Saturday, February 24, 2007

Russia at center of tensions in Europe

Sources:
Human trafficking in Russia - Businessweek.com
Russia and US play down missile dispute - FT.com
Russia warns neighbors - FT.com

Russia’s major cities have enjoyed continued economic growth and increasing annual wages (at a rate of approximately 17-19%) for five straight years despite widespread poverty in the country at large. However, this economic growth has been coupled with an increased involvement with Russia’s criminal networks—particularly in human trafficking.

Lured from third-world countries to cities such as Moscow, ambitious young people hoping to make a decent wage are tricked by criminals into these cities and forced to become slaves and prostitutes. According to a recent report, some 2.45 million people have been trafficked in the region. This huge flow of trafficked peoples, together with a tide of illegal immigrants into Russia, all of which is expected to increase, is making the EU uneasy—the EU fears spillover into its countries. Thus, the EU is pressuring Russia to bolster its border security to help put a stop to this illegal trade.

In addition to being at the center of the human trafficking controversy, Russia is also at odds with the U.S. over the latter’s missile defense program; the U.S. has proposed the installation of missile sites in eastern Europe—a move that has offended the former superpower, prompting president Putin to liken it to cold war-style tactics. However, the U.S. has maintained that such missiles are not to be aimed at Russia, rather to act as a defense from potential attacks from Iran or other enemy states.

Despite such assurances, Russia is still uneasy about the missile placement: its commander of strategic missile forces warned Poland and the Czech Republic that Russian missiles would target their countries if they allowed placement of U.S. missiles. Nevertheless, officials from the U.S. and Russia continue to hold talks in order to stifle the controversy.


Question:

- What ramifications, if any, on EU markets will such tensions help create?

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