Tensions between Russia and Ukraine are rising. The uncertainty surrounding the conflict can affect Norway in several ways.
For several years, there has been great tension between Ukraine and Russia. There have also been conflicts within Ukraine.
President Vladimir Putin has recognized breakaway regions in Ukraine, Luhansk and Donetsk, as independent states. In addition, he ordered what he calls «Peacekeeping forces» to the area.
As a result, the EU warns of strong sanctions against Russia.
There is great uncertainty about what Putin chooses to do next. And the uncertainty can spread and affect Norway and the rest of Europe.
–How the conflict between Ukraine and Russia affects Norway depends on how the situation develops, Tor Bukkvoll believes. He is a senior researcher at the Norwegian Defense Research Establishment.
– So far, there is no major war. The bigger the war, the worse the relationship between Russia and the West, he says.
Bukkvoll says that Russia has an interest in Norway, but not in the same way as Ukraine.
– When it comes to the High North, I think Russia wants to ensure stable development and that they want to avoid conflict. On the whole, relations between Russia and the Nordic countries are good as they are.
– There is no direct risk for Norway as the situation is now, he says.
–Norway has no major role in the conflict between Russia and Ukraine, other than the one we have through being a member of NATO.
At the same time, Norway has backed the EU’s sanctions against Russia.
– I do not believe in a big war in Europe, but it could be a big war in Ukraine. The risk is there. But I hope Putin is aware of the terrible consequences of a war, also for his own country, says Bukkvoll.
More expensive oil and energy
When there are conflicts in the world such as between Russia and Ukraine, it can lead to economic uncertainty and instability.
Oil and energy prices may rise as demand increases and the stock market may decline. The uncertainty has had consequences for The Moscow Stock Exchange plunged on Monday.
– In a turmoil, people want to hoard a bit. Then you want to be sure that you have enough energy, and then the price goes up because you are unsure of the supply in the future. What we sell will then have a higher price, says professor at the Norwegian School of Management Trond Døskeland.
Oil prices have already risen, and Døskeland believes that electricity prices in Europe may rise because access to gas from Russia is reduced.
At the same time, Germany has decided to halt the approval of the controversial Nord Stream 2 gas pipeline from Russia. This could lead to higher gas prices in Europe.
– Norway is lucky in the sense that we are an exporter of oil, gas and electricity, says Døskeland.
–The conflict can also affect interest rates at home.
– When it comes to interest rates, it is raised when the economy is doing well, but when the economy is uncertain, one is more reluctant to raise interest rates. Therefore, the announced interest rate increase may be postponed, says Døskeland
He says that Norway is not largely dependent on Russia to get goods and services.
Will continue the collaboration
During a press conference on Tuesday, Prime Minister Jonas Gahr Støre says that Norway will continue to cooperate with Russia.
Norway as a neighbor has lived with the Soviet Union and Russia for many decades, and has managed to maintain that relationship in a pragmatic way. We want to continue with that, says the Prime Minister.
He says that through several conflicts, Norway and Russia have managed to cooperate. The countries co-operate on fishing, search and rescue, and a number of neighborhood issues.
– For Norway, it is important to stand by European countries and adhere to the principles that states have rights, they have the right to security and the right to make their choices.
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