Thursday 6 March 2014

Whither the future for Europe?

With the visit of Angela Merkel to Downing Street recently, this is perhaps a good time to talk about seismic world events. With the anniversaries of two World Wars to consider and the 25 year milestone achieved since the tearing down of the Berlin Wall, there is no shortage of prompts.

But actually the political upheaval I wanted to focus on is the one which is happening in the Ukraine.

I was prompted to think about this for a whole variety of reasons. Firstly, there was the jarring juxtaposition of humour and tragedy which I saw in the newspaper reports from Russia and Ukraine at the end of the Sochi Winter Olympics. On one side we read an article about the humorous end to the games which deliberately feigned a technical fault to mirror the real one at the opening ceremony. And then right next door to it we see a feature about the carnage, despair and hopelessness of the deteriorating situation in the Ukraine. Secondly I was drawn to this subject because I myself once visited Kiev. It was back in the 60’s when the Ukraine was a part of the USSR and we were accompanied everywhere by our Intourist guide, Masha. But even as a schoolboy, which I was then, I was struck by the warmth and approachability of the local people. Finally, my attention is always drawn to this part of the world as I studied Russian at University and have been lucky enough to visit since as a businessman.

Involved as I am these days in international trade with a variety of businesses, it seemed to me a good time to reflect on the economic tragedy underpinning the political warring. Uncertainty is the enemy of economic growth and we are all involved whether we like it or not. Of course it concerns us greatly in the UK because of the potential EU enlargement angle but really it is a major event which will shape the global distribution of power.

The former proud breadbasket for the Soviet Union is today on her knees economically. In 1989, when the Berlin Wall fell, Ukraine and Poland both had a GDP of $80 billion. Poland today is nearing $600 billion while Ukraine struggles to reach $200 billion. At the mercy of foreign aid from whichever source, it is very hard to imagine things getting better, if indeed further crises and bankruptcy can be staved off.

But, in my view, this is not the time or place for academic discussion on painful contrasting economic fortunes. Perhaps we should simply be reflecting and doing what we can to ensure that our government’s response to this crisis is appropriate. When we come to discuss the question of “in or out” votes for Europe, maybe some consideration of Ukraine’s plight might just help us to focus better on our own problems and issues.

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