Over the weekend, insolvent, debt-dependent Europe thought long and hard how to best punish Russia and moments ago reached yet another milestone in deep projective thought: as Reuters reports, Europeans could be barred from buying new Russian government bonds “under a package of extra sanctions over Moscow’s military role in Ukraine that European Union ambassadors were to start discussing on Monday, three EU sources said.” This will be in addition to the ban on the debt funding of most Russian corporations. So as Europe’s 7-day ultimatum for the Kremlin to “de-escalate” counts down, Putin has a choice: continue operating under a budget surplus and ignore Europe’s latest and most amusing hollow threat which is merely a projection of Europe’s biggest fears, or spend himself into oblivion as Europe has done over the past decade and become a vassal state of the Frankfurt central bank.. Somehow we doubt Putin will lose too much sleep over this latest “escalation”…
Some more details on today’s latest threat by Europe, which if nothing else has sent the ruble to a fresh record low against the dollar, leaving Europe green with envy at such currency debasement, and boosting Russian exports even more:
German Chancellor Angela Merkel, who led the drive for a tougher EU response, said on Monday that Moscow’s behaviour in Ukraine must not go unanswered, even if sanctions hurt the German economy, heavily dependent on imported Russian gas. “I have said that (sanctions) can have an impact, also for German companies,” Merkel told a news conference in Berlin. “But I have to say there is also an impact when you are allowed to move borders in Europe and attack other countries with your troops,” she said. “Accepting Russia’s behaviour is not an option. And therefore it was necessary to prepare further sanctions.”
This post was published at Zero Hedge on 09/01/2014.