On the face of it, the stand off between the European Union (EU)-US and Russia due to the Ukraine crisis is escalating.

The US, despite attracting considerable Russian capital, is not linked with having substantial economic and business interests in Russia, but has become a prime destination for European-made products. The EU, however, has been badly affected by the sanctions imposed on Russia by it under US duress.

So far, European companies have suffered losses totalling €21 billion (Dh87 billion), which are likely to worsen and even lead to bankruptcy for many of them as a result of their reliance on exports to Russia. Meanwhile, the German Exporters Association — the largest trade grouping in that market — has warned of a real disaster if sanctions continue. The trade body also confirmed that nearly 6,200 German companies have interests in Russia.

The German Council of Economic Experts recently said: “The Ukraine crisis poses the greatest threat to global economic growth”, particularly to Germany. This is because of Russia’s economic importance, while those sanctions have little impact on the US economy.

The EU members before the Ukrainian crisis looked to the Russian market as a source of energy and one which would be extremely favourable to taking in substantial European exports. But these hopes have evaporated, putting Europe in a rather difficult situation. On the one hand there is the US pressure and on the other hand there are the European companies’s interests that cannot be overlooked. There is need for prudence in the imposition of sanctions and to find a way out of the crisis in Ukraine, though it does not represent one of economic importance for European businesses.

Russian President Vladimir Putin knows this well and makes the best use of it in a smart manner that serves Russian interests. He visited many countries as part of his recent global tour, looking for alternatives to Western sanctions.

He has succeeded in signing trade agreements with many countries including some Arab nations, such as Morocco and Egypt, to increase their exports to Russia. Putin also signed agreements worth billions of dollars to ensure the steadiness of Russian energy exports.

Russia is more likely to sign its second agreement with China after the first one, which was to supply China with its gas needs through pipes, while it continues to receive support from the other members in the BRICS grouping such as Brazil, India and South Africa.

So, it seems that Europe represented by Germany and France has began to realise the depth of the crisis, and are ready to make concessions that might not satisfy its American ally. However, the game of interests is stronger than any alliance, especially after a clearer picture emerged of the Ukrainian crisis and those of the various parties involved.

The gap in the interests between European and America will further widen, especially after the success of radicals in Greece’s recent elections and their approach towards Russia to ask for help to get loans and subsidies as well as support in energy supply. This sends a strong message to the European Commission that Greece has an alternative.

Eventually, it is expected that Europe will listen to the cries of its affected companies, more so as the continent is still passing through an unprecedented crisis that has got worse due to the sanctions on Russia. Russia, in turn, has suffered from the outflow of capital and the collapse of the rouble.

Nevertheless, Russia will not make significant concessions because it views this crisis as a security and national challenge that directly affects its national interests.

It is important for Europe and Russia to stop any further deterioration and address the crisis in a manner that reflects the interests of both. It seems that they have eventually realised this fact and are working to safeguard these.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.