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EU leaders hold firm on Kremlin sanctions

A pedestrian passes European Union (EU) flags outside the European Commission headquarters, in Brussels, Belgium, on Monday, Dec. 19, 2011. European finance ministers will today seek to meet a self-imposed deadline for drawing additional aid to the debt crisis and to form new budget rules as investor confidence that a comprehensive solution is achievable wanes. Photographer: Jock Fistick/Bloomberg EU leaders continued to push Russia to back down from its aggression inside Ukraine, signalling that they were not prepared to ease their sanctions against the Kremlin despite Russia’s mounting economic crisis . After a summit meeting in Brussels, the EU’s national leaders said in a communiqué that they would “stay the course” in their policy towards Russia and said they were “ready to take further steps if necessary” in sanctions on the Kremlin if it did not live up to commitments it has made to de-escalate the conflict. More On […]

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Economic Fears May Push Russia Into Ukraine Deal

BERLIN — The turmoil in the Russian economy appears to be encouraging Moscow to seek compromise in the crisis over Ukraine , although President Vladimir V. Putin has proved so erratic in past months that Western leaders are wary of proclaiming progress, officials and analysts said Wednesday. On Sunday and again on Tuesday night — after days in which the ruble gyrated wildly , raising the possibility of a broader financial crisis that could saddle Mr. Putin with deeper economic and political problems — the Russian president spoke by phone with his Ukrainian, German and French counterparts. Statements released afterward in all four capitals talked of moving quickly to cement a cease-fire broadly observed since last week in eastern Ukraine . Mr. Putin may make his intentions clearer at his annual news conference on Thursday. European leaders will meet later Thursday and Friday in Brussels amid growing indications that […]

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Putin’s Year of Defiance and Miscalculation

ENLARGE When Russia annexed the Crimea Peninsula in March, a flag picturing Vladimir Putin flew in Moscow. Zuma Press As Western governments seethed last spring over Russia’s takeover of the Crimea region in Ukraine, Vladimir Putin told advisers that the world eventually would accept the audacious move. The Kremlin was confident the economic costs of Western sanctions, though substantial, would be tolerable for the world’s ninth-largest economy. For much of the year, the Russian president’s gamble seemed to pay off. “His forecasts have come true,” Alexei Kudrin, a former finance minister and longtime Putin adviser, said in May. “A lot of people have come to terms with Crimea now, at least informally.” Mr. Putin also seemed confident, according to people who spoke to him at the time, that the deep ties he had nurtured for years with major trade partners like Germany would limit the fallout. Those calculations turned […]

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Jailed Russian tycoon leaves house arrest

MOSCOW (AP) — A Russian tycoon placed under house arrest in September in a move that rattled markets was released from house arrest on Tuesday, just hours before President Vladimir Putin’s annual televised press conference. A lawyer for Vladimir Yevtushenkov was quoted by Interfax news agency as saying his client had been freed. The last-minute release echoes a similar move last year, when Putin announced after his annual press conference that another tycoon, Mikhail Khodorkovsky, would be set free. "Vladimir Petrovich (Yevtushenkov) is now a free man who can work productively," lawyer Vladimir Kozin said. Shares in Sistema, a company that Yevtushenkov controls and manages, surged by more than 30 percent in the early hours of trading on Moscow’s MICEX stock exchange. One of Sistema’s most lucrative assets – the oil company Bashneft – was transferred to the government this month. Yevtushenkov in September was charged with money-laundering in […]

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Russian rouble suffers steepest drop in 16 years

MOSCOW (Reuters) – The rouble plunged more than 11 percent against the dollar on Tuesday in its steepest intraday fall since the Russian financial crisis in 1998 as confidence in the central bank evaporated after an ineffectual rate hike. The rouble opened around 10 percent stronger against the dollar after the central bank unexpectedly raised its benchmark interest rate by a hefty 650 basis points to try and halt the currency’s slide, but it reversed gains in volatile trade and repeatedly set new record lows. It has now fallen close to 20 percent this week, taking its losses this year against the dollar to more than 50 percent and stirring memories of the 1998 crisis when the currency collapsed within a matter of days, forcing Russia to default on its debt. Although Russia’s public finances and reserves are much healthier than in 1998, analysts say the country is on […]

