By Darren Smith, Weekend Contributor
The Group of Seven Nations (G7) agreed to impose new sanctions and move more swiftly against Russia for the state’s actions in The Ukraine. The group accused Moscow of violating the de-escalation measures mutually agreed to during the Geneva Accord designed to reduce tensions in the region.
The powers in North America, Europe, and Japan agreed Saturday to impose new targeted sanctions. In an official statement, the G7 announced:
“Given the urgency of securing the opportunity for a successful and peaceful democratic vote next month in Ukraine’s presidential elections, we have committed to act urgently to intensify targeted sanctions.”
The market is also beginning to deal blows to Russia’s increasingly perilous economy. Standard and Poors, a benchmark rating service for sovereign debt and other investments, announced that it was cutting the insurance rating due to the risk of Russia defaulting on its debt; lowering its rating to BBB- making it just one step above a junk rating. This is certain to affect large Russian government owned businesses such as Gasprom that supply the nation with hard currency. The reduction of this rating carries an 18% probably of default within the next three years. Russia defaulted on its sovereign domestic debt in 1998 and plunged the nation into a financial chrisis forstering a devaluation of the Rouble and an 84% rise in inflation.
Could Russia later be an example of hard sanctions working as opposed to a much more costly direct action by both sides militarily?
Continue reading “Russian Economy Could Face Strong Shocks In Market Resulting From Actions In The Ukraine”