Ukraine’s shock decision to turn its back on an EU trade deal continues to reverberate with mass rallies on the streets of Kiev in protest at President Viktor Yanukovich’s decision.
To try to defuse tensions, Yanukovich issued a statement saying he would do everything in his power to speed up Ukrainian moves toward the EU. Is this another U-turn or mere semantics? The answer is important.
Kiev must find more than $17 billion next year to meet gas bills and debt repayments. Another sovereign meltdown is far from impossible.
Yanukovich is due to embark on a trip to China. Dare he go? And is the opposition cogent enough to threaten him? The call for a national strike will be an acid test.
After a week off, I’m in recap mode and there’s plenty to chew on.
The ratings agencies gave some interesting food for thought. The Netherlands lost its AAA status, leaving only Germany, Finland and Luxembourg in that exalted club in Europe. Moody’s raised Greece by two notches and S&P upgraded Cyprus, though both are still firmly in junk territory. And S&P followed Fitch by raising its outlook on Spain’s rating.
With France further downgraded last month the picture of southern Europe’s high debtors starting to close the gap on their northern counterparts (Germany excepted) is slowly gaining momentum.