The World in 2:00 – March 21, 2015
TRANSCRIPT: “The World in 2:00″
From Kyiv, Ukraine, this is your World in 2:00 for Friday, March 20th, 2015. I’m your host, Luke Vargas, with the Talk Radio News Service.
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Saturday will mark one year since Russia finalized its annexation of Crimea. It’s been a tough year for Ukraine militarily and politically, but economy has become a nightmarish story of its own.
First, political instability last year kicked off the widespread flight of foreign capital. The ensuing Crimean annexation forced Ukrainian banks to sell many of their assets in the region at a loss and suspend banking activity on the peninsula.
Finally, the spread of fighting to the eastern Donbas region shuttered hundreds of bank branches, and many faced looting and saw their tangible assets stolen.
The fiscal consequences have been staggering.
In February alone, the Ukrainian Hryvnia lost 50%, on top of a 50% drop last year.
As of the beginning of this week, 41 Ukrainian banks were considered insolvent.
Make that 43 now, as Astra Bank and Bank Kyivska Rus were deemed to insolvent today.
A sign of the times, Kyiv’s Hrushevskoho Street, the scene of violent clashes between Ukrainian security forces and anti-government protesters last year, played host to a different sort of demonstration today, as hundreds marched to express frustration over the government’s suspension of Delta Bank, the country’s fourth-largest lender, earlier this month.
Penalizing faltering banks isn’t a popular move, but the Ukrainian government has been waiting months for banks to fall in line with recommendations to increase the stability of their holdings.
But while the consequences for financial mismanagement can be severe, the stakes are even higher when it comes to military order.
At a gathering of Ukrainian soldiers in Kyiv today, such discipline was obviously lacking, as cell phones rang out from the pockets of servicemen, including during a moment of silence.
With the Hryvnia seemingly in free fall and the Russian military amassing along Ukraine’s southern and eastern borders, the day of reckoning may not be far off.
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