Ukraine Crisis: Russia Demands Guarantees from Nato

[Mr Poo]

After reading this, Russian involvement in Ukraine is pretty obvious..

Russia has called for "a 100% guarantee that no-one would think about Ukraine joining Nato", President Vladimir Putin's spokesman has told the BBC.



Dmitri Peskov added that Nato's gradual approach towards Russia's borders had made Moscow "nervous".

Earlier, Mr Putin said the US would never "subdue" Russia over Ukraine.

Germany's foreign minister said Europe was heading for "confrontation instead of cooperation", amid warnings of a Russian build-up on Ukraine's border.

During a joint news conference in Moscow with Russian Foreign Minister Sergei Lavrov, Frank-Walter Steinmeier said that as fighting escalated in east Ukraine he could see "no grounds for optimism".

The minister also urged Russia to abide by the Minsk ceasefire agreement.



Nato has warned of a serious Russian military build-up in rebel-held territory in eastern Ukraine and on Russia's side of the border.

But Mr Peskov countered by accusing Nato of breaking a historic promise by gradually approaching Russia's borders.

He said the alliance was "attempt[ing] to break the... balance of power".

In a televised meeting earlier, Mr Putin told a group of pro-Kremlin activists that the US wanted "to subdue us, solve their problems at our expense. They want to dominate and influence".

To applause he added: "No-one in history ever managed to achieve this with Russia, and no-one ever will."

Mr Putin said that US and EU sanctions against Russia ran contrary to these countries' own interests and that Russia - whose currency is suffering because of the sanctions - would see a boost in its industries.

On Monday the EU agreed not to increase sanctions against Moscow.

The West has long accused Russia of direct involvement in Ukraine, something which it denies.

In March the EU imposed sanctions on the country over its annexation of Crimea.

These were followed by further EU and US sanctions after Russia was claimed to be arming separatist rebels and sending Russian fighters into eastern Ukraine.

[commondenom]

Originally Posted by Mr Poo

Russia - whose currency is suffering because of the sanctions - would see a boost in its industries.

this is exactly what happens....

we had economic sanctions against us in South Africa during the apartheid years.....no-one really noticed other than we didn't get any decent bands visiting our shores (not that that's changed much). everything we owned was designed and made in south africa and was as good or better then the stuff that's available these days....hell south africa even figured out how to turn coal into petrol so we didn't have to worry about not having fuel...

[Mr Poo]

Originally Posted by commondenom

this is exactly what happens....

we had economic sanctions against us in South Africa during the apartheid years.....no-one really noticed other than we didn't get any decent bands visiting our shores (not that that's changed much). everything we owned was designed and made in south africa and was as good or better then the stuff that's available these days....hell south africa even figured out how to turn coal into petrol so we didn't have to worry about not having fuel...

It can't boost it's production of foods without time and investment in infrastructure. The sanctions are hurting Russia in the short term.

[commondenom]

Originally Posted by Mr Poo

It can't boost it's production of foods without time and investment in infrastructure. The sanctions are hurting Russia in the short term.

all they really do is stop exporting and things settle down quick enough... russia has more natural resources and industry than the majority of countries in the world so while they might lose out economically and in a few negligible areas in the short term it won't affect the country too much....

when a nation thrives under sanctions it really just proves that the financial system we live under is a big fucking con

[Mr Poo]

Originally Posted by commondenom

all they really do is stop exporting and things settle down quick enough... russia has more natural resources and industry than the majority of countries in the world so while they might lose out economically and in a few negligible areas in the short term it won't affect the country too much....

when a nation thrives under sanctions it really just proves that the financial system we live under is a big fucking con

Russian banks are the most vulnerable among the world's large emerging market economies due to Western sanctions and near-zero levels of economic growth, Standard & Poor's said in a report released Wednesday.

Sanctions directly affect more than 50 percent of Russia's banking sector, which is dominated by state financial institutions, the report said.

Western sanctions over Moscow's role in the Ukraine crisis have restricted the access of major state-controlled banks such as Sberbank, VTB, Vnesheconombank and Rosselkhozbank to long-term EU and U.S. financing, curbing their ability to refinance debts and hand out loans to businesses in Russia.

The lack of financing is already taking its toll. Russia's second-largest bank, VTB, is expected to report an 84 percent drop in third-quarter year-on-year net profit on Thursday, weakened in part by the need to set aside higher provisions to cover bad loans, Reuters reported.

