Stranded jets are least of plane lessors’ problems 14 Apr 2022 Big fleet-owners like AerCap may have to write off $10 bln of planes trapped due to Russian sanctions. Ultimately, though, insurers should cover their losses. A bigger brake on the aircraft-leasing industry’s rapid ascent is the rising cost of debt from jittery lenders.
Covid shuts down China, Baltic lessons for Germany 14 Apr 2022 As Shanghai grapples with a coronavirus outbreak and almost one-third of the country’s population is under lockdown, Breakingviews columnists discuss the impact on China’s economy in this Viewsroom podcast. Plus, tiny Lithuania shows European countries how to give up Russian gas.
Russian misinformation will target its economy too 12 Apr 2022 Sanctions may lop as much as 15% off output this year. But Kremlin propaganda and a media crackdown will keep negative GDP and other numbers hidden. That gives extra weight to unorthodox economic indicators like household budgets, freight traffic and online food sales.
Fertiliser makers face long wait for free lunch 11 Apr 2022 Soaring gas prices are making products of crop nutrient producers like Norway’s Yara and Austria’s Borealis unaffordable for farmers. Subsidising the companies might be the least bad way to avoid a food inflation crisis. Waiting for grains to fail will store up bigger problems.
Nickel deal upheaval is unfair but reasonable 11 Apr 2022 IGO’s $820 mln bid for miner Western Areas was derailed by KPMG, prompting the buyer to increase its offer by 15%. It’s unclear whether war in Ukraine will alter the nickel market longer-term. Even so, it’s refreshing to see an adviser ditch the usual rubber stamp.
Putin’s finances can survive a European energy ban 8 Apr 2022 The Russian president may cut off gas to Europe, or even face a hydrocarbon export freeze himself. That could mean up to $50 bln less annual revenue, yet Moscow’s reserves and high oil prices will cushion the blow. An embargo would hurt Russia, but not bring Putin to his knees.
China’s Russian energy pause looks very temporary 8 Apr 2022 Companies are holding off new oil purchases to avoid stumbling into secondary sanctions. But the Chinese are top owners of Russia’s key gas export facilities in the strategic Arctic. Beijing has a strong incentive to resist disruption to its long-term energy security plans.
Telegram’s Russia performance is a one-man show 7 Apr 2022 Pavel Durov’s messaging app has resisted President Vladimir Putin’s edicts and survived them. The app’s popularity has surged, setting it up to double its $30 bln valuation. Yet for skeptics of transparency at Twitter or WhatsApp, Telegram arguably presents even starker risks.
Rouble’s strength is sign of Russia’s weakness 6 Apr 2022 The Russian currency has appreciated 70% against the dollar since early March. Capital controls, 20% interest rates, and forced conversion of export revenues have been enough to push it up in very thin trading volumes. The rebound is a sign of economic woes, not resilience.
Ukraine should be rebuilt without Russian money 6 Apr 2022 Reconstruction may cost as much as $200 bln, more than Europe’s post-WW2 Marshall Plan in today’s money. Even if Kyiv wanted Russia’s roubles, Western finance will keep Ukraine in Europe’s orbit. Moscow’s main penance for the carnage will be in the form of long-term sanctions.
Time for Europe to break energy sanctions taboo 4 Apr 2022 Alleged Russian atrocities against Ukrainian civilians are set to trigger a harsher EU response. Dependency on Russian oil and gas makes Germany and others reluctant to back a full energy embargo. Taxing hydrocarbon imports is a halfway-house option that still hurts Moscow.
Putin’s gas April fool masks ulterior motives 31 Mar 2022 The Russian president told importers to buy Moscow’s gas in roubles but seems to have devised a way for them not to. The storm in a teacup helps Putin look tough, and Europe’s leaders brace citizens for tough times. It may also have helped Russia sell more gas at higher rates.
China jitters, energy decoupling and Russian gold 31 Mar 2022 The war in Ukraine is spurring investors and governments to act fast. In this Viewsroom podcast, Breakingviews columnists discuss foreign cash fleeing Beijing, the West’s rapid plan to de-Russify its energy mix and Vladimir Putin’s options for his $140 billion gold chest.
Sloppy sanctions will blunt themselves 31 Mar 2022 Their design allows Europe to keep buying Russian energy, and Washington’s focus is belatedly turning to spillover effects on poorer economies hit by spiking prices for wheat and oil. Rising resentment among innocent bystanders will reduce Western sanctions’ future effectiveness.
Capital Calls: Chip supply chain bites own tail 31 Mar 2022 Concise views on global finance: Semiconductor factories rely on machines made by ASM International. Paradoxically, the firm is having trouble finding the chips it needs. Untangling the mess will take a while.
EU’s Ukraine currency fix is a problem best shared 29 Mar 2022 The ECB wants the European Union to guarantee potential losses when Ukrainians fleeing the war change their currency into euros. A rival plan would leave this up to national governments. The pooled scheme is much more likely to give Ukrainians hope in the value of the hryvnia.
Germany’s oil embargo block is short-sighted 29 Mar 2022 Berlin is opposing a European ban on Russian energy. A gas embargo would take months to manage. But stopping oil imports now would be doable, while depriving Moscow of resources to fund the war. And Germany could afford the economic price.
Russia’s gold reserves buy Putin a few options 28 Mar 2022 The Russian leader has a $140 bln stash of the yellow metal. Using it, however, can require shell companies and middlemen. Putin’s regime may have some experience helping Venezuela turn bullion into euros. Though U.S. prosecutors will give chase, the gold trail is hard to follow.
Capital Calls: Renault out of Russia 24 Mar 2022 Concise views on global finance: Dire prospects for the sanctioned economy make the French carmaker’s decision to leave rational, but costly.
On the Ukraine refugee crisis, watch Canada 22 Mar 2022 The country that claims the second-largest Ukrainian diaspora has already done more than its southern neighbor to help those fleeing war. Unlike trade, immigration is one area where Ottawa has clout. Canada could prove an example to countries far removed from the crisis.