Newspaper article International New York Times

Russians Not Ready for Cold War II

Newspaper article International New York Times

Russians Not Ready for Cold War II

Article excerpt

The Soviet Union and the members of its empire were in some ways in their own economic universe. Now, the world is a far more globalized place.

Russia had some real economic problems even before the crisis in Ukraine led the United States and European countries to threaten sanctions on the country.

Growth in Russia had slowed to almost nothing: Its real gross national product in the third quarter of 2013 was just 0.6 percent larger than it had been a year earlier. The ruble was weak.

Its manufacturers appeared to be doing much worse than competitors in other countries. Its stock market has trailed those of most other countries over the past year.

If this is a new incarnation of the Cold War, it will be very different from that era.

Back then, the Soviet Union and the members of its empire were in some ways in their own economic world. They largely traded with one another, and they controlled the value of their currencies. Now, the world is a far more globalized place.

Just which side would have the ability to frustrate the other is a subject of debate now that John Kerry, the United States secretary of state, has threatened to throw Russia out of the Group of 8, to which it had been added in 1997. The other members are seven traditional economic powers: the United States, Britain, Germany, France, Italy, Japan and Canada.

On the one hand, Russia is a major supplier of energy to Western Europe. If it were to cut off its natural gas exports, several countries -- notably the Netherlands -- would have a hard time coping. On the other hand, energy accounts for most of Russia's exports. Its foreign currency reserves could be depleted rapidly if cash from Western Europe stopped arriving.

Germany is a substantial customer for Russian gas, but it is also a major exporter to Russia. It would be damaged more than most countries if a trade freeze were to develop. …

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