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By Taras Kuzio of the University of Alberta

Vladimir Putin, Russia’s president, has tough decisions to make this week that will have a profound impact on his legacy and on Russia’s future. His two choices are both unpalatable for the anti-Ukrainian strategy he has pursued since last November. Then, he led Viktor Yanukovich, Ukraine’s president at the time, to turn away from Europe, supplied weaponry for Ukraine’s security forces used against protesters, occupied Crimea and launched a proxy war to break up Ukraine by detaching the so-called “New Russia” (Tsarist Russia’s name for east Ukraine). Continue reading »

By Timothy Ash of Standard Bank

Ukraine, along with Georgia and Moldova, has signed far-reaching free trade and association agreements with the European Union. This is a landmark agreement for Ukraine and will be transformational.

Petro Poroshenko, Ukraine’s president, has indicated that his country aims for EU membership but this is a long-term goal, likely 10 to 15 years away at least. Ukraine is realistic and understands the changing politics in the EU, which goes against further enlargement as nationalism builds in EU member states. But as with Turkey, the EU accession process is more important than the end result. The process will transform Ukraine by providing a key anchor for reform. It will enable Ukraine to adapt to European core values including the rule of law, democracy and a market economy. This is what the Maydan demonstrations were all about. Continue reading »

Getting caught up in a war zone ranks among the worst-case scenarios for an oil company. This has happened to Royal Dutch Shell in eastern Ukraine, where heavy fighting between pro-Russian separatists and Ukrainian military forces continues.

Shell has a hydrocarbons production-sharing agreement at the 8,000 sq km Yuzivska field, which lies across Donetsk and Kharkiv regions. A map of the field shows it covers Slovyansk, the heart of the pro-Russian military uprising.

Such proximity has affected Shell’s Ukraine operations, but only up to a point, according to the company. Simon Henry, Chief Financial Officer said on Bloomberg TV in early June that the oil giant is taking “time out on the actual drilling activity on the ground”, for security reasons. Continue reading »

By Dalibor Rohac of the Cato Institute

Can the European Union help Ukrainians get their country back on track? Notwithstanding the threat the country faces from the east, the bulk of Ukraine’s problems are domestic: lack of economic growth and employment opportunities, rampant corruption, mismanagement of public funds and burdensome regulation.

In the late 1990s and early 2000s the prospect of EU membership served as an impetus for radical reforms across central and eastern Europe. A credible timeline for joining the Union would certainly improve the prospects for similar reforms in Ukraine. On the other hand, given the EU’s internal problems and the current state of disarray in Ukraine, European leaders are not keen to rush into accession talks. Continue reading »

As international budget airlines begin to make headway in the Russian market, Aeroflot has launched its own version of easyJet. Passengers crammed aboard the maiden flight from Moscow to – guess where? – Crimea on Tuesday were waved off by Dmitry Medvedev, Russia’s prime minister. Continue reading »

With pressure from the east piling up, Kiev’s pro-western government is shifting gears to more swiftly integrate its vast but financially-troubled energy sector with the west.

Arseniy Yatseniuk, Ukraine’s prime minister, said on Wednesday his government had decided to unbundle Naftogaz, the debt-laden state gas and oil company, into separate domestic supply, transit and storage companies. Continue reading »

By Taras Kuzio in Dnipropetrovsk

Reported moves by Ukraine this week to leave the Moscow-led Commonwealth of Independent States merely underline the result of Sunday’s elections: the country is now leaning overwhelmingly towards Europe. Continue reading »

By Taras Kuzio of the University of Alberta

Ukraine is set to hold its sixth presidential election on Sunday with chocolate magnate Petro Poroshenko riding high ahead of his two rivals: Yulia Timoshenko, a former prime minister and a political prisoner under the recently deposed regime; and Serhiy Tihipko, a defector from the regime’s ruling Party of Regions. In presidential elections held four years ago Timoshenko and Tihipko came second and third, respectively. Continue reading »

By Demetrius Floudas of Immanuel Kant Baltic Federal University, Kaliningrad

Amid the growing political tensions between Russia and the West, the world’s top economists and politicians are unanimous that the Russian economy will get worse and worse under new waves of sanctions.

But none of them mention that Russia is just as likely to hurt itself with its own damaging monetary policy. Continue reading »

By Ben Aris of bne

The shouting match between west and east continues but the Russian stock market is up sharply this week, as President Vladimir Putin travels to China where he is expected to sign a string of big investment deals. Continue reading »

While the government in Kiev tries in vain to pacify the pro-Russian military uprising in the eastern regions of Ukraine, new challenges are arising in the far west of the country. The 150,000-strong Hungarian minority of Transcarpathia region is demanding more rights – including greater autonomy and dual citizenship – and Budapest is supporting them against Kiev.

On Friday, Viktor Orban, the Hungarian prime minister, said that ethnic Hungarians in neighbouring Ukraine should be given political autonomy. “Ukraine can be neither stable nor democratic if it does not give its minorities, including Hungarians, their due. That is, dual citizenship, collective rights and autonomy,” Orban said. Continue reading »

By Taras Kuzio of the University of Alberta

The controversial referendums held in Donetsk and Luhansk on Sunday will have repercussions inside and outside Ukraine. The country’s next president, to be elected on May 25 or two weeks later if it goes to a second round, has three unpalatable options. Continue reading »

Welcome to Ukraine. You’re running a rickety business, mainly cash-in-hand, that has a big gas bill and is losing money. Your shady Uncle Vlad says he will give you cheaper gas, lend you money on suspiciously favourable terms, and perhaps see his way to giving your workers an extra something in their pay packets. In return, all you have to do is back him up in family disputes in perpetuity. Meanwhile Christine, your steely-eyed bank manager, wants you to turn down the thermostat in your offices, lay off half your staff and stop fiddling the books.

 Continue reading »

The International Monetary Fund has slashed its growth forecast for Russia for the second time in less than a month as international sanctions threaten to tip the already weak economy into recession.

Russia’s economy is on track to grow by just 0.2 per cent this year, rather than the 1.3 per cent it forecast earlier this month, the IMF said on Wednesday, warning that further downgrades were likely unless the Ukrainian crisis abated. Continue reading »

By Timothy Ash of Standard Bank

The US government rolled out another round of sanctions on Russia today – its third – affecting seven individuals and 17 banks and companies in addition to the 30-odd individuals and Bank Rossiya sanctioned on March 17 and 21. These are first stage (individuals) and second stage (banks/corporates) sanctions and this time there was also a sniff of third stage sectoral sanctions, with restrictions placed on the export of high tech defence goods, although the assumption is that these were limited anyway.

The list of individuals is again fairly significant, capturing yet more of the Kremlin’s elite, those nearest and dearest to President Vladimir Putin. Continue reading »