The West is definitely not at war with Russia. However, she is not calm, as the Nobel Prize-winning American economist Paul Krugman notes in his article in the New York Times.

Western weapons have helped Ukraine not only stop the Russian invasion, but also counterattack, and Western economic sanctions have clearly created serious problems for Russian industry.

Russia, for its part, has responded by imposing a de facto embargo on natural gas exports to Europe. However, this element also shows how Russian President Vladimir Putin himself regards events on the war front. According to Krugman, if the Russian leader had not been worried about the turn of military events, he would not have taken such a step.

Now, after a de facto embargo on natural gas exports, no one will ever again face Russia as a reliable trading partner, as the Nobel laureate American economist notes in the New York Times. Putin, however, appears willing to bear the price in an attempt to intimidate the West with the ultimate goal of reducing Western support for Ukraine.

Six months ago there was still much debate about whether Europe could or should stop importing energy from Russia. However, at present, Russia itself has actually decided to stop this export.

As for Europe, it seems ready to respond in the same way that democracies always do when faced with wartime inflation: introduction of emergency taxes, price control and, perhaps restricted card distribution measures (rationing).

The problem is currently mostly Europeannotes Krugman in his analysis, highlighting how Europe has allowed itself to become dependent on Russian natural gas in recent years.

However, there are now natural gas reserves in Europe that, combined with the energy conservation measures being promoted and the provision of alternative sources of energy supply, will keep it from melting in the coming winter, according to Krugman.

So the main problem, as the American economist notes, is that economical as well as Social.

Gas prices in Europe have skyrocketed, and as buyers turn to alternative sources, the prices of other energy sources, including nuclear power, renewables and coal, have also skyrocketed.

Europe is facing an energy shortage. Higher prices create incentives to alleviate this shortage. Consumers are being urged to ditch thermostats, improve insulation and wear sweaters. On the other hand, energy producers must maximize production.

However, as Krugman notes, in such a context, energy producers whose operating costs have not increased will reap huge profits, while many families and some businesses will instead face financial ruin under the burden of exorbitant bills.

But there are still strong unions in Europe, and some of them may be able to demand higher wages to offset the rise in the cost of living, which, however, could lead to an upward spiral in wages and prices, as Krugman warns, under which Europeans let energy prices grow. not really an option.

Alternatively, the authorities could start issuing one-off checks to compensate households that have to bear higher electricity bills. On paper, this may seem like a good idea, as households will still have reasons to cut back on their energy consumption. However, in practice, different families, even if they have the same income, can have very different electricity bills, and people living in houses with poor insulation cannot solve this problem overnight.

Commission president Ursula von der Leyen announced possible measures on Wednesday, proposing, among other things, reducing electricity consumption, paying a solidarity tax to fossil fuel companies and limiting the revenues of companies that produce cheap electricity.

Paul Krugman emphasizes that von der Leyen is not the head of government. However, according to the American economist, the measures proposed by the president of the Commission probably give a pretty good idea of ​​where Europe is heading.

Can these measures work in practice? Krugman believes that much will be decided in detail.

The priority now must be to protect families and maintain a sense of justice, he concludes.