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Russia Sees No Need to Cut Oil Supply With Prices to Stabilize

Russia will keep its crude oil output steady next year and plunging prices will stabilize, Energy Minister Alexander Novak said, reiterating comments made almost three weeks ago that nation won’t alter supplies to halt the rout. The world’s largest crude producer’s output will be similar to this year’s 10.6 million barrels a day, Novak said at a conference today in Doha, the Qatari capital. Brent, the international benchmark grade, has fallen 47 percent since the end of 2013, contributing to a currency crisis in Russia, which relies on energy for half its budget. By keeping oil output unchanged, Russia is mirroring a strategy by OPEC, which said Nov. 27 it won’t curb production to tackle a global surplus. The government plans to hold a meeting today to discuss its deteriorating financial situation. Sanctions imposed by the U.S. and European Union over the conflict in Ukraine stoked the worst capital […]

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Ruble Freefall Helps to Shield Russia’s Most Important Industry

The freefall ruble that symbolizes Russia ’s economic crisis is also shielding its most important industry. Russian oil and gas companies are benefiting from earning dollars from sales of their products, while paying for expenses in rubles that have lost about half their value against the U.S. currency in the past five months. Still, the energy companies whose revenues brought power and status on the world’s stage to President Vladimir Putin are battling collapsing crude prices, hurdles to borrowing and sanctions imposed by the U.S. and Europe over the Ukraine conflict. Set against the short-term gains from the ruble’s slide is a recessionary backdrop that’s driving down stocks of all Russian commodity businesses, and raising concerns that oilfield exploration and development will be hindered. “The devaluation of the ruble under the same oil price is actually positive for all exporters, including oil companies ,” said Alexey Bulgakov, a Sberbank […]

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New Russia Sanctions Bill Will Be Signed by Obama, White House Says

WASHINGTON — President Obama has decided to sign legislation imposing further sanctions on Russia and authorizing additional aid to Ukraine , despite concerns that it will complicate his efforts to maintain a unified front with European allies, the White House said on Tuesday. The legislation calls for a raft of new measures penalizing Russia’s military and energy sectors and authorizes $350 million in military assistance to Ukraine, including antitank weapons, tactical surveillance drones and counter-artillery radar. The bill was approved unanimously by Congress, but Mr. Obama hedged for days on whether he would sign it. Josh Earnest, the White House press secretary, announced the decision to approve the bill even as he described the president’s qualms over it. Mr. Earnest said it sent a “confusing message” internationally, including language “that does not reflect the consultations” with European powers. But in the end, he added, the president opted to allow […]

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Vladimir Putin vs. the Currency Markets: What to Know About the Ruble’s Collapse

Vladimir Putin ’s biggest enemy right now may well be the currency markets. Even as it spars with Ukraine, Russia’s government is in the midst of a full-scale war to preserve the value of the ruble as a plummeting oil price has led to billions flooding away from the country. The ruble fell 11 percent against the dollar on Monday alone. To try to stanch the bleeding, on Monday evening (the middle of the night Moscow time), the Central Bank of Russia announced a stunning interest rate increase. Its main deposit rate is now 17 percent, up from 10.5 percent when Russian banks closed for business Monday. It may go without saying, but an emergency interest rate increase of 6.5 percentage points announced in the middle of the night is not a sign of strength. Rather, it is the kind of thing you see only in an old-school emerging […]

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The rouble crisis reveals Putin’s strategic failure

Russia’s President Vladimir Putin is seated for the "welcome country" ceremony for the G20 Summit at the Brisbane Convention and Exhibition Center in Brisbane on November 15, 2014. Australia is hosting the leaders of the world’s 20 biggest economies for the G20 Summit in Brisbane on November 15 and 16. AFP PHOTO / Mandel NGAN R ussia is in the throes of a full-blown currency crisis, with profound implications for its economy, its political system and its relations with the outside world. Even by the standards of emerging market currency meltdowns, the rouble’s gyrations this week have been extreme, plumbing record lows that days — even hours — earlier would have seemed unthinkable. The rout is caused by the plunge in the price of oil, Russia’s major export, and exacerbated by western sanctions imposed in response to Vladimir Putin’s military intervention in Ukraine . But the depth of the […]

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