BRUSSELS – Russia’s intervention in Ukraine and the ensuing Crimea crisis is wrongly seen as the start of Cold War II. But, while the fallout from Russian President Vladimir Putin’s defiance of international law and public opinion will be very different from that of the Soviet Union’s long campaign to defeat capitalism, the geopolitical ripple effects are certain to be just as far-reaching, if not more so.
Russia is set to sideline itself from the global economy, and by doing so it will usher in a new era in international relations. International sanctions will be only the first consequence. Markets and banks penalize uncertainty, so the Russian economy will progressively be cut off from international trade and investment and consigned to a future of slow or no growth.