Reuters blog archive
from The Great Debate:
In the three weeks since Ukraine formally suspended talks aimed at signing an Association Agreement with the European Union, two important facts have become clear.
First, it is now apparent that Ukraine's president, Viktor Yanukovich, had no effective strategy to resist intense pressure against the EU deal from Moscow. The Kremlin promised big cash loans, a gas discount and debt forgiveness, while explicitly threatening to block Ukraine's access to the Russian market and implicitly threatening to stoke separatism in regions of the country.
Second, as street demonstrations gain momentum in Kiev and other cities, it has become clear that a strong, diverse and increasingly vocal plurality of Ukrainians will not accept their country's continued isolation from the West. The authorities have confronted street protestors with shocking violence, and have offered no significant political concessions. Yet the prospect of real reform driven by the EU association has now become a key symbol for Ukraine’s national identity.
Though these two basic dynamics may appear to confirm the cliche of Ukraine "caught between East and West," Ukrainians themselves do not see it this way.
Ukraine continues to top the European worry list.
Monday demonstrated how quickly the financial side of the equation can spiral out of control. The hryvnia currency slumped and the cost of insuring against Ukrainian default soared, forcing the central bank to intervene and urge its citizens not to spark a bank run.
Having turned its back on the EU, Kiev must find more than $17 billion next year to meet gas bills and debt repayments. Presumably Russia will have to help out if it is not to have a basket case on its doorstep.
from The Great Debate:
Russian President Vladimir Putin has had a good run over the past few months.
Edward Snowden, the former NSA contractor, landed on his doorstep, a gift from the PR gods. Agreement on Syria went from no chance to golden opportunity in the course of one afternoon. Forbes dubbed Putin the most powerful man in the world. Yet all these successes obscure a basic fact: Russia is running out of money.
To be fair, Russia is far from broke. Revenues continue to stream in from oil and gas sales, and Moscow maintains healthy financial reserves for future rainy days. Russia also dislikes budget deficits and keeps its foreign debt down -- a model of fiscal rectitude that most Western countries can only dream about.
The bombardment of European Central Bank interventions continues today. ECB chief Mario Draghi addresses the European Banking Congress in Frankfurt and any number of his colleagues break cover elsewhere.
Draghi shepherded a surprise interest rate cut earlier this month and consistently says that other options are on the table though yesterday he said that talk of cutting the deposit rate into negative territory to try and force banks to lend more was people “creating their own dreams”.
from India Insight:
India's top politicians Sonia Gandhi and Manmohan Singh have fallen out of the top 20 in Forbes' annual list of the world's most powerful people.
Gandhi, leader of India's Congress party, was No. 21 on the 2013 list, down from 12 last year. Prime Minister Singh took the 28th spot in the list, also losing nine spots since 2012.
from Ian Bremmer:
Vladimir Putin’s having a hell of a summer. Before writing the most talked-about New York Times op-ed in months, he embarrassed his chief rival, the United States, by harboring its most high-profile dissident, Edward Snowden. He then came out ahead on negotiations over what to do about Syria’s chemical weapons attack that killed 1,400 people. The general consensus is that Putin and Russia are winning.
But what, exactly, are they winning? Russia’s prize for conquering the summer isn’t power -- it’s constriction. In defending Assad, harboring Snowden, and preparing for the Sochi Olympics, Putin is actually just inviting more complications. This has been a summer of shallow wins for Putin as he puts his ego and personal quest for international legitimacy over his country’s best interests.
from Nicholas Wapshott:
The confusion surrounding the American response to the Syrian government gassing its own people has shocked foreign policy wonks. Here is Richard Haass, President of the Council on Foreign Relations, after the president threw the problem to Congress, then, facing defeat, handed negotiations with Bashar al-Assad to his nemesis Vladimir Putin: “The President has essentially allowed the red line in Syria to be somewhat ignored.” And here is Haass’s final verdict on the president’s dillydallying: “Words like ‘ad-hoc,’ ‘improvised,’ ‘unsteady’ come to mind. This is probably the most undisciplined stretch of foreign policy of his presidency.”
There is little sign the president has yet grasped the cost of contradicting all his top foreign policy advisors. Secretary of State John Kerry, National Security Advisor Susan Rice, and Defense Secretary Chuck Hagel were each asked for advice, then ignored. Obama appears oblivious to the fact that his fumbling over Syria has severely diminished his authority, even among close colleagues and his own party. He is under the impression that marching to the top of Capitol Hill and marching down again and backward flipping on decisive action against a despotic perpetrator of dastardly mass murder is simply a matter of “style.”
from David Rohde:
It started as “a new beginning” and ended as “America is not the world’s policeman.”
Between President Barack Obama’s historic 2009 address to the Islamic world in Cairo to his address to the American people on Syria last week, Obama has zigged and zagged on Mideast policy, angering supporters and detractors alike.
from John Lloyd:
The light on the discussions on Syria in Geneva between the U.S. and Russian foreign ministers is dim and flickering and may well be snuffed out. But at least there’s a light.
For the light to become brighter, world powers must declare war not on each other, but on noxious geopolitics. It is time to end the zero-sum game. World leaders are magnetized to its bare calculus: if you’re up, I’m down. It’s not a pleasant equation, but it’s terribly hard to give up.
from David Rohde:
Dictators have never looked so good.
Vladimir Putin is saving the United States from another Mideast military intervention. Bashar al-Assad promises to 'thin the herd' of jihadists and hold Syria together. And Egypt’s new strongman, General Abdal Fattah el Sisi, says he is sorting out the Muslim Brotherhood. With each passing month in the Middle East, it seems, authoritarianism grows more attractive.
Leaders described as “repressive” sound eminently reasonable. They promise to bring order to chaos without dirtying American hands. Putin’s op-ed article in the New York Times on Wednesday was the latest example.