Bershidsky on Europe: Standoff in Crimea
Here's today's look at some of the top stories on markets and politics in Europe.
Standoff continues in Crimea as Security Council condemns Russian intervention.
Persistent reports that Russia would attack Ukrainian forces in the Crimea in the early hours of Tuesday unless they surrendered turned out to be untrue. Russian forces continued to surround Ukrainian military units and hold key positions on the peninsula, while the pro-Russian local authorities reported thousands of defections from the Ukrainian military. Russian President Vladimir Putin still has not made a public statement on the situation, leaving experts to guess whether he was bent on annexing the Crimea from Ukraine or potentially receptive to a compromise that would give the region more autonomy. Russia called a U.N. Security Council meeting Monday night to discuss the situation in Ukraine and was universally condemned, though its representative Vitaly Churkin maintained that the intervention was meant to protect Russian-speaking people. Putin, however, has heard it all before and is not likely to pull back the troops until some sort of compromise is reached. Western diplomacy is now geared toward achieving such a compromise rather than punishing Russia, which is not necessarily a hopeful sign -- Putin may see it as weakness. In the end, however, a peaceful solution is only possible if Putin is allowed to save face as he pulls out. Otherwise, the dangerous standoff may one day erupt into fighting.
Eurozone bond markets stabilize , emerging markets new worry.
Volatility at government bond auctions held by countries on the eurozone's periphery has returned to the low levels of 2007, signalling that investors are no longer worried about the ability of European governments to handle their debt burdens. In the Italian and Spanish bond markets, yields have hardly moved since the start of the year. Southern Europe, Belgium and Ireland are no longer the financial hot spots they were three years ago after expensive bailouts and tough austerity programs, but also because emerging markets are looking scarier. Russia, Ukraine and with them other East European countries will inevitably suffer because of the political instability in the region. In April, Russia may remove its discount on natural gas for Ukraine, possibly forcing the neighboring country to default on its debt. The 2011 debt crisis was bad, but wars and power politics were not on the agenda. Now they are.
Sweden says other EU countries should share its immigration burden .
According to Swedish immigration minister Tobias Billstroem, only nine of 28 EU member states receive 90 percent of all asylum seekers in the bloc, and they are "starting to, well, become fed up." European Commissioner for Home Affairs Cecilia Malmstroem, a Swede, is investigating immigration violations in 12 EU member states, up from only one in 2010. Italy and Greece estimate 20,000 Syrians entered their countries in 2013, but only 1,000 applied for asylum there: The rest moved north, to wealthier and more welcoming countries like Sweden. This year, the nation of 9.5 million expects 59,000 asylum seekers, 23,000 of them from Syria. Only Germany, a much bigger country, accepts more Syrian refugees. Sweden faces a housing shortage and is now putting up the asylum seekers at hotels. Meanwhile, Italy and Greece receive the bulk of EU immigration subsidies, stressing their role as points of entry. Eastward expansion and the recent debt crisis has made the EU too unevenly developed economically, straining the social safety nets in the richer countries. Unless some policy is worked out for sharing out the burden, Euroskeptic parties in these countries are only going to get stronger.
Glencore Xstrata to take stake in Russian oil company.
The Anglo-Swiss mining and commodity trading giant Glencore Xstrata is about to take an equity stake in Russneft, a private Russian oil company that owes it $900 million. The debt will be converted into equity after the international company completes due diligence of the Russian producer, assembled by billionaire Mikhail Gutseriev from a motley collection of small assets. The fact that one of the world's largest natural resources groups is interested in acquiring a Russian asset shows that the Western business community puts little faith in politicians' threats to isolate Russia economically. In fact, the U.K. appears to be opposed to any sanctions that might close London's financial center to Russians.
French artificial heart recipient dies .
Last December, a French patient for the first time received a permanent artificial heart transplant. The French company Carmat, the maker of the robot heart, received profuse congratulations from President Francois Hollande, and indeed, it had managed to overtake U.S. competitors in supplying a heart-replacement device expected to last for the rest of the patient's lifetime. On Monday, however, the 76-year-old patient died. The death is a serious setback for Carmat, which had planned to market its device throughout Europe this year, drastically cutting the waiting list for transplants and the price of the surgery. Turning people into cyborgs with replaceable aritficial parts is not going to be a smooth process.
(Leonid Bershidsky writes on Russia, Europe and technology for Bloomberg View. Followhim on Twitter at @Bershidsky.)
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