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posted by Dopefish on Sunday March 09 2014, @01:30AM   Printer-friendly
from the back-in-the-USSR dept.

Papas Fritas writes:

"James B. Stewart writes in the NYT that there's one major difference between now and the last time Russia invaded a neighbor (Czechoslovakia in 1968): Now Moscow has a stock market that provides a minute-by-minute referendum on Putin's military and diplomatic actions.

On Monday, the Russian stock market index (RTSI) fell more than 12 percent, in what a Russian official called panic selling and the ruble plunged on currency markets, forcing the Russian central bank to raise interest rates by one and a half percentage points to defend the currency. On Tuesday, as soon as Mr. Putin said he saw no need for further Russian military intervention, the Russian market rebounded by 6 percent. With tensions on the rise once more on Friday, the Russian market may again gyrate when it opens on Monday. Russia is far more exposed to market fluctuations than many countries, since the Russian government owns a majority stake in a number of the country's largest companies and many Russian companies and banks are fully integrated into the global financial system.

The old Soviet Union, in stark contrast, was all but impervious to foreign economic or business pressure, thanks in part to an ideological commitment to self-sufficiency. By contrast, today "Russia is too weak and vulnerable economically to go to war," says Anders Aslund. "The Kremlin's fundamental mistake has been to ignore its economic weakness and dependence on Europe." Almost half of Russia's exports go to Europe, and three-quarters of its total exports consist of oil and gas. The energy boom is over, and Europe can turn the tables on Russia after its prior gas supply cuts in 2006 and 2009 replacing this gas with liquefied natural gas, gas from Norway and shale gas.

If the European Union sanctioned Russia's gas supply to Europe, Russia would lose $100 billion or one-fifth of its export revenues, and the Russian economy would be in rampant crisis. Other penalties might include asset freezes and the billionaire Russian elite who are pretty much synonymous with Mr. Putin's friends and allies are the ones who are being severely affected by visa bans, which were imposed by President Obama on Thursday. "The recent events were completely irrational, angering the West for no reason," says one Russian economist. "This is what is most scary, especially for businesses. Instead of reforming the stagnating economy, Putin scared everybody for no reason and with no gain in sight. So it is hard to predict his next actions. But I think a real Cold War is unlikely.""

 
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  • (Score: 3, Interesting) by AsteroidMining on Sunday March 09 2014, @01:00PM

    by AsteroidMining (3556) on Sunday March 09 2014, @01:00PM (#13548)

    If you really think that Germany is going to go along with having its natural gas turned off just in time for Easter, you are living in cloud cuckoo land.

    I have to say, this submission reads like propaganda more than news.

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  • (Score: 2, Interesting) by yours truly on Sunday March 09 2014, @05:39PM

    by yours truly (3040) on Sunday March 09 2014, @05:39PM (#13600)

    This afternoon shortly after 4PM it was 23°C (73°F) in our back yard in central Germany and not a cloud in the sky. I can't remember when the temperature this "winter" was last below freezing. The only snow was early Dec. and disappeared quickly. Putin may have problems selling gas independent of anything he is doing.

    I have read estimates of 20 ~ 25% of Germany's gas coming from Russia. It might not be terribly expensive to do without that and switch to alternatives (Norway, Netherlands, LPG). A couple of years ago we got a wood stove which reduced our use of gas noticeably, although not as much as the cost of wood (which comes from the hills around us). But this year we haven't quite used half what we did last year. It will be interesting to see what develops.