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Is it war if no shots have been fired? The Ukrainians say so but Moscow, its grip on Crimea now pretty much complete, says it is merely protecting its people. The rest of the world and its financial markets watch on very uneasily.
There is virtually no chance of any western military response after Vladimir Putin declared he had the right to invade his neighbour – NATO expressed "grave concern" but did not come up with any significant measures to apply pressure on. But there will be a diplomatic and economic price to pay.
The rouble tumbled by 2.5 percent at Monday’s open and the central bank has already acted to try and underpin it, raising its key lending rate by 1.5 percentage points although the Russian economy is already in poor shape. The main Russian stock index has plunged by about 9 percent with Gazprom doing worse than that and safe haven German Bund futures have jumped.
Already the talk is of shunning Russia’s G8 summit later in the year. America’s John Kerry, who will visit Kiev on Tuesday, has put visa bans, asset freezes and trade isolation on the table, saying U.S. business may well want to think again about involvement in Russia. Putting pressure on Russia’s oligarchs could be one way of exerting leverage.
To most people, the idea of falling prices sounds like a good thing. But it poses serious economic and financial risks - just ask the Japanese, who only now finally have the upper hand in a 20-year battle to drag their economy out of deflation.
That front is shifting westward, to the euro zone.
Deflation tempts consumers to postpone spending and businesses to delay investment because they expect prices to be lower in the future. This slows growth and puts upward pressure on unemployment. It also increases the real debt burden of debtors, from consumers to companies to governments.
Euro zone policymakers like to talk. They often contradict each other at separate speaking engagements on the same day. But they have struck a chorus in recent weeks, asserting that deflation is not a threat.
Members of the ECB Governing Council have been particularly vocal, insisting they will not have to alter policy to counter falling prices.
The 18-country euro zone has had a rough ride in the past 6 years, and even with the glimmers of good news reaching the darkest corners of the debt crisis, the European Central Bank has been anything but ready to sound a crisis-over siren.
Right after ECB President Mario Draghi warned against undue optimism, the central bank has identified a new threat to the common currency's integrity - rounding up or down small change.
Ask investors about their minimum criteria when putting money into a country and rule of law comes pretty high. That’s one of the reasons why Turkey’s corruption scandal, and the reaction of the government in ousting hundreds of police officers, is so serious. The lira touched a record low on Thursday.
Today, parliament's justice commission will debate a draft law reforming the High Council of Judges and Prosecutors, which makes judicial appointments. Critics of the bill say it will give the justice minister significant influence over appointments, describing it as anti-constitutional and undermining the separation of powers.
When Mario Draghi, the president of the European Central Bank, told Der Spiegel magazine at the end of last year that "there was this perverse Angst" in Germany that things were turning bad, he caused an outcry in German media, already suspicious of his policies. What had perhaps slipped by Draghi is that the English word perverse can also mean kinky in German.
Was his outburst really helpful, a German journalist queried during the monthly press conference on Thursday, and the Italian tried to set the record straight.
Nonetheless, the European Central Bank is likely to sit tight at its policy meeting today. The Bank of England’s rate setters are also meeting but facing a very different set of problems.
A day after she was sworn in for a third term and a day before she attends an EU summit in Brussels, Chancellor Angela Merkel delivers a speech in the Bundestag lower house. She will then head to Paris in the evening for a meeting with French President Francois Hollande. That bilateral could be the moment that the seal is set on banking union, in time for the Thursday/Friday EU leaders summit.
In parallel, the bloc’s 28 finance ministers will meet in Brussels to try and finalise a common position on the detail. "For the acceptance of the euro on financial markets, the banking union is very important," Merkel said on Tuesday.
Decision day for Ukrainian President Viktor Yanukovich as he heads to the Kremlin seeking a financial lifeline while demonstrators in Kiev gather again to demand he steps down.
Vladimir Putin seems set to agree a loan deal, and possibly offer Ukraine a discount on the Russian natural gas.
It seemed he was the only game in town after an EU commissioner said the bloc was suspending talks on a trade agreement with Kiev. But yesterday, European Union foreign ministers said the door remained open, which in a way makes Yanukovich’s predicament harder.
Germany's Social Democrats voted overwhelmingly to join a "grand coalition" with Chancellor Angela Merkel's conservatives. The government will offer broad continuity with some tweaks, the reappointment of Wolfgang Schaeuble as finance minister testifies to that. But could it unlock some euro zone policy doors after three months of limbo?
The big item on the agenda of an EU summit late this week is banking union. What results will dictate whether the seeds of a future financial crisis have been sown. Thanks to our exclusive at the weekend, we know that the latest proposal will see the cost of closing down a euro zone bank borne almost fully by its home country while a euro zone fund is built up over 10 years.