"Ukraine: EU seeks to de-escalate" Topic

latimes.com/world/europe/la-fg-russia-europe-sanctions-20141219-story.html

Well seems that Putin will get his way in the end. No new sanctions and several major EU states looking to de-escalate the situation.

From a wargaming perspective, if Putin gets his way, expect more Russian expansionism.

I think it's more of a "why do more sanctions when the price of oil has already way more then they ever did."

Didn't Putin publicly state that he no longer wants independence for East Ukraine but would settle for autonomy? Though of course many would disbelieve him.

Its more likely that a ruined Russian economy will be bad for Germanys economy, and a bad German economy will be bad for the whole of Europe. It all comes down to money in the end.. Ukraine is not near as important to countries as corporate profits. I might be wrong, but its nearly always the way.

The Russian economy is approaching the falling off a cliff stage, the oil market finally making a positive outcome for international relations.

Yep, looks like they are Neville Chamberlain-ing him.

That worked out so well last time. [heavy sarcasm intended]

I'm just wondering what was promised to the Saudis in return for letting the price of oil slide so far. Isn't OPEC supposed to control oil flow to maintain the price?

I'm just wondering what was promised to the Saudis in return for letting the price of oil slide so far.

NOTHING!!! The Saudis are trying to make oil so inexpensive that the U.S. will stop its oil production. It's going to have to go south of $40.00 USD a barrel for the U.S. to even notice.

Oh, and too bad for Dobby and his sad dreams of empire!

Yea, Cyrus is right.

They're trying to crush the competition, and it appears to be working in some cases, since workers and wells are being idled, and some companies face takeovers, or bankruptcies, so……

Yep, looks like they are Neville Chamberlain-ing him.

Very much so. I wonder how Estonia and co are feeling right now.

A Finnish military study conducted a couple of years ago did not believe NATO would intervene in a Russian take over of the Baltic states with Germany seeing as a primary opponent. Th Finns don't think Article 5 is worth the paper it's printed on.

Hence they're investing in cruise missile to create a minimum deterrence. As are incidentally the Poles.

I suspect the Finns are correct.

Apparently, they have/had a secret agreement with the Swedes, and lots of their moth-balled jets, too.

The Saudis are trying to make oil so inexpensive that the U.S. will stop its oil production

Bear in mind that it is not the perosn with oil that is important, but to be the last person with oil. It is not in the interest of the US to use up their own oil reserves and place them in a position where they have no choice but to rely on Saudi oil.

The US #1 supplier of oil is Canada, the Saudis #2 and Mexico #3 …

Bear in mind that it is not the perosn with oil that is important, but to be the last person with oil. It is not in the interest of the US to use up their own oil reserves

I agree. We should use this time wisely to make the U.S. energy independent. We have the collected wisdom, but whether we have the wisdom to use it, is another matter. In the short run, I don't know if we shouldn't buy cheap Saudi oil and increase our strategic oil reserves. I'm not an economist.
The Saudis also have to compete with the cut rate oil prices being offered by ISIS in their own backyard.

"Yep, looks like they are Neville Chamberlain-ing him."

A little off-topic but recently de-classified documents have revealed that Chamberlain may have received a bad rap for his actions.

It turns out that he wasn't trying to appease Hitler. At the behest of the British general staff he was trying to buy time to get Britain on a war footing. British military leaders felt that they weren't ready for a land war in Europe (see Dunkirk) and the nation was not politically, and therefore economically, totally committed to war. Chamberlain and British military leaders were fighting for time so they could pull together the resources needed to resist Hitler once he moved west. They sacrificed bits of central and eastern Europe in the hope that they would have more time to gear-up for the coming conflict in the west.

In the end, Hitler moved faster than the allied political and military establishments. But from what I've read Chamberlain and his military advisers was actually focused on ultimately defeating or at least resisting Hitler at some point in the future. They just ran out of time.

While there may be some question over the level of effect it is having on EU nations with higher levels of economic dealings with Russia, it seems that on the contrary to the thread title, additional sanctions are indeed going ahead with the EU, Canada and US showing a fairly united front, that they will never accept the Russian annexation of Crimea, and that the lifting of sanctions are very much associated with Russia's position over the peninsular:

europeansanctions.com

"The EU has today imposed additional sanctions on investment, services and trade with Crimea and Sevastopol ‘in view of the continued illegal annexation of Crimea and Sevastopol'…

The German Chancellor Angela Merkel said in a news conference today that the EU may consider lifting its sanctions against Russia if Ukraine's territorial integrity is preserved."

America has also stated that it will never accept the Russian annexation of Crimea.

"Canada will not accept the illegal occupation of Crimea and persistent, provocative military activity in eastern Ukraine."

I'm not sure this is an economic war of attrition that Russia can win.

You know, if they'd done that this Summer, instead of dithering for so long, things might be better today.

