Increased Russian aggression in Ukraine has forced Europe and the US to impose sanctions on Russia. According to George Soros, the sanctions have served their purpose of inflicting more damage on the economy of Russia. The objective of the sanction was to deny Russian banks and corporations access to capital in the international market. George Soros posits that the damage on the Russian economy has been aggravated by the falling oil prices. For its budget to balance, Russia should retail oil at around $100 per barrel. The current price of oil is $55 a barrel. Soros contends that the sanctions have caused Russia to experience a financial crisis.
In 1998, Russia caused turmoil in the financial system of the world after its hard currency reserves were depleted, thus defaulting on its debt. George posits that the inflation has accelerated and interest levels are rising to levels that are slowly pushing the Russian economy towards recession. He goes on to argue that Russia has more foreign currency reserves as compared to 1998. There is the possibility that Russia will fail to honor its debt obligations. This situation portends greater danger to the country considering its military conflict with terrorism groups. Soros believes that there is the likelihood that Russia’s default may disrupt operations in the global financial system.
George Soros asserts that there is need to review the existing strategies of the European Union towards Ukraine and Russia. He has been arguing for a two-sided approach that seeks to balance between assisting Ukraine and imposing sanctions on Russia. According to Soros, sanctions are not good. However, they are being imposed because neither the US nor the EU is prepared to risk aggression with Russia. This situation leaves sanctions as the most appropriate way to resist aggression by Russia. George contends that sanctions hurt both the countries that impose sanctions and those that have to bear the effects of such sanctions.
George Soros – Forbes
George argues that euro’s structural defects have caused the European authorities to become experts of moving from one crisis to the other. He calls this situation as kicking the can up the hill. This is because the crises keep on coming back. George asserts that Europe has five crises to solve. These crises are the financial crisis in Greece, the migration concerns, the just concluded British referendum, the euro and the Russian conflict against Ukraine. The authorities and the public are overwhelmed by these crises. George says that there is the need to have preferential treatment to some of the crises given that it is not possible to solve all the five crises at the same time.
The Russian conflict against Ukraine is supposed to unite the European Union. The new Ukraine is seeking to break away from the traditions of the old Ukraine. In the old Ukraine, the political oligarchs and the elite exploited their positions in order to accumulate wealth. By contrast, the new Ukraine has been inspired by the need for change and a better tomorrow.
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