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Russia brushed off the threat of western energy sanctions on Friday and pledged to press ahead with plans to build a new gas export pipeline that would strengthen its hold on European gas markets.

Russia is continuing work on the 2,500km South Stream pipeline that will carry gas across the Black Sea to southern and central Europe, Alexander Novak, Russian energy minister told a press conference in Moscow on Friday. Continue reading »

Ievgen Vorobiov, Polish Institute of International Affairs.

The four hour Q&A session of Vladimir Putin televised on April 17 was dominated by his vision for Ukraine. He cheerfully accepted congratulations on the “victory” in Crimea from a political opponent and benevolently corrected “hawkish” appeals of an ardent supporter. But the informal talk with Russian citizens, in my view, sent a direct message to the West: you either accept the way we deal with Ukraine or watch us wreak a much bigger havoc in the country. To make that message more palatable to the West, Putin alluded to Moscow’s involvement in the region as showing a “responsibility to protect”. Continue reading »

Lukoil has agreed to sell its stake in several oil projects in Kazakhstan to Sinopec for $1.2bn, in the latest of a string of Chinese investments in the country’s energy sector. The Russian company – the country’s largest private-sector oil producer – said the purpose of the sale was to “optimize Lukoil’s overseas hydrocarbon asset portfolio”.

But the deal is also symbolic of China’s rapid expansion in Central Asia, part of Russia’s traditional “sphere of influence”. Continue reading »

By Taras Kuzio

After the fall of president Viktor Yanukovich, the Euromaidan leadership turned to Ukraine’s eastern oligarchs to take charge of the Donbas region. Rinat Akhmetov, one of the world’s 50 wealthiest people, was offered the governorship of Donetsk, now at the centre of clashes between Ukrainian forces and pro-Russian separatists.

Akhmetov turned the job down and it went instead to Serhiy Taruta, a fellow billionaire who recently told the FT the region’s youth saw a “brighter future in integration with the EU” than in following Crimea into Russia’s embrace.

Akhemtov, however, has preferred to bide his time and trade his support with Kiev and Moscow. Continue reading »

By Guy Norton of bne in Zagreb

If there’s a subject guaranteed to provoke impassioned debate in Croatia, it’s golf. Millions of people around the world may regard the game as Scotland’s greatest gift to humanity after single-malt whisky, but in Croatia it’s more often seen as one of the darkest evils of global capitalism. Opponents of about 90 proposed golf course developments in the country are keen to characterise golf as the sport of choice for global property speculators willing to wreak long-term environmental damage on Croatia in pursuit of short-term profit. Continue reading »

By Tim Gosling of bne in Prague

Czech power utility CEZ said today it had cancelled a tender to expand the country’s Temelin nuclear plant. The move comes a day after the government made its strongest statement yet that it would not offer the €8bn-10bn project any public support.

State-controlled CEZ said it had informed the contending bidders – US/Japanese Westinghouse and a consortium led by Russian state nuclear agency Rosatom, as well as Areva of France, which had already been ejected – that the tender to build two additional 1,200 megawatt reactors at the plant had been halted. Continue reading »

There is no doubt that emerging market (EM) investors have cheered up considerably of late. Following a torrid January and February, virtually all asset classes in the EM universe appear – on aggregate at least – to be gaining in value.

The bellwether stock index, the MSCI EM index, is up 9.6 per cent from its low on February 5. EM sovereign bonds are yielding an average of 5.51 per cent, down 0.37 per cent since January 1. Local currency bonds are, in many cases, producing stellar returns sharpened by windfall currency gains. Indeed, some EM currencies are among the world’s best performers, with the Indonesian rupiah rising 7.81 per cent, the Brazilian real gaining 7.3 per cent and the Indian rupee climbing 2.8 per cent so far this year. Continue reading »

By Danylo Lubkivsky, deputy foreign minister of Ukraine

Putin’s aggression against Ukraine had the same effect on the world as the recent Ebola outbreak had on Africa. Everybody knew it was possible but nobody really saw it coming. Once it happened and the initial shock passed, efforts ensued to localise the pandemic. They are scattered at first, and then more sophisticated, but mostly beside the point, for one reason: Russia’s actions are even more irrational than Ebola. Continue reading »

Will he, won’t he… get it?

That was the question on Magyar political analysts’ lips on Monday – he being Viktor Orban, Hungary’s go-go, rapid-fire prime minister, “it” being the two-thirds parliamentary vote he most definitely covets for a “super-majority” again during his second term in office.

He’s on the brink – it depends on a few thousand votes cast outside the country or in other districts. But regardless of this, the one time anti-communist student firebrand is sure to be at the helm in Budapest for four more years, and still with a commanding parliamentary majority. Continue reading »

In the years before the crisis, Slovenia was touted as the Switzerland of eastern Europe, praised for its robust export-oriented economy, sizeable banking sector and hard-working citizenry, as well as its stunning Alpine scenery. Then the crash came and its banks racked up multi-billion euro shortfalls, exports plunged and allegations of graft started to surface. By 2013, this tiny former Yugoslav state was “the next Cyprus”, in line for an EU-IMF bailout and a possible eurozone exit.

Now it has bounced back again and on April 1, Slovenia issued a €2m tranche of bonds on the international markets, marking the fastest pace of debt issuance in its short history and ensuring it has more than enough funds for its full-year 2014 financing needs. Continue reading »

Russia’s shoppers are buying more goods online than ever before. E-retail sales have grown at a rate of around 26 per cent a year and 57 per cent of non-grocery retail spending is now made online.

This may seem odd for a nation that prefers to pay in cash and doesn’t have a reliable postal service, both typically important for e-retail. Attitudes to other payment methods are changing, however, and some home grown businesses have adapted their approach to suit Russian preferences. Continue reading »

Russia is rethinking investor friendly dividend reforms as the Ukrainian crisis weighs on its faltering economy. Rules introduced last year that would oblige state companies to put more of their profits in shareholders’ pockets may be shelved, according to a report out on Wednesday.

Russia has been pushing state companies to pay more generous dividends in an effort to improve the country’s investment image and boost interest in upcoming privatisations. Rules introduced in late 2012 setting a minimum 25 per cent pay out were a step in the right direction but, as often happens with Russian regulations, there was room for interpretation. Continue reading »

Simferopol airport: all change

Ukraine’s aviation market has been badly hit by the political turmoil surrounding Russia’s annexation of Crimea. Airlines have been forced to cut flights and adjust networks due to a significant decline in passenger traffic.

Mid-sized commercial carrier Dniproavia issued a statement on Monday saying it would “optimize the operations grid”. Continue reading »

Russian lawmakers are debating measures to restrict the distribution of foreign films shown at domestic cinemas in a move that reflects growing anti-western sentiment. The threat of a new Cold War is giving Hollywood the shivers.

Robert Schlegel, a member of the pro-Kremlin United Russia party, has tabled a parliamentary bill that would place a 50 per cent cap on the share of foreign-made films distributed at Russian cinemas. Deputies are expected to debate the proposals in the next couple of weeks. Continue reading »

By Ben Aris of bne

When he first assumed power in 2000, the press corps spent the first six months asking one question: “Who is Vladimir Putin?”

At first the media assumed he was a puppet of the oligarchs, handpicked by Roman Abramovich and Boris Yeltsin’s daughter Tatyana Dyachenko, who at the time were effectively running the country. But after Putin moved forcefully to sweep business from the corridors of power and return control of Russia to the centre, everyone had to recalibrate. Continue reading »