Through an old fashioned lens the situation in the Ukraine is very scary. Putin has been given and inch, the story goes, and its hard to see where a line can now be drawn without major conflict. What has changed is that free trade has led to economic inter-dependency. It seems we might have all learned the lesson that French Economist Frederic Bastiat taught 200 years ago if goods dont cross borders, soldiers will. This article captures it well: But the economies of Russia and the West have become entwined since the Berlin Wall fell 25 years ago — meaning it would be hard to go back to the hermetic “us-versus-them” world of the Cold War. U.S. brands including McDonald’s and Pepsi have a big presence in Russia, and the European Union does far more trade with the country than the U.S. The Europeans are less eager than Washington to take punitive economic measures, in part because European companies from German engineering firm Siemens to British oil giant BP have major Russian investments. And Russia supplies almost a third of Europe’s natural gas. But economic rupture could hurt Russia even more. Russia relies heavily on income from oil and gas, which make up more than two-thirds of the country’s exports. Around half of Russia’s exports, mainly natural gas, oil and other raw materials, heads to the EU. And rich Russians rely on places like London for a place to stash their cash in homes, businesses and discreet, stable banks — so much so that some British people refer to their capital as “Londongrad.” “London is more important to Russians than Russians are to London,” said Yolande Barnes, head of global research at real estate agent Savills. She says Russians buy about 2.5 per cent of prime London properties. “If Russians disappeared, I think London would barely blink.”
Posted on: Mon, 17 Mar 2014 20:35:05 +0000
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