The cost of war

In August, the first war for a decade took place in Europe, as Russia invaded Georgian territory. Since then, Russia has faced its worst financial crisis since the 1998 debt default. emeafinance editor Julian Evans looks at the economic costs for Russia of its military adventure in Georgia.

The Russian government has a siege mentality right now. A government official tells me a story: “I overheard two senior members of the government talking to each other in September. One of them said ‘you know, if this situation gets worse, we might not even be able to visit the west. No holidays in the south of France, no British schools for our kids, no visits to see Chelsea play in London.”