A reported 0300 GMT deadline, which Russian forces denied had been issued, for Ukraine’s troops to disarm in Crimea or face the consequences has passed without incident and in the last hour President Vladimir Putin has ordered troops that took part in military exercises in western Russia to return to base.
That has helped lift the euro but the situation remains incredibly tense. Russia’s stock market is up a little over two percent and the rouble has found a footing but they are nowhere near clawing back Monday’s precipitous losses.
The West may have no military card to play – and its ability to impose meaningful sanctions is untested as yet – but the markets reminded Putin in no uncertain terms yesterday that there is a price to pay for war mongering.
The rouble plunged, Russian stocks dropped 11 percent and the central bank raised interest rates by a full point and a half and then blew $12 billion of its reserves trying to prop up the currency, hardly an ideal policy response for an economy that is already struggling. If in the longer term foreign investment dries up things could get quite nasty.
NATO allies will hold emergency talks on the crisis, for the second time in three days, following a request from Poland which has taken a more robust stance against Russia than some of its European peers. Kiev’s U.N. ambassador said Russia had deployed roughly 16,000 troops to Crimea since last week.