The Looming Showdown in Ukraine

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March 3 (Bloomberg) -- Citigroup Global Markets' Robert Kahn discusses the situation in Ukraine with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Of what you know about the situation in crimea, ukraine, and russia.

And how you think things are going to play out.

In terms of the economy on the ground in russia, we have the makings of a very severe crisis.

There are economy was already doing poorly, the government is using reserves at a rapid pace.

Even the basic functioning of the government is proving difficult.

The economy is falling quite sharply, so from an economic respect of there are some needs that he should be addressed if we're going to sustain this coalition during this very difficult time.

In terms of what is going on in russia, as was earlier noted, we have had some significant moves in the russian financial markets.

In 2008, when there was geopolitical tension, we saw very similar moves in russia.

We do believe that they are vulnerable to a pullback in risk-taking, assets leaving russia, and the possibility of sanctions.

That could all weigh on russian market, and have an effect.

They have large reserves to attack -- address it, but it is some place where we feel we can bring pressure.

Talk about vladimir putin has perspective, based on what you know of his strategy and his experience in the past.

We debate that, editing the basic answer is that we do not know.

It is very hard to predict, we're all somewhat surprised by the aggression of the recent news.

Russia has important restaurants -- interest in the crimea, but that does not explain the kind of -- are those interest really being threatened by the revolution that is taking place in kiev?

I do not think so.

I think the threats that are used to justify these actions are really fabricated moves.

That said, the turn towards russia that yanukovych had contemplated, that was through with his departure, we see them wanting to move more toward the west.

I do not see that as a material threat to russia, it certainly does not need to be.

In that sense, the sake -- statement by secretary kerry that there are many solutions are, i believe that.

Crimea areas they send him a autonomous region -- crimea is a semiautonomous region.

What does that mean, and how does that impact the future of these events?

There are strong russian interests in terms of military bases, and there are many people whose be russian or have russian associations they are.

To the extent that those peoples where fire -- welfare would have been obvious concern to russia . but i think fundamentally, there must be some broader belief in terms of russian influence, which is hard to me to explain or understand.

What does this send as a message to other countries that in the future may try to go their own way and defied the where vladimir putin -- defied the will of vladimir putin?

I look at this in the terms of economic disruption and the cost, and i do think it is an extraordinarily painful time for ukraine.

It is a challenge for the west to come with a significant financial package brady needs to be done in two stages.

They need to have some upfront cash, and that a long-term adjustment program with the imf.

If you have that i did on the table you can see that the ukraine comes out of this stronger with a western orientation.

Ultimately, that is something that could be a positive statement for countries in terms of adopting a more marketable economy and sustainable resources.

Tell us about the great economy.

It is not only a transit point for natural gas and energy from russia to western europe, but it also has a large wheat growing area, and an macro cultural center, and in the east it has coal.

It has a very strong cultural advantage.

It has heavy industry that is really a legacy from the soviet union, and from the integrated reduction networks that existed at that time.

Unlike tackles lamacchia, hungary, poland, you do not see the reorientation of that infrastructure toward the west.

There are more integrated, and more reliant on russian trade than many other countries in the region.

That of course is part of the vulnerability we are seeing in terms of the threats russia is making to break down that trade.

Thank you.

Robert kahn is a senior fellow

This text has been automatically generated. It may not be 100% accurate.

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