Europe seen as heavy loser in crisis

ROME－The eastward expansion of US-led NATO toward Russia is a major root cause of the conflict between Russia and Ukraine, which could take a heavy toll on the European economy, an Italian economist says.

Michele Geraci, former undersecretary of state at the Italian Ministry of Economic Development, told Xinhua News Agency that the military alliance's moves have created two main problems for Russia.

"From the Russian point of view, NATO's expansion into eastern Europe is a breach of a promise "made in the 1990s, Geraci said.

"Second, Russia considers this expansion a threat to its territorial integrity and national security, so President (Vladimir) Putin for the last 10 years has been saying that this is not acceptable, and that NATO has crossed a red line.

"Every country has its own red lines. For Russia the red line was having NATO at its borders."

NATO has gone through five rounds of enlargement to the east since 1999, increasing the number of its members from 16 to 30 and reaching the Russian border.

Europe rather than the US pays the high price.

In a way, the Russia-Ukraine conflict is "a proxy war between Russia and the United States … which is fought in Europe", Geraci said.

"Now the cost for the United States is minimal. The sanctions are hurting the Europeans… The incentive for the US to finish (the conflict) quickly is not really there, because they (the Europeans) are paying the highest price."

Amid the escalating conflict, the US has been stoking tensions in the region, shipping weapons into Ukraine and pushing its allies to impose sweeping sanctions against Russia.

"The European Union has not (got) a red line and a foreign policy. This puts us in a very weak position.

"Our concerns and interests are in conflict, because we are allies of the US, but the economic interests and even the foreign policy of the EU are not always those of the US."

The conflict could lead to "a weaker Europe because the economy there could take a serious hit".

In the medium and long term, if Europe loses Russia as a trading partner, and they reconcile once the conflict is over, Europe will suffer, he said.

"We are imposing sanctions on energy products thinking that these would hurt the Russian economy. However, they would hurt the EU's economy more."

In such a case, Italy, Germany, and a number of smaller countries in eastern Europe will be stranded, he said.

By way of example, he cited the EU's ban on exports of luxury goods to Russia, which would "hurt brands like Gucci and Prada".

"We are doing everything wrong. We are imposing export bans, which would only hurt us," he said.

Xinhua