This week has not finished yet, but it has already brought
some interesting news from the political and business fields. Whilst everyone is
keeping eye on the situation in Gaza – the European Union under the enormous
pressure from the Netherlands, decided to make radical changes in EU-Russian
relations. To be frank, I was shocked to hear the number of sanctions that was
implemented by the EU! Of course I knew, after the tragedy where so many innocent
people were killed (mostly Dutch residents) in eastern Ukraine - something will
be done to stop Russia from supporting the rebels. However, even having no
specific expectations from the EU, the news about the sanctions has literally raised
my eyebrows! On that day, once again my
theory that says “there is nothing that is not humanly possible” was confirmed
in Brussels!
Unsurprisingly, my mind had two completely different reflections
on that issue!
One side of me which is mainly based on business feelings said
the following things;
Gosh, Europe isn’t ready yet for such a drastic move toward
Russia! Almost the entire EU pretty much depends on Russian gas,, and what is
more, as the figure shows in some cases, gas pipes from Russian supply hundred
per cent of gas to countries such as: Lithuania, Estonia, Finland and Latvia! Someone
could say, yes, but these countries don’t have an impact on the European core –
maybe that’s right but my sense tells me that this could be a good element of
prolonged debate! But what about Austria where the number almost exceeds 60%,
Poland 59%? Arguably, as it stands now, Europeans don’t feel the impact but
that is about to change in a few months time! Eurpean countries do not depend
on Russian gas in the summer, but they do refill their storage facilities with
it then. But yet the $292 bilion’s worth trade market ( in 2013) comprises
other areas where money flows between two economies. One of them is undoubtedly
the financial sector. Only French banks lent Russia c.$49bln in 2013. Italy
c.$29bln, Austria c.$21bln and so on. Aforementioned examples are only a drop
in the ocean. Although, they are already alarming my vision about how the
European economy, slowly bouncing back from the financial crisis, would adopt to
new reality. In theory, the sanctions would explicitly worsen the stabilisation
process! Luckily, that doesn’t translate to anything at the moment, as this is
only my rhetorical assumption. Having
said that I meant to wrap up this part of my perception of how I see the
situation from my business point, but I decided to briefly add additional
sentences, because while I’ve been writing
this post, new information related this issue appeared online.
Apparently, Angela Merkel has been working behind the scenes
directly with Vladimir Putin on a secret plan to broker a peaceful solution
over the Ukraine. As a part of the deal Russia would compensate Ukraine with a billion
dollar package for the historic rent it used to pay for stationing its fleets
in the Crimea and at the port of Sevastopol on the Black sea. Until Crimea
voted for independence in March, Russia paid rent to the Ukraine for the use of
the port, vital to Russia’s access to the Mediterranean. Lastly, Ukraine would
be offered a new long-term agreement with Russia’s Gazprom, the giant gas
supplier, for future supplies and pricing. As it stands now, there is no deal
in place, thus Ukraine’s gas supplies are running low and are likely to run out
before the winter, spelling economic and social ruin for the country.
Angela – Ich liebe dich and I don’t care what others think
And of course there is part of me with more human elements
that essentially supports the recent EU decision! Furthermore, I wish to see the EU putting almost enormous pressure on Putin so he would end up in a situation
where people in Russia would demand for him to resign from the presidency!
However, practically this is not going to happen anytime soon! Hence my
support for Merkel’s secret plan, which involves negotiating new
deals with Putin. Hypothetically speaking, in consequence of that talk, Europe together with
Ukraine could get back on the right track and think about the upcoming “warm
winter”!
Bottom line – if the EU has already started playing a taught
game with the almighty gas supplier from far East, maybe it’s time to immediately
invest in the fuel of the future which at the moment is shale gas! That would help
Europe to reduce reliance on Russia! I know, eco-friendly supporters would burn
me for that statement, but Hey! Oil-and-gas exports make up 70% of Russia’s
$515 billion annual exports and 52% of the federal budget, according to
America’s Energy Information Administration so if we have already joined the game,
let’s make it even more interesting! No pain, no game!
