The European Union in the middle of the US- Russia conflict.
Wars are by their very nature inhuman as well as economically destructive. Some break out in a sudden and unpredictable way as in the case of the First World War which began a month after the assassination in Sarajevo of Archduke Franz Ferdinand of Austria. Hitler's World War II, which began with the invasion of Poland in September 1939, took Chamberlain, the British Prime Minister, by surprise. On the contrary, the conflict in Ukraine has been a topic of diplomacy and international politics for years.
The most important attempt to avoid the conflict was made in 2015 with Minsk II conference to which participated France, Germany and Russia along with the Ukrainian government, when a peaceful solution was indicated – a solution that included, , among other measures, the constitutional reform in Ukraine granting self-government to certain areas of Donbas.
In this framework it would have been possible also to regulate the relations among Ukrainian regions with different histories and different dominant languages. It was not an unsolvable problem. Different languages are spoken in countries that are part of the European Union as in Spain, and in Belgium between Walloons and Flemings.
But over the following years Donbas, the region in the east of Ukraine was the seat of the conflict, involving on one side the central Ukrainian government supported by arms delivered by the US and, on the other, the Donbas provinces supported by Russia. Years passed without a solution and thousands of deaths.
The February invasion of Ukraine has undoubtedly placed the responsibility on Russia. There was an ongoing negotiation promoted by France and Germany. It could also have been developed in opposition to the US, highlighting the different positions. We do not know what the outcome of the European attempt might have been
.But the question remains unanswered: was the war unavoidable? Here we must consider a predominant factor. That is the inclusion of Ukraine in the NATO that would have meant bringing the largest Western military organization along many hundred kilometers of Russian borders, substantially at the gates of Moscow.
No one can say when an how the war will end. In any case, it will have, aside from tragic human consequences, also important economic outcomes, mainly due to the gas and oil that could cease to fuel the economy of Western Europe. The traditional trade, based on import of primary products from Russia and Ukraine in exchange for industrial products originating in the West, will be deeply hit. And the forecasted consequences will be less growth all over Europe, increase in inflation and unemployment,
There will not be only economic effects. The current political order in Europe and beyond will be seriously affected. Russia has already established new relations with China and is going to determine new relations with the south Asiatic countries. The new gas pipeline between Russia and China, Power of Siberia, with an annual capacity of 38 billion cubic meters of gas, will be definitively operating. And a new projected pipeline will transport the Russian gas from the island of Sakhalin to Nord east China. In effect, China needs big quantities of gas to reduce the use of coal, and Russa is going to be its closest provider.
At the same time, the new economic dislocation will affect the current political asset between Russia and southern Asian countries, as it is the case of India with great disappoint for the US. India is a member of the Quad alliance involving the United States, Australia and Japan. But in relation to the conflict in Ukraine, India, has taken the same position as China by abstaining from the vote condemning Russia promoted by the US at the United Nations assembly.
The US government has tried to convince Narendra Modi, the head of the Indian government, to renounce to this agreement with Russia, but without success. In effect, India is tightening its trade and political relations with Russia. It is the world's third largest consumer of oil, mainly imported from the Middle East. Russia has agreed to reduce the price of the delivery by around 20 percent - a not difficult discount, considering that oil price has risen by around 80 percent in the last year. Thus Russia will quadruple its own, hitherto low, oil supply to India.
South Asia is an important market for oil and gas. In 2015 Russia and Pakistan had agreed in principle to build the North-South gas pipeline of 1.100 KM to bring the Liquified Natural Gas (LNG) from the port of Karachi to the northeastern province of Punjab, where live more than 100 million inhabitants, about half of the total Pakistan’s population.
The realization of the project was defined in the meeting in Moscow between the head of the Pakistani government of Imran Kahn and the Russian government at the beginning of last February. “Pakistan - Economist wrote -plans to finalise a Russian-built gas pipeline despite international pressure to isolate Moscow economically…::: known as the “North-South” project, it will transport liquefied natural gas from the southern port city of Karachi to Pakistan’s north” (“Pakistan presses ahead with Russian-built gas pipeline”, 15 mar 2022).
Following the war in Ukraine, the United States asked Pakistan to condemn Russia and block the execution of the gas agreement. But despite the pressure , Khan said he “regretted the conflict but wanted to remain neutral”. it is in this context that a vote of no-confidence ousted Kahn on 9 April. Now, Shehbaz Sharif, brother of Nawax Sharif - three terms former Prime Minister, jailed for seven years on corruption charges - is the candidate as Prime Minister. Under pressure from the United States, the new government could jeopardize the pipeline project developed by the Kahn government.
In any case, regardless of the future of the agreement with Pakistan, the accord with the two largest countries in Asia, China and India, with almost three billion inhabitants, offers new great commercial and economic partners to Russia. Oil and gas prove to be an instrument of new and intense economic relations on the eastern-south side of the Asian continent. It is the failure of the attempt to isolate Russia.
According to Nouriel Roubini and Brunello Rosa (“Is the New Stagflation Policy-Proof?- Project Sndicate, March 30, 2022) “Governments would see that their ability to maintain sanctions on Russia is constrained by the negative impacts on their own economies… This, together with additional disruptions to global supply chains, has exacerbated the stagflationary conditions that emerged during the pandemic”. In other words, given Europe's dependence on energy sources, the consequences of the policy currently imposed by the Biden government to punish Russia will have far more negative consequences for Europe than for Russia.
The trade and economic dislocation will principally penalize German and Italy, which more than any other need gas and oil, As well as some agricultural products such as wheat. Along with some mineral goods as nickel and cobalt of which Russia is the respectively the first and the second producer at word-wide level: minerals that ,together with lithium, are the basis of new branches of industrial development, including the development of electric motors for the new generations of car.
The attempt to isolate Russia is a difficult challenge. It was not in the interest of the European community to extend NATO, which already involves the great majority of European countries, to Ucraine along some one thousand kilometers of southern Russian border.
United States has involved in this conflict as in others that it has lost in the past, from Vietnam to Afghanistan. The novelty is that on this occasion Europe is directly involved. France and Germany tried to avoid the conflict without success. The European Union remains divided. What we can say today is that this conflict was avoidable, and the most serious consequences will fall on Europe.