Ukrainian War: How Economic Effects Continue to Spread

Over time, the economic impact of the conflict in Ukraine will become even more intense and widespread. This is due to two surprises. The first touch of Russian weight. According to the paper, Russia is a second-class economic power ranked 11th in the world, and despite its double population, its GDP is about half that of France.

If you stick to a simple assessment of trade, the trade we have with it, we French, is the limit. Still, its relative weight is much greater, nuclear weapons.
There is also an economic reason Made in russia Everywhere because the country exports a lot of raw materials. A small amount is short of these metals, grains, or of course oil and gas, and their disappearance is sufficient to destabilize the global market and push up prices.

When Russian influence Globalization is doubling. example. Two days ago, a senior government official told me that France turned to Brazil to supplement Russia’s grain imports. Unfortunately, Brazil used fertilizer from Russia, which is a hindrance in itself! It ’s a butterfly effect. My interlocutor said. There are countless such butterflies.

What is the impact on our business?

Again, the analysis of macroeconomic figures can be misleading. This is because they tend to underestimate the impact. This is local, of course, but very powerful. Let’s look at some more examples here. TotalEnergies, where Russia accounts for 16% of hydrocarbon production, is a gas in the northern part of the country, with significant projects still under development, mobilizing tens of billions of dollars in investment.

AuchanThe plan was to transfer the production of clothing sold in the brand’s European stores from Asia to Russia before the war, generating 18% of sales in Russia … Renault planned to transfer its production in Russia last year. Car profit from sales carried out half 400,000 units. For these companies, it is enough to say that war is an earthquake.

What is the second surprise?

She touches Sanctions.. Previously, economic sanctions on rebels were generally taken by the American government, which took care not to harm its own interests. Not here under social pressure, but shocked by a war so close that it looks like they are at their doorstep. This is the first time that a long war has occurred in Europe on such a scale.

There was still a conflict in former Yugoslavia … that’s true, but it had much less impact on European public opinion. As a result, today Leroy Merlin, It is active in Russia and is demanding withdrawal. Shareholders of TotalEnergies ask him the same.And the government itself is constantly tightening under pressure from its members. Economic sanctions Against Russia, even if the results have hit us even more.

Tomorrow and Friday the European Summit needs to add a hishaku on it by banning the purchase of Russian oil in Europe.And maybe Head of State of Europe Will Volkswagen bosses stop buying Russian gas lately? He said it would put the continent in a more serious recession than in 2020. Therefore, the combination of economic cross-penetration and public pressure will enhance the economic benefits of this war.Despite its light weight Of Russia in the world economy.

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