World at Risk: Ukraine on failed state brink – Nomura
Friday, May 23, 2014 - 04:09
May 23 - Post the presidential election, the Ukrainian government will have greater legitimacy, says Nomura’s Alistair Newton. But the key will be how it deals with factions in the east of the country.
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I'm Alistair Newton senior political analyst at Nomura international PLC to. Do. Presidential election. Is of course very important that whatever the outcome whatever the outcome of the Lenox industrial very much like. The chocolate king is going to win the election. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Whatever the outcome of the Russians will undoubtedly. Continue to preannounce the legitimacy of the you mentioned. -- however it will be that it will have been elected we'll continue to work closely with the west. And it was certainly have rights of legitimacy in the eyes of most of the world. In the interim administration. The important question is going to be will be able to negotiate successfully. With elements -- -- he's looking for a great -- critical moment how this is not going to be straightforward. Ukraine is still on the brink of becoming at that fact failed states. It's a great tentative politically explosive force. Young talent that launch economic challenges which reflects not only the Ukrainian administration but also the place. Particular. It's important construction over. The important question is -- which is quite heavily on markets for the last few weeks or less stress enough the -- on the second the knowledge. We've actually seen very little volatility being -- by this issue. But the big question of course remains will Russia virtually insisting that a charity in these did you -- And they also right now looks to be probably know. Falling Vladimir Putin's. Agreements that may be the 24 by elections in Ukraine can be helpful. And his withdrawal of support for the referendum which did actually take place in the east on. -- autonomy. Joining Russia. That has been a certain easing in the general dynamic of this crisis and it does look like but the four Russian military intervention is higher than many of us at this stage. Now for all that city still a great deal of uncertainty going forward and the reason the military intervention -- issue it's particularly important for markets. Is that if we do see that I believe it's extremely likely. That the US would move the financial sector banking sector of sanctions with serious implications. For European banks in particular. Now a lot of it -- role of exposure to Russia we've seen today. Has undoubtedly been caused not by the sanctions and close well. But by anticipation of the situation with its. We get yet more sanctions up to and we might expect sanctions. If the perception of that risk goes down in the coming weeks the 24 by election takes place. If diplomacy continues. As it is right now to try to resolve this crisis to believe the market will in that scenario. Be able to cut it back to touching Russia and the irony on this fundamentalist. Bob but only places to see -- Missed right now I have to -- it's my place -- bill moving away from the possibility. All miniature inspection without warning outside this. I think to a scenario where privacy. And a source that writes the stability may view it more on. Against her -- crisis headlines markets don't work about felt about something else.
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