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Unsettled Ties & Socio-Economic Consequences: Russia & EU

[vc_row][vc_column width="1/1"][vc_column_text]world this weekThe topic I am addressing today, is a topic of great importance not just to the regions affected by it, but has affected the nations globally. It is something that has been discussed in the media for the last 6 months and it is something that has greatly impacted on the global economy along with international relations and will continuously do so for years in the future. We all know that the issue was ignited by Russia’s accession of Crimea, which was then followed by a great conflict between Russia and Ukraine, and continues to be a wild west still today. Although for many the situation seems to be simple but let me remind you, that the problem is much more complex as the social economic problems that are created by this issue are massive and extremely complex. The relations between the EU and Russia were never “great” and this incident had created a huge gap between the two, Russia’s “Stalin” tendency of expansion followed by Russia – EU gas conflict, created a dangerous situation in the West. We can easily understand on the fact that war simply dragged EU in the conflict of the two “once friends”, as pipelines which were connected with Ukraine also affected many European nations. Many European countries were heavily affected due to Russia’s “old nature” of expansionism and its possible implications for the near future. History As mentioned above, most of the socio economic problems resurfaced after Russia’s succession of Crimea. Crimea has been strategically crucial for Russia and was fought over for decades. Crimea was essentially a part of Ukraine before Russia’s hostile takeover. In 1994 the Presidium of the Supreme Soviet of the Soviet Union issued a decree transferring the Crimea from the USSR to the Ukraine, although even after its transfer the inhabitants of the Crimea considered themselves as Russians. Although the conflict intensified after the removal of President Viktor Yanukovych presidency, armed gunmen (Russian soldiers) invaded Crimea and began calling to re-join with Russia, and in the wake of chaos, the entire peninsula came under hostile occupation. This situation is often termed by geopolitical experts as “Russia’s Expansionism”. The West had to respond, the European Union and the United States imposed heavy sanctioned not only on Russia but also on Crimea. First came the “diplomatic boycott”, instead of G8 summit in Sochi, a G7 meeting was held in Brussels on 4th and 5th June. Restrictive measures were applied in Europe, assets of prominent Russians were freezed and visa bans were applied to 132 nations in Europe. As mentioned before, restrictions were imposed on Crimea and Sevastopol which also included restrictions on any form of investment in Crimea or Sevastopol such as export of certain goods and technology to Crimean companies or for use in Crimea. Measures were targeted on sectorial cooperation followed by exchanges with Russia mostly targeting their economy, such that no EU nationals and companies could provide loans to major Russian state owned banks but also the embargo on the import and export of arms and related material from/to Russia, covering all items on the EU common military list, forced them on the ground. Next the halt of entire economic cooperation Russia had from the West. Due to this conflict, people feared Russia’s expansionism even more. People living in bordering regions such as Latvia, Poland and Finland felt a Russian expansion was on their way. As a matter of fact, in 1999, Latvia was in a Crimea like situation, hence people feared that history might repeat itself. “The situation in Ukraine will have negative effects on the situation of the Republic of Moldova and the “Transnistria conflict”” quoting a famous Russian Political Scientist: “Moscow will be watching Moldova for future plans…” Lastly, Finland which broke away from Russia in 1917, was on a high alert. In October Sweden had week- long submarine hunt in the Stockholm archipelago. Economically Russia was hit hard. Russia, we all know, was the biggest supplier of gas for Europe, after the incident of Crimea, Russia threatened to stop gas supply if Ukraine didn’t pay $5.3 Bn and this was done by the Russian state-owned company Gazprom. Earlier also because of similar style of dispute, Russia discontinued the gas supply from 2006 which lasted till the winter of 2008-2009. Russia supplies 23% of EU’s gas so, retaliation of economic sanctions was hard on EU too. Current Scenario As mentioned by the Danish foreign minister in the interview, “we see no reason to lift the sanctions because Russia has not delivered on the ground; I think that it doesn’t make sense right now to increase the level of sanction”. As a matter of fact, sanctions had severe effect on Russia, forcing Russia’s move to a halt. The EU now has the upper hand “Putin’s Achilles heel, the economy” as well stated by Jaako Ilioniemi, Finland’s former ambassador to the United States mentioned. Sanctions up on Sleeve By imposing all the sanctions mentioned above, we can easily see, how hard it hit the Russia’s economy, as oil price dropping every day, Russia was agitated. Russia’s stand to take the EU to court on imposed sanctions saw a weaker communist, a sign of weakness that every western nation wanted to see. Now that years have passed, the damaged tap off the pipelines, Russia can bring down EU on its knees. Last but not the least, practically that makes EU fearful is that Russia can survive without one year of investments in general of all the sanctions imposed, but on the contrary, the EU cannot without Russia’s gas. So here we see that “mutual interdependency” becomes “asymmetric interdependency”. The EU not only aims to maintain its general sanctions, it also wants to strengthen it. Experts believe that if EU lets Ukraine fall; it would be disadvantageous for the EU, the NATO and for the US, “the EU would save itself by saving Ukraine” says George Soros. Let’s say, if Ukraine falls, Poland, Latvia and Finland could be the next in line after Crimea, “if no one reacts then they’ll occupy the next country” – a Latvian Political Researcher said. Member nations of the European Union also have to realise that in the light of this economic crisis and the fast drooping rates of export on Russian Federation, their own economy suffers as well.[/vc_column_text][/vc_column][/vc_row]

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