As I suggested yesterday, Putin got what he wanted and is likely to move on. By destabilizing Ukraine, Western governments ended up putting Putin in an impossible situation. If didn’t do anything, he would be viewed as a weak leader. Yes, he was forced to go into Ukraine. After demonstrating his power and taking Crimea without a single shot, Putin is a happy man. Plus, it is likely there was some sort of a behind the scenes deal where Western governments had agreed to stop meddling in Ukraine business. Put these two together and you have today’s resolution.
Is this crisis over? Yes and No. It is over if the Western powers back off and shut their mouth. However, if the US Government, the EU Bureaucratic monkeys and the western media continue to go after Putin and/or Russia we might see re-escalation again. It is as simple as that.
Vladimir Putin said there’s no immediate need for Russia to invade eastern Ukraine as the Obama administration prepares sanctions to punish him for military action in the southern region of Crimea.
In his first public remarks since protesters overthrew Viktor Yanukovych last month, President Putin reserved the right to use force to protect ethnic Russians, though said there’s “no such necessity” at present. Troops stationed in Crimea, where Russia keeps its Black Sea fleet, have only been securing their bases, according to Putin.
“The use of the military is an extreme case,” he told reporters at his residence near Moscow. “But we have a direct request from a legitimate president, Yanukovych, on military aid to protect Ukrainian citizens.”
Russia is tussling with the West for influence over Ukraine, which claims its former Soviet master seized control of Crimea by deploying troops to block army bases and airports. The U.S. and Europe have threatened sanctions against Russia and are racing to seal billions of dollars of aid to help the new administration in Kiev avoid bankruptcy. Russia says Ukraine owes state-controlled energy giant OAO Gazprom $2 billion.
Kerry Visit
As Secretary of State John Kerry arrived in Kiev for talks with the new government, officials traveling with him said sanctions such as travel and asset bans on Russian individuals and institutions are likely within days if Russia doesn’t de-escalate its actions in Ukraine and return its forces to barracks. They spoke on condition they not be named because the penalties aren’t finalized.
Putin’s comments signal the crisis, the worst between Russia and the West since the Cold War ended, won’t immediately escalate. The standoff roiled markets as Russia held military exercises on Ukraine’s eastern border. The drills ended today.
Russia’s Micex stock index, which yesterday plunged 11 percent, extended gains as Putin spoke and rose 5.9 percent. The ruble strengthened 1 percent against the dollar-euro based used by the central bank, which unexpectedly raised its benchmark interest rate by 150 basis points to 8 percent yesterday.
Ukraine’s hryvnia gained 3.6 percent to 9.4 per dollar, while the yield on the government’s dollar debt due 2023 fell 82 basis points to 9.738 percent, data compiled by Bloomberg show.
Kerry will unveil a U.S. financial-assistance package that includes $1 billion of loan guarantees by international financial institutions, according to a government fact sheet.
An International Monetary Fund delegation is also due in Kiev today. Ukraine needs $15 billion in the next 2 1/2 years to stay afloat, Finance Minister Oleksandr Shlapak said March 1.
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