As I am writing this article, Russian grip tightens around the Crimea, and the political future of the entire Ukraine is far from certain. While not wanting to appear overly cynical, we find it worthwhile to pose a simple question: what does the Ukrainian crisis mean for Poland economically? It seems reasonable to consider the possible impact of the crisis through three key dimensions: how much longer will it take to resolve, how destabilising it will be internally and externally, and what will be the final outcome. The ideal scenario is simple to conceive: the interim leaders of Ukraine, Russia and the West soon reach a settlement that leaves Ukraine mostly intact, no further violence ensues, political normality returns. What is the worst scenario? Possibly a violent conflict which leaves Ukraine territorially maimed (with the industrial east being ceded to Russia) and lingering in a limbo of internal instability for years. And there is, of course, a plethora of different combinations in between. There are different channels of transmitting the crisis onto the regional financial performance. Firstly, let’s consider the most obvious channel – trade. Ukraine has been the European Union’s (EU) 19th (1.4%) largest export market, with EUR 36.6 billion trade volume. It has been somewhat more important to the EU’s peripheral economies – for instance, 2.5% (in excess of 3.5 billion EUR) of the Polish exports head towards Ukraine. These numbers, obviously, do not impress – or at least do not impress significantly to threaten us with a strong, negative trade-transmitted shock to demand for European products. More importantly, Ukraine has a potential of being a lost opportunity for European business – particularly, for businesses of EU’s easternmost countries. Poland’s PZU, an insurer and PKO, a bank, have been amongst the firms which already expanded onto the Ukrainian market. With its toxic business environment (it has been labelled the most corrupt country in Europe by the global transparency rankings) unlikely to be improved by the political instability, Ukraine may struggle to become an attractive place to invest and export. Unless, of course, the crisis will not culminate in a devastating conflict, stability ensues and the political shift will bring around transparency-oriented reforms (such as though tied to the EU-affiliation agreement). This could, bears some resemblance to dangerous wishful thinking. What worries Polish, however, is not really the loss in actual trade, or even in the trade potential – it’s overall destabilisation of the entire region, or rather the change in the overall geo-political risk associated with the countries on the eastern EU border. There is a threat that the possibility of short and medium-term political instability will feed into the risk premia of the Polish, Slovakian, Lithuanian and Romanian sovereign bonds – or even the prevailing market rates in general. The central-eastern Europe has gone a long way since the fall of the Iron Curtain, and one of the most important dimension of this change has been a change in perception, as the countries in the region have been working hard to build a reputation for being a safe and stable markets for foreign products and FDI. If the Ukrainian crisis lingers – or even worse, escalated into an open conflict, the risk is the entire region will be downgraded, once again, to a status of a high-risk, high-yield, short-term investment market. Whilst hoping for the best possible resolution of the Ukrainian crisis, we are no ashamed to add a little personal context to our consideration. Author note: Adam Pasierbek, studied economics and political science at the University of Reading (UK) and the University of Ottawa (Canada). Passionate about the international monetary and institutional economics, finance and political philosophy. He has been involved in management of a number of the student clubs at his universities, as well as held positions in institutions such as the Polish Foreign Office, National Bank of Poland and UofR Department of Economics.