What is true here? A great dependence. Indeed, we would not have survived without Western aid. Both militarily, which is obvious, because we are fighting with Western weapons. And financially, which is not so obvious. But the entire macroeconomic stability of the country is based on financial assistance from the West. The entire social security system in the country, which is half of the budget, is funded by the collective West. So we are really critically dependent on the West.
But there is a second point. The fact that helping Ukraine is a very expensive pleasure. And this is where the fun begins. This year, for example, the United States will provide $13 billion in grants to Ukraine. Will the US be torn because of this? Moreover, we have heard that the US will soon reach the debt ceiling. This means they may not have enough money for Ukraine.
So here's the thing. The US has a budget deficit. For 2023, it was projected at $1.4 trillion. In fact, it will be more. It will be $1.6 trillion. This is not the entire US budget, but only its deficit. Now compare these figures with the aid to Ukraine. Even if we add military aid to the mix. All together, it amounts to $50 billion a year, and a large share of that goes to American businesses. Compare these figures. $1.6 trillion and $50 billion.
“There can be no fatigue in the US, especially no financial fatigue. Moreover, the example of bringing down the Kinzhal missile shows that investing in helping Ukraine is very profitable for the United States. It allows the US to promote the interests of its military business and strike at its strategic enemy at minimal cost”
There can be no fatigue in the US, especially no financial fatigue. Moreover, the example of bringing down the Kinzhal missile shows that investing in helping Ukraine is very profitable for the United States. It allows the US to promote the interests of its military business and strike at its strategic enemy at minimal cost.
Therefore, the United States will not get tired.
What about Europe, whose economy is suffering? It seems that everyone has stopped suffering. Putin has lost the energy war. Inflation in Europe is falling. The price of gas has fallen below $400, dropping to the level of summer 2021. The price of oil has stabilised. The price of coal has fallen. So Europe has adapted to the changes. And Russia can no longer influence the EU economy. This means that there are simply no new losses physically.
“Putin has lost the energy war. Inflation in Europe is declining. The gas price has fallen below $400, dropping to the level of summer 2021. The price of oil has stabilised. The price of coal has fallen. So Europe has adapted to the changes”
Putin has lost the EU market and almost zeroed out his exports. This year, Russia's gas exports will amount to 50 billion cubic metres in all directions, a record low since the late 1970s. And Europe has gained energy independence from Russia and returned to the previous level of energy prices. So the pain is over. What's the point in changing the direction of movement now?
There is nothing to be afraid of and therefore force Ukraine to surrender. And many people are simply living in the paradigm of last year, ignoring the changes.
The economy is playing on Ukraine's side. Including the depletion of the Russian economy. Which is 10 times smaller than the total economy of the G7 countries. And Russia's economy is building up a record budget deficit, which it cannot cover with borrowing, unlike the United States. And it is running out of money. Unlike the EU or US economies. It is Russia that cannot afford to continue the war for economic reasons, not the collective West. And for Russia, every new day of war is an economic pain. And so Russian propaganda, as always, mirrors and talks about the economic problems of the EU. It is just trying to make everyone believe it in order to get a compromise peace as soon as possible and free its economy from the burden of war. But we should not confuse reality and propaganda. We should not give gifts to Russian propagandists.
About the author. Serhiy Fursa, investment expert, blogger.
The editors do not always share the opinions expressed by the authors of the blogs.