Jens Weidmann, a European Central Bank Governing Council member and head of Germany's Bundesbank, stated that the crisis in Ukraine, specifically Crimea, has little impact on the Eurozone and would not be anything that the Eurozone could not handle. He goes on to say that even Russia has minimal impact on the Eurozone because Russia accounts for very little trade with the Eurozone and will not have much of an effect. I do not believe that this will be as manageable as Mr. Weidmann thinks because Russia will have effects on other major countries that will in turn have an effect on the Eurozone. Although these sanctions are potentially a good way to get Russia to pull back on Ukraine, I think that Russia is ready to take the implications in order to keep Crimea and show their dominance over the Eastern European countries. Because of this, Russia's economy will continue to worsen and I believe this will hurt the Eurozone more than Mr. Weidmann and other optimists think it will.
http://online.wsj.com/news/articles/SB10001424052702303949704579461522664866960?mod=WSJ_World_MIDDLENews&mg=reno64-wsj
I agree with Rich here, there seems to be no reason Russia wouldn't take implications to show dominance. I think it is difficult to form an opinion in this situation because who knows what kind of information we are really getting in the news. I think it is very possible that we do not really know what is going on in Russia. Who knows.
ReplyDeleteEconomic sanctions have both costs and benefits. In this case, economic sanctions on Russia have a negative effect on Ukraine (who imports most all of its natural gas from Russia) the country that we are trying to support.
ReplyDeleteIt is inaccurate to state that Russia could not retaliate economically and hurt the Eurozone's economy. Russia is a large oil exporting country, and they have the option to limit the amount of oil that they export to other nations. Furthermore, I agree with Tyler that Russia would be interested in enforcing sanctions on the European or US markets if tensions increase.
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