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Russia must stand down

Despite Russia's overwhelming advantage in size and firepower in its conflict with Georgia, the Kremlin may have the most to lose if the fighting there continues. It is too soon to know with certainty who was responsible for the initial outbreak of violence in South Ossetia, but the war that began there is no longer about Georgia's breakaway regions or Russian peacekeepers.

By acting disproportionately with a full scale attack on Georgia and seeking the ouster of Georgia's democratically elected President Mikheil Saakashvili, Moscow is jeopardising its standing in Europe and the broader international community - and risking very real practical and political consequences.

(...)

For Moscow, the most obvious casualty of the fighting could be the Sochi Winter Olympics in 2014 - supposedly the crown jewel in the country's campaign to reinvent itself. Sochi is only a few miles from the border with Georgia's other breakaway region of Abkhazia. Regardless of any political consequences, if fighting spreads, it could drive up insurance rates for the games to the point that it becomes prohibitively expensive to hold the Olympics in the region at all.

Russia may face other costly consequences for the violence. Vladimir Putin's plans to make Moscow an international financial centre may evaporate as the prospect of sanctions on the country rears its head. Western financial institutions, which have done little to expose evidence of official Russian corruption, may start pursuing the issue much more publicly.

Is that a call to US insurers and banks to put Russia on their shit-list? Coming from someone heavily involved in their regulation/lobbying?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Aug 12th, 2008 at 03:40:32 PM EST
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