The recent uprising in Ukraine condemns Russia’s president, Vladimir Putin, to rethink his dream of building “Eur-Asia”.
The original concept of building a new continent between the West and Asia, which emerged for the first time in 1920, became a doctrine in 1998. The Russian government has taken it up as a means to create and maintain a buffer zone against the West. This will also help Mr Putin to contain the growing influence of China in Central Asia (which holds vast reserves of raw materials).
Ukraine is a cornerstone of this geostrategic vision, namely because of its size – it is the second-largest country in Europe – and its location bordering Poland, Slovakia and Russia. It also gives Moscow direct access to warm waters through the Black Sea.
The fixed smile of Sochi has given way to a deep tension for Mr Putin. Granted, no one knows how the Ukrainian crisis will evolve. But the spectre of a progressively stiffening Russian position, fuelling retaliation by way of trade sanctions, is looming.
From an economic and financial standpoint, the breaking of trade would mean risks for Russia of losing three-quarters of its exports in hard currency – mainly gas – while Europe would lose a third of its energy supply. Moscow would neither benefit from crucial foreign direct investments from the West nor get access to its technology. The interest rate of the rouble would be pushed up, adding to the fragility of the financial and banking sector.
The country, which is already suffering from sluggish growth and a dramatic demographic development, would have very few solutions to fill these gaps.
In the European Union, Germany would have to manage its energy dependence and halt its policy of delocalisation, a key element of the country’s miraculous booming productivity. The Baltic countries and the former satellites of the USSR would also experience lower capital flows and investments.
Russia and Europe are going through the prisoner’s dilemma – while both sides have a clear interest in cooperating, each may opt for conflict and betrayal.
What could be the consequences for the markets?
The region is certainly in for renewed volatility. After experiencing extreme financial oscillations during the past decade, strategic natural resources are back in the spotlight. Fears of monopolisation and supply disruption are re-emerging, although groups active in the exploration and distribution of gas and shale oil will act as a stabilising factor.
The prices of uranium, nickel, potash and some grains are also at risk. Some Australian-listed companies and Norwegian and Canadian producers are potential beneficiaries, which could help their home currencies. The world’s economic recovery will also add to the commodity demand.
The euro zone is experiencing inflows from the eastern periphery. The area is a relative shelter in terms of geostrategic security. This is confirmed by the recent and opportunistic renewed interest of the Polish government for membership in the euro zone. It may also reignite interest in industrial investments in a few southern peripheral countries.
Germany, Austria and continental banks heavily involved in the East have already seriously underperformed. They could be supported by the formation of a geopolitical premium on oil prices, but a potentially stronger dollar will get in the way of pricing, just as it has for precious metals.
Philippe Schindler is the chief investment officer at Blue Lakes Advisors, a Swiss company that advises financial institutions in Europe and the Middle East.
Follow us on Twitter @Ind_Insights
The biog
Favourite food: Tabbouleh, greek salad and sushi
Favourite TV show: That 70s Show
Favourite animal: Ferrets, they are smart, sensitive, playful and loving
Favourite holiday destination: Seychelles, my resolution for 2020 is to visit as many spiritual retreats and animal shelters across the world as I can
Name of first pet: Eddy, a Persian cat that showed up at our home
Favourite dog breed: I love them all - if I had to pick Yorkshire terrier for small dogs and St Bernard's for big
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
%20Ramez%20Gab%20Min%20El%20Akher
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Match info
Uefa Champions League Group C
Liverpool v Napoli, midnight
The specs: 2019 GMC Yukon Denali
Price, base: Dh306,500
Engine: 6.2-litre V8
Transmission: 10-speed automatic
Power: 420hp @ 5,600rpm
Torque: 621Nm @ 4,100rpm
Fuel economy, combined: 12.9L / 100km
Brief scoreline:
Manchester United 0
Manchester City 2
Bernardo Silva 54', Sane 66'
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
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The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
The team
Photographer: Mateusz Stefanowski at Art Factory
Videographer: Jear Valasquez
Fashion director: Sarah Maisey
Make-up: Gulum Erzincan at Art Factory
Model: Randa at Art Factory Videographer’s assistant: Zanong Magat
Photographer’s assistant: Sophia Shlykova
With thanks to Jubail Mangrove Park, Jubail Island, Abu Dhabi
MATCH INFO
Champions League quarter-final, first leg
Ajax v Juventus, Wednesday, 11pm (UAE)
Match on BeIN Sports
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%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20James%20Wan%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Jason%20Mamoa%2C%20Patrick%20Wilson%2C%20Amber%20Heard%2C%20Yahya%20Abdul-Mateen%20II%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%202%2F5%3C%2Fp%3E%0A
The biog
Hobby: "It is not really a hobby but I am very curious person. I love reading and spend hours on research."
Favourite author: Malcom Gladwell
Favourite travel destination: "Antigua in the Caribbean because I have emotional attachment to it. It is where I got married."
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
The%20Genius%20of%20Their%20Age
%3Cp%3EAuthor%3A%20S%20Frederick%20Starr%3Cbr%3EPublisher%3A%20Oxford%20University%20Press%3Cbr%3EPages%3A%20290%3Cbr%3EAvailable%3A%20January%2024%3C%2Fp%3E%0A
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
My Cat Yugoslavia by Pajtim Statovci
Pushkin Press
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Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Scoreline
UAE 2-1 Saudi Arabia
UAE Mabkhout 21’, Khalil 59’
Saudi Al Abed (pen) 20’
Man of the match Ahmed Khalil (UAE)
SUE%20GRAY'S%20FINDINGS
%3Cp%3E%22Whatever%20the%20initial%20intent%2C%20what%20took%20place%20at%20many%20of%20these%20gatherings%20and%20the%3Cbr%3Eway%20in%20which%20they%20developed%20was%20not%20in%20line%20with%20Covid%20guidance%20at%20the%20time.%3C%2Fp%3E%0A%3Cp%3E%22Many%20of%20these%20events%20should%20not%20have%20been%20allowed%20to%20happen.%20It%20is%20also%20the%20case%20that%20some%20of%20the%3Cbr%3Emore%20junior%20civil%20servants%20believed%20that%20their%20involvement%20in%20some%20of%20these%20events%20was%20permitted%20given%20the%20attendance%20of%20senior%20leaders.%C2%A0%3C%2Fp%3E%0A%3Cp%3E%22The%20senior%20leadership%20at%20the%20centre%2C%20both%20political%20and%20official%2C%20must%20bear%20responsibility%20for%20this%20culture.%C2%A0%3C%2Fp%3E%0A%3Cp%3E%22I%20found%20that%20some%20staff%20had%20witnessed%20or%20been%20subjected%20to%20behaviours%20at%20work%20which%20they%20had%20felt%20concerned%20about%20but%20at%20times%20felt%20unable%20to%20raise%20properly.%3C%2Fp%3E%0A%3Cp%3E%22I%20was%20made%20aware%20of%20multiple%20examples%20of%20a%20lack%20of%20respect%20and%20poor%20treatment%20of%20security%20and%20cleaning%20staff.%20This%20was%20unacceptable.%22%C2%A0%3C%2Fp%3E%0A
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5