As I wrote last week, what is currently going on in Ukraine is highly dynamic and, of course, dangerous.

Though there are some commentators who suggest that there is a danger in the crisis drawing the old adversaries of Russia and America into conflict.

However, what we are likely to see is a stalemate and that what has really happened is that Vladimir Putin - a leader who was welcoming athletes from around the world at the winter Olympics in Sochi only a couple of weeks ago - has, though his intervention in Crimea, acquired a 'bargaining chip' in the eventual settlement of Ukraine.

As always there are a number of dimensions to the current dispute.

The first consideration is in whose interest is a war?

I cannot see President Obama wanting to become embroiled in this dispute; regardless of whatever noises we hear from Washington. And without American support that effectively scuppers any chance of intervention from elsewhere, particularly the UK.

What is more likely is that the 'sabre-rattling' will continue and that some NATO troops might be deployed to act as a deterrent against further intervention couple with diplomatic and economic sanctions.

The imminent commencement of the Paralympic Winter Games this Friday in Sochi will tell us much of how relations have been strained by recent events though I don't envisage the sort of action that was taken in 1980 at the Moscow Olympics following Russia's invasion of Afghanistan.

Whether Putin really wants a war is debatable but lest we forget that this is exactly what he did in Georgia in 2008.

Whilst I don't rule out a war between those in the West of Ukraine who it is widely suggested by some commentators, are looking towards the EU, and those in the East, such as Crimea, who are believed to be loyal to Russia, even this is not certain.

Ukraine has had the misfortune to be the battleground of conflicts for centuries going back to the invasion by the Mongols in the twelfth century.

What gives this conflict additional complexity is that a simple division would not be easy.

As Ukrainian scholar Alexander Motyl stated recently, "There are significant numbers of ethnic Ukrainians who continue to speak Ukrainian in the east and in the south [and there] are significant numbers of passionate Ukrainians, let's call them patriots, who speak Russian and who prefer Russian culture, and who nevertheless are committed to Ukrainian statehood and Ukrainian nationhood."

Providing everyone keeps their head some sort of a solution will emerge and which, I contend, will be based on economics.

Despite being a market economy for the last two decades, Ukraine has a current account deficit of 8% of GDP. As a consequence GDP per head is way below even the poorest EU states.

Ukraine's reserves have been used to pay for imports which represent 80% of GDP.

Rather than war, what Ukraine really needs is economic intervention; at least £9 billion from the EU and or the IMF to simply stop it from effectively going bankrupt but with more to follow in order to achieve the sort of economic development seen in other ex-communist states.

This, of course, won't happen unless there is some sort of stability and certainly not if Russia insists on turning this into a full-scale war.

At present the EU takes a quarter of Ukraine's exports which is pretty much the same as what it sells to Russia.

As economist Hamish McRae pointed out, Ukraine is potentially another Turkey with a well-educated workforce (note that Mr. Gove) and a wealth of modern industries that, with sufficient support and encouragement, could easily compete in producing high value goods but at lower cost.

McRae asserts that what is required is for Ukraine to come to an arrangement that enables it to co-exist between the trading blocs of the east and west:

"It is not either/or. Economic progress depends on trading with both. Somehow the politics have to be consistent with the economics. I suppose the obvious model would be Finland during the Cold War, a country that was non-aligned politically but operated a Western economic model."

And let's not forget the importance of Russian gas.

The EU receives a quarter of its gas from Russia, most of which is transported through pipelines that cross Ukraine.

Given the dependence we have on gas to generate power any disruption would have a potentially devastating impact on industry and the way we live our lives.

Thankfully we are probably over the worst of the winter but we absolutely depend on a steady flow of electricity all year round.

Whatever we may prefer to believe about Putin, his is not stupid.

Whilst he is cognisant of popularity within Russia, he is acutely aware of the economics of what is unfolding in Ukraine.

This is why, above all other things, Putin will garner a settlement that benefits Russia.