PRINCETON, N.J. (Project Syndicate)—Since the early 2000s, European leaders and intellectuals have pushed the idea that the European project is not merely about economic opportunities. At its core, they claim, is morality and the promotion of shared values, with the implication that Europe’s soft power is more effective than the hard power of the United States.
It was an easy argument to make under former President Donald Trump, whose administration was a caricature of foreign-policy “realism,” now thrown into sharp relief by Russia’s invasion of Ukraine. Trump derided Ukraine as a “loser” country, while then-Secretary of State Mike Pompeo reportedly asked, “Do you think Americans give a f— about Ukraine?”
Rise to the occasion
Now, Europe has a chance to demonstrate moral leadership in response to a crisis, to back up its lofty rhetoric with action, and to show that Europeans are not hypocrites. The war in Ukraine allows Europe to determine what it is really about.
“ Russia’s war in Ukraine has given Europeans a chance to show that their oft-stated commitment to morality and shared values is more than lofty rhetoric. The single most effective way to force the Kremlin to reverse course is to absorb the costs of cutting off the Russian war machine. ”
Now that geopolitics is being remade, a united Europe is more necessary than ever. But if Europe is going to rise to the occasion, it must figure out how to act effectively.
Nowhere are the stakes higher than in the energy sector. In a striking speech to the European Parliament earlier this month, the liberal Spanish economist Luis Garicano pointed out that Europe is spending less on helping Ukraine than it is on supporting the Kremlin’s war, through its purchase of Russian energy exports. Thus, there is a strong case to be made for a complete cessation of gas and oil imports from Russia.
But this would come with costs, requiring expensive measures to help Europe wean itself from a longstanding source of energy.
Although there are plausible options for cushioning the blow—such as delaying routine maintenance on Norwegian gas platforms and allowing German nuclear energy plants to remain operational—the situation ultimately demands a reduction of energy consumption. This is probably best handled through the price mechanism, with higher fuel prices reducing demand and increasing the costs of German manufacturing.
This option would certainly be painful. It would mean fewer car journeys, less pleasant leisure activities, and a higher chance of a recession. Ultimately, though, no one can know the full costs that Europe would bear. A recent paper by Rüdiger Bachmann and others calculates that the cost for Germany (the country most likely to be affected) would be between 0.5% and 3% of GDP—less than the 2020 pandemic-induced decline of 4.5%. But economist James Hamilton, using a method that accounts for the macroeconomic knock-on effects of the crisis, anticipates substantially higher costs.
Some European countries would be affected worse than others.
Finland, Latvia, and Bulgaria are more dependent than Germany on Russian gas, and Italy is not far behind. While Poland is highly dependent on Russian gas, its government has courageously called for a boycott. Russia’s invasion of its neighbor has brought Poland back to the realization that the European project—an idea that Poland’s current leaders have spent years scoffing at—is worth defending.
Save lives now
More broadly, European leaders have become increasingly worried about the long-term costs of carbon energy and its implications for the planet. The common argument for addressing climate change is that we should make some sacrifices today in order to make life better for subsequent generations. But now, Russia has made this logic even simpler. In Mariupol, Kyiv, Kharkiv, and eastern Ukraine, cutting off the Kremlin’s main source of revenues would save lives immediately—not years down the road.
Europe’s moral standing depends on it cutting back Russian oil and gas imports as fast as possible. But to be credible, the process must be sustainable. Swift action will be needed to minimize the economic fallout in Europe. And while one hopes that a boycott of Russian energy will bring peace sooner rather than later, Europe should be prepared for a longer-term scenario.
Fortunately, morality and realpolitik do not always conflict, and there is a strong pragmatic argument for freezing imports of Russian oil and gas now, rather than relying on seemingly less painful half-measures. A complete, sudden blockade would be more likely to force a reconsideration of the war within Russia.
And if it prompted a policy change from the Kremlin, it would not even need to be maintained for the long term. Europe might soon be able to access Russian oil and gas once again, albeit on very different terms.
Harold James is professor of history and international affairs at Princeton University. A specialist on German economic history and on globalization, he is a co-author of “The Euro and The Battle of Ideas,” and the author of “The Creation and Destruction of Value: The Globalization Cycle,” “Krupp: A History of the Legendary German Firm,” “Making the European Monetary Union,” and “The War of Words.”
Markus Brunnermeier is professor of economics and director of the Bendheim Center for Finance at Princeton University.
Jean-Pierre Landau is associate professor of economics at Sciences Po.
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