Right, because the European economy is very small, so 30% really isn't hard to replace after all.
Actually you've got it backwards. The European economy is very large, so replacing a hundred billion dollars of Russian energy imports would be very manageable for Europe. They could even push two hundred billion dollars if they wanted to. For Russia, such a loss of revenue would represent a 10% yearly drop in GDP. That's an event in the ballpark of the collapse of communism in terms of economic disruption.
This isn't complicated, Europe economy big. Russia economy small.
They're going to take their money, put it into an alchemical mixture, and create natural gas to use? I didn't know it worked that way.
Now lets see, where would Europe get natural gas and oil from without Russia? First off, the price would be drastically increased to account for transportation cost, as Russia's pipeline is significantly cheaper to run and more efficient than shipping. Iran is embargoed under sanctions as well to my understanding, the US has sufficient energy needs that it isn't likely to export much, the Saudis have plenty but are supplying many other countries already right now and don't have unlimited production, etc etc etc.
You also seem to be forgetting that the economy is not a gigantic, amorphous mound of cash, but a system of trades conducted by many different individuals. So if I'm a German factory owner and suddenly my costs for energy skyrocket, I can't just say "well its a good thing I'm German, I'll just take my share of the national GDP to cover my expenses", I have to cut something to make up the cost. Maybe I increase prices, maybe I cut production a bit, maybe I lay off a bunch of workers or what have you, but whatever I do, it isn't good for me. Furthermore, everyone I do business with is hurt too, both directly by the drastic increase in energy costs (and I'm being generous here and assuming there isn't a massive shortage in the aftermath of Russian import cuts bringing European industry to a grinding halt) and indirectly by other German companies up and down the supply chain having to deal with these increased energy costs. Thus, you have a domino effect; companies go out of business, people lose their jobs, companies have to cut production because people lost their jobs and aren't buying their products, and so on and so forth. Now, there are plenty of ways to adjust to this in the long run that would minimize damage, but looking at the European Union's economic policies, it's doubtful that the adjustment would be anything but harsh.
Author
Topic: UR's Post-USSR politics megathread (Read 305000 times)