In February 2022, Russia invaded Ukraine and surprised the whole world. This February one year has passed, and the war doesn’t seem to have come to an end. Turkey had tried to mediate between the two countries to end the war, but couldn’t proceed positively.
Soon after the invasion of Ukraine; Canada, the USA and European countries imposed sanctions on Russia. They had the misconception that Russia would stop if we imposed sanctions on her, however, it happened against their expectations. Russia didn’t stop it and moved forward and attacked many other cities in Ukraine including the country’s capital Kyiv.
Initially, the European countries weaponized their financial system. They froze all Russian assets, banned trade and also froze Russian Elite assets which are there in different banks of European countries. They tried to put pressure on Russia by doing this. They forget their weakness which gives power and benefit to Russia.
European countries depend on Russia for their energy supply. Russia is the big energy provider to Europe. Russia provides crude oil and gas to Europe which is more than any other country. Russia is the second largest energy producer: it provides crude and refines the oil to Europe which is worth 700 million US dollars per day, Russia also provides gas via pipeline which is worth 400 million US dollars. The revenue from these export is about half the size of the Russian federal budget.
When the European countries weaponized their financial systems, Russia weaponized its energy sector. Russia stopped providing its energy to Europe, and as a result, the prices of everything rose. The inflation rate in European countries increased, because when there is a shortage of energy then who will establish factories and industry? Because of the shortage of energy, industries and factories in Europe started lowering their production. The price of everything automatically started rising.
Russia is one of the top three exporters in the world. Big economies like China and India refused to ban trade with Russia. They still buy oil from Russia at a cheap price. So the sanction didn’t have a high impact on Russia, rather it affected the economy of European countries. European countries already were buying energy from Russia at cheap prices on daily bases, but when Russia stopped supplying its energy to Europe, they became obliged to buy oil and gas from other countries at a high price.
The unavailability of energy and the import of expensive energy from other countries destroyed the economy of European countries. The production of things became unique and the price of already available things increased ten times, this brought destruction to the European economy.
The economy of European countries was already on the edge of destruction due to the pandemic. During the pandemic ban on trade and everyday life affected the world economy very much. Limited trade was allowed during the pandemic: it not only put pressure on economy large economies but also on small economies like Pakistan etc. This pandemic made worst the European economy too. Europe did not come out of this worst economic situation, sanctions on Russia made it worse than the pandemic.
The third reason which brought economic destruction to European countries is climate change; Climate change not only brings destruction to nature but it has a great impact on the economy too. Study shows that if climate change is not controlled and doesn’t take any serious measures to cope the climate change, it would bring a loss of 250 billion dollars to the US economy. It already had destroyed the agriculture, tourism, forestry and infrastructure of many European countries. Climate change on the one side destroyed the economy of Europe. These are the reasons which brought economic destruction in Europe. Europe needs to adopt some other strategy to control economic destruction. If not adopted, then this strategy will demolish the whole economy.