Markets are far from pricing in peace 26 Jun 2023 Germany’s Rheinmetall and other defence shares fell after an aborted Russian mutiny. Domestic instability may shorten the Ukraine war, curtailing lucrative contracts. Yet chaos in Moscow, Western tensions with China and rising cyberthreats will keep the world amply unsafe.
Europe has more Russian lessons to learn 26 Jun 2023 Yevgeny Prigozhin’s failed mutiny rams home the EU’s need to protect itself from trouble abroad. Leaders meeting this week in Brussels are thinking in more geostrategic terms and may now agree a China policy. But until they act as a bloc they will lack clout, says Hugo Dixon.
Time for world to dust off its post-Putin plans 26 Jun 2023 The Russian president has been humiliated by his former protégé Yevgeny Prigozhin’s failed coup. Whether he clings to power or is eventually shunted aside, he looks wounded. When weighing up the consequences, global powers should expect the worst but prepare for the best.
Ukraine’s push for speedy rebuild faces obstacles 23 Jun 2023 Kyiv is keen to put aid money to work on an early start of the reconstruction effort. Foreign donors and investors remain wary of the war dangers. A scheme to insure those risks could speed up things, but going too fast could also compromise Ukraine’s long-term recovery effort.
Rebuilding Ukraine: how much and who pays? 22 Jun 2023 Talk of reconstruction may seem premature with Russia still firing missiles at Kyiv. Yet that’s what policymakers and financiers gathered in London this week to debate. In this Viewsroom podcast, Breakingviews columnists discuss the cost, the timetable, and who picks up the tab.
Kyiv courts risk with oligarch bank takeover plan 12 Jun 2023 Ukraine wants to nationalise Sense Bank, owned by sanctioned tycoons Mikhail Fridman and Petr Aven. The political move lacks a strong economic logic. The state already owns four of the country’s top lenders. Finding a new private owner for the bank would be more sensible.
Russia writedown is Raiffeisen’s best option 30 May 2023 The Austrian bank may spin off its profitable Moscow-based unit. The new Vienna-listed lender could struggle to operate given sanctions, shrinking its depressed value further. Stomaching a 4.1 bln euro loss would force Raiffeisen to atone for years of mindless Russian expansion.
How US allies can mitigate Trump 2.0 29 May 2023 A return to the White House for the pro-Putin, protectionist and climate-sceptic former President would pose many challenges for other rich democracies. Their best insurance is to ramp up support for Ukraine, promote trade and speed up action on global warming, says Hugo Dixon.
EU will go easy on Indian resale of Russian fuel 23 May 2023 Fuelled by imports from Moscow, oil products sales to Europe from refiners including Reliance and Nayara have nearly doubled to $15 bln. The trend shows anti-Russian sanctions are not watertight. Yet, risks of an energy inflation revival make a European Union ban a tough call.
Strongmen are riskier the more they stay in power 22 May 2023 Autocrats often seduce investors with promises to be good for business. But Turkey’s Tayyip Erdogan, Russia’s Vladimir Putin and Xi Jinping in China show this effect doesn’t last. The longer leaders stick around, the greater the risk of poor decisions, says Hugo Dixon.
Russia sanctions become a high return investment 19 May 2023 As older penalties lose their bite, Western powers are preparing a new round of measures to tighten the screws on Vladimir Putin. That will hurt the Kremlin and be a marginal sacrifice for Europe, which no longer depends on Moscow for its energy – a good cost-benefit balance.
Ukraine rebuilding would be small wager for Europe 16 May 2023 The Ukrainian economy shrank by 30% last year but the war didn’t break it. Reconstruction will cost $410 bln over a decade, according to the World Bank. The European Union could fund the bulk of those efforts by spending just 0.1% of annual GDP. That would be a shrewd investment.
Ukraine banks’ robust health masks big challenges 11 May 2023 After previous central bank reforms and an influx of deposits, the Ukrainian financial sector remains strong. But bad loans are at 38% and the three largest banks are state-owned. To support Ukraine’s reconstruction they will need more balance sheet cleanups, and privatisations.
Rebuilding Ukraine depends on luring private money 10 May 2023 International agencies and allied governments are taking care of the war-torn country’s immediate needs. An estimated $400 bln reconstruction bill, however, requires additional investors. Economic incentives and new laws would help attract them even before Russia’s invasion ends.
Sinking Russian military crafts new arms winners 12 Apr 2023 Moscow’s share of global arms exports shrank by 27% over the last five years, to the benefit of the US and France. Deprived of Western technology, Russia’s defence industry has struggled to adapt. Its traditional customers also aren’t impressed by its poor performance in Ukraine.
China sanctions red line has shifted westward 21 Mar 2023 President Xi Jinping’s visit to Moscow has rekindled concerns Beijing could get too cosy with Vladimir Putin. Arming Russia would likely trigger a joint Western diplomatic response even in the absence of a Chinese invasion of Taiwan. Beijing is walking a thinning tightrope.
Economic asphyxiation puts Russia in China’s orbit 20 Mar 2023 Moscow needs up to $90 bln to fund its budget deficit this year. As sanctions keep biting, financing the shortfall will slowly add to the economy’s woes. Russia’s need to use the yuan for trade and payments will also increase Vladimir Putin’s dependence on Beijing.
Ukraine’s long shadow on business and geopolitics 23 Feb 2023 It’s been 12 months since Russian President Vladimir Putin’s bloody invasion. In this Viewsroom podcast, Breakingviews columnists discuss how energy markets have changed for good, how defence companies are benefiting, and another potential conflict troubling CEOs and investors.
Ukraine yet to make defence a safe investor haven 20 Feb 2023 Kyiv’s pressing call for weapons to defeat Russia dominated a top security forum in Munich. With defence budgets rising, some investors and banks are tempted to engage more with military hardware firms. For most, however, lethal weapons will remain a no-go investment zone.
Even a weak Russia is a problem for Europe 20 Feb 2023 A year after Vladimir Putin invaded Ukraine, Europe seems destined for an arms race and further economic decoupling from its neighbour. But extra defence spending, lost business and rebuilding costs will be minor compared to a scenario where Moscow crushes Kyiv, says Hugo Dixon.