22:08 GMT17 February 2020
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    Despite Washington’s best efforts to cripple Russia’s economy through sanctions, US allies appear to be realizing the senselessness of Moscow’s supposed "isolation."

    Because of Russia’s alleged involvement in the Ukraine conflict, which Moscow has consistently denied, Washington has imposed economic sanctions on Russian companies and individuals. The policy relies on the cooperation of US allies in Europe, principally, Germany and France.

    But that European support may be eroding.

    "There was news out of Russia on Friday that (German chancellor Angela) Merkel had basically acknowledged that Crimea would stay Russian," Vladimir Signorelli, head of macro-research firm Bretton Woods LLC told Forbes.

    "…Given the popular discontent with the sanctions in Europe, I wouldn’t be surprised to see pressure build against extending sanctions in January," he added.

    This is partially due to upcoming elections in Ukraine’s east. On Friday, Merkel, Putin, French president Francois Hollande, and Ukrainian President Petro Poroshenko met to discuss the possibility of those elections being held within three months.

    If honored by Kiev, the results could bring about an end to the conflict.

    "An optimistic case might see the sanctions regime breaking down by March, certainly June 2016," Signorelli said. "And because markets are always keyed on the future, and this optimistic scenario looks increasingly likely, one could begin to position for this now."

    Last month, Fitch Ratings also pointed to the strength of the Russian markets.

    "We assess the capability of a country to fulfil its debt obligations," senior analyst Charles Seville told Deutsche Welle. "Russia has a low level of debt, a strong external trade balance, state financial assets, and international reserves in the Central Bank and Finance Ministry’s reserve fund."

    An end to sanctions makes particular sense given that it affects Ukraine and Europe just as much as Russia.

    "The end of sanctions opens the door again to better Russian-European relations. This is good for Russia and Russia-bound investors. But it is also good for European companies…" Kenneth Rapoza writes for Forbes, "and it is good for Ukraine."

    A report from RBK last month also reiterated the link between the Russian and Ukrainian economies.

    "Even in times of peace a downturn in Russia’s economy would damage Ukraine’s economy," the report read.

    "This is an emerging win-win," Signorelli said, according to Forbes. "It’s positive for Russia and for Ukraine."

    Related:

    Russian Communists Suggest West Lift Sanctions in Light of Anti-ISIL War
    Journalism Must Discuss Russian Economic Development - Rossiya Segodnya
    Kiev Informs Russian Airlines of Sanctions - State Aviation Service
    Tags:
    anti-Russian sanctions, Russian economy, Bretton Woods, Fitch Ratings, Vladimir Signorelli, Angela Merkel, Petro Poroshenko, Francois Hollande, Germany, Ukraine, Russia, France
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