War & Conflict

Putin gas assault is a survivable test of EU unity

19 Jul 2022

Moscow’s key pipeline to Germany is offline for repairs, stoking fears Russia may cut off all its gas for good. That would mean soaring energy costs and a big economic contraction. But the worst outcome, where Germans hoard gas and splinter the European Union, looks less likely.

Review: The cat and mouse game of Russia sanctions

15 Jul 2022

In “Freezing Order”, investor Bill Browder describes lobbying to suspend the assets of those responsible for the death of his Russian employee. Moscow used economic interests and U.S. lawyers to undermine the sanctions. The same tactics threaten the response to the Ukraine war.

Saving energy now is an EU no-brainer

28 Jun 2022

The bloc has hiked LNG imports by 50% to replenish storages and cut its Russian gas dependency. But if Moscow turns off the taps, Germany could sink into recession. All the more reason to kick off energy-saving measures this summer and try to curb gas prices by cutting demand.

Ukraine needs grants more than long-term loans

22 Jun 2022

EU leaders are debating ways to help Kyiv finance its $5 bln monthly budget deficit from the Russian invasion. So far, it has met all its financial obligations. But Ukraine’s allies shouldn’t add to its debt burden. Better that they borrow in order to help Kyiv out with grants.

Russia’s economy will soon be unrecognisable

16 Jun 2022

When the Ukraine war eventually subsides, Moscow will try to tempt companies and investors back. But its $1.5 trln GDP will have changed dramatically, with poorer consumers and more basic modes of production. Returnees will find a very different economic beast.

Oil embargo will hurt Putin more than EU

31 May 2022

Europe will halt 75% of Russian crude imports now and 90% by year end. Replacing the lost fuel will hike EU consumers’ red-hot energy bills. Moscow can sell oil elsewhere but may still lose more than a third of its most lucrative export revenue source, hurting its war machine.

Stability and security trump threat of sanctions

30 May 2022

India is buying more Russian oil and coal, and a state-led group of companies is now eyeing Shell’s stake in an LNG project. Price volatility and climate woes are dictating national priorities. It’ll be thorny for the West to punish poorer countries for putting themselves first.

Fingers crossed Davos Man gets it wrong again

27 May 2022

Gloomy delegates at the Swiss conference worried about a prolonged conflict in Ukraine, Covid-19 lockdowns in China, and runaway food and energy prices. But in 2020 they failed to foresee the global pandemic. This time, an incorrect forecast might be good news for the planet.

EU’s Ukraine budget support lacks long-term focus

27 May 2022

Kyiv will need at least $30 billion this year to plug the holes in its ravaged finances. Western allies have pledged enough money to keep it running in the short term. But as the country’s situation deteriorates, they should brace for a lasting effort to keep Ukraine afloat.

How sanctions against Russia could backfire

26 May 2022

The threat of financial punishment did not prevent President Vladimir Putin from invading Ukraine. History shows that economic penalties can stoke conflict by pushing countries to be more self-sufficient, Edward Chancellor writes. Investors risk being stuck with stranded assets.

HSBC’s jarring ESG message, Davos in spring

26 May 2022

The bank’s head of responsible investing believes policymakers are exaggerating the financial risks of climate change. In this Viewsroom podcast, Breakingviews columnists discuss the ramifications of those remarks. Plus: The World Economic Forum is back, but the mood is dour.

Global stability partly hangs on Saudi reinvention

25 May 2022

The kingdom’s efforts to shape its image go so far as branding a café at Davos bearing the crown prince’s name. Worldwide demand for oil and gas amid the Ukraine war gives Saudi extra power and a chance to realign itself politically. There’s much more work to do.

U.S. sanctions give Russia default it doesn’t need

25 May 2022

The Treasury won’t let Moscow pay U.S. bondholders, tipping it into default. The move further isolates Vladimir Putin but will have minimal impact. It’s a surreal twist given Russia can still pay its debts, while battlefield foe Ukraine urgently needs relief but isn’t getting it.

Biden tries a new tool for handling China: realism

24 May 2022

At first glance a pact with India, Japan and Vietnam looks short on substance and skips sensitive issues. The U.S. also looks likely to drop many tariffs against China. But where his predecessors’ bids to woo or contain Beijing failed, Biden’s are at least likely to prove durable.

Smaller, warmer Davos confronts a siloed world

23 May 2022

The Swiss confab of global leaders returns this week after a gap of over two years. Pandemic, war, and the unusual spring timing explain some notable absences. As markets tumble and economies turn inward, founder Klaus Schwab’s knack for brokering relationships faces a test.

Ukraine’s spare energy can help itself and Europe

20 May 2022

The war-torn nation generates more electricity than it needs, and from carbon-neutral nuclear plants, too. But its links to the EU power grid are sketchy. Helping Ukraine bolster exports to the EU would support Kyiv’s economy while easing the bloc’s energy headache.

German fiscal obsession is ill-timed and untenable

19 May 2022

Finance Minister Christian Lindner is keen to reinstate a debt limit that was waived during the pandemic. The Ukraine war means the economy is facing new problems. And massive investments are needed in the green transition. This is no time for fiscal fetishes.

Egypt’s hunger pangs are like 2011, but worse

19 May 2022

A decade ago the soaring cost of bread helped unseat Cairo’s long-term ruler, Hosni Mubarak. In 2022 food prices are rising faster, and Egypt’s population and debt are bigger. The more prices rise, the trickier the tradeoff between enraging financial and domestic constituencies.

EU funds can ease, not end common energy pain

18 May 2022

Brussels has earmarked 300 bln euros to cut fossil fuel ties with Russia. Rising rates make cheap, repurposed Covid-rescue loans more attractive to many EU states, increasing the chance they’ll be used. But higher fuel purchases will still have to come from national budgets.

Using Russian assets in Ukraine would be a mistake

17 May 2022

Seizing $200 bln of central bank reserves frozen by the EU and U.S. could provide financial relief and moral comfort to the war-torn country. But it would also trigger legal fights and give Russia even less reason to back down. Confiscation is no substitute for a realistic plan.