Ukraine: Goodbye Cold War (and Democracy), hello globalized economy - by Remi Piet

It's all about money now

While most observers claim that the current conflict over Ukraine is reminiscent of the Cold War, a political economy analysis of the last three days would au contraire underline how liberal economic interdependence has modified the rules of the game. 

If the sound of boots on the ground is still very real in Crimea, the Ukrainian conflict proved the incapacity of countries to engage in military conflict without being vulnerable to exogenous economic forces or having to suffer the consequences of capital flight and currency exchange rate fluctuations. 

The reaction from oligarchs in Ukraine as well as the impact that the prospect of war had on both the Russian stock exchange and currency are solid proof that countries cannot operate bluntly as they did during the Cold War without closely monitoring global economic dynamics. 

While the prospect of targeted economic sanctions such as asset freezing or visa restrictions had been inoffensive in Belarus and mostly inefficient in Syria, it has modified the forces on the exchequer in Ukraine. Viktor Yanukovich did not leave Kiev in the middle of the night because of a military invasion of his country, nor because the few armed militants in Maidan represented such a threat to his security that he had to abandon his lavish lifestyle. 
 
No, he fled because the powerful Ukrainian oligarchs turned their back on him in fear of economic sanctions from Europe that would have meant the end of their industrial empire and freedom of movement. 

Liberal-minded Victor Pinchuk - the billionaire son-in-law of the first Ukrainian president and Russian ally, Leonid Kuchma - and Petro Poroshenko were the first to defect, signing a letter of support to the demonstrators and stating that the European path was the "way to modernise the country, to fight corruption, the way to have a fair court, freedom of press, democracy".

Rinat Akhmetov, commonly considered one of the 40 wealthiest men in the world, put the deepest nail in the newly impeached Ukrainian president's coffin by asking for balanced agreements with Russia and Europe, which meant reopening economic negotiations with Brussels. 

Even Eastern Ukrainian billionaires Igor Kolomoyski and Sergey Taruta, once close to Yanukovich, quickly followed suit when they pledged allegiance to the new Ukrainian prime minister, by accepting governor positions in Donetsk and Dnipropetrovsk. 

They claimed to do so to "protect the homeland in danger". Yet the decision from EU-member Austria and Switzerland - which currently faces its own share of EU pressure after last month's immigration referendum - to freeze financial assets, the perspective of not being able to vacation in Nice or Courchevel or meet potential investors in London and Paris, as well as the risk of seeing German car manufacturers turn away from their steel production were surely equally as strong an argument to call for closer European ties. 

The days of the "iron curtain" and of the Council for Mutual Economic Assistance (COMECON) which economically isolated the former Soviet Union states from the rest of the world are far behind us.

Note EU-Digest: indeed money in today's world speaks louder than guns and politicians while Democracy has become just an illusion.

Read more: Ukraine: Goodbye Cold War, hello globalised economy - Opinion - Al Jazeera English