Minsk 2: Macroeconomic background

Макроэкономика 13.02.2015 In a second attempt by Ukraine (supported by the West) and the Kremlin to stop the Donbas war, there is a great deal of uncertainty whether the key sides--Ukraine's leadership and the Kremlin--will fulfil the agreement. The details of yesterday's agreement are available at the following sources: Financial Times (http://on.ft.com/1CYFpBD) and Wikipedia (http://en.wikipedia.org/wiki/Minsk_II). While the democratically elected leadership of Ukraine has a mandate to align Ukraine with the EU, the Kremlin is on a mission to restore Russia to its former Soviet Union glory as a pre-eminent global power. Below is our analysis of the macroeconomic factors behind the second Minsk agreement.