Page 83 - Monaco Economy 122

Consequences of the War in Ukraine:

the crisis might possibly be limited to the short-term

The West was just emerging from the pandemic and could finally hope for happy days once again
when suddenly the outbreak of the Russian army’s offensive in Ukraine tipped everything over to
the dark side: a war within Europe with its grim trail of human tragedies and its inevitable very
serious consequences on the balance of the world economy: a meteoric rise in in the price of oil
and gas, soaring costs of cereals and all minerals, etc.

All growth prospects have been compromised and public opinion has On the financial level “There are already consequences following the
turned from hope to anxiety and from aspiration to fear of the future. sanctions taken against the Russian banking system and the freezing
Nevertheless, in the midst of this geopolitical and macroeconomic of the assets of the country’s Central Bank. And these will continue to
earthquake, Paolo Di Gaeta, a specialist in international finance based increase, weighing heavily on Moscow’s treasury and the value of the
in Monaco, shows unwavering faith in a rapidly improving future. ruble, with all that this implies - increased difficulty for the population
It is the opinion of the expert that this war and the resulting infectious in their daily lives, given the inevitable increase in the price of many
tetany could be limited to the short term. “I think that this disastrous imported products as a result of the weakening of the value of the
situation will not exceed a few months for geopolitical as well as national currency”
financial reasons. I think that there will be a return to normality before
the summer, even if it may not be the normal of before the conflict”. China at the heart of the debate
On the geopolitical level first: “The attack is costing Russia much more Moreover, Paolo Di Gaeta thinks that first and foremost, the crisis will be
in men and material than it had expected, the Russian government resolved rapidly because international stakes are interconnected. “The
can only enter into negotiations on the basis of a neutral Ukraine, the banking sanctions and the blocking of some of its exports - cereals and
appropriation of the provinces of Donbass and the entire coastline of minerals - decided by the West against Russia have led Russia to seek
the Sea of Azov as well as recognition by the United Nations of the increased support, both financial and economic, from its ally China. And
recapture of Crimea eight years ago”. though China understands the imperatives of its neighbour, it nevertheless
calls for restraint on all sides and appears to be
a moderating factor on the world stage.
The inescapable reality is that China wants
peace to prevail in the world in order to continue
to export to keep its immense industrial
machine running. It needs prosperous partner
countries not countries suffering depression.
We should never lose sight of the fact that 70%
of the US debt is held by Beijing in the form
of Treasury bonds. So, from China’s point of,
world trade must not be hindered and energy
and commodity prices must be sustainable.
All its political commitments are and will
continue along this line, in Ukraine and Russia
as elsewhere. This is a particularly reassuring
premise for the present situation.
This is why Western governments must ensure
that China is included in all future global
negotiations, anything else would deny reality
and risk grave danger.”
It should be noted that Paolo Di Gaeta never
personalises his analyses ad nominem:
“The major interests of the countries always
prevail, and not the character of their
© depositphotos/PromesaStudio leaders. Reducing a crisis to the particular
characteristics of its actors is like considering
that the dimension of an iceberg is limited to
its emerged surface…”

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