Russia Crisis: Not Good For EU.

In international relations you have to be very careful what you wish for; something which modern politicians find difficult. Let nobody suppose that a Russian financial crisis or instability among the Kremlin personalities would be good. It would be bad for Russia certainly, but bad for everybody also and especially bad for the EU. This blog has been consistently critical about sanctions and the West’s posture over Ukraine. Russia is now in trouble primarily because of the fall in all prices rather than sanctions, but sanctions reduce the room for Russia’s economic manoeuvre. Its economy is too oil dependent and opportunities in recent years to re-industrialise in depth have been allowed to slip by.

Russia’s predicament would in normal times have created great opportunities for EU firms to participate in putting Russia back on its economic and industrial feet, but sanctions prevent that. Indeed sanctions are the main reason why the EU is flatlining. The EU will not start to grow again until it reaches an accommodation with Putin and the nervousness now evidenced in the global markets will continue until it is clear that the prospects for Moscow look better.

This requires each side to see the red line of the other. The West sees the Ukraine crisis as evidence that Putin is trying to re-establish the old Soviet sphere of influence in Europe’s east. What the West cannot see is how it looks from the Kremlin. There they see NATO and the EU moving ever east. NATO they are relaxed about because if it became necessary Russia could contain it. But the EU is different. It is different because it is now dominated and driven by its richest and most populous country, Germany. Any expansion east of the EU means German leadership moves ever closer. That is the Russian red line. It is drawn with the blood of tens of millions of Russian dead in two world wars. Wars about containing German ambition. Merkel needs to think about that. That is why ethnic Russians in Eastern Ukraine have taken up arms.