The European Union Times |
- S&P downgrades Russia’s credit rating to step above junk status
- Russian fighter jets cross into Ukrainian airspace – US
- Post-communist European countries losing population too fast
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Posted: 26 Apr 2014 02:08 AM PDT
 For the first time in five years Standard & Poor’s has cut Russia’s credit rating to ‘BBB-’, just above junk status. It warns the tension in Ukraine and ‘significant’ capital outflow could mean another downgrade. Moscow says it is “politically motivated.” “In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects,” the ratings agency warned. The last time S&P downgraded Russia was in December 2008. In the first 3 months of 2014 $50.6 billion left Russia, and more is expected to flow out as the situation in Ukraine harbors instability in the markets and uneasiness for investors. Russian government officials estimate capital outflow in 2014 could reach $70-80 billion. “Clearly this is partially a politically motivated decision. And in part, perhaps, a reaction to the deteriorating macroeconomic situation we find ourselves in,” Russia’s Minister of Economic Development, Aleksey Ulyukaev said, as quoted by Vesti Finance. In March S&P, as well as Fitch Ratings, cut Russia’s credit rating outlook to ‘negative’. “The decision was expected, as prior to this the expectations had been revised, and then the ratings were revised,” the minister said. S&P also trimmed Russia’s foreign currency rating to ‘BBB-/A-3’ from ‘BBB/A-2′ and cut the local long-term rating to ‘BBB’ from ‘BBB+’. The Russian ruble has fallen significantly in 2014 as a result of the Central Bank’s decision to normalize the overvalued currency, which the institution plans to be free-floating by 2015. Against the dollar, the ruble has already lost more than 8 percent in 2014. Forecasters have lowered their estimates for Russia’s economic growth based on the geopolitical risk of Ukraine and the possible effect of US and EU sanctions. S&P says Russia can still achieve 2.3 percent growth between 2014-2017, as long as the Ukraine crisis de-escalates. The Russian government is optimistic growth could reach 2.5 percent, but has also warned that in worst case it may be 0 percent, according to Russia’s Finance Minister Anton Siluanov. The IMF has trimmed its growth estimate to 1.3 percent, the same the economy expanded in 2013. No More ‘Big Three’ As the West ramps up economic threats against Russia, policymakers in Moscow are preparing colossal changes to their role within the global financial structure. Russia hopes to create its own ratings agency, independent of the western “big three” – S&P, Moody’s, and Fitch, in an effort to break the world monopoly of rating systems. Over-reliance on the western financial paradigm has caused Moscow great pain- especially the US decision to wind down its asset buying program, which has had a negative effect on emerging markets worldwide. Decreasing reliance on the dollar and switching to a national payment systems, like China and Japan already have, is also a main goal for Russia. In March, as a result of sanctions, US credit card company’s Visa and MasterCard erroneously blocked transactions at three Moscow banks. Services shortly resumed, but the slip up may cost these companies market share in Russia, President Vladimir Putin said Thursday while addressing journalists in St. Petersburg. Source           |
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Posted: 26 Apr 2014 01:57 AM PDT
 A Russian Yak-130 combat training jet.The officials, who spoke on condition of anonymity because they were not authorized to talk to journalists about the issue, said on Friday that the Russian jets could have been checking Ukrainian radar system or making a show of force against the country. The Autonomous Republic of Crimea declared independence from Ukraine on March 17 and formally applied to become part of Russia following a referendum a day earlier, in which nearly 97 percent of the participants voted in favor of the move. On March 21, Russian President Vladimir Putin signed into law the documents officially making Crimea part of the Russian territory. He said the move was carried out based on international law. On April 17, Russia, Ukraine, the US and the European Union agreed over steps to “de-escalate” the crisis in eastern Ukraine, where anti-Kiev protesters seized buildings in several towns and cities. But, Ukrainian authorities have ordered a military offensive against the protesters, claiming that Russian special forces are fueling unrest in the country. Putin has dismissed as “nonsense” claims that Russian special forces are fomenting unrest in eastern Ukraine. This week, Russia began military exercises close to the border with Ukraine, saying the drills are in response to Kiev’s intensified crackdown on pro-Russia protesters in the east and south. Moscow called on the US to force Kiev to halt its operation in Ukraine’s eastern and southern regions. But, interim authorities in Kiev said they are ready to fight Russia. Russian Foreign Minister Sergey Lavrov on Wednesday accused the US of being behind the Ukraine turmoil and said Moscow would respond if its interests came under attack. “There is no reason not to believe that the Americans are running the show,” RT television quoted him as saying. On Wednesday, some 150 US Army troops arrived in Poland, the first of what will be a “persistent presence” of the US military in the country. The US soldiers from the 173rd Airborne Brigade Combat Team were airlifted from Vicenza, Italy, and dropped in Swidwin, in the northwest of the country. At least 450 more US troops will be deployed in the next few days in Estonia, Latvia and Lithuania. On Tuesday, Pentagon press secretary Rear Adm. John Kirby announced that the US will send 600 troops to Poland, Lithuania, Latvia and Estonia over the coming days for joint military exercises. In an interview with Press TV on Saturday, American political commentator Don DeBar noted that the US is “placing the military resources into the theater for an attack on Russia.” He added that the Russians are apparently being encircled by the US military. Source      |
