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from MacroScope:

A question of gas

Vladimir Putin will meet senior Russian government officials to discuss Russia's economic ties with Ukraine, including on energy after state-controlled natural gas producer Gazprom said Kiev missed a deadline to pay a $2.2 billion bill.

In previous years, gas disputes between Moscow and Kiev have hurt supplies to Europe. The Ukraine government has said it would take Russia to an arbitration court if Moscow failed to roll back gas price hikes.

U.S. Secretary of State John Kerry accused Russian agents and special forces of stirring separatist unrest in eastern Ukraine, saying Moscow could be trying to prepare for military action as it had in Crimea. Armed pro-Moscow protesters occupied Ukrainian government buildings in two cities in the largely Russian-speaking east.

Speculation is rife that Greece is about to issue its first bond in four years as soon as today though our sources have not supported this and the finance minister has said he is in no rush.

from MacroScope:

Ukraine inching back to the brink

Pro-Moscow protesters in eastern Ukraine took up arms in one city and declared a separatist republic in another yesterday and the new build-up of tensions continues this morning.

The Kiev government has launched what it calls “anti-terrorist” operations in the eastern city of Kharkiv and arrested about 70 separatists. Moscow has responded by demanding Kiev stop massing military forces in the south-east of the country.

from The Great Debate:

Putin’s new ‘values pact’

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Now that Russia President Vladimir Putin has swallowed Crimea, the question becomes: What if the peninsula doesn’t satisfy his appetite for new Russian territory? What if the only thing that will satiate his hunger for power is the goulash known as eastern Ukraine? Or does he then move on to Moldova, and then on and on?

Indeed, while the world watched the protests in Kiev and the Sochi Olympics last month, the Moldovan territory of Gagauzia quietly held a referendum about whether or not to join Russia if the rest of the country opts for stronger ties to the European Union. Its citizens, just like those in Crimea, have argued that they would be economically better off on Putin’s planet, rather than as meager satellites in the Western solar system.

from MacroScope:

Osborne stakes out election ground with little fiscal leeway

The annual UK budget is always a big set piece but it’s hard to remember one where there have been fewer advance leaks – indicative of a steady-as-she-goes approach by George Osborne.
Having put so much political capital into reducing the deficit, to switch now at a time when the economy is recovering strongly would be politically risky. And with debt falling only slowly there is little fiscal leeway.

That’s not to say this isn’t a big political moment. Yes there is the finance minister’s autumn statement and another budget before May 2015 elections but this is the moment when the narrative for the economy and Britons’ wellbeing is staked out.

from Global Investing:

Iran: a frontier for the future

Investors trawling for new frontier markets have of late been rolling into Iran. Charles Robertson at Renaissance Capital (which bills itself as a Frontier bank) visited recently and his verdict?

It's like Turkey, but with 9% of the world’s oil reserves.

Most interestingly, Robertson found a bustling stock market with a $170 billion market cap -- on par with Poland - which is the result of a raft of privatisations in recent years.  A $150 million daily trading volume exceeds that of Nigeria, a well established frontier markets. And a free-float of $30 billion means that if Iranian shares are included in MSCI's frontier index, they would have a share of 25 percent, he calculates.

from The Great Debate:

The other Egyptian crisis

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Like most artists, I often wonder what art’s place is in a world that seems consumed by violence during these times of social upheaval.

It frequently seems like hell is breaking loose in the world while I work in the serenity of my art studio in New York. Like most people, I’d rather believe that what takes place outside of my comfort zone is only a fiction, that the terrible images and footage of people suffering are all fabricated. However, my daily conversations with my mother in Tehran are my constant reminder of how removed I am from reality. Indeed it is I who lives in a fiction, not them.

from The Great Debate:

IAEA conduct complicates Iran nuclear deal

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The world powers in November reached an interim deal with Iran to freeze and even roll back a portion of its nuclear program in exchange for some sanctions relief. The arrangement went into effect on Jan. 20 and is set to expire in six months. Another interim deal may be signed then, according to the agreement's "Joint Plan of Action," but the proposal calls for a comprehensive long-term solution by late January, 2015.

Though Iran is often painted as the only party at fault here, the situation is far more complicated. The International Atomic Energy Agency (IAEA) and even some of the “P5+1” powers -- the five permanent members of the United Nations Security Council, the United States, Britain, France, Russia and China, plus Germany -- that are now negotiating with Iran, are also guilty of misconduct and unprofessionalism.

from The Great Debate:

The shale factor in U.S. national security

The boom in domestic shale oil and gas production has increased U.S. prosperity and economic competitiveness. But the potential for this to enhance our national security remains largely unrealized.

The shale surge has boosted production by 50 percent for oil and 20 percent for gas over the last five years. Yet our political leaders are only just beginning to explore how it can help further national strategic interests.

from MacroScope:

Davos Day Two — Rouhani, Lew and Lagarde

Day one in Davos showed the masters of the universe fretting about Sino-Japanese military tensions, the treacherous investment territory in some emerging markets and the risk of a lurch to the right in Europe at May’s parliamentary elections which could make reform of the bloc even harder.

Today, the focus will be on Iranian President Hassan Rouhani (and his main detractor, Israel’s Netanyahu). Presumably he’s there to woo the world of commerce now sanctions are to be relaxed in return for Tehran suspending enrichment of uranium beyond a certain level. Anything he says about Syria’s peace talks, which have so far been more hostile than conciliatory, will instantly be headline news.

from David Rohde:

Dooming the Syria talks before they begin

The United States won a short-term diplomatic victory over Iran this week. Under intense pressure from American officials, U.N. Secretary-General Ban Ki-moon withdrew an invitation for Iranian officials to attend the Syria peace conference.

Disinviting Tehran is the latest example of the Obama administration’s continual search for easy, risk-free solutions in Syria. As the conflict destabilizes the region, however, Washington must finally face the hard choice: Either compromise with Iran, or decisively support and arm the rebels.

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