By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The last day of the year and all is quiet – but not for long.
Unless the price of oil bounces markedly or Vladimir Putin walks away from Ukraine thereby loosening western sanctions – both unlikely – Russia could be heading for a serious economic fall. Reserves are being burned defending the currency. They are sufficient for now but without hefty tax increases, public spending cuts and/or a higher pension age the outlook for 2016 and beyond is much gloomier.
Germany’s ZEW index will give an indication of whether the fourth quarter will be any better for Europe’s largest economy after it barely escaped recession in Q3. In October, the index dropped to its lowest level in nearly two years.
Ukraine's currency shed nearly 5 percent on Monday after a weekend that saw the heaviest shelling in a month of the main rebel stronghold in the east and signs that Moscow had dispatched troops and tanks to reinforce separatists. The prospect that a two-month-old ceasefire could collapse has helped drive the currency 12 percent lower since the central bank abandoned an unofficial peg a week ago.
Negotiations with Iran over the future of its nuclear program have not even concluded yet some members of Congress are preparing to manufacture a political crisis over a deal. Their beef? President Barack Obama may initially bypass Congress and suspend sanctions imposed on Iran to make a deal possible and only later ask lawmakers to end them permanently when it is determined that Iran has complied fully with its obligations under the deal.
Russian and Ukrainian energy ministers are due to meet European Energy Commissioner Guenther Oettinger in Brussels after presidents Petro Poroshenko and Vladimir Putin said they had agreed on the "basic parameters" of a deal to get gas flowing to Ukraine again this winter.