Ukrainian government forces say they are preparing for the final stage of recapturing the city of Donetsk from pro-Russian separatist rebels after shelling its outskirts and making significant gains over the weekend.
The city faces increasing shortages of food, water and electricity. Vladimir Putin must now decide whether to leave the rebels to their fate or step up his support. Kiev said on Saturday it had headed off an attempt by Russia to send troops into Ukraine under the guise of peacekeepers accompanying a humanitarian convoy sanctioned by the Red Cross. Moscow dismissed the allegation as a “fairy tale”.
On a weekend telephone call, U.S. President Barack Obama and German Chancellor Angela Merkel agreed that any Russian intervention in Ukraine, even under purported ‘humanitarian’ auspices, without the express authorization of Kiev was unacceptable and would provoke “additional consequences.”
With Russia retaliating against western sanctions, Iraq teetering on the edge and Gaza and Libya little better, could this be the point at which all these world crises start to derail economic recovery?
The European Central Bank has clearly flagged that concern, saying the Ukraine crisis and tit-for-tat sanctions could pose a serious risk to the euro zone economy. The survey evidence is already showing a loss of confidence among business and investors which could lead to a new curb on investment.