The new year begins with renewed war and an economic crisis that threatens to turn into a slump. The connections between the two run very deep.
While the world’s attention was focused on Gaza, a dispute broke out as Russia cut gas supplies to its neighbour, Ukraine.
As they are supplied via Ukraine, states such as Romania, Croatia, Hungary, Poland and Bulgaria have all seen a fall in their gas supplies.
On the surface this is simply an economic spat – but it is part of a wider agenda with Russia increasingly flexing its military muscles.
This comes after the rouble was devalued for a ninth time last month. As Russia’s economic woes increase so does its determination to assert its control of eastern Europe.
Russia is attempting to block Nato and the European Union (EU) from expanding to its borders.
It is pressurising Ukraine to stay in the Russian sphere of influence rather than joining Nato. Russia wants Ukraine to honour treaty commitments allowing the Russian navy to use Ukrainian ports on the Black Sea.
In stopping gas supplies to Ukraine, Russia is also testing the EU – which is dependent on the same supplies.
Russian prime minister Vladimir Putin is unlikely to risk war, but it is a game of brinkmanship which can easily slip out of control.
And in a world where arms spending has soared to over $1 trillion a year, wars can break out when governments miscalculate situations.
In 1989 the Iraqi dictator, Saddam Hussein, wanted to recoup the horrendous costs of an eight year war with Iran.
He believed his US ally had given him the green light to annex neighbouring Kuwait. He had read the signals wrong and the Iraqi people paid a terrible price.
This marked the beginning of two decades of direct US military intervention in the Middle East.
The attempt to reassert US power in the region lies behind the disastrous occupations in Iraq and Afghanistan.
In the summer of 2008, the Georgian regime believed the US would back it up when it invaded Russia’s ally South Ossetia. It was wrong. Mired in wars of its own the US could only respond with words as Russian forces drove deep into Georgia.
Since then Russia has consolidated alliances with Armenia, Azerbaijan and other states along its southern border.
This is a region where the US has established a number of military bases in states that were formerly controlled from Moscow as part of its “war on terror”.
The Russian government has also responded to the growing economic crisis by beating the nationalist drum.
Its treatment of Ukraine is an example of how economic and military pressures can combine for states vying for regional or global power.
But the solutions different states attempt vary greatly.
Globally the ruling class has fractured as it tries to respond to the worst economic crisis since the 1930s.
Some governments have turned to state spending as a solution, as Gordon Brown claims to be doing in Britain.
Others like the Irish government are implementing austerity measures. Some try a mixture of both and still others will be attracted to looking for scapegoats and to nationalism.
Any of these supposed solutions will lead to more conflict and instability as states rub against each other and bully less powerful nations in the battle for resources.
This situation places a responsibility on socialists. We must build a response to the economic crisis which says working people should not pay the cost. And we must maintain and develop the anti-war movement in Britain and worldwide.