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War in Ukraine will not be short, and it’s changed everything for Europe

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HR/VP Blog – Putin’s war against Ukraine has already caused thousands of death but also major economic damages globally. We need to handle the impact of this third asymmetric shock in 15 years, at home and abroad. EU leaders agreed at the informal summit in Versailles to bolster European economic resilience, radically reduce our energy imports from Russia and move ahead with a serious strengthening of European defense.

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The war against Ukraine that Vladimir Putin started is already having considerable economic consequences in Russia, where the rouble has lost half its value and inflation is soaring. Moscow’s stock exchange is closed. Many international companies, like Ikea, McDonald’s, Visa, and MasterCard have left the country. Russia’s economy is expected to shrink by at least 15% this year. Weakened and isolated, Russia risks becoming very dependent on China in the future.

Frosts in Brazil have impacted supply. (Supplied: Melbourne Coffee Merchants)

The war against Ukraine that Vladimir Putin started is already having considerable economic consequences in Russia, where the rouble has lost half its value and inflation is soaring. Moscow’s stock exchange is closed. Many international companies, like Ikea, McDonald’s, Visa and MasterCard have left the country. Russia’s economy is expected to shrink by at least 15% this year. Weakened and isolated, Russia risks becoming very dependent on China in the future.

The price of freedom and democracy

However, we are also seeing significant effects in Europe, with energy and other prices rising and probably set to continue to do so. We, inside the EU, have to accept to pay also a price to stop this outrageous and unprovoked war: the future of our security and our democracies depends on it. The price to pay is the price of freedom.

The price of freedom and democracy

The price of freedom and democracy

However, we are also seeing significant effects in Europe, with energy and other prices rising and probably set to continue to do so. We, inside the EU, have to accept to pay also a price to stop this outrageous and unprovoked war: the future of our security and our democracies depends on it. The price to pay is the price of freedom

The war in Ukraine is the third asymmetric shock, as economists call it, that the Union has experienced in the last two decades after the 2008 financial and economic crisis and the following Eurozone crisis, and the COVID-19 pandemic. An asymmetric shock is a sudden change in economic conditions that affect some EU countries more than others. The war in Ukraine is indeed having a much greater impact on neighboring countries due to the influx of refugees and their heavy dependence on Russian gas.

To prevent asymmetric shocks from weakening the EU, we need to step up our capacity to show solidarity with the most affected countries. This is what we did after the 2008-2009 crisis, even if we were slow to do so. This is what we did facing the economic impact of the COVID-19 pandemic, both by pooling vaccine purchases and through the Next Generation EU plan. This is also what we need to do now.

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