Two events have called into question the advancing integration of Ukraine with the European Union. President Petro Poroshenko has acknowledged there is no chance of the Ukrainian government winning the war in eastern Ukraine as Russia will not allow that, and so he has pledged a series of major concessions.
According to the latest NBP inflation report, economic growth will gradually accelerate without the risk of rising prices. This will allow interest rates to remain stable. The Ukrainian crisis will not impact negatively on the Polish economy, but invites thinking about a more solid anchoring in Europe – says Marek Belka, Governor of the Poland's central bank Narodowy Bank Polski.
The Ukrainian parliament voted the law granting the Cabinet the right to pay its expenses to businesses with Treasury bills up to unlimited value. This practically breaks the central bank’s monopoly on the monetary policy.
Recession looms over Ukraine. The oligarchs rule. A currency crisis may break loose at any time. Foreign investors demand a high risk premium, some of them retreat. High interest rates hamper domestic investment, while domestic consumption is stemmed by recession. And we do not have the first idea how poor our neighbour is.