Tomorrow sees two big meetings in Europe, the success or failure of which could have major repercussions for markets, and the European political landscape. In Minsk, Belarus, the leaders of Germany, France, Ukraine and Russia are due to meet to try to hammer out a peace agreement.
Failure to reach an agreement will lead to further EU economic sanctions against Russia, which were delayed at yesterday’s EU foreign minister’s meeting to allow time for the diplomatic offensive tomorrow. Failure would also make it easier for The United States to step up its plans to send lethal aid to Ukraine – plans that US president Barack Obama has not yet committed to.
If the prospect of all out war on its eastern border is not enough for Europe to worry about, there is also the real prospect of a major sovereign debt blow-up on its southern border. Tomorrow evening the finance ministers of the euro area meet to see if a new deal can be done for Greece. Greece is pushing for a 10 billion euro bridge loan to allow it avoid a funding crunch, while also giving the new Greek government time to come up with a new plan for the sustainability of Greek finances.