The Russian stock market has experienced the maximum drop since the annexation of the Crimea | Economic news from Germany

The Russian stock market on Monday, February 21, collapsed at the fastest pace in eight years amid growing fears about the imminent Russian invasion of Ukraine.

At the end of the main trades, the ruble index of the Moscow Exchange fell by 10.5% to 3036.88 points, demonstrating the largest one-day decline in percentage terms since March 2014, when Russia annexed the Ukrainian peninsula of Crimea. The fall of the indicator during trading exceeded 14%, which is the maximum since November 2008. The RTS dollar index following the results of the main session lost 13.2%, dropping to 1207.5 points. During the day, it fell by more than 17%, the most since October 2008. Both the Ukrainian hryvnia and the Russian ruble fell in price during volatile trading.

The fall in stock indices accelerated after the heads of the self-proclaimed “DNR” and “LNR” appealed to Russian President Vladimir Putin with a request to recognize their independence. The head of state discussed the issue with the Security Council, promising to take a decision on this issue today. “In the event of an armed conflict, Russian assets will fall in price much more than now,” says Christian Maggio, head of portfolio strategy at TD Securities, quoted by Bloomberg.

The agency notes that the recognition of the independence of the “DPR” and “LPR” is likely to lead to the disruption of peace talks mediated by Europe and further increase tensions in relations with the West. Moscow continues to deny plans to invade Ukraine, despite US and allied claims to the contrary.

See also:

A Brief History of the Ukrainian-Russian Confrontation

The collapse of the Soviet Union and the creation of the CIS

In December 1991, Ukraine, Russia and Belarus documented the collapse of the USSR. Moscow apparently hoped to maintain influence through the CIS and cheap gas supplies. But it turned out differently. The Russian Federation and Belarus created a union state, Ukraine increasingly looked to the West. In the photo: Leonid Kravchuk, Nursultan Nazarbayev, Boris Yeltsin and Stanislav Shushkevich during the official founding of the CIS in Almaty.

A Brief History of the Ukrainian-Russian Confrontation

Legacy of the USSR and the Budapest Memorandum

Ukraine inherited from the USSR almost a million strong army and the 3rd largest nuclear arsenal in the world. Kiev refused the missiles, handing them over to Russia in exchange for economic assistance and security guarantees (Budapest Memorandum of 1994). While the West did not reciprocate Kiev and was not going to integrate it into its structures, the reaction of the Russian Federation was restrained. In the photo: Russian and US leaders Boris Yeltsin and Bill Clinton.

A Brief History of the Ukrainian-Russian Confrontation

Cracks in Post-Soviet Friendship: Tuzla Conflict

The first major diplomatic crisis between Moscow and Kiev occurred under President Putin. In the fall of 2003, Russia suddenly began building a dam in the Kerch Strait towards the Ukrainian island of Tuzla. Kiev considered this an attempt to redistribute borders. The conflict was resolved after a personal meeting of the presidents. Construction was stopped, but the first cracks appeared on the facade of friendly relations between the two countries.

A Brief History of the Ukrainian-Russian Confrontation

Orange Revolution 2004

In the presidential elections in Ukraine in 2004, the Russian Federation actively supported the pro-Russian candidate Viktor Yanukovych, but the Orange Revolution prevented him from winning amid accusations of fraud. Pro-Western politician Viktor Yushchenko became president. His victory became the starting point for changes in the policy of the Russian Federation, designed to prevent what Moscow calls “color revolutions.”

A Brief History of the Ukrainian-Russian Confrontation

Shutting off Ukraine’s “gas valve” in the 2000s

During Viktor Yushchenko’s presidency, the Russian Federation twice shut off Ukraine’s “gas valve” – in 2006 and 2009, which led to interruptions in transit supplies to Europe. In the photo: a Gazprom employee at the Sudzha gas measuring station, 200 meters from the Ukrainian border, Kursk Region, Russia, 2009.

A Brief History of the Ukrainian-Russian Confrontation

The promise of NATO membership

The key event happened in 2008. At the NATO summit in Bucharest, US President George W. Bush tried to get Ukraine and Georgia to receive a Membership Action Plan (MAP). Putin sharply objected, making it clear that he did not fully recognize the independence of Ukraine. As a result, Germany and France blocked Bush’s plan. Ukraine and Georgia were promised NATO membership, but no date.

A Brief History of the Ukrainian-Russian Confrontation

Ukraine’s course towards the European Union

It was not possible to move quickly towards joining NATO, and Ukraine set a course for economic rapprochement with the EU. In the summer of 2013, the Russian Federation began to exert massive pressure on Kiev, almost cutting off Ukrainian exports at the border. The Yanukovych government has suspended preparations for signing an association agreement with Brussels. Soon protests began in Ukraine, in February 2014 Yanukovych fled to Russia.

A Brief History of the Ukrainian-Russian Confrontation

Russian annexation of Crimea

A power vacuum emerged in Ukraine, in March 2014 Russia annexed Crimea. This was a turning point, the beginning of an undeclared war. Pictured: Russian military in Crimea (Simferopol, March 2014).

A Brief History of the Ukrainian-Russian Confrontation

War in Donbass

At the same time, Russian and local paramilitary structures provoked an outbreak of separatism in the Donbass, “people’s republics” were proclaimed in Donetsk and Luhansk, which were led by people who had come from the Russian Federation in unmarked uniforms. Kiev reacted slowly, waiting for the presidential elections at the end of May 2014, and only then decided on a large-scale use of force.

A Brief History of the Ukrainian-Russian Confrontation

Birth of the Normandy Format

In early June 2014, in France, at events marking the 70th anniversary of the Allied landings in Normandy, newly elected President of Ukraine Petro Poroshenko met for the first time with his Russian counterpart Putin through the mediation of the leaders of Germany and France. This is how the “Norman format” was born.

A Brief History of the Ukrainian-Russian Confrontation

“Ilovaisky cauldron”

In the summer of 2014, the Ukrainian army began to push back the separatists, but at the end of August, Russia, according to Kiev, used its army on a large scale in the Donbass. Moscow denies this. The peak of the conflict was the defeat of the Ukrainian forces near Ilovaisk. The war along the entire front line ended with the signing of a ceasefire in Minsk in September, which was quickly broken.

A Brief History of the Ukrainian-Russian Confrontation

Positional war continues

In early 2015, the separatists went on a broad offensive. Kiev accused Moscow of using an unmarked army, the Russian Federation denied everything. Ukrainian forces were defeated near the city of Debaltseve. Then, with the mediation of Germany and France, “Minsk-2” was signed, an agreement that still remains the main document for the settlement of the conflict. None of its points has been fully implemented.

A Brief History of the Ukrainian-Russian Confrontation

The concentration of Russian troops on the border of Ukraine

In 2021, there was a new aggravation. Russia twice, in spring and autumn, drew up its troops to the western borders. Ukrainian and Western intelligence reports about the threat of a possible Russian invasion of Ukraine. To defuse the situation, a series of international negotiations took place in the West. However, the Russian Federation demands guarantees that Ukraine will not join NATO and lets know that it is not going to withdraw troops yet.

Author: Roman Goncharenko