Russia mess sucks up U.S. economic bandwidth 30 October 2017 The first charges in the 2016 election-meddling investigation snagged President Donald Trump’s former campaign manager. That diverts White House resources better used elsewhere: namely reforming taxes, picking a new Fed chair and preparing for a high-stakes Asia trip.
Ukraine’s IMF bailout is a drop in the bucket 21 September 2016 The International Monetary Fund approved a $1 bln aid tranche after a year’s delay, waiving some criteria in the process. It’s a start. But the country has to overcome corruption and get back in business. An ongoing standoff with Russia makes that unusually tough.
Putin is slipping into Crimean economic sinkhole 14 June 2016 Russia’s struggle to build a bridge link to Crimea is a microcosm of President Vladimir Putin’s problem: his annexation carries high costs but is yielding meagre benefits. Public discontent risks flaring before September’s parliamentary elections and may spur a new crackdown.
Eurovision puts Ukraine in helpful spotlight 16 May 2016 Kiev’s pride in winning Saturday’s annual croon-fest has a downside: it has to pay to host next year’s. Russia has pointed out Ukraine has a ropey economy and a war in the east. The experience of former hosts, though, suggests there could be a return on the investment.
Chernobyl is symbol of shaky EU-Ukraine ties 26 April 2016 Thirty years after the disaster at the nuclear power station, EU money has helped build a structure to contain further reactor fallout. But Ukraine will have to sort any future issues by itself. Efforts to bring Kiev and Brussels closer suffer from a similar risky dynamic.
Loser from Dutch referendum: referendums 7 April 2016 Voters in the Netherlands rejected a Ukraine-EU trade deal. The economic fallout is tiny compared with what’s at stake in Britain’s EU referendum. Still, it’s a reminder that such plebiscites are too often hostages to voter apathy and discontent about unrelated issues.
Bondholders escape Ukraine with only mild scratch 27 August 2015 War-torn Ukraine has agreed a 20 percent haircut with a group of rebellious creditors. That’s half the loss Kiev originally wanted. Yet it’s not much of a victory for lenders either: with the economy in tatters and doubts continuing, creditors will be lucky to escape another hit.
Grenada offers debt restructuring model for Greece 9 April 2015 The Caribbean island is close to agreeing a deal with creditors after years of wrangling. The deal structure, including warrants and phased debt relief, is equitable, and provides incentives for reform. It looks like a decent model for Ukraine—or even Greece.
Russia occupies Ukraine’s debt talks 19 March 2015 The Kiev government needs to restructure its debt, but one of its big creditors is its foe Russia. The possibility of defaulting on that part of the debt complicates the talks and exacerbates tensions. But sparing Moscow could irk other creditors, and make an agreement harder.
Others will join hryvnia and rouble in FX sin bin 6 February 2015 Ukraine’s currency plunged 30 pct in a day. Russia’s is down by half since July. Both are stuck in vicious circles, where local inflation and devaluation reinforce each other. In a disinflationary world where capital is flighty, others could easily fall into the same spiral.
Ukraine crisis forced into suspended animation 29 December 2014 Markets worried about Europe’s economy in 2014. They will worry about Europe’s security in 2015. EU sanctions over Ukraine will weigh heavily on Russia’s economy. A lot depends on Vladimir Putin, but Europeans need to define what they want sanctions to achieve.
European defence wakes up to new reality 9 September 2014 Conflict in Ukraine is changing national security policies. The post-1989 era of shrinking defence budgets is ending. Countries including Sweden and Poland are increasing spending. Rallying European defence stocks anticipate an enduring shift.
Investors decide not to worry about the world 1 September 2014 The demise of the post-Cold War vision of Europe? Not a big problem, markets say. Nor do investors see the rise of Islamic State, arguably the biggest threat to Middle East peace in decades, as their issue. The financial indifference is defensible, but increasingly precarious.
Superpowers reclassify trade from end to means 11 August 2014 Before the 2008 crisis, leaders from Washington to Beijing mostly believed more trade creates greater prosperity. Trade liberalization was a goal in itself. That has changed, as Russian sanctions make clear. Governments are increasingly treating trade as a political lever.
Business faces tough adjustment to post-MH17 world 21 July 2014 Western governments are rounding on Russia after the crash of MH17. Sanctions against the country will be toughened, regardless of business not being ready for a prolonged economic conflict. Obstinate Russian bulls should be prepared to pay the price of escalating tensions.
Gazprom/Ukraine dispute is proxy for Putin’s whims 16 June 2014 The Russian energy group will deliver only pre-paid gas to Ukraine, after talks on $4 bln of overdue bills collapsed. Combine that with renewed hostilities by Russian separatists in the east of the country, and markets were premature in believing that the Ukraine crisis has ended.
Rob Cox: Solving America’s homegrown Putin dilemma 6 May 2014 Critics say that Obama’s targeted economic sanctions against some Russian oligarchs smack of appeasement. Yet silence prevails when it comes to a Nevada tax scofflaw surrounded by vigilantes. If the U.S. can’t uphold the rule of law at home, it can have no credibility abroad.
Sanctions on Russia will cost less than inaction 17 April 2014 European leaders blame Russia for the takeover of Ukrainian cities by armed separatists. Yet they’re refraining from further sanctions because it’s not a full-blown invasion. The wavering and waiting will only increase the final price to be paid for Vladimir Putin’s actions.
Ukrainian rate rise is a sign of desperation 15 April 2014 With Russia squeezing an already feeble economy, it will be tough to avoid meltdown. A steep interest rate hike can only delay woes. Since impoverished Kiev cannot count on either citizens ready for huge sacrifices or massive Western financial support, Russia has the upper hand.
U.S. stalls IMF reforms at risk of own ambitions 14 April 2014 Finance ministers meeting in DC blasted Congress’ refusal to back more lending power for the fund and a bigger voice for the likes of China and Brazil. Harsh words alone won’t do much. But votes against Ukraine loans and other plans would inflict a high price on foot-dragging.