Guidelines for the Nobel Prize in Economics for Europe to adapt to life without buying oil and gas from Putin

Nobel laureate in economics Joseph Stiglitz said that although the speed and intensity of economic and financial sanctions decided against Russia are effective, Europe should stop buying Russian oil and gas He said.

In an interview with AFP in Paris, economists spoke on the sidelines of a conference on the future of Europe about the impact of sanctions on the economy “[Russia's] war capabilities (... ) This is going to change,” he said. “They have lost a significant amount of military equipment and need to be replaced (...), but will they have industrial and financial capabilities? There's room for debate.”

One of the main factors for the potential success of sanctions is “how quickly the sanctions were imposed.”

Welcoming the speed with which Europeans acted after the Ukrainian invasion, Stiglitz said: “If it is implemented gradually, [the Russians] can adapt.”

But it is “difficult” to know whether the impact of sanctions on the Russian population and the oligarchy will allow Vladimir Putin to mitigate his position against Ukraine and the conflict he started He believes. As for import restrictions, the departure of some foreign companies, the devaluation of the ruble and other sanctions, “there is too much propaganda for false information that Russian citizens are blaming the West, not Putin.”

But he believes that Europeans should “stop buying Russian gas and oil.” This makes it easier for the regime to finance the war in Ukraine.

According to him, the influence between European countries, which are more or less dependent on Russian gas, “can be compensated by sharing the burden.”

At the moment, the European Union has ruled out a pause in the purchase of Russian oil and gas, a measure already taken by the US Biden administration. Countries that import more than half of their gas from Russia, such as Germany and the Baltic countries, do not have a short-term alternative.

Europe and the United States “can put enormous pressure on Saudi Arabia, Abu Dhabi or the United Arab Emirates and ease sanctions on additional oil supplies against Iran and Venezuela,” the economist said.

He also believed that Europe and the United States should “do what they can to protect the countries and individuals most affected” by sanctions against their territories.

“In some democracies, there are groups that can suffer (from sanctions) and demonstrate, and political parties that can take advantage of these protests.” He warns to call for common action on the budget at the European Union level.

Former economic adviser to US President Bill Clinton met that China's position is important in ensuring the effectiveness of the sanctions.

China's support for Russia worries the United States. The White House said that if a country provides support to Russia, “we have made it clear to China that we will not do anything.” China said it did not want to be affected by “opposition” sanctions.

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Concerns about “disproportionate” inflation

The 2001 Nobel Prize in Economics considers the acceleration of sanctions and inflation caused by the war in Ukraine, especially in the context of energy and commodity prices, that this phenomenon of price increase is temporary I see this concern as “unbalanced.”

“From a political point of view, it's a problem,” he says. But “there is no economic reason to worry about inflation going to 5%, 6%, or even 7% or 8%,” he says.

Stiglitz pointed out that there are no conditions for the vicious cycle of rising prices and wages, and the market expects a decrease in inflation in the medium term.

(Information from AFP/Marie Hurin)

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