Europe and China seem unlikely to go along with Sanctions and any financial war would likely claim European Banks as collateral damage

Ian Bremmer is the president and founder of Eurasia Group, a global political risk research and consulting firm and he gives his views on the situation with Russia and the Ukraine.

1) The West’s direct response. Ian Bremmer sees basically no response just like when Russia invaded Georgia.

2) International complications from Russia. Russia can complicate things with Iran and Syria. If Russia /Putin is pushed hard enough he can create a lot of mischief

3) Geopolitical shift. Russia will see its key opportunity as closing ranks more tightly with China.

The International Business Times is indicating that China is backing Russia in some statements on the Crimea.

Sanctions

If the West could organize crippling sanctions on Russia then Putin would have a lot of trouble. If the US could get crippling sanctions on Russia they probably could force a change. Sanctions help bring down the Soviet Union and Russia is weaker than the Soviet Union.

But it seems that weakness goes both ways. It seems that effective sanctions will not happen.

The UK Telegraph believes that European dependence on Russian natural gas will prevent effective sanctions.

The UK appears prepared to rule out trade sanctions.

China is providing verbal support to Russia over Crimea. It seems likely that China would buy Russian oil at slightly lower prices if the West did organize sanctions.

The head of a hedge fund told John Mauldin that European banks have exposure to emerging-market corporate debt, Chinese debt, and Russian liabilities is going to weaken their balance sheets just as the European central bank stress test will be kicking off.

Russia’s economy is not that Strong

Russia is still only about a $2 trillion economy. It does dominate a few eastern european countries and has them in a Eurasian Union. Russia does produce more oil and gas than Saudi Arabia.

Saudi Arabia can also behave very badly and escapes punishment because of the need for its oil.

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