Ukraine

If you’ve any assets in the Ukraine get them out FAST…..

 

Less reported than the travails of other EMs, the situation in Ukraine is nearing a tipping point.  Ukraine is one of the most vulnerable EMs from the perspective of FX reserves (second chart).  FX reserves are falling at an alarming 28% YoY rate (first chart).  Meanwhile the repayments schedule to Ukraine’s international creditors looks daunting.  Total external debt due for repayment over the next 12 months stands at around $62 billion, or 35% of GDP.  Moreover, the likelihood is that much of the 2013 debt refinancing will be short term, leaving next year’s debt burden little better than this year’s.

h/t Varian Perception

There are still several countries in deep deep trouble Slovenia and Portugal spring mind as being in acute difficulties. Problems in Greece, Iceland and Cyrpus still haven’t been resolved. Even Ireland, “the poster child of austerity” to use that tired nomenclature beloved of European politicians, isn’t in the clear. We may be saying goodbye to the Troika shortly (with 25bn in cash on hand we are sorted for a year or so) but our banks are still in deep trouble as mortgage arrears continue to mount. If the Irish banks marked to market their mortgage books properly they would require even more capital – the question is where will they source it from?

Debt and Austerity in Europe

Austerity just isn’t working. Ive long felt there are no good choices here – just bad choices and worse choices. But something needs to be done about the surge in unemployment in the PIIGS especially youth unemployment.

h/t Matt Philips at Quartz