Reuters blog archive
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.
Russia cut off gas supply to Ukraine in mid-June following more than two years of dispute on the price and said Kiev had to pay off large debts for previously-supplied gas before it would resume supply.
Putin also threatened to cut gas supplies to Europe if Ukraine steals from the transit pipeline to cover its own needs this winter. Any interruption to flows to western Europe, via Ukraine from Russia, would deal another blow to already struggling EU economies.
The two sides still differ over how to calculate Kiev's huge gas debt and the schedule for payments and Poroshenko has already said Ukraine will need help to pay the bill.
The big question of the week is whether financial market gyrations continue, worsen or calm. European stocks are being called higher at the open.
Greece has been effectively shut out of the bond market. If it and others on the euro zone’s southern flank come under persistent market pressure, in a way that hasn’t happened for two years, the onus on the European Central Bank to act will grow and grow.
Russian President Vladimir Putin and Ukrainian President Poroshenko are due to meet on the sidelines of the EU/Asia summit in Milan today to try to find a way out of the Ukraine crisis.
Germany’s Angela Merkel and French President Hollande will also meet the pair as part of a four-way contact group. The Kremlin has just said Putin and Merkel have "serious differences".
A two-day summit of EU and Asian leaders, which was going to be most notable for a meeting between the heads of Russia and Ukraine, risks being overtaken by financial market tremors which have spread worldwide.
There’s a good case that markets, primed with a glut of new central bank money, had climbed to levels which the state of the economies that underpin them did not justify. With the Federal Reserve about to turn its money taps off, investors seem to have woken up to poor growth prospects in much of the world.
France will submit its 2015 budget to the European Commission today and, after a respectable period of consideration, it is likely to be thrown right back.
Paris has confirmed it will yet again miss the EU’s debt limits, failing to achieve a budget deficit of three percent of GDP until 2017 four years after it should have done.
from The Great Debate:
How dangerous is Vladimir Putin?
Reuters Editor-at-Large Sir Harold Evans moderated a panel of experts searching for answers to that question at a Newsmaker event hosted at the company's Times Square offices in New York on Oct. 14. The panel was comprised of New Yorker Editor David Remnick, author of the award winning Lenin's Tomb, former chess champion and Russian opposition leader Garry Kasparov, Russian-American journalist Masha Gessen and Roger Altman, who served in the Treasury Department under presidents Jimmy Carter and Bill Clinton, and is currently chairman of investment advisory firm Evercore.
The conversation ranged over topics including Putin's personal psychology, what threat Russia now poses to the world economy, and whether his regime might be toppled from within.
The predictable battle lines were drawn at the G20/IMF meetings in Washington - most of the world urged Europe to do more to foster growth while Germany warned against letting up on austerity. The argument will doubtless be reprised today when euro zone finance ministers meet in Luxembourg.
Given a ghastly run of German data last week and sharp cuts to its growth forecasts by the IMF and Germany’s economic institutes, Berlin’s stance looks increasingly odd but Finance Minister Wolfgang Schaeuble continued to make it abundantly clear he will not countenance any more public spending in the one European country that could really afford it.
By this time tomorrow, the anti-EU United Kingdom Independence Party is likely to be celebrating its first member of the Westminster parliament. Polls have just opened in the deprived seaside town of Clacton where the sitting Conservative lawmaker switched to UKIP and called a vote.
A second member of the ruling Conservative party has now defected to UKIP and will force another by-election before long leaving the party on tenterhooks over who might be next. Many fear they will lose their seats at the May 2015 general election as UKIP splits their vote.
from Global Investing:
Russia's equity market has always been cheap, argues USAA's Wasif Latif, but at present levels it is just too cheap to ignore. Russia's economic decline, driven by not only falling oil prices, its main source of income, but also Western sanctions over its intervention in Ukraine has caused a major sell-off that Latif and other asset managers believe is an overshoot. This has brought Russia's benchmark dollar-denominated RTS stock index to its lowest level since March and before that, a level not seen since Sept. 2009.
"We're not looking for it to go way up, but looking for it to go up from its near-death cheap to its normal-cheap condition," said Latif, head of global multi-assets at USAA Investments.
from Anatole Kaletsky:
Following the grim market response to European Central Bank President Mario Draghi’s latest monetary policy pronouncements, Europe is approaching another make-or-break moment comparable to the crisis of 2012. The summer quarter ended this week, and financial markets delivered their judgment on just how bad things are, pushing the euro down to its lowest level since September 2012. Europe’s quarterly stock market performance was the worst since the nadir of the euro crisis. The question is whether the miserable summer will give way to a milder autumn. Or whether the summer squalls will turn into a catastrophic tempest.
Given the absence of any decisive action at this week’s European Central Bank meeting, the answer will depend on three events in the month ahead: the Ukrainian elections on Oct. 26; the bank stress tests due to be finalized in late October by the central bank, and the judgment on French and Italian budget plans due to be delivered in outline by Europe’s political leaders at the Milan “growth summit” on Oct. 8 and then in detail by the European Commission at the end of the month.