This is a curated list of the most important economic stories from the past week. This week has been all about international politics.
There is no way about it. This week has seen several summits of world leaders in different formats. One of them was the meeting between the NATO states, where they once again expressed their support to Ukraine in the territorial conflict, the country has with Russia. They also said, they were open to the idea of Ukrainian NATO membership, though it is still a thing for the future.
US president Joe Biden later confirmed this – that Ukraine is welcome in NATO after a serious list of reforms.
“The fact is they (Ukraine) still have to clean up corruption. The fact is they have to meet other criteria to get into the Action Plan… It remains to be seen. In the meantime, we will do all that we can to put Ukraine in the position to be able to continue to resist Russian physical aggression. And it will not just depend on me whether or not we conclude that — that Ukraine can become part of NATO; it will depend on the Alliance and how they vote,” said Biden before adding that it might not be easy to convince all NATO members.
An article about the NATO summit can be found here, while there is a link to the comments made by Joe Biden below:
Even more importantly, Joe Biden met with Russian president Vladimir Putin on Wednesday. The two discussed several things including democracy, human rights and Ukraine.
“There are also areas that are more challenging. I communicated the United States’ unwavering commitment to the sovereignty and territorial integrity of Ukraine. We agreed to pursue diplomacy related to the Minsk Agreement and I shared our concern about Belarus,” said Joe Biden in a speech following the meeting.
Inflation is spiking
This week we also spoke to Kristian Andersson from SEB about the latest rise in inflation. Inflation is rising more than expected, but there is no reason to panic yet, he says. This is a short excerpt of the detailed article:
“I think that the central interest rate is too low if they want to keep inflation down,” says Andersson, “They have to raise the central interest rate, but I am not sure that they will do that, because the President last year said that the interest rate is too high and that it needs to stay low so that it will remain cheap to borrow money.”
Instead, Andersson believes that it is more likely that NBU will increase the central interest rate at a meeting on July 22 or at another meeting in September.
“They will have to do more if they want to fight inflation, and I speculate that they are not doing this because of the strong signals from the President,” says Andersson, who does not feel that there is a need to be very concerned at the moment.
Gas transit is down to 20 percent
In the overlap between international geo politics and financial politics, it should be mentioned that the gas transit through Ukraine is now down to 20 percent of the capacity. With Nord Stream 2 being almost finished and the Russian-Ukrainian gas transit deal stopping in three years, many Ukrainians are fearing what will be the consequences.
Ukrainian entrepreneurs wants to make bags out of fallen leaves
This week we also spoke to the Ukrainian start-up Re-Leaf, who are making paper bags out of fallen leaves. The whole interview touches upon the core of the company, the development and the goals for the ambitious startup.
“I just wanted to do something great. People already made paper from wheat straw, and I wanted to do something else,” says 20-year-old Frechka to Ukrainenu about his company Re-Leaf, “I soon had the product, but I did not know what to do with it from here.”
Swedish company suspends wind project
Vindkraft Ukraina had plans to build a 200 MW wind farm in Kherson this year, but those plans are suspended after a new bill in parliament threaten to increase the excise tax on renewable energy producers by 3.2 percent. The increase will lead to additional costs of around three million euros per year for Vindkraft Ukraina, said Carl Sturen, company CEO.
“If a decision on excise tax is made now, it will be necessary to recalculate it (our loans) again, to renegotiate that we cannot fulfill the payment schedules. This is an ongoing process,” said Swedish investor Sturen.
Ukrainians are heavily into crypto
Ukrainian investors have earned 400 million dollars on bitcoin in 2020, according to a new survey done by Chainalysis. That ranks Ukraine as number ten in the world, even close to Russia ranking fifth with 600 million dollars in earnings.
The price of bitcoins has been soaring in 2020 and it is benefiting the Ukrainian investors. Kyiv Post suggests that Ukrainians are investing so much in bitcoin because of the different investment culture in Ukraine, where people are less inclined to buy stock or bonds.
The top three countries in the world are the U.S., China, and Japan, where investors earned respectively 4.1 billion dollars, 1.1 billion dollars, and 0.9 billion dollars. Ukraine is ranking over countries such as the Netherlands, Canada, and Turkey.
Bitcoin is a cryptocurrency based on the so called blockchain technology developed by the anonymous Satoshi Nakamoto. Some call it a ponzi scheme, some think it will put a stop to inflation, financial crisis and unequal fiscal policies over the world. Whatever turns out to be true, the blockchain technology offers a lot more than just the foundation of payment services or digital currency. It is a serious field of interest among scholars, and tech companies like Tesla are accepting Bitcoin as payment.
Beware of the Chernobyl movies
In general it is said that you should not trust what is being said in TV or on the internet. By that logic, tv on the internet should be approached with extreme care. This holds true for a Russian depiction of the events surrounding the 1986 Chernobyl disaster. The team behind the movie, that has received funds from the Russian ministry of culture, has added quite a bit of extra action to the story.
We watched it, we pointed out some of the inaccuracies and offered some alternatives for the people interested in the history.
Focus on Norway
The Kyiv Post has directed their eyes towards Norway. In a big interview with the ambassador of Norway to Ukraine, Erik Svedahl, he talks about business, corruption and the relationship between the two countries.
Unian restructures the English coverage
Still in the world of media – somehow – Ukrainian news agency Unian has decided to temporarily stop their coverage in English. While they are shut down, they will be figuring out how they want to cover Ukraine in English in the time to come.