Sanctions against Crimea and Sevastopol are not going to make a difference. The worst thing is current crude price, second – credits at european low rates. First thing is out of control of "victims" – Venezuela, Iran and Russia. (ok, you can add Nigeria here too). I still not sure if it is purely Gulf states plot to get rid of all competition at once (to hurt shale oil production in addition with a.m. states), or USA agreed to ruin a part of its own economy for a bigger picture win. Shortage of capital will be partially compensated by asian banks credits, and anyway I guess we should be less reliant on robbery credit rates (I'm getting money for 1.5%, so you pay me 15%). Since there's no clear definition what exactly is expected from Russia to remove tha sanctions (the list of requirements is on daily update ;)) I expect that we'll not see much changes in current situation – providing that Ukraine is not seeing now any other solution to the East problem apart of military drive-in…and it is not that Putin can afford. You see, sanctions are going to be there for undetermined period of time, and if East will be leveled anyway, it is a lose-lose situation….

It's not the Gulf States, my sister is over from UAE. They are far less dependent on oil these days anyway these days as they have already figured out that their oil supplies are limited and have been diversifying for the last 10+ years into a combination of tourism and business hub. If anything the Gulf States rely on a lot of Russian tourism, which will now not be happening.

I don't see that sanctions on Crimea are meant to make a material difference, but a clear statement that there is a united front not to accept the Russian annexation of Crimea and prevent Russia from being able to buy in services that would consolidate their position. With the Russian rouble pension now having far worse purchasing power than the old Ukrainian Hryvna pension, they must be starting to wonder if this was really such a good idea..

I see sanctions remaining while Russia retains Crimea and fails to secure the Russian-Ukrainian border, at least in the foreseeable future.

Barin – remember the sanctions are currently more or less cosmetic…

If we extended to Russia the same kind of treatment which the USA gave Cuba – i.e. giving the world a choice between trading with Russia or the USA and EU, you might find life a bit tougher because that's a no-brainer.

Well someone seems to think sanctions are having an effect…

"Russia's former finance minister has warned the country is entering a 'full blown economic crisis' and will enter recession next year. "We are entering or have already entered a full-blown economic crisis, and we're going to feel it to the full next year,'' said Alexei Kudrin…

On Monday, Mr Kudrin said that even if the price of oil, currently trading at around $62 USD a barrel, rose to $80 USD a barrel the Russian economy would still contract by at least 2%. If oil remained at around its current level he said the economy would shrink by 4%.

"This is a serious challenge to the economy," he said.

He calculated that low oil prices accounted for as little as a quarter of the rouble's decline, with western sanctions against Russia accounting for 40%."

I would not expect anything to be lifted within the next 6-12 months, unless there is a serious turnaround in the situation over Ukraine.

Kudrin is an interesting man…he is not a fool, however he wasn't too successful as a finance minister; what he is not mentioning is that at least 25 % of the ruble fall happened bcs of panic. There were some panic sms and messages over social networks, telling people that Euro is going to be 200, all deposits will be frozen and cash machines will not be giving cash. Not saying that they originated from abroad, we're quite capable of spreading panic ourselves…
In some regions, especially where governors were not really popular, panic erupted, people stormed banks and cash machines. The shelves of many electronics shops were wiped out (also in Moscow and other big cities), same with new cars. For instance, shortly after I've booked my car, its price jumped ca.30%…so I was very lucky.
In the end this craziness may result in GDP rise in the 4th quarter of this year.
Now, ruble floated back to less than 70 per Euro (from 100-120), with the same oil prices. Problem is, that we don't really trust our government, so whatever they will be saying, people will still see something wicked (this way comes ;)) Panic might happen again, if Central bank will not be more active.
Most of the enterprises, who were selling imported goods had their prices up, and it will be some time before general demand and cash excess will be balanced with people rejection of new prices.
Even before all Ukrainian stuff started, there were talks about zero growth in 2015, so I suppose his estimation of 2-4 % is as good as any other similar analysis.
There will be budget cuts, for instance defence budget, so it will be balanced still…

There will be budget cuts, for instance defence budget, so it will be balanced still

Well they do seem to have a large scale of 'training' this year that needs paying for, extra military presence in Crimea and a significant increase in the number of military flights, so not sure how much of a cut can come there…

I'm not sure this is an economic war of attrition that Russia can win.

The Russians historically have shown not to be too concerned with economic matters when it comes to national pride.

Russia's mentality is more in line with seventeenth century Europe – power and prestige and who cares about the people.

Westerners have transformed government into some sort of economic managers. For a lot of the rest of the world, that transformation has not occurred.

I'm not sure this is an economic war of attrition that Russia can win.

The Russians historically have shown not to be too concerned with economic matters when it comes to national pride.

Russia's mentality is more in line with seventeenth century Europe – power and prestige and who cares about the people.

Westerners have transformed government into some sort of economic managers. For a lot of the rest of the world, that transformation has not occurred.

The Russians historically have shown not to be too concerned with economic matters when it comes to national pride.

Well we all know what pride comes before.

This is no longer the 17th century. Countries can no longer afford to stand completely independent in a global economy.

This is no longer the 17th century. Countries can no longer afford to stand completely independent in a global economy.

And with the modern communications networks, it's a whole lot harder to hide that other countries have a much higher standard of living for their average populations, which plays into national pride these days.