This in from the Wall Street Journal on the somewhat disturbing, political dimensions of Russia's Nord Stream pipeline.  Approved just last week by Finland and Sweden after ecological concerns were overcome, the project is now ready to get off the ground, or rather under the ground.  For the pipeline will traverse the Baltic Sea floor to Germany, rather than crossing overground through former Eastern bloc countries; a divisive move, Alexandro Peterson suggests:[ . . . ] The Nord Stream project is part of an exclusionary agreement between Moscow and Berlin--nicknamed in circumvented Warsaw the "Molotov-Ribbentrop Pact," after the 1939 Soviet-Nazi deal to carve up Poland. It would have been much cheaper to build an overland pipeline ...

Gideon Rachman's column in the Financial Times focuses on the ongoing economic troubles in the Baltics - and the threat it poses to European and Russian recovery.The economic downturns in the region are shocking. Last week, Lithuania announced that its economy had shrunk by 22.4 per cent, at an annual rate, during the second quarter of 2009. Latvia and Estonia are likely to record similar falls when they announce their figures. Dalia Grybauskaite, the Lithuanian president, told me last week that her country might have to apply to the International Monetary Fund for a loan. Latvia has already trodden that path. Last week it agreed its second loan in eight ...

p style="text-align: left;"By Claus Vistesen: Copenhagenbr /emspan/span/em/pp style="text-align: center;"emspanbr //span/em/pp style="text-align: center;"emspanChina! China! burning bright /span/em/p p style="text-align: center;"emspanIn a bubble, Day and Night /span/em/p p style="text-align: center;"emspanIs it Bust or is it Boom/span/em/p p style="text-align: center;"emspanThat frames thy fearful asymmetry?* /span/em/p pbr //p pspanbr //span/ppspanCan you feel it? That calm and soothing feeling of low volatility and heaven bound risky assets driven by green shoots and second derivatives. Well, if you can't you are excused since neither can yours truly, or more precisely; he has a distinctly difficult time seeing from where people get the idea that we are headed for a broad based global recovery. However, beauty as always lies in the eye of the beholder and whichever way you look at it would be difficult to completely deny that the three key ingredients for a global recovery (and a resurgence of carry trade) in the form of ...

China! China! burning bright

In a bubble, Day and Night

Is it Bust or is it Boom

That frames thy fearful asymmetry?*

 (click on pictures to enlarge)

Can you feel it? That calm and soothing feeling of low volatility and heaven bound risky assets driven by green shoots and second derivatives. Well, if you can't you are excused since neither can yours truly, or more precisely; he has a distinctly difficult time seeing from where people get the idea that we are headed for a broad based global recovery. However, beauty as always lies in the eye of the beholder and whichever way you look at it would be difficult to completely deny that the three key ingredients for a global recovery (and a resurgence of carry trade) in the form of low volatility, steadily climbing risky assets, and benign credit wholesale market credit

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Vaclav Havel, Lech Walesa, and a long list of other former leaders of Eastern European states have penned an open letter to U.S. President Barack Obama expressing their fears over what kinds of sacrifices to their sovereignty might come along with Washington's effort to improve relations with Russia.  Full text of the letter below from Gazeta Wyborcza, news coverage from Associated Press and Reuters.

An Open Letter to the Obama Administration from Central and Eastern Europe

by Valdas Adamkus, Martin Butora, Emil Constantinescu, Pavol Demes, Lubos Dobrovsky, Matyas Eorsi, Istvan Gyarmati, Vaclav Havel, Rastislav Kacer, Sandra Kalniete, Karel Schwarzenberg, Michal Kovac, Ivan Krastev, Alexander Kwasniewski, Mart Laar, Kadri Liik, Janos Martonyi. Janusz Onyszkiewicz, Adam Rotfeld, Vaira Vike-Freiberga, Alexandr Vondra, Lech Walesa.

