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The political fallout from the Crimean Crisis has been widely broadcast; however the economic impacts have been far less widely stated. The West has rushed to condemn Russia and has imposed a number of penalties on it, but the effects to both parties have not been clearly stated.
The headline grabbing acts of the West imposing sanctions on Russia and suspending from the G8 will not have a particularly large effect. The sanctions so far are nothing compared to those imposed upon Cuba, Iran or other such 'rogue states'. Indeed, there has been no permanent action apart from imposing asset freezes and travel restrictions on a few individuals. Suspension from the G8, which Russia is the poorest member of, has little real value. The effects, though, will be felt more thoroughly over the next couple of months. Being a member of the G8 yields significant soft power which can be used to further a country's own agenda. With this denied, Russia has had its hand on the tiller of the world economy forcibly removed.
The sanctions may also have an effect on the West, though. America began crying for sanctions as soon as Russia 'invaded' Crimea but European leaders stayed mostly quiet. It was only when Russia continued to act and America continued its call that Europe reluctantly agreed. This point represented the zenith of the shock that the Russian economy was experiencing. The combined loss to Russian businesses and investors from the huge contraction in the stock market was estimated to have been larger than the whole amount spent on the Winter Olympic Games.
In response to the sanctions, Russia promised counter measures. This tit for tat war is what Europe feared. Eastern Europe relies, almost solely in some countries, on Russia for gas to power their energy grids and if this vital link was broken electricity prices would rocket. Apparently, Russia supplies almost 40% of Europe's natural gas. Western Europe, which relies far less on Russia, would also feel the squeeze as some of their supply would divert to Central and Eastern Europe. In the extreme, this energy crisis would lead to a split in Europe between those who would be forced to support Russia and those who could manage on their own. However such an outcome would have dramatic effects for Russia too, the EU is Russia's principal trade partner whereas Russia ranks third in European export destinations.
The increasing tension between Russia and the West has, seemingly, transported the world 50 years into the past. However appearances are deceptive. Trade between Russia and the West is still flourishing and though the rhetoric has been tough, the actions have not.