Forced to operate in an unfavorable financial environment, Russian banks have become increasingly reliant on the Central Bank. According to S&P, reliance on the Central Bank has reached 10 percent of total liabilities. This is close to the 13 percent level reached at the peak of a previous funding shortage caused by the 2008-09 financial crisis.

S&P expects the risks for Russia's economy in general and for the banking industry in particular to remain high, as the consequences of sanctions are likely to have a prolonged effect. According to the agency, the main risk for next year is capital erosion on the back of rising risk costs and funding pressures.

http://www.themoscowtimes.com/busine...ys/511423.html

[commondenom]

all that says is that businesses will be getting loans from a central bank instead of high street banks.....

good, high street banks are as crooked as they come....you should live in a country that has sanctions against it....then you will see how little difference it really makes to the people who live there..

[Mr Poo]

Originally Posted by commondenom

all that says is that businesses will be getting loans from a central bank instead of high street banks.....

good, high street banks are as crooked as they come....you should live in a country that has sanctions against it....then you will see how little difference it really makes to the people who live there..

Over many years like South Africa they could become fully self reliant, but it doesn't happen overnight. Are you living in Russia right now?

Russian banks are the most vulnerable among the world's large emerging market economies due to Western sanctions and near-zero levels of economic growth, Standard & Poor's said in a report released Wednesday.

Sanctions directly affect more than 50 percent of Russia's banking sector, which is dominated by state financial institutions, the report said.

Western sanctions over Moscow's role in the Ukraine crisis have restricted the access of major state-controlled banks such as Sberbank, VTB, Vnesheconombank and Rosselkhozbank to long-term EU and U.S. financing, curbing their ability to refinance debts and hand out loans to businesses in Russia.

The lack of financing is already taking its toll. Russia's second-largest bank, VTB, is expected to report an 84 percent drop in third-quarter year-on-year net profit on Thursday, weakened in part by the need to set aside higher provisions to cover bad loans, Reuters reported.

Forced to operate in an unfavorable financial environment, Russian banks have become increasingly reliant on the Central Bank. According to S&P, reliance on the Central Bank has reached 10 percent of total liabilities. This is close to the 13 percent level reached at the peak of a previous funding shortage caused by the 2008-09 financial crisis.

S&P expects the risks for Russia's economy in general and for the banking industry in particular to remain high, as the consequences of sanctions are likely to have a prolonged effect. According to the agency, the main risk for next year is capital erosion on the back of rising risk costs and funding pressures.

The Moscow Times has compiled a list of 10 economic moves currently hitting the Russian business community and/or the general populace that the government has had a hand in. The impact of most items on the list — up to and including the hypothetical risk of "smoker riots" — is expected to be felt in 2015, just around the corner.
1. Falling Ruble

The ruble has lost 38 percent of its value versus the U.S. dollar since the start of the year, and earlier this month the Central Bank stopped supporting the exchange rate, apparently due to shrinking currency reserves. The devaluation is expected to hit all industries with foreign connections in the coming year, including retail, tourism and dining. About 25 percent of the restaurants in Moscow are expected to shut down next year, consumer confidence is sliding, and clothes shopping and travel abroad are becoming less accessible to middle-class Russians.
2. Borrowing Restrictions

The EU and U.S. have limited access to international capital for Russia's state-owned banks and corporations, including VTB, Sberbank and Rosneft, because of Russia's support for separatists in Ukraine. Other Russian banks and companies are also reportedly struggling to borrow internationally, with foreign lenders increasingly distrustful of Russian businesses in light of a geopolitical standoff.

The end result is obstructed access to capital and rising borrowing costs for Russian companies, which already have a corporate debt of $600 billion as of October, according to Central Bank data.
3. Food Sanctions

One of the most questioned countermoves against the Western sanctions was an embargo on food exports from the U.S. and most European countries. The government promised that the embargo would boost domestic productivity, and that Asian and South American exports would make up for the rest. But dairy and meat imports have shrunk by a third, according to customs data, and food inflation this year has neared double digits, the State Statistics Service said this month.
4. Bashneft

In what has arguably been the highest-profile corporate scandal since the fall of oil giant Yukos in the 2000s, the government earlier this year voided the 2003 privatization deal for oil company Bashneft, nationalizing the controlling stake and placing its owner Vladimir Yevtushenkov under house arrest.

