<![CDATA[Hedgehogs.net: '' related content]]> http://www.hedgehogs.net/tag/foreign+minister?view=rss http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370397/more-mindless-sanctions-merkel-a-liar-or-a-fool Sun, 07 Sep 2014 17:20:08 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370397/more-mindless-sanctions-merkel-a-liar-or-a-fool <![CDATA[More Mindless Sanctions? Merkel a Liar or a Fool?]]>
Bloomberg reports EU Vows More Russia Sanctions If War in Ukraine Worsens.
European Union leaders agreed to impose tougher sanctions on Russia, possibly targeting energy and finance, if the war in Ukraine worsens.

Leaders early today gave the European Commission a week to deliver proposals for the penalties. The EU left open the precise trigger for further sanctions, contrasting with a four-point ultimatum issued to Russian President Vladimir Putin on June 27 that preceded the latest curbs.

“We are close to the point of no return,” Ukrainian President Petro Poroshenko told reporters at the EU summit. “Thousands of foreign troops and hundreds of foreign tanks are now on the territory of Ukraine.” 

Earlier, EU leaders selected Polish Prime Minister Donald Tusk as the bloc’s next president and Italian Foreign Minister Federica Mogherini as chief diplomat after a bitter contest that showed the 28-nation EU’s divisions on how to deal with the Kremlin. Tusk has pushed for tougher sanctions on Russia while Mogherini has favored diplomacy. Leaders also met with Poroshenko.

The EU and the U.S. have already slapped visa bans and asset freezes on Russian individuals and companies, and since July have imposed steadily tougher sanctions targeting the country’s energy, finance and defense industries.

Merkel said the EU is looking at more measures to target Russia’s energy and finance industry.

Leaders disagreed about possible military assistance to Ukraine, with Lithuanian President Dalia Grybauskaite telling reporters before the meeting: “We need militarily to support and send military materials to Ukraine.”
Disagreements Everywhere

The entire, yet unstated, gist of the above article is there are disagreements everywhere: On sanctions, on military aid, on diplomacy vs. sanctions, and on triggers.

If this is a bluff, it is easily transparent. If it's not a bluff, it's economically stupid.

Merkel a Liar or a Fool?

Who is fooling whom when it comes to Merkel's claims "the EU is looking at more measures to target Russia’s energy and finance industry."

Merkel is either a liar or a fool. I believe Merkel knows full well sanctions are a losing game.

Target Russian energy and Russia will likely shut off natural gas supplies to Europe.

It was reckless enough to suggest that possibility in April. This is September. Winter is on the horizon. Want to risk it now?

My guess is that Merkel is a liar. If you prefer, call it an "obvious bluff".

Politically, Merkel has played her hand very well at every turn, with countless lies, bluffs, reversals, and opportunistic moves along the way, on countless eurozone issues.

Why should this time be any different?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com]]>
11370397
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370270/eu-mulls-modest-increase-in-sanctions Sun, 07 Sep 2014 14:21:30 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370270/eu-mulls-modest-increase-in-sanctions <![CDATA[EU Mulls Modest Increase in Sanctions]]> 11370270 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370266/russia-urges-us-to-rein-in-ukraine Sun, 07 Sep 2014 14:21:26 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370266/russia-urges-us-to-rein-in-ukraine <![CDATA[Russia Urges U.S. to Rein In Ukraine]]> 11370266 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370244/polands-tusk-wins-top-eu-job Sun, 07 Sep 2014 14:21:03 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370244/polands-tusk-wins-top-eu-job <![CDATA[Poland's Tusk Wins Top EU Job]]> 11370244 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370231/eus-foreign-policy-pick-wont-trigger-abrupt-change Sun, 07 Sep 2014 14:20:52 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11370231/eus-foreign-policy-pick-wont-trigger-abrupt-change <![CDATA[EU's Foreign Policy Pick Won't Trigger Abrupt Change]]> 11370231 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11367440/uk-not-ruling-out-airstrikes-against-islamic-state-says-hostage-video-genuine Fri, 05 Sep 2014 19:36:10 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11367440/uk-not-ruling-out-airstrikes-against-islamic-state-says-hostage-video-genuine <![CDATA[UK not ruling out airstrikes against Islamic State, says hostage video genuine]]>






