Russia would pay steep price for Ukraine invasion 8 Apr 2014 The pro-Russian agitation in eastern Ukraine has rekindled fears of an intervention from Moscow. But even if Vladimir Putin is tempted, the economic implications will hopefully bring second thoughts. Any Russian invasion would spur costly sanctions and massive capital flight.
Ukraine needs gas efficiency more than imports 31 Mar 2014 Congress is debating speeding up U.S. gas exports to curb Russia’s sway over its former satellite. A cheaper solution lies closer to home. Ukraine is the world’s second most wasteful energy user. Merely matching Romania’s efficiency would slash Ukraine’s gas bill by two-thirds.
Ukraine bailout can work if politics are fixed 27 Mar 2014 The IMF has announced a $14-$18 bln aid package for Ukraine conditioned on medium-term reforms. Kiev will get emergency relief while pain is delayed. But the Fund’s third attempt to help will only work if Ukraine gets a stable and decent government after the May election.
Hugo Dixon: How EU can wean itself off Russian gas 24 Mar 2014 The Ukraine crisis has highlighted the EU’s dependency on Russian gas, although Moscow is even more dependent on exports. EU leaders want to intensify plans to diversify supplies. There will be a cost – either in cash or in the environmental impact. But it’s one worth bearing.
Ukraine defence more crucial than Crimean sanction 20 Mar 2014 Western leaders are still debating their response after Russia moved to annex the Black Sea territory. Their focus should instead be on preventing Vladimir Putin destabilising Ukraine. That requires tougher sanctions than previously discussed, and preparedness for economic war.
Ukraine rescue needs American Tea Party signoff 17 Mar 2014 Talk about irony. Obama will be the cheerleader for a $15 bln fund bailout of the embattled state. Yet the Republican right is still blocking an IMF overhaul agreed in 2010 giving extra power to the likes of China and Brazil. To get them to help Ukraine, the GOP has to budge.
EU’s Crimea sanctions only good as opening gambit 17 Mar 2014 Vladimir Putin won’t care much about the travel bans and asset freezes imposed by the EU on 21 Russian individuals. But these sanctions only make sense as a first-step response to Moscow’s actions in Ukraine. It’s now up to EU leaders to get serious about retribution.
Rouble hard to defend against Putin’s attacks 14 Mar 2014 The takeover of Crimea has sent the currency down, along with Moscow stock markets. The president’s erratic moves are hurting an already slowing economy, even before Western sanctions isolate Moscow. Soon even the central bank will find it hard to defend the rouble against Putin.
Edward Hadas: Russia and the unreliable West 12 Mar 2014 Ukraine has revived tensions between Russia and the West. The clash is geopolitical, but bad economics lurk in the context. Russia has suffered from two ideological imports, first communism and then ultra-free markets. Now it is harmed by Western easy money and capital flight.
Russia harms the BRICs and adds to global risks 12 Mar 2014 The intervention in Ukraine is bad for Russia’s own economy and will do further harm to emerging economies as they struggle with reduced capital inflows and weak exports. Investors are shifting to developed markets, increasing the risks there.
Russia, not Ukraine, is Gazprom’s real problem 7 Mar 2014 The 20 pct slide in the gas giant’s shares during the Kiev-Moscow spat looks like an overreaction. Gazprom has become less reliant on Ukraine as a transit point. Its valuation reflects its status as a Kremlin tool. A chillier investment climate in Russia is a bigger threat.
What Putin wants matters less than what he doesn’t 7 Mar 2014 The Russian president fears real democracy in Ukraine as much as at home. And he’s afraid of a disruption of trade and financial ties if Kiev turns towards the EU. If the U.S. and Europe want Putin to back down, they have to convince him that he’s wrong on both counts.
Bondholders will have to pay for Ukraine’s reset 5 Mar 2014 The country’s bonds keep sinking in spite of an upcoming IMF package. Creditors are facing either a soft debt rescheduling or more radical haircuts. The risks of austerity, devaluation and continued political uncertainty all point to the latter. Market prices still look rosy.
Markets too bullish on Putin’s mind games 4 Mar 2014 The Moscow stock market rose more than 5 pct after President Vladimir Putin seemed to tone down his rhetoric on Ukraine. After a 10 pct fall the day before, investors focused on the good news. They may have misinterpreted the Russian leader’s cryptic pronouncements.
Talk of Russian asset freeze is empty rhetoric 4 Mar 2014 The U.S. and Europe are mulling a freeze on the western assets of Russian officials to punish Vladimir Putin’s actions in Crimea. That would be impossible to do legally and fairly. Better address the core of the problem: banks’ eagerness to accept shady money from Russia.
Crimea could be spark for bigger Western selloff 3 Mar 2014 Russia’s intervention in Ukraine has hit global stocks. Investors are likely to pull even more money out of emerging markets. Their faith in developed equities, especially in Europe, has survived previous stumbles. But it’s now on shakier ground given how expensive shares look.
West can hurt Russia – if there’s a will 3 Mar 2014 The U.S. and Europe say Russia will pay a cost for its actions in Crimea. Markets contributed by sending Moscow exchanges down 10 pct. But Putin won’t be impressed until Europe reviews the two pillars of its relationship with Russia – finance and gas. That won’t happen overnight.
Ukraine crisis dents EU banks’ recovery plans 3 Mar 2014 Shares in France’s SocGen and Austria’s Raiffeisen have fallen sharply. European banks have been looking to Russia to juice up humdrum returns and/or weak capital positions. While Russian lenders like Sberbank are more at risk, the fallout could mess up a few turnaround plans.
Ukraine, the bailout Europe cannot shirk 24 Feb 2014 After triggering the end of the Yanukovich regime, the EU has a responsibility to help with Ukraine’s dire economy. It won’t provide all the needed $20 bln, but it can give the IMF political cover, while calming Russian anger. The ultimate goal has to be for Kiev to join the EU.
EU left with a few bad choices on Ukraine 19 Feb 2014 After clashes left more than 25 dead in Kiev, EU governments want sanctions. But economic measures would be crude. More important, Europe must first decide whether to try to keep on dealing with Ukraine – or to write off partnering with the current regime as a lost cause.