Valentin M. IONESCU
Summary. Russia’s aggression on Ukraine is changing the configuration of the global economy, which for 30 years has been operating on a liberal model open to the movement of goods and services, although the Cold War has not stopped during this time.
The evolution of the global economy is changing radically, as Russia has decided to isolate itself from the Western world. This country has a share of approx. 2.2% (2021) in the total value of world trade. The share of Russian exports in international trade is not high. However, Russian exports have a significant position in trade for oil, natural gas, coal, ferrous and non-ferrous metals, precious metals in relation to the European Union.
Coming out of the 2020 recession, the EU countries are in different stages of economic recovery and confront structural problems that cannot be removed in the short term, despite generous funding (structural funds, Resilience Program). Also, the EU countries are affected in a different way by the Russian-Ukrainian war depending on the degree of asymmetric interdependence that exists between them, as well as on the imports of Russian raw materials.
Given the decoupling of the Russian economy through a successive set of sanctions, the future economic strategy of the European Union does not change fundamentally: the “Ecological Pact” / “Green Deal” structured on 8 areas, digital transformation and labor market remain the pillars of economic policy in this decade. Time has been too short for adjustments and several solutions are being applied to the crisis in the supply of natural gas and oil. But the political agenda is already fraught with problems related to the reconfiguration of energy security, critical infrastructure resilience, food security, and defense industry.
The European Commission’s economic growth forecasts are adjusted negatively. It is possible that economic growth in the European Union will be 2.7% in 2022 and 2.3% in 2023, although there is a high degree of uncertainty. The economic recovery after the pandemic shock seems to have turned into a stagflation, but with different features compared to that of the 70’s of the 20th century. If the response of prices to shocks is slow (persistent inflation), we may see a tightening of monetary policy in the coming months, which could lead to an economic recession towards the end of 2023 or 2024, even if forecasts are still maintained. optimistic and shows the opposite.