The Economic Stakes of the Ukraine Crisis
Summary
The conflict in Ukraine has reached a perilous new chapter, with Russian troops reportedly crossing over the country’s eastern border after Moscow yesterday formally recognized two Russian-leaning separatist enclaves there. The global economic implications of the conflict remain hard to figure, with Western sanctions on Russia potentially ramping up in response to how far and how aggressively its troops push into Ukraine. Stock markets fell sharply and the price of commodities like oil soared in early trading today, but these moves moderated in the past few hours, as investors tried to assess what it all means. Chancellor Olaf Scholz of Germany today halted certification of Nord Stream 2, a crucial pipeline designed to ferry Russian natural gas to his country. That could inflict pain on Europe, which relies heavily on Russian supplies of natural gas in particular and is already suffering from spiking energy prices.