I hope these announced bilateral peace talks prosper. Peace between Ukraine and Russia would not only end so much misery and death, it would also be the beginning of a new economic landscape.
We have normalized war as part of the geopolitical landscape. However, since its beginning, this conflict has been altering the dynamics of global markets, weakening multilateral institutions and fueling a structural distrust among many European economic players. The weak growth in France and Germany is largely the result of the halt in many investment and cooperation decisions.
If peace were to come, the most immediate impact would be seen in the energy sector. Since the outbreak of war, Europe has lived under a kind of energy blackmail, which has affected monetary policies and industrial growth. With peace, the natural gas market would stabilize, oil prices would fall, and, above all, expectations would no longer be anchored in fear. This is no small matter: the economy is not driven by perceptions, and business confidence has been weakening for some time.
Another key issue is agricultural and industrial raw materials. As we know, Ukraine and Russia are key suppliers of grain, vegetable oils, fertilizers, and metals. The war has limited their flow and made imports more expensive. With ports operating again and without logistical restrictions, pressure on prices would fall significantly, which would help control inflation.
Confidence. Beyond the economic effects, we need a change of heart. The global economy has been stalled for years by excessive caution.
Since the war began, many multilateral institutions have lost prominence. The UN, the G-20, the WTO, and so on have seen their ability to coordinate common agendas diminished. Peace would reintroduce neglected issues: climate change, the just energy transition, and the regulation of artificial intelligence, among others.
And then there's the sad truth, the reconstruction of Ukraine itself. There will be investment in infrastructure, transportation, energy, and housing. The reconstruction of bombed towns is a source of prosperity.
