Merkel reassures Russia
December 13, 2014
Chancellor Angela Merkel sought to limit Russian concerns about closer European trade ties with Ukraine, and other east European states, during her weekly video podcast published on Saturday.
"The EU's association agreement with Ukraine, Georgia and Moldova is not directed against Russia" Merkel said. The intention was to create a "closer relationship between economic areas" in which Russia would be included.
International sanctions against Russia over its actions in the Crimea and Ukraine have been imposed in stages during the course of the year. Merkel again called for a diplomatic solution to the conflict in eastern Ukraine. She said that the first steps had been taken with the Minsk Agreement in September and they should be built on.
Rouble in trouble
On Friday, Russia's central bank was seen intervening on financial markets to halt the slide of the rouble against the US dollar. The Russian currency has lost 40 percent of its value against the US currency in 2014. It dropped to a new low of almost 58 to the dollar in New York markets at the end of the week. On European markets the rouble fell 2.4 percent to trade at 71.55 versus the euro at the close.
Dollar-denominated Russian stocks also dropped on market trade, following the weaker currency and lower oil prices. The price of oil, which together with sales of natural gas accounts for half of Russia's federal budget revenues, has reached a new five-year low because of concerns over excess supply and a negative outlook for demand.
Oil slip
At the end of the week, the price for a barrel of benchmark Brent oil settled at below $62 (49 euros) and US crude slumped to under $58 to extend Thursday's landmark fall below $60.
On Friday, the Paris-based International Energy Agency, which coordinates the energy policies of industrialized countries, cut its outlook for demand growth in 2015 by 230,000 barrels per day (bpd) to 900,000 bpd on expectations of lower fuel consumption in Russia and other oil-exporting countries.
jm/tj (Reuters, AFP)