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War In Ukraine Has Widespread Consequences.

Posted on 14th April 2022

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The war in Ukraine is having a wide range of consequences throughout the world, most especially in Europe.

Germany is under increasing pressure from their EU partners to stop buying Russian natural gas; Germany is the largest buyer in Europe of Russian gas (it gets about 55% of its gas supplies from Russia, and had planned to buy more once the Nord Stream 2 pipeline, now cancelled, was operational). Although the German government has not agreed, as the rest of the EU has, to stop Russian gas imports, it seems only a matter of time until they do. Once that happens, Germany is looking at energy shortages and major price rises, which are likely to result in many business closures, as reported here on The Guardian.

One of the reasons touted by Russia for the invasion was to prevent Ukraine from joining NATO (probably not the main real reason, and certainly not the only reason). Russia has long been concerned about its neighbours joining NATO, but the invasion of Ukraine seems the have backfired in this regard: Sweden and Finland, as a result of Russia's actions, now seem ready to give up their neutral status and join NATO, as reported here by The Guardian. That has already had its own consequences, with Russia reportedly moving military equipment towards its border with Finland, as reported here on "Metro". Ukraine itself is now on a fast-track to joining the EU, as reported here on Deutsche Welle, and may yet join NATO (they have offered to negotiate this option away, but those negotiations made no headway - membership of NATO is now an objective stated in Ukraine's constitution).

Ukraine, along with Russia, is one of the world's major wheat producing regions, and the war (and the sanctions against Russian) will mean less grain on world markets and higher prices. Those price hikes are on top of those already trickling through to consumers, caused by the Covid pandemic and general supply-chain issues. A significant part of the price rises that we can expect will also be due to increased energy prices, resulting from sanctions on oil purchases from Russia due to the war (the cost of transport is a significant part of the price od food and other consumer goods).

There are also direct costs to many nations from the war in Ukraine. Many governments are sending large quantities of weapons to Ukraine, and many governments, especially Germany (see here on SIPRI) are increasing their military budgets. This increased spending will have an effect on national debt and taxes throughout the western world for many years to come.

One of the most surprising aspects of Russia's invasion of Ukraine is how well the Ukrainians are defending their country. This is in part due to their fierce commitment, but also in part due to the incompetence of the previously much feared Russian military machine: broken machines, bad leadership, poor troop morale, supply-line issues, etc. While this sounds like good news, at least in the short-term, it does in fact increase the risk of nuclear war; if Russia can't achieve its aims using conventional forces, it is more likely to escalate the conflict to a nuclear one, even if only to save face.

There are also environmental impacts of the war. War is one of the most polluting human activities that there is. There will also need to be a huge rebuilding effort in Ukraine, which will cause environmental damage (concrete is now well known to cause lots of C02 pollution. Finally, the rebalancing of energy supplies, due to sanctions against Russia, will, in the near-term, lead to more use of oil and coal, with all the global warming and other environmental downsides that come with that.

We will be living with the consequences of this war for years to come.