in the coordination of European responses to the war.
Rumours circulated that Poland, Slovakia, and Bulgaria were planning to supply fighter planes to Ukrainian fighter pilots, blurring the boundary between military assistance and actual engagement. Even Switzerland, which has maintained neutrality since the Napoleonic Wars, has supported the EU’s economic sanctions against Russia assets and banks.
In Conclusion, History Must Never Be Forgotten.
This is not, contrary to certain reports, the first major war in Europe since World War II. The Balkans were engaged in a war that saw Yugoslavia disintegrate, brutal ethnic cleansing, Serbian genocide, NATO bombing of Belgrade, and the continued garrisoning of Kosovo for much of the 1990s. Putin has never forgotten what NATO did in the Balkans.
Similarly, the Russian-Ukraine military war, which has been ongoing since 2014, was preceded by the 2008 Russian-Georgian War. Iraqis have pointed out that Russia’s war on Ukraine is reminiscent of the US invasion of Iraq in 2003, which similarly called into question the strength of international law.
Historians are aware, however, that previous wars in Europe and abroad did not result in the kind of quick and coordinated European action seen today. They also did not result in the prospect of nuclear war that has resurfaced as Europe dances the tightrope between providing military aid and becoming an active belligerent, which may unleash the kind of nuclear retaliation that Putin has promised. This nuclear conundrum did not exist under the reigns of Hitler, Stalin, or the tsars.