]]>
11367440
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11366171/charlemagne-dance-of-the-powers Fri, 05 Sep 2014 08:41:26 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11366171/charlemagne-dance-of-the-powers <![CDATA[Charlemagne: Dance of the powers]]>
IT WAS a wearyingly familiar exercise. Phones were worked, diplomatic deals struck and, at a summit of the European Union’s 28 leaders in Brussels on August 30th, the goods summarily delivered: Donald Tusk, Poland’s prime minister, won the job of president of the European Council, and Federica Mogherini, Italy’s foreign minister, that of the EU’s high representative for foreign affairs.Sympathisers sometimes refer to the routine by which the EU apportions its most senior positions as a “delicate dance”. But in its clunking awkwardness it more closely resembles the pirouetting hippopotami in Walt Disney’s “Fantasia”. The twin jobs, created by the Lisbon Treaty in 2009, were supposed to sharpen European decision-making, particularly on foreign policy, and to give the EU a distinct global voice. But on the two occasions on which they have been doled out, only rarely has the debate over their distribution intersected with anything happening in the world outside Brussels. Instead, questions of merit are roundly trumped by political box-ticking.This summer the discussion unfolded as follows: at least one of the jobs had to go to a woman, and the Party of European...

]]>
11366171
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11366166/french-political-fiction-what-if-it-were-true Fri, 05 Sep 2014 08:41:19 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11366166/french-political-fiction-what-if-it-were-true <![CDATA[French political fiction: What if it were true?]]> ONE pleasure of the French summer is the publication of political fiction in media usually busy with the soap opera of real political life. During the holidays, reporters let their imaginations run wild. Improbable alliances, liaisons and betrayals are invented. Le Figaro, a conservative newspaper, ran a 17-part fictional series in August entitled “Hollande departs”. L’Opinion, another daily, ran a 14-part series originally called “The kidnapping of Arnaud Montebourg”.Other countries turn out political drama, from America’s “House of Cards” to Denmark’s “Borgen”. But the French seem keen on fiction based on real characters. In recent years directors have made films about serving, or recently active, politicians, including “La conquête”, a fictional portrayal of the rise to power of Nicolas Sarkozy, the former president. “Quai d’Orsay” was an entertaining glimpse into theatrics at the foreign office under a fictitious Dominique de Villepin, a former foreign minister.Television does it too. A French series, “L’Ecole du Pouvoir”, followed five characters who met at the elite Ecole Nationale d’Administration in the late 1970s, ahead of the election of a Socialist president, François Mitterrand, in 1981. One seemed rather like François Hollande, the incumbent; another resembled Ségolène Royal, his classmate, former partner and...

]]>
11366166
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11365542/eu-gives-russia-ultimatum-pull-back-in-ukraine-or-face-sanctions Sun, 31 Aug 2014 05:10:44 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11365542/eu-gives-russia-ultimatum-pull-back-in-ukraine-or-face-sanctions <![CDATA[EU Gives Russia Ultimatum: Pull Back In Ukraine Or Face Sanctions]]>
Instead, the 28-nation bloc's heads of state and government tasked their executive body to "urgently" prepare tougher economic sanctions that could be adopted within a week, according to EU summit chairman Herman Van Rompuy. The decision on new sanctions will depend on the evolution of the situation on the ground but "everybody is fully aware that we have to act quickly," he added. The EU leaders call on Russia to "immediately withdraw all its military assets and forces from Ukraine," they said in a joint statement.

NATO said this week that at least 1,000 Russian soldiers are in Ukraine. Russia denies that. NATO also says Russia has amassed some 20,000 troops just across Ukraine's eastern border, which could rapidly carry out a full-scale invasion.

