Ukraine

Ukraine central banker exit is nail in reform hope

2 July 2020

Governor Yakiv Smoliy quit, citing political pressure. He tamed inflation and stood up to the former owners of nationalised PrivatBank. His resignation scuppered a bond issue and puts a $5 bln IMF loan at risk. Opaque vested interests are winning out over transparency in Kyiv.

Ukraine bank battle pits oligarch vs. reformers

18 December 2019

Ukrainians central to President Donald Trump’s impeachment inquiry are busy at home too. The billionaire who owned PrivatBank when a $6 bln balance sheet hole was found is unlikely to get the lender back. But any deal could undermine antigraft reforms and threaten foreign aid.

Central banks’ plain talking has perils

28 May 2019

Monetary policymakers increasingly want to speak directly to the public, partly to defend and justify their independence. A conference in Ukraine showcased this desire – but also the resulting imperative to speak more simply. Stripping away nuances and caveats may backfire.

Next Ukraine leader will inherit unfunny problems

18 April 2019

A comedian whose TV character accidentally becomes president is the front runner to win Sunday’s election and take charge of securing billions of dollars in aid. To unlock the money, Kiev must satisfy the IMF it is tackling corruption. It’s a challenge where life may imitate art.

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.