https://www.rozen-bakher.com/timeline-risks/29/11/2022/1008

Published Date: 29 November 2022 at 10:08

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29 November 2022 at 10:08. Based on my analysis, the big loser due to the Ukraine war is the EU bloc, especially in the long-run. Why?

• Russia has transformed its imports from non-friendly countries to friendly countries. It’s done intentionally by Russia whether exists or not West sanctions on certain goods or products. It is a strategic decision of Russia to give priority to trade with friendly countries. Hence, EU exporters not only lost revenue due to the current sanctions, but they permanently lost the most of Russian market even when the war will over including the sanctions. This trend has already led to an economic slowdown in the EU bloc, but it may be more prominent further.

• The EU bloc is going to pay high prices for gas and oil compared to the prices before the Ukraine war. The EU took a high risk regarding energy when they started a war-sanctions with Russia, a country that the EU is heavily dependent on their oil and gas. Despite it, the EU even did not secure alternatives for Russian gas before they started the war-sanctions with Russia. That has led to a significant increase in the living costs in the EU bloc because of the unprecedented increase in energy prices.

• The EU did not get from the USA any privilege regarding trade compared to the mechanism that the Russia-China coalition formed among their allies. On the contrary, Biden makes its trade policy even worse to the EU compared to Trump because Trump tried to achieve ‘America First’, while Biden is trying to achieve ‘Mercantilist-America’, namely maximum exports of American products while minimising imports of foreign products even from USA allies like the EU. Thus, the EU is in a lose-lose situation namely, the exports of the EU have decreased to the USA, as well as to Russia.

• The EU is pushed to buy more weapons for their countries and even for Ukraine. From the USA perspective, any military aid that Biden gave to Ukraine has led to a ‘one-lifetime opportunity’ for the Military Industry of the USA because it increased in a huge way the revenue of American firms because it also allow them to get rid of old weapons, but at the same time, to test new weapons in the battlefields in Ukraine. Therefore, regarding weapons, the USA is the big winner, while the EU is the big loser because it’s increased significantly their annual budgets.

• The EU is pushed into the situation that their countries need to allocate aid budget to Ukraine, despite the slowdown and the increase in living costs, which may push the EU into recession in 2023.

• Since the start of the war, the EU countries need to deal with a wave of Ukrainian refugees that even may increase during the coming winter because Ukraine suffered from 'Dark and Cold' due to the Russian shelling. How many Ukrainian refugees arrived the USA and other West countries compared to EU countries? This wave of Ukrainian refugees in the EU is going to impact the budget of each EU country because the Ukrainian refugees are going to stay for long in the EU countries due to the massive devastation that will take years to restore.