January 3, 2016
Trying to lure global investors back to a market frozen by a currency slump and international sanctions, Russian banks are now selling ruble-denominated Eurobonds. While unprecedented stimulus by the European Central Bank will start to take effect in coming months, weak growth in Germany and France and rising tensions in Ukraine threaten the Eurozone’s modest revival as the 18-nation economy expanded by only 0.2 percent in the third quarter. Meanwhile, Latvia, Estonia and Lithuania (all NATO members) are preparing to hit back, after repeated incidents of Russian airplanes violating European Union countries’ airspace. They believe Russia is shutting itself off from the West. Internally, Europe has to come to terms with a gaping hole in its policy response due to its unwillingness to reduce excessive levels of corporate, bank, and sovereign debt accrued during the global financial crisis and its aftermath.