Yulia Tymoshenko vs. Vladimir Putin

The events unfolding in Ukraine set the stage for much broader global policy issues. Will brutal arrogance on the part of the Yanukovych regime and Vladimir Putin’s ambition to restore a Soviet Union characterized by hegemonic, oppressive, and confiscatory policies prevail over Central and Eastern Europe and the former Soviet empire? The Ukrainian people have now tasted freedoms previously unknown, made possible by the dissolution of the Warsaw Pact and the fall of the Iron Curtain. Emboldened by tenacious determination to hold onto what they have won, can their uprising prevail? Will Yulia Tymoshenko, the charismatic but controversial former prime minister and opposition leader, who was cast into prison in 2011 by Yanukovych but released today, be returned to power?

Several broader matters are now at stake. Investment implications for Central and Eastern Europe are at stake. Former Soviet satellites and their markets’ foreign direct investment, economic outlook, quality of life, and freedom of their populations are all now at stake as well.

I have asked my colleagues Michael McNiven and Bill Witherell to dissect the implications and advance a detailed discussion of the markets that are directly and peripherally involved. That longer analysis is forthcoming.

For now, we must follow the events in Ukraine closely. More than Ukraine alone is at stake in the outcome. Ukraine is a tipping point, not an isolated geographical entity. The entire complex structural relationship between old Europe and Russia is again in play. The outcome in Ukraine affects nations as far north as Finland and Estonia and as far south as Turkey and the original Levant. Both history and the trajectory of affected markets will hinge on the outcome in Ukraine.

BY David R. Kotok