13 December 2024

Winter is Coming: How Energy and Economics Will Impact Negotiations in Ukraine

Benjamin Jensen

The climate surrounding any negotiation in Ukraine will be chilly at best, marked by concerns about energy prices, economic growth in Europe, and shifting public opinion on the continent. This confluence of economic and political factors will make it difficult, albeit not impossible to support Ukraine’s desire to take back its territory and hold the Kremlin accountable. As a result, the incoming Trump administration should increase energy exports and pause any tariffs on European partners during the negotiation process. When combined with military strategy to bolster Ukrainian forces defending along the frontline, these measures ensure that Kyiv will have a stronger hand at the negotiating table.
How Energy and Economics Shape Support for Negotiations in Europe

There is a confluence of economic and political factors that could change European support for Kyiv during any negotiation. Energy costs are rising in Europe while the prospect of price volatility linked to conflicts in the Middle East remains high. Uncertainty could produce domestic pressure, especially in Germany, which heads to the ballot box in February. Rising energy costs could also tip broad-based economic stagnation, defined by low GDP growth, into a recession. Even absent a recession, rising costs amidst sluggish growth could increase domestic pressure to end the war and avoid costly military buildups in multiple European states.

No comments: