Buying long, selling Langer: Paying the bill for the US's Ukrainian policy
Morten is the editor-in-chief and owner of Økonomisk Ugebrev (Economics Weekly), which for over 20 years has provided analysis on companies, finance and economic policy to Danish leaders, along with advice on equity investments to private investors. ØU is respected as a sober and critical observer of business, governments and finance.
Europe is paying the bill for the US’s Ukrainian policy.
Are Europeans in general – or Danes in particular – interested in escalating the cold war now developing out of the Ukrainian conflict that has created a nasty political climate between the East and West in just a few months? Hardly.
Like two schoolboys
Politicians both at the Kremlin and NATO seem to ignore this fact and continue to flex their muscles like schoolboys about to mix it up in the playground.
Who started the crisis? How did it escalate so quickly? Was it Russia taking liberties in Ukraine by annexing the Crimea? Or was it the EU and NATO, who along with the non-democratically elected leadership of Ukraine, moved into Russian precincts?
Whatever happened then, we all know where things stand today, with reciprocal sanctions damaging both the Russian and European economies – and things look poised to get even worse. This schoolyard brawl is far from over, and there could very well be more sanctions ahead.
Russia could turn off the gas to Europe, or Ukraine could decide to turn off the gas coming from Russia.
The downing of Malaysian flight MH17 escalated the conflict, even though no-one really knows who was behind what was almost certainly a mistake.
Easy for US, tough for us
Politicians in the US run little risk by flexing their muscles at home and taking a hard line against Russia. The US is not as bound to Russia as Europe is, either trade-wise or geographically. Should armed conflict flare up, the US is pretty far away.
Europe is running right behind the US in the muscle-flexing category, even though the macro-economic and security consequences for Europe are far more serious.
Europe is paying for the escalation of a conflict that has no clear ending point. That perhaps makes obvious solutions to ending the crisis hard to see.
NATO’s current escalation is strengthening Putin domestically, and there is little chance that he will be the first to throw in the towel. Where do we go then?
Økonomisk Ugebrev will focus on the conflict in Ukraine in Sunday’s edition.
Never a dull moment outside Ukraine's parliament building