Financial markets perked up on Monday after Russia called off military exercises near the Ukraine border but was the confidence well founded?
NATO’s chief told Reuters there was a “high probability” Russia could launch an invasion of Ukraine where the government said it was in the “final stages” of recapturing Donetsk, the main city held by pro-Russian rebels, a battle that could be a decisive turning point in the biggest confrontation between Russia and the West since the Cold War.
Vladimir Putin must now decide whether to leave the rebels to their fate or step up his support. Thousands of Russian troops are still massed near the border and a Russian convoy of 280 trucks carrying humanitarian aid for Ukraine set off on Tuesday amid Western warnings against using help as a pretext for an invasion.
Thousands of people in eastern Ukraine are believed to be short of water, electricity and medical aid due to the fighting.
On the economic side of the ledger, stronger than expected retaliatory measures against western sanctions by Moscow – banning most food imports – will hurt a number of European countries and also isolate Russians from world trade to a degree unseen since Soviet times.