Shots were fired at an international team of monitors in Crimea over the weekend, violence flared in Sevastopol as thousands staged rallies and Angela Merkel, who perhaps has the most receptive western ear to Vladimir Putin, rebuked him for supporting a referendum on Ukraine’s southern region joining Russia. But in truth we’re not much further forward or backwards in this crisis.
The West from Barack Obama on down has said the referendum vote next Sunday is illegal under international law but it’s hard to put the genie back in the bottle if Ukraine’s southern region chooses to break away. The best guess – but it is only a guess – is that barring an accidental sparking of hostilities, there is not much percentage in Russia putting its forces in Crimea onto a more aggressive footing in advance of the vote.
Euro zone finance ministers meet and are joined by their non-euro counterparts for an Ecofin on Tuesday. They have the mammoth task of finalizing everything on banking union that was set out in principle by their leaders at a December summit, since when not much has happened.
Intractable issues such as who decides when a bank is failing, how a decision is taken to wind down a failing bank and how long it will take to build up a fund from bank levies to pay for failing lenders all have to be sorted out, as does who picks up the bill in the meantime. Plan A was for the fund to be built up over 10 years and then be pooled but critics say that leaves the bloc’s governments exposed for far too long.
Policymakers agreed last year that the ECB will be the single supervisor for all euro zone banks from November. But talks on a single European agency to wind up or close failing banks, and on a single fund to back it up, are ongoing and the EU finance ministers and European Parliament must reach a deal this week or run out of time before May elections and then face months of delay. Sounds like it could be a marathon couple of days.