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How the Russia- Ukraine crisis could affect our economy

'Instability is toxic for the stock market.'
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Posted at 7:08 AM, Feb 22, 2022

CLEVELAND — The world is on the edge of its seat as Russian President Vladimir Putin’s troops push into the border of Ukraine.

“This is Ukrainian territory. The world recognizes that and his forces are entering it, as we speak, now openly, declaratively before they were there covertly,” said George Jaskiw.

Jaskiw is the vice president of the United Ukrainian Organization of Ohio. He said they estimate around 70,000 Ukrainians have settled in Ohio, many in the northeastern region and many are worried for their friends and family back in Ukraine, who are living in a state of fear.

“They’re very concerned. They got constant text messages about bomb threats, there’s misinformation,” he said. “The internet sites, at times, don’t work. There’s a rolling cyberwar going on.”

Jaskiw said this isn’t just a Russian vs. Ukrainian problem: it’s a global crisis.

“This is about a demolition of the world order. Mr. Putin is taking a wrecking ball to the established rules of international relations,” he said.

Juscelino Colares is a professor of law at Case Western Reserve University. He said Putin and Russia supply a large portion of energy and natural gas, especially to Europe.

“If he, basically, takes over Ukraine, he can pretty much control how he's going to distribute gas into Europe,” said Colares. “The dream scenario for Putin would be for him to break up NATO right and he's exploiting the major fault lines along NATO. He perceives that we are negotiating with one hand tied behind our backs as the United States and as Europe.”

Colares said it is time for sanctions.

“The president of the United States likes to say that America is back, but if America is back only with, you know, jawboning, that's not going to work with a shark-like Putin, he smells weakness from far. We are importing oil, including from Russia and he knows that we are in a tight situation, you know, because we have inflation. We have new supply chain constraints,” he said.

Jaskiw said the snowball effect of a Ukrainian invasion would be felt here in Northeast Ohio.

“In general, instability is toxic for the stock market. We can expect there to be a hit in the weeks to come, but it could get even worse if the invasion continues rolling on,” he said.

Colares hopes President Biden will work with European allies to make Putin rethink the cost of an invasion.

“Do we have the leadership that is willing to basically say any country that does business with Russia, right? Any country that does business with Russia, if you keep doing business with Russia in the U.S. market is no longer open to you,” he said. “If you want to think about Russia as a gigantic gas station, once you cut the customers the gas station goes bankrupt.”

Jaskiw echoed his sentiment.

“There have to be penalties. Russia has to feel that there’s pain for the continuing invasion and floating or international norms. This cannot go on,” he said. “This is a Russian-managed, funded and organized invasion. Let's call for what it is. Let's bring the full array of sanctions in and of Nord Stream 2, sanctions against the banks, the oligarchs, and we ought to cut Russia off from SWIFT.”

Ohio Senator Rob Portman (R) who is the co-chair of the Senate Ukraine Caucus, issued the following statement in response to Russia’s further invasion of Ukraine.

“Russia is continuing to violate the territorial integrity of Ukraine by sending additional forces into two Ukrainian territories, Luhansk and Dnetsk. These are Ukrainian territories that Russia has been essentially occupying for the past eight years. Now they are adding additional troops and recognizing these two Ukrainian territories as independent, in clear violation of international law.
 
“I support the imposition of sanctions on Russia and urge the Biden administration to work with allies to join us to ensure a coordinated response to this unwarranted continued incursion on sovereign territory of Ukraine.”

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