Geopolitical Tensions Could Rise if Russia Escalates Conflict

Yet markets are still underestimating the risk, some analysts of the region are warning.

“Many people have been in denial for too long over Russian intentions towards Ukraine,” Timothy Ash, head of emerging markets research at Standard Bank, said in a statement. “Another red line has been crossed, the only questions now are how the West responds.”

The week had started off with hopes for a rapprochement, as Poroshenko and Russian President Vladimir Putin both attended a key regional summit, but ended with both sides more fiercely opposed than ever.

Here, we outline some of the reasons this conflict will likely continue to escalate.

NATO has confirmed that there are more than 1,000 Russian soldiers in eastern Ukraine, suggesting both that their influence has extended beyond the previous centers of conflict, to the coastal town of Novoazovsk, and also that Russia is less and less concerned about concealing its active role in aiding the pro-Russian side in Ukraine’s civil war. The “West will view Russia’s actions as incursion, not invasion,” according to Eurasia Group – but this increasingly seems a matter of semantics only.

via CNBC

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