Russia

While EU and US sanctions against Russia over its aggression in Ukraine, and Russia’s counter-sanctions, are much discussed due to their evident political significance, less attention has been given to Russia’s punitive sanctions against the three Eastern European states–Ukraine, Moldova and Georgia – that have signed with the EU Association Agreements (AA), which include Deep and Comprehensive Free Trade Area (DCFTA) provisions.

Machine building sector in Ukraine is facing a difficult situation. Recent research showed that machine building is most heavily exposed to the Russian market in terms of the percentage of output exported to Russia.

The irony specific to the Kremlin’s new paranoia is that Russia still attributes some mythical power to the United States, a power which has all but dissipated over the past two decades.

What else is the Ukraine to do in this undoubtedly unfavourable situation? Indeed, if the military costs cannot be increased for Russia (more causalities, more losses in military equipment), one should decide on a different strategy that would make Russia cover the economical costs of this politic-military mayhem.

The most negative impact is definitely going to hit Russian citizens themselves, because prohibiting of food imports dramatically lowers their utility, reduces economic activity, including job creation, and last but not least it cuts disposable income in their wallets.

Hungary, whose people have a long, historic dislike for Russia is now torn between the West and the East. Although financed heavily by the European Union, Hungary seeks shady partnership with Putin.

Clueless looks of politicians will be once again drawn to the ECB. In addition to reports on starting recession, they are supported also by the legend of deflationary spiral that regularly emerges from monetary depths to destroy the shoots of economic success.

The EU’s new economic Agreements with Georgia, Moldova and Ukraine could have a major geopolitical impact on Europe’s relationship with Russia.

Who has caused the crash of a malaysian boeing? Putin, little green people? Not really. We all did. The European Union, NATO, UN, international community – everyone.

Ukraine shows that, when pressure is applied, Potemkin institutions reveal themselves for what they really are. The lessons for countries in the neighborhood, most of all Russia, should be apparent, as, although there are major differences between Ukraine and its anxious neighbor, at the most fundamental levels, the institutional stagnation is the same.