The economy of Ukraine has been in a terrible shape anyway. And now with the ongoing turmoil it might get worse, much worse. This is worse than the Greece, Spain scenarios... Not EU member, but the effects could propagate. Article on CNN: http://money.cnn.com/2014/02/25/news/economy/ukraine-financial-rescue/index.html?hpt=hp_t3
Would be interesting to see who are the major bond holders - Russian banks, EU banks or a mix of the two. Would be 'funny' if Cypriot banks had significant exposure. I suspect the IMF/EU/US etc. will cobble together some package primarily for geopolitical reasons (not financial ones).
Haven't they just had a civil war to give Russia the finger? I expect the EU will help so that they don't turn back to Russia.
ZH is reporting that a Russian ship has landed APC's in Sevastopol (port town on the Crimean sea) and the town has installed a pro-Russian mayor. http://www.zerohedge.com/news/2014-02-25/meanwhile-main-square-sevastopol
This is a good article on the situation. http://www.stratfor.com/weekly/ukra...0140225&utm_term=Gweekly&utm_content=readmore In summary Ukraine owes money to the West, Russia has been helping out financially and with cheap gas, the EU won't help out financially but the IMF may do with strings attached. The Ukraine is just a pawn in the game in which Russia is, for the moment, in the slightly stronger position. As usual, (quelle surprise) the MSM is telling only the part of the story we are meant to hear.
They really don't like it being called 'the' Ukraine.... its a throwback to when it was "The Ukrainian Soviet Socialist Republic" Things are not going well there, that's for sure. My girlfriend is Ukrainian and has been telling her mum to take her money out of the bank since these protests began. She holds it in USD, so its safe from a collapse of the hyrvnia, but it sure wont be safe if they decide to do a bail in. Hopefully now she will listen before it is too late. Apparently finding Euros or USD's is next to impossible on the streets at the moment.
Excluded. It's not just the cost, it's the resources that are an even bigger problem. Most of their gas comes from Russia and if Russia stops delivering, they're in a terrible danger. Secondly: the Ukraine is allegedly begging the IMF & EU for funds (money in the billions). Last year they agreed on help from Russia, but the latter has stopped the funding. Poor economy, 45 million people, political turmoil. Bank runs are already occurring - I've read from various sources. And they're intensifying controls at the border so that people don't bring much foreign currency or gold out of the country. I see a tremendous socio-economic crisis in the making. I think by the summer we'll see more riots, bank runs, political turmoil and perhaps IMF-EU-Russia hostilities. It might not take that much time, the problems might escalate in March already. I say: watch the news on Ukraine. March could be another ugly month as economically, financially they're crashing. It's inevitable. They have insufficient funds and Russia will most likely cut the delivery of gas. I suppose the pipelines are built in such a way that the rest of Europe won't suffer. If not, then it might affect other countries as well.
I reckon the EU would supply Ukraine with energy from another source if need be but even with a good trade deal it would cost more than for what Russia supplies it.
Unless things have changed in the last year or so, Russia cannot bypass Ukraine for nat gas delivery. My understanding is that they are building an alternate pipeline, but I do not know what stage it is in.
Seems that way. The GF (with some help from me) convinced her mum to take her money out of the bank as a precaution... the balance is in USD and she requested it yesterday but will have to wait over a week to pick it up from the bank. It wont be surprising at all if after a week she still wont be able to lay hands on her money.
There are multiple pipelines that are under construction and multiple existing pipelines. I don't know how complete this map is: http://www.mappery.com/maps/Europe-Proposed-Natural-Gas-Pipelines-Map.gif I still think that even if Russia blocks the gas to the Ukraine, otherpipelines could still transport gas across the Ukraine to the rest of Europe (these simply pass through). But this is just my theory, I don't know how they work in reality.