by Xinhua writers Fu Yiming, Chen Chen, He Miao

STOCKHOLM, Dec. 26 (Xinhua) -- In 2022, the prolonged conflict between Russia and Ukraine, the series of problems brought about by the northern expansion of the North Atlantic Treaty Organization (NATO) and the energy crisis have all caused severe headaches across Europe.

Adding fuel to the fire were the West's series of sanctions against Russia and the weapons deliveries to Ukraine.

The economic, geopolitical and social consequences of all these developments have been profound -- something the continent has not seen for decades. Calls for peace and stability are growing louder by the day.

GEOPOLITICAL UPHEAVAL

"At first, I was positive about (becoming a conscript) and thought it would be a year with good experiences. But now that we may be joining NATO, I have changed my mind," Wilhelm Waldenlind, an 18-year-old Swede, told Swedish Television in April.

He is not alone. Sweden is about to join NATO, and the prospect of the country saying goodbye to decades of neutrality divided the public. And coupled with ever more influence from the far-right political spectrum, the development has prompted certain analysts to concede that "anything is possible."

Under NATO's Article 5, which views an attack on one member state as an attack on all, Sweden, once a full member, may eventually be forced to wage a war -- a prospect Waldenlind and many others refuse to entertain.

Meanwhile, Finland, which shares a 1,340-kilometer border with Russia, said that it would erect a 200-kilometer barbed wire along that border next year, a decision criticized by some experts as irrational.

The decision by Finland and Sweden to abandon their long-held neutrality and NATO's expansion to Russia's borders threaten to upset the stability of the Baltic Sea region and of Europe as a whole. Finland and Sweden may easily find themselves fighting a war on their own territory with Russia, a neighbor whom they have lived in relative peace for decades.

The NATO expansion plans have elicited criticisms in both Nordic countries. Nooshi Dadgostar, leader of Sweden's Left Party, warned that "it risks leading to escalation in our immediate area." Agnes Hellstrom, president of the Swedish Peace and Arbitration Society, said in a statement that with its decision to join NATO, "Sweden contributes to making the world more militarized and polarized. NATO membership does not make Sweden or the world more secure or democratic -- rather the opposite."

The Finnish Peace Committee emphasized in a statement that lasting peace in the world could not be built based on an arms and alliance-based security policy, and that military alignment would not increase security in Europe, but a further escalation of military tensions instead. NATO's adoption of new members would also exacerbate the division of the world into military blocs, thereby complicating negotiations and cooperation.

Sweden and Finland simultaneously submitted their formal requests to join NATO in May 2022, and were later invited to join the alliance at NATO's Madrid summit in June. The accession protocols for both countries were signed on July 5, and must now be ratified by all NATO allies, of whom, Hungary and Türkiye have yet to give a green light.

ECONOMIC FRAGILITY

On Nov. 21, top leaders of 49 major multinational companies, including Orange, Ericsson, Unilever, AstraZeneca, Volvo and BMW, met at a banquet in the Elysee Palace in Paris. Their host, French President Emmanuel Macron, reportedly tried to persuade them not to move production lines to the United States.

Macron's message was clear: remain in Europe and choose France for your future investments. The French president reportedly argued that the participating industrial powerhouses should resist the lure of the U.S.'s lower energy prices and the Inflation Reduction Act (IRA) and should not be pushed overseas by fears of the ongoing Ukraine crisis or the energy crisis.

Indeed, Europe appears to be losing its appeal to businesses, and the IRA in the U.S. seeking to provide high subsidies for electric vehicle-related industries in the country further worsens situations in Europe. Consequently, a quarter of German companies are considering shifting productions to other countries, the Federation of German Industries has warned. Sweden's battery maker Northvolt is also reportedly preparing to leave Germany for the U.S.

Meanwhile, the successive rounds of sanctions imposed by the West on Russia have upset the status quo in business across Europe. The harsh measures meant to target Russia's energy sector hurt Europe itself even harder, with the worsening energy crisis, record-high inflation and the looming threat of recession.

Germany, highly dependent on Russian gas, is facing an unprecedented energy crisis, which may have profound consequences. The German ifo Institute for Economic Research said recently that the country was heading into recession, and forecast its economy to contract by 0.6 percent in the fourth quarter of 2022. The German government predicted a 0.4 percent economic slump for next year.

In Britain, the Bank of England (BoE) pointed to the consecutive double-digit inflation rates recently and warned that the third quarter decline in the country's economic output likely marked the start of a recession that may last until the end of next year and possibly into 2024.

Sweden, the largest Nordic economy, also has to grapple with soaring inflation not seen there for decades. The country's central bank (Riksbank) has had to abandon its negative and zero-interest rate policy -- lasted for more than seven years -- and raise its key interest rate aggressively to stave off the cost-of-living crisis, but to little avail. The Swedish government has said the country will enter a recession next year that is expected to last until 2025.

SOCIETAL TURMOIL

Along with his wife and two sons aged 4 and 10, Labiz, 44, arrived in Poland from Ukraine in early March after a harrowing nine-hour wait at the border.

He is one of the 1.5 million Ukrainian refugees who had fled to and settled in Poland by Dec. 13, according to figures released by the United Nations High Commissioner for Refugees (UNHCR). Labiz witnessed first-hand the societal impacts of the Russia-Ukraine conflict. The massive humanitarian crisis triggered by the conflict has displaced millions of Ukrainians to neighboring European countries, which now struggle to deal with the influx.

Since the start of the conflict, over 8 million Ukrainians had crossed the border to enter Poland, the Polish Border Guard said, adding that there were still an average 20,000 new arrivals per day.

With many of the new arrivals looking for temporary or long-term accommodation, there has been a surge in demand in the housing market in nearly all major Polish cities. The ensuing shortages have pushed up rental and sales prices.

In the first two weeks after the start of the conflict in February, ad views on Otodom, a popular real estate service in Poland, surged by 166 percent. Experts at another real estate service, GetHome, said that the number of apartments available for rent in Warsaw, Gdansk and Poznan fell by 34 percent to 40 percent during the first month of the conflict. Rental prices in Warsaw have risen by an average of 31.6 percent in a year, according to a joint analysis conducted by real estate firms Morizon and Gratka.

Schooling is another problem. The number of Ukrainian children enrolled in Polish schools for the new academic year that started in September stood at around 185,000, Poland's Education Minister Przemyslaw Czarnek has said.

"I think the challenges lie in the education system and the healthcare system, because, again, half of these newcomers are children. Even before the war, our shortage of teachers was quite acute," Dominika Pszczolkowska, political scientist at the University of Warsaw's Center of Migration Research, told Xinhua, stressing that the influx of an additional 100,000 Ukrainian students would make the shortage even more acute.

Poland will have spent 8.36 billion euros (8.87 billion U.S. dollars) on housing, health care and other services for Ukrainians by the end of this year, the highest amount among the member countries of the Organization for Economic Co-operation and Development (OECD), the organization said in October.

However, with an increasing "host society" fatigue, the hospitality of the receiving nation -- already saddled with the energy crisis, soaring inflation and a sluggish economic outlook -- is being tested like never before.

Labiz told Xinhua that he was grateful for the Polish people's help during the past difficult months and has always felt at home in the country.

Still, he said he wanted to return to his home country. "I will go home as soon as the conflict ends." Enditem (Xinhua reporter Zhang Zhang from Warsaw also contributed to the story.)