The selective inspection of a single privatization deal among dozens prompted speculations about its motives — with many commentators referring to it as a takeover attempt by state-run Rosneft. The company denied it, but the move — which highlighted a lack of property-right guarantees in Russia — did nothing to boost investor confidence, which had already taken a hit from political risks in the country.
5. New Business Duty

As falling oil prices ($79.2 per barrel of Brent as of Tuesday) drain the state coffers, the government is struggling for revenue and apparently expects small businesses to foot the bill. Though plans for a sales tax have been shelved, a government-penned bill under review in the State Duma proposes a new duty for small businesses of all stripes, from hairdressers to grocery stores, transportation firms and even public pay-per-use toilets.

The quarterly municipal duty is to vary from 6,000 to 600,000 rubles ($130 to $13,000). Analysts said it would cripple Russia's already heavily taxed small and mid-sized businesses, which — according to Prime Minister Dmitry Medvedev — account for a mere 20 percent of Russia's GDP, compared with 50-60 percent in developed countries.
6. Gas Prices

As oil prices plummet, gasoline prices in Russia continue to soar (9 percent since the start of the year, to about 33 rubles, or $0.70, per liter). A hike to 50 rubles ($1.06) per liter is expected in 2015 because of new duties. Given that Russia is a leading oil producer, the government will have a hard time selling the hike to millions of motorists nationwide — and that is without mentioning the negative impact of increased transportation costs on the economy.
7. Property Tax

Russian real estate tax is currently a blip on the radar of public spending, but new rules will cause it to surge 10 to 20 times by 2016, to between 5,000 and 26,000 rubles ($107 to $550) a year for typical Moscow apartments, according estimates by news site Realty.NewsRu.com.

The tax has been in talks for years, continually mothballed over fear of public discontent, especially among apartment owners in the lower income brackets. Given the slowing economy and rising prices, discontent is exactly what can be expected to happen when hefty new bills hit mailboxes everywhere.
8. Pension Freeze

The government has approved a freeze of a combined 540 billion rubles ($11.5 billion) of non-governmental pension fund savings for 2014 and 2015, with the money expected to be spent on more immediate state projects. Simultaneously, it expects to spend the last 3 trillion rubles ($64 billion) from the state's National Welfare Fund — intended as backup for the flagging, also state-run Pension Fund. The money has been earmarked for state corporations, with Rosneft and Russian Railways having already requested 1.5 trillion rubles each.

Though the official line is that the savings will be returned, and emptying the National Welfare Fund will boost the economy, many observers are skeptical. The state risks running out of emergency savings, while simultaneously incurring the ire of 28 millions of Russians who keep their pension money in those plundered private funds.
9. Social Spending Cuts

State spending on health care and education will be slashed in 2015 by 21 percent and 6 percent year-on-year, respectively, as outlined in the draft state budget. In Moscow, a handful of public hospitals are slated to be shut down — and replaced by malls and high-end real estate — already triggering street protests by medics.
10. Tourism Slump

The Russian tourism industry is in its death throes, with dozens of travel agencies having declared bankruptcy this year, in many cases leaving hundreds of tourists stranded at a time. A story by the Kommersant newspaper in October linked the industry's turmoil to decreased revenues caused by the government prohibiting about 4 million officials, or 22 percent of all tourists, from traveling abroad over fears that they risked being seized by Western spy agencies. And that was before the ruble's devaluation and its devastating effect on tourism (see above).
Honorary Mention: Tobacco Tax Hike

The State Duma last week approved a new increase in tobacco excise tax, the second in two years. Cigarette brands used by 80 percent of smokers will become about 10 rubles ($0.20) more expensive per pack, Kommersant said.

While modest, the hike may prove to be the final straw as far as public patience is concerned. In a country where the average salary is 22,000 rubles ($460) and half of the male population is smoking, "smoker riots" are undesirable but possible.

[commondenom]

nope....but i did just return from ukraine...so close enough

[commondenom]

for the record every time a bank reports a drop in profit or goes bankrupt i think it's a good thing....money is definitely the most damaging thing humans have ever created...so fuck em..

and yeah...a couple of years is required to get a country under sanctions running effectively under it's own steam but a couple of years isn't a long time...

[niknik]

Sanctions won't cripple Russia, but they will isolate them a little. Of course Russia can become self reliant. But it won't. Russia isn't interested in just becoming a self reliant nation, Russia wants to become a major world power. And becoming self reliant doesn't accomplish that. A nation that is forced into isolation will find it extremely difficult to expand its influence, which is what Russia wants.

If Russia wanted to become a rich vibrant nation it could do so. But Russia doesn't want to just be a rich nation, they want to be a Super power like they once were. Instead of spending it's wealth on infrastructure and investing in its people, Russia is spending billions on military. As well as supporting other nations military capabilities. As Russia did in the cold war, they are drawing lines and picking allies.