Western leaders endless dilemma - What should we do now and who and what we have to deal with?
Russian markets might be buoyed a bit on Sept. 1 by a combination of factors:
First, no further significant escalation on the ground in Ukraine - albeit fighting continues unabated (note the attacks on Ukrainian coast guard vessels off Mariupol on Aug. 31) I used the word "escalation" now somewhat warily, as the United States and European Union has now set the bar so high in terms of Russian "escalation" that it likely will take a mega escalation to warrant much of a response from the EU (even for a "dead cat" bounce).
Second, the EU council meeting over the weekend generated an awful lot of hot air but nothing that specific in terms of real actions (eg sanctions) - a one week cooling off from EU leaders before contemplating more sanctions on Russia.
I thought the EU/US last signaled that they had a well calibrated sanctions model of what to do next with each Russian step "escalation" - but clearly this is a political problem at the heart of the EU. This really just revealed how weak the EU is now in foreign affairs matters, and specifically in dealing with a new and virile Russia - on the "move".
The mood music from the EU - and actually also the US administration - was "we really would rather this was not happening, and can we all not just be friends".
Putin devours weak and feeble EU politicians for breakfast - figuratively speaking my dear boy, figuratively speaking! Actually the relative silence from the White House was also deafening - aside from Susan Rice, its United Nations representative who gave another combative performance on Aug. 29.
Presumably U.S. President Barack Obama has his hands full with dealing with ISIS, and trying to figure out a strategy therein. One take out from my Washington, D.C., visit last week was the commentary from a number of current/former officials that actually on Ukraine there is a reasonable chance of a favorable outcome for the US in terms of securing a reform minded Ukraine administration - this is not Iraq, Syria and libya where there are few likely positive end games for the West.
But Ukraine likely needs a bit more focus/attention from the White House to secure a good outcome - certainly more than at present, as the EU clearly is lacking real leadership on this issue.
Third, and on the last note, and as I wrote over the weekend, glasses much have been raised in Moscow over the appointment of Italy's foreign minister to replace Catherine Ashton as the EU's new foreign affairs commissioner. Italy is seen as being firmly in the pro-Russian camp in the EU, and doing everything possible to avoid sanctions from damaging the never ending flow of Ferraris, sharp suits, Benetton jumpers and flashy expresso coffee machines to Moscow, St. Petersburg and Vladivostok.
Italy's foreign minister Federica Mogherini (L) to replace Catherine Ashton (R) as the EU's new foreign affairs commissioner.
It is also perhaps reflective of the problems at the heart of the EU when its leaders appoint a relatively inexperienced (from a ministerial perspective at least) foreign policy chief at a time when the bloc is perhaps facing the biggest foreign policy challenge since the fall of the Berlin Wall.
Let's hope that Donald Tusk the Polish PM and EU President elect can introduce a bit of balance and experience therein. But everything in life is about expectations, so I guess there is only one way for the new EU foreign minister, and hopefully that is up.
Donald Tusk the Polish PM and new EU President elect.
Indeed, Catherine Ashton herself was a relative political, and foreign affairs, "unknown" when she took the job (even in her native United Kingdom people were asking Catherine who? at the time of her appointment) but is widely acclaimed to have done a decent job - I would not lay the blame for the Ukraine crisis at her door.
Short-term positives for Russian markets aside, it is still difficult to see an obvious long-term solution to the current Russo-Ukraine crisis which will actually stick and ensure some kind of normality in terms of the relationship between the two countries. I am afraid that this crisis will have long run impact on Russia, Ukraine and peace and stability in Europe - however some European leaders might prefer to ignore this uncomfortable fact.
------------------------------------------------------------
Timothy Ash is head of emerging market research for Standard Bank in London.
No comments:
Post a Comment