The fighting between the military and Russian-backed separatists in eastern Ukraine has so far claimed 2,600 lives, according to U.N. figures.

The U.S. and the EU have so far imposed sanctions against dozens of Russian officials, several companies as well as the country's financial and arms industry. Moscow has retaliated by banning food imports.

German Chancellor Angela Merkel said the new sanctions would target the same sectors as previous punitive measures, which also included an export ban for some high technology and oil exploration equipment.

"If Russia continues to escalate the crisis it will come with a high cost," said EU Commission President Jose Manuel Barroso. "It's time for everyone to get down to the business of peace-making. It is not too late, but time is quickly running out," he said.

Several European leaders had called for additional sanctions at the outset of the meeting in Brussels, but the fear of an economic backlash apparently prevailed and led the bloc to grant Russia another chance at avoiding tougher action. New sanctions would have required unanimity among the leaders.

Russia is the EU's No. 3 trading partner and one of its biggest oil and gas suppliers. The EU, in turn, is Russia's biggest commercial partner, making any sanctions more biting than similar measures adopted by the U.S.

Ukrainian President Petro Poroshenko, who briefed the leaders at the beginning of their talks, said a strong response was needed to the "military aggression and terror" facing his country. Efforts to halt the violence in eastern Ukraine were "very close to a point of no return" and failing to de-escalate the situation could lead to a "full-scale war," he warned.

"Thousands of the foreign troops and hundreds of the foreign tanks are now on the territory of Ukraine," Poroshenko told reporters in English. "There is a very high risk not only for peace and stability for Ukraine, but for the whole ... of Europe."

Conceding ground in the face of a reinvigorated rebel offensive, Ukraine said Saturday that it was abandoning a city where its forces have been surrounded by rebels for days. Government forces were also pulling back from another it had claimed to have taken control of two weeks earlier.

The statements by Col. Andriy Lysenko, a spokesman for the national security council, indicate that Ukrainian forces face increasingly strong resistance from Russian-backed separatist rebels just weeks after racking up significant gains and forcing rebels out of much of the territory they had held.

The office of the Donetsk mayor reported in a statement that at least two people died in an artillery attack on one of Donetsk's neighborhoods. Shelling was reported elsewhere in the city, but there was no immediate word on casualties.

European leaders also issued dire warnings, reflecting their concern over the most recent military escalation with the opening of a new front by the Russian-backed rebels in southeastern Ukraine.

Lithuanian President Dalia Grybauskaite said Russia's meddling in Ukraine, which seeks closer ties with the EU, amounts to a direct confrontation that requires stronger sanctions.

"Russia is practically in the war against Europe," she said in English.

Grybauskaite said the EU should impose a full arms embargo, including the canceling of already agreed contracts, but France has so far staunchly opposed that proposal because it has a $1.6 billion contract to build Mistral helicopter carriers for Russia.

British Prime Minister David Cameron also warned that Europe shouldn't be complacent about Russian troops on Ukrainian soil.

"Countries in Europe shouldn't have to think long before realizing just how unacceptable that is," he said. "We know that from our history. So consequences must follow."

Moscow, meanwhile, is preparing to send a second convoy of humanitarian aid to eastern Ukraine.

Foreign Minister Sergey Lavrov said Friday that Moscow has already received Kiev's preliminary approval and insisted that it would send aid in coordination with the Red Cross. Lavrov wouldn't say when the aid is likely to be sent, but said it could happen next week.

Russian state Rossiya 24 on Saturday showed trucks from the previous convoy at the border being loaded with humanitarian aid that was brought to the area by train. It was unclear when the new convoy could start moving.

Barroso said that the EU — a bloc encompassing 500 million people and stretching from Lisbon to the border with Ukraine — stands ready to grant Kiev further humanitarian aid and financial assistance if needed. The bloc will also organize a donors' conference to help rebuild the country's east at the end of the year, he added.

Ukrainian forces had been surrounded by rebels in the town of Ilovaysk, about 20 kilometers (15 miles) east of the largest rebel-held city of Donetsk for days.

