Flash Notes

25 de Março de 2022
Monthly Report | Economic and Financial Market Outlook | March 2022

The invasion of Ukraine by Russian troops marks a turning point in the international geopolitical context since the fall of the Berlin Wall. The consequences of an event of such magnitude (a black swan in financial terminology) are still difficult to anticipate, but some of the underlying trends that have defined the behaviour of the global economy in recent decades could change. The search for greater strategic autonomy (especially in Europe) will entail a rethink both of foreign actions and in terms of energy, defence and competition policies, and this will be transmitted to the economic framework. It is clear that a return to spheres of geopolitical influence would have a negative impact on international trade, at a time when doubts over the fragility of value chains are already beginning to trigger attempts to seek vertical integration in sectors that are being particularly affected by the supply chain disruptions. In other words, after decades marked by a rapid globalisation process that has continued almost unobstructed, like a car on a motorway, it is now being diverted to a secondary road, subject to various imponderable factors (COVID, geopolitics, etc.). The paradox, therefore, is that globalisation – the apex which up until the pandemic appeared to be the strongest in Rodrik’s trilemma (it is not possible to pursue globalisation, national sovereignty and democracy all at once, but rather only two of these elements) – may now also begin to reflect some signs of wear and tear.