Merkel Warns Russia of Economic Consequences Over Ukraine

wsj.com ^ | March 27, 2014 | Harriet Torry

[Berlin_Freeper]

BERLIN—German Chancellor Angela Merkel on Thursday said Russia "can lose a lot" economically if it escalates tensions in Ukraine further and prompts Western allies to impose economic sanctions.

"It's not just about concrete sanctions. Russia also needs trade and movement, today we're all connected internationally" the chancellor said in a joint news conference with her Canadian counterpart.

Speaking in Berlin, Canadian Prime Minister Stephen Harper acknowledged the economic risks, particularly for Europe, in slapping further sanctions on Russia and said "we should proceed quite cautiously."

Mr. Harper added that the Russian economy is "quite fragile," and "when a major power is prepared to use military force to violate very fundamental concepts of its own borders and international law, the risks to the global economy are very significant in the long term."

[Berlin_Freeper]

Stephen Harper eyes energy deal with Europe
Are Prime Minister Stephen Harper and German Chancellor Angela Merkel cooking up ways to sell Canadian gas and oil to western Europe — in order to wean European economies from their dependence on Russian fossil fuels — in response to Vladimir Putin sending his troops into Crimea to steal it from Ukraine?

It certainly looked that way from the knowing, smiling glances that the Group of Seven’s two longest serving leaders exchanged when I asked them about this on Thursday.

[Berlin_Freeper]

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[Berlin_Freeper]

Europe's dependency on Russian energy bolsters case for Canadian pipelines: Baird
In light of the crisis in Ukraine’s Crimea region, Foreign Affairs Minister John Baird says European nations’ dependency on Russian energy imports is another reason why Canada needs to move ahead with construction of oil and gas pipelines.

"This crisis in eastern Europe, casting its shadow over all of Europe, reminds us that Canada is one of the only countries with substantial oil reserves that is both an open economy governed by the rule of law and a stable liberal democracy," Baird said in Ottawa on Thursday. Latvia, Estonia and Lithuania are almost entirely dependent on Russian gas, Baird added.

"What does that do to their sovereignty? What kind of power does that give a regime to think it’s acceptable to rewrite the boundaries of the borders in the 21rst century?" Baird said. "So if anything, it underlines the importance of moving ahead responsibly on the export of not just our oil but natural gas. And it’s a reminder, it’s an important reminder, that not all opportunities are exclusively south of the border, or in the Asia-Pacific region, but also to our traditional allies in Europe."

[Berlin_Freeper]

German Chancellor Angela Merkel, welcomes the Prime Minister of Canada, Stephen Harper.

[elhombrelibre]

Everyone needs to get off of Russian oil and gas so that Putin’s war machine grinds to a halt.

[Enterprise]

Word is that Putin challenged Merkel to take her shirt off and wrestle him. Winner must win two out of three matches.

[spetznaz]

That's true. Russia's economy is heavily dependent on energy exports, and like most largely undiversified primary industry exporting countries, that is an Achilles heel t that can be exploited.

I just don't know how serious some of these European countries are however. Look at the first sentence: ...said Russia "can lose a lot" economically if it escalates tensions in Ukraine further and prompts Western allies to impose economic sanctions.

If it escalates further. It's like they have accepted Crimeria is gone. All Russia would need to do is wait another couple of years and then pull another Georgia/Ukraine move, shear off territory, get some sanctions here and there, and then things go to normal.

Which means Europe has around 5 years to develop greater energy independence and develop a demonstrable defensive platform (that is believable). Otherwise this whole process will repeat itself unfortunately.