Russia: Gaining on Syria Losing on Ukraine

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Russia: Gaining on Syria Losing on UkraineUkraine is planning to sign the EU Association Agreement, which includes a free-trade agreement with the 28 EU member-states in November. Recently Russia has announced that it would impose trade restrictions to protect its market if Ukraine signs the EU deal because it wants the former Soviet republic to join the customs union it formed with Kazakhstan and Belarus instead. In the meanwhile, rating agency Moody’s downgraded Ukraine’s credit rating by one level to Caa1 yesterday, citing ‘increased political and economic risks due to deteriorating relations with Russia,’ low central bank reserves and ‘increased downside risk related to future negotiations’ with the International Monetary Fund. ‘Given the significant risks facing the country, we see very little upward potential in the rating in the foreseeable future,’ Moody’s said.