Bershidsky on Europe: Civil War in Kiev

Leonid Bershidsky's look at some of the top stories on markets and politics in Europe.

Here's today's look at some of the top stories on markets and politics in Europe:

Kiev street war leaves at least 25 dead.

Protests in the capital of Ukraine, which started three months ago as peaceful rallies meant to make President Viktor Yanukovych reconsider his decision not to sign an association pact with the EU, have now turned into a full-scale civil war. On Tuesday, radical protesters battled riot police and paramilitaries loyal to Yanukovych. Both sides used firearms, leaving 16 civilians and nine police officers dead. More than 100 were hospitalized with serious injuries. A journalist from a pro-Yanukovych newspaper was shot to death, apparently by paramilitaries on the government's payroll. In Kiev's central square, a crowd of about 15,000 withstood police attacks, burning two armored personnel carriers and one water-cannon truck. It is hard to believe this was, only a month ago, a peaceful city where both sides were extra careful to avoid bloodshed. Despite the escalation, Yanukovych appears determined to hold onto power, saying he has offered numerous compromises but the opposition has not kept its end of the bargain. Formally, that is true, but given all the anger against Yanukovych's inept and corrupt regime, few protesters are willing to listen to formal arguments. While an early election is probably the only way to avoid further bloodshed, Yanukovych is unwilling to call one and Western efforts at mediation have been woefully ineffective. Kiev needs to brace itself for more violence.

Chinese investor and French government to save loss-making Peugeot.

After a tumultuous six-hour meeting, the supervisory board of French automaker PSA Peugeot Citroen approved a plan whereby Chinese automaker Dongfeng and the French government will become PSA shareholders with 14 percent each. The founding family, Peugeot, will reduce its 25.5 percent holding to the same level, ceding control of the company. This was a tough decision for Peugeot heirs to make: Their family had controlled the automaker for 200 years. Each of the new shareholders, however, will inject $1.1 billion into PSA, and for a company that has just reported a $3.16 billion loss for 2013, this could mean the difference between life and death. Besides, Dongfeng brings to the table its power in China, where the French company already sells 20 percent of its output. There is even the possibility that the PSA-Dongfeng joint venture will export cars from China, which would be an unusual move. The Asian bet is understandable given the fiercely competitive European market's continuing weakness. The PSA general meeting, scheduled for April, needs to approve the deal, and the shareholders will surely see its wisdom.

EU warns Renzi he must stick to deficit limit.

As Matteo Renzi, the Italian prime-minister-to-be, laid out a bold four-month plan to change everything from the Constitution to tax laws, EU officials worried about the cost of all this change. In recent speeches, Renzi has talked of "going beyond austerity" and criticized the budget deficit limit of 3 percent of gross domestic product, imposed by the EU on its members. The EU's economic chief, Commissioner Olli Rehn, warned Renzi he was not going to get his way. "I trust Italy and the Italian authorities will continue to stay committed to the European treaties," he said. "We all know Italy has a very high level of public debt and piling new debt on top of this old debt does not seem to improve the economic competitiveness of Italy." Indeed, in the EU, Italy's debt level, at 133 percent of GDP, is second only to Greece's. Renzi's reformist zeal may run into a stone wall if he indeed tries to press Brussels for leniency on the deficit limit. The bloc does not need another debt crisis on its hands.

European IPO market at post-2007 high .

The initial public offering market in Europe is having its best start of the year since 2007. The Danish outsourcing group ISS, the U.K. discount retailer Poundland, the French engineering group GTT, and the U.K. pet shop chain Pets at Home are all planning listings in the near future. The Russian retailer Lenta is about to start trading on the London Stock Exchange after a successful road show. In total, $8.3 billion worth of new offerings are being marketed in addition to the $3.2 billion that have already hit the European exchanges. Despite continuing stagnation in most European countries, market sentiment about Europe has improved, creating a good opportunity for private equity investors to cash out -- and perhaps to offload some of their lower-quality assets. Caveat emptor.

Ruble continues losing value as Turkey and Hungary stabilize.

Though the market panic that drove down emerging markets currencies is over, the Russian ruble continues its slide. The euro now costs 49 rubles, its highest rate ever, and the dollar stands at 35.62 rubles, the most since 2009. The latest drop was caused by the finance ministry's announcement that it was going to buy about $100 million worth of foreign currency every day until the end of the year. The Russian central bank is openly pessimistic about Russia's economic prospects, expecting output growth of 1.5 to 1.8 percent this year and inflation higher than the official target of 5 percent. Given this outlook, the Central Bank is in no hurry to raise rates as its Turkish counterpart did in late January, causingthe lira to gain 5 percent against the dollar. The Hungarian Central Bank is even getting away with lowering rates for a 19th straight month: the forint is almost unchanged against the dollar so far this year, while the ruble has lost 10 percent of its value. Despite the relative political stability in Russia, the ruble seems to have the biggest downside of all European emerging market currencies this year, largely because the monetary authorities do not believe in it.

(Leonid Bershidsky writes on Russia, Europe and technology for Bloomberg View. Follow him on Twitter.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.