"We are surrendering this city," Ukraine's Lysenko told reporters. "Our task now is to evacuate our military with the least possible losses in order to regroup."

Lysenko said that regular units of the military had been ordered to retreat from Novosvitlivka and Khryashchuvate, two towns on the main road between the Russian border and Luhansk, the second-largest rebel-held city. Ukraine had claimed control of Novosvitlivka earlier in August.

Separately, Ukrainian forces said one of their Su-25 fighter jets was shot down Friday over eastern Ukraine by a missile from a Russian missile launcher. The pilot ejected and was uninjured, the military said in a brief statement.

___

Jim Heintz reported from Kiev. Nataliya Vasilyeva in Moscow contributed reporting.

___

Follow Juergen Baetz on Twitter at http://www.twitter.com/jbaetz]]>
11365542
http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11364385/ukraine-overnight-interest-rates-soars-to-175-external-debt-cannot-be-paid-back-ukraine-demands-rebels-surrender Mon, 25 Aug 2014 17:12:16 +0100 http://www.hedgehogs.net/pg/newsfeeds/hhwebadmin/item/11364385/ukraine-overnight-interest-rates-soars-to-175-external-debt-cannot-be-paid-back-ukraine-demands-rebels-surrender <![CDATA[Ukraine Overnight Interest Rates Soars to 17.5%; External Debt Cannot Be Paid Back; Ukraine Demands Rebels Surrender]]>
Thus death and destruction will continue, possibly long after Ukraine takes over Luhansk and Donetsk (or rather what's left of Luhansk and Donetsk).

Please consider Ukraine Says It Makes Gains Against Rebels in Luhansk.
The Ukrainian government said its forces took control of one of four districts in the pro-Russian separatist stronghold of Luhansk and are fighting in the city center as diplomatic efforts to end the conflict intensified.

European leaders are pushing to halt the conflict that’s killed more than 2,000 people and fractured Ukraine since Russia annexed Crimea in March.

“Ukraine’s armed forces have been beating the separatists for weeks now and are moving deeper into the east,” Karl-Heinz Kamp, academic director at the German government’s Federal Academy for Security Policy in Berlin, said by phone. “Something must have happened that’s boosting their fighting skills. My gut feeling -- and I don’t have any concrete evidence -- is that the Ukrainian forces are getting support from the outside.”

Ukraine’s government says it will declare a truce only if the pro-Russian rebels lay down their arms and Russia stops supplying them with weapons. Russian Foreign Minister Sergei Lavrov, meeting with his Ukrainian, French and German counterparts in Berlin, repeated calls yesterday for an unconditional cease-fire. Russia denies it’s aiding the rebels.

Ukraine Rates

The conflict has cost Ukraine $8 billion, Prime Minister Arseniy Yatsenyuk was quoted as saying today by the Unian newswire. Ukraine’s central bank raised its overnight refinancing rate to 17.5 percent today from 15 percent as it seeks to support the hryvnia. The Ukrainian currency fell as much as 1.6 percent before trading little changed at to 13.03 per dollar, taking its decline for the month to 5.8 percent.
Hryvnia vs. US Dollar



From mid-2007 the hryvnia crashed from 4.50 to the US dollar to 13.03 to the US dollar. That is a decline of 65%.

Given that Ukraine's external debt is not priced in hryvnia, but rather euros or US dollars, this currency decline really hurts.

Ukraine External Debt



Rule: When you have massive (relative to the size of your economy), external debts denominated in foreign currencies, very bad things happen.   

Ukraine's external debt as valued in US dollars has risen from under $40 billion in 2005 to nearly $140 billion today. Yet, I hear no mainstream media reporting on how Ukraine is supposed to pay this back.

Here's a hint. It can't.

And that is why interest rates are totally out of control, and why Ukraine will be beholden to the IMF and other creditors for decades unless it defaults.

As we all know ... This is a "small price" to pay for "peace".
And in case you missed it, please consider the Rule of Small Prices.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com]]>
11364385