In its latest report, published today, the United Nations Economic Commission for Europe gives an upbeat assessment of progress in the Central and Eastern European transition economies in the first half of this year. It warns, however, that the region as a whole is threatened by continuing instability in neighboring Russia. The report says that, while Russia appears to have successfully warded off the latest attack on the ruble, which began in May, the country’s long-term financial prospects remain uncertain. The UN argues that, whereas ruble flight continues unabated, Russia has become dangerously dependent on volatile capital inflows from abroad to finance its budget deficit. The UN report says this vulnerability can be overcome only by further far-reaching reform, especially of the tax system. It also recommends a devaluation of the ruble. (Financial Times, BBC, July 7)
ONEKSIMBANK PULLS OUT OF ROSNEFT AUCTION.