We have written this letter because, as Central and Eastern European (CEE) intellectuals and former policymakers,

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by Edward Hugh: Barcelonabr /br /br /pa href="http://3.bp.blogspot.com/_ngczZkrw340/SlmdGD2bh-I/AAAAAAAAOoo/P8vnyB3RTno/s1600-h/bulgaria+population.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 258px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357485959172294626" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SlmdGD2bh-I/AAAAAAAAOoo/P8vnyB3RTno/s400/bulgaria+population.png" //abr /br /br /The International Monetary Fund this week forecast the recession in Bulgaria would be deeper than it previously predicted. Such a decision should come as no surprise to anyone, since the country's economic dynamics in both the short and long term look extremely unstable, and Bulgaria is now almost certainly headed towards a series of more or less hair-raising roller-coaster rides. Even the briefest of glances at the population chart above should lead even the most sceptical among us to stop and think a little about the possible economic implications of such an appauling demographic outlook. As can be seen, the opening to the west brought a sharp outflow of people in the late 1980s (mainly ethnic Turks), but the important thing ...

by Edward Hugh: Barcelonabr /br /Well that so called investor "risk appetite" took a surprise hit yesterday (and from an unexpected quarter). It wasn't the worries about US fiscal deficits that caused the panic, but problems in the European banking system. a href="http://ftalphaville.ft.com/blog/2009/06/16/57171/investor-fears-cut-risk-appetite/"Gwen Robinson reports/a:br /br /blockquoteRisk appetite suffered a sharp deterioration on Monday as fresh uncertainty about the global economy prompted investors to shift from equities, commodities and emerging market assets into the perceived safety of government bonds and the dollar. Markets were further unnerved by warnings on the economic outlook from the head of the IMF and an ECB report saying eurozone banks face another $283bn in writedowns on bad loans and securities this year and next./blockquotebr /As Izabella Kaminska notes, a href="http://www.facebook.com/ext/share.php?sid=117027956538h=wHY-pu=bc40uref=nf"it is Southern Europe that is now getting all the attention/a.br /br /blockquoteThis time it’s the turn of 25 Spanish banks, all of whose senior ratings ...

Peering out of the window on a rainy and cold Sunday (election) afternoon in Copenhagen it is difficult not to paraphrase, yet again, one the Economist's many classic cover stories but really; it sure has been one hell of ride this week in Latvia. One wonders whether politicians and economists in the central bank really want to see what happens come tomorrow as markets and the flow of news re-commence. The truth however is that they really do not have a choice. Consequently and what actually started a little more than a week ago has now steadily turned into the well known story of politicians and official authorities doing their best to maintain a crumbling edifice. Markets, analysts, and commentators, on the other hand, are beginning to smell a rat and this particular rat looks set to gnaw its way right to the core of the

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Even when liars tell the truth, they are never believed. The liar will lie once, twice, and then perish when he tells the truth.

One thing which is certain at the moment is that the rumour mill is grinding hard and that it is very difficult to get a clear picture of what is going on. It is too cumbersome for me to go into the entire background here (I assume most of you are familiar with the Baltic and CEE situation), but if you want some background try this or this which will give you the opportunity to browse a myriad of articles. The situation is however pretty simple. Ever since it became clear that the Baltics was going to suffer not only a hard landing, but a veritable collapse on the back of the financial crisis one obvious question always was whether these economies could maintain the

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Irina Filatova has a new comment piece over on the Guardian about Dmitry Medvedev's formation of a new commission to fight back against the "falsification" of history.  She points out that despite some seemingly noble endeavours of the council (such as declassification of Soviet-era documents from the War), most observers and academics are quite leery of the proposal - beginning with the fact that there are only three historians on the 28-member commission.  Filatova predicts that by early June the legislation will sail through the Duma, and the Kremlin will have a new instrument to imprison journalists and place sanctions on individuals in foreign states, such as the Baltics.

Every historian knows that history as an academic discipline can only exist when its contents are

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