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Posted: 26 Apr 2014 01:46 AM PDT
 Post-communist countries within the EU are losing population faster than Russia, Mark Adomanis, a Forbes blogger argued in his article. American economist Lyndon LaRouche pointed out that as of 2012 the population of 14 European countries has decreased. He called the EU’s policy in the field of demography a policy of “genocide,” and Russian expert Irina Rudneva agreed with him. Mark Adomanis positions himself as an expert on Russia and an author who is trying to write about the country more or less objectively. He provided a graph of the population in Bulgaria, Czech Republic, Estonia, Croatia, Hungary, Lithuania, Latvia, Poland, Romania and Slovakia since 1994 and compared it with similar dynamics in Russia in favor of the latter. The author wrote that all the stories about “the last man in Russia” looked far more relevant for the countries scrupulously following Western recipes. The new EU member countries have liberalized their economies, opened their markets to Western goods, and joined NATO and the European Union. Yet, instead of demographic stability they received as a reward for all the efforts only a colossal decline in population, even worse than in Russia. The author concluded that the trend could only increase “in Russia’s favor” because recently the European Union lifted the last restrictions for Romanian and Bulgarian workers. Mark Adomanis wrote that the outflow of workers from the East to the West would probably slightly increase, and considering the poor economic conditions in places such as Croatia, Bulgaria and Romania, many of those who left abroad are unlikely to soon return to their homeland. Adomanis concluded that the liberalization of the economy, labor market reforms and free and fair elections were not directly related to an increase in life expectancy, birth rate growth, or attraction of migrants. “The liberalization of the economy has no direct impact on birth rate growth,” commented for Pravda.Ru Natalia Tikhonova, head of the department of social and economic systems of the HSE. “Increase in population is boosted not only and not so much by economic reasons, but culture, traditions, and stage of development of a country. As for the post-communist countries, their young population is leaving for Western Europe. Liberalization has nothing to do with it. As for Russia, in different regions these numbers vary greatly. If we were to subtract the number of births in Muslim regions from the average number for Russia, I think it would not be higher than in those countries. I would try to see deeper processes in these data,” said the expert. Let’s try to see these “deep processes” in the statistics. If you look at the results of the last census that took place in the EU in 2011, the most catastrophic situation is in Romania where the population in the last decade has declined by 12 percent. No less serious is the situation in Latvia where the population has decreased mainly due to emigration by 13 percent, as well as Lithuania – 12 percent. The decrease in Bulgaria was ten percent, and in Serbia that is not yet part of the EU – five percent. In Hungary where 10.4 million people lived before 1989, now less than ten million people reside. Demographers paint a bleak picture for Eastern Europe for not too distant future. By 2060 Romania, Latvia, Poland and Bulgaria will have the highest in the EU share of elderly population compared to working population. American economist Lyndon LaRouche called demographic policy of the EU a policy of “genocide.” He pointed out that as of 2012 over five years the population of 14 European countries has decreased in absolute terms. The countries where the population is shrinking, in addition to Eastern Europe, are those in Southern Europe – Greece, Spain and Portugal. In Portugal and Italy death rate has been higher than birth rate since 2008, and every year the imbalance is growing. He believes one of the reasons for this situation to be impoverishment. LaRouche wrote that this was not just some horror movie. This is done consciously. The British Empire has openly declared that the human population should be reduced. The easiest and most effective way to do so is to reduce the potential relative population density to a level that does not allow maintaining the current level of the population, Lyndon LaRouche argued. Irina Rudneva, scientific secretary of the Center for the Study of the Balkans Crisis with the Institute for Slavic Studies, agreed: “The current demographic decline in the former Yugoslavia is not associated with market liberalization, but the consequences of the economic, social, and psychological crisis that these countries went through in 1990s,” the told Pravda.Ru. “This (the outflow of population and reduction of natural growth) also has to do with the domestic and foreign policy. European Union is constantly giving conditions to the countries that are not its members. Those who have already entered the union are forced to play by its rules, and it has a very strong impact on their economic development, and not in a positive way. First of all, it concerns Croatia that has a very high unemployment rate and rising prices for food and housing. The situation is grim in Bosnia and Herzegovina lacking political stability and where the situation is forced by the EU. The most difficult situation is in Serbia that had to independently recover from the bombing and that is under a lot of pressure from the EU because of Kosovo,” said Irina Rudneva. She also added that in Serbia and Montenegro there has been a recent sharp increase of cancer cases, which is a consequence of the NATO bombing in the 1990s. Source     |
