Wicked Thoughts Department 1

As Nick notes in an earlier post Barroso and Solana have both been voicing their concerns about what is going on in Ukraine. Barroso has also issued a scarcely veiled threat about possible consequences. (Come to think of it, a strong stand on Ukraine could be one way of recovering some authority after the bruising he’s been taking at the hands of the MEPs). So I ask myself what has the always (even to the point of cynicism) pragmatic Putin got to trade?

Well he could try suggesting that the Russian central bank put a hold on its plans to convert some more of its reserves into euros. Preposterous suggestion, probably. Doable in the modern world of realpolitic, certainly. The irony here is that there were undoubtedly some people around at the time of setting up the single currency who thought that this ‘achievement’ of central bank reserve status was going to be a thoroughly good idea.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

4 thoughts on “Wicked Thoughts Department 1

  1. Eek! Economics not your strong point, is it? Listen, if Putin wants to f*ck the EU, he would order Russia’s entire reserves to be converted from US$ into euros. The euro’s at what, $1.30 already … to make things worse for EU exporters, you’d sell dollars and buy euros, thus driving UP the euro.

    Smart move eh?

  2. “Economics not your strong point, is it”

    Hmmm. I think you’ve missed the point. I was suggesting that Putin might offer to help keep the euro down as a trade for the EU turning a “Nelson style” blind eye to what is happening in Ukraine.

  3. “Putin must think he can get something out of it to have declared Yakunovich the winner already…”

    I’m not sure. I think we’re playing poker here. But I would say that for Russia the stakes are pretty high, as they are of course for the Ukranian people.

    Rumerology is naturally rife, but the big issue is what is actually going off at the diplomatic level. It seems unlikely that Yakunovich will declare himself elected unless he can count on Russian support, and it seems unlikely that Putin will offer him that support if he doesn’t feel he can get away with it, and make Yakunovich stick, which he may not be able to do.

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