Russia

Russia is “not yet on the brink” of a credit-rating downgrade by Moody’s Investors Service as the ruble and foreign reserves stabilize and the government resists taking corporate debt obligations, Bloomberg reported. The ratings firm has no current plans to follow Standard & Poor’s and Fitch Ratings, which both cut their debt ratings for Russia since December, according to Jonathan Schiffer, Moody’s lead analyst on Russian sovereign debt. Moody’s rates Russia at Baa1, three levels above non-investment grade and a step higher than equivalent ratings from S&P and Fitch.

Ukraine, once considered a worldwide symbol of an emerging, free-market democracy that had cast off authoritarianism, is teetering, The New York Times reported. And its predicament poses a real threat for other European economies and former Soviet republics. The sudden, violent protests that have erupted elsewhere in Eastern Europe seem imminent here now, too. World leaders are increasingly worried about the discontent and the financial crisis in Ukraine, which has 46 million people and a highly strategic location.

Russia has won $25 billion in loans from China in return for agreeing to supply oil from new fields in eastern Siberia for the next 20 years as Moscow seeks funds to see its oil industry through the financial crisis, the Financial Times reported. Transneft, Russia’s oil pipeline monopoly, said on Tuesday China had agreed to lend it $10 billion (€8 billion, £7 billion) and Rosneft, Russia’s state-controlled oil giant, $15 billion in return for 20 years’ worth of oil supplies.

Australia’s ailing car industry has taken another blow, with Albury manufacturer Drivetrain International Systems falling into receivership with debts of $30 million to $40 million, SmartCompany.com.au reported. Production has been suspended for a week, with the company’s 400 workers stood down. Receivers and manager Stephen Longley from PricewaterhouseCooopers will assess the company’s financial position and attempt to sell the business as a going concern. Production is expected to resume next week in a reduced form.

The International Monetary Fund is likely to suspend loan payments to Ukraine, a move that would further push the government toward Moscow for aid and exacerbate a feud between top leaders in Kiev, The Wall Street Journal reported. Ukraine is failing to meet the terms of its loan deal with the IMF, and likely won't get the next installment this month, according to a person close to talks between the fund and the government in Kiev. Ukraine Prime Minister Yulia Tymoshenko's government's 2009 budget is forecast to show a deficit of 3% of gross domestic product.

A spokeswoman for Clifford Chance confirmed a Law.com report that the firm had lost about 20 percent of the lawyers from its Moscow office through layoffs and natural attrition, Bankruptcy Law360 reported. “It's a continuing situation that has been under review for several months now,” spokeswoman Anne Groves said. The news broke just a couple of weeks after the firm announced a redundancy program that could lead to job losses for up to 80 additional attorneys in London.

One of Europe’s most high profile architects, Erick van Egeraat Associates, has called in the receivers after a number of major projects were put on hold due to the credit crunch, BD reported. The sudden cancellation of work caused a cash-flow crisis at the Rotterdam-based firm, which also has offices in London, Budapest, Moscow and Prague. Law firm De Bok Roijers Gasseling was appointed by the Dutch courts after van Egeraat himself declared the practice insolvent. The practice has about 50 projects on its books from Leipzig to Budapest to Prague.

Russia's gas price dispute with Ukraine escalated Tuesday, disrupting deliveries to the European Union in the midst of a bitter cold spell, with a number of countries reporting that gas supplies had been suspended or reduced, and Germany predicting a possible shortage, the International Herald Tribune reported. Bulgaria, Romania, Croatia, Macedonia, Turkey, Greece, the Czech Republic and Austria reported that gas supplies had been suspended or reduced after Gazprom, the Russian gas monopoly, reduced gas shipments through Ukraine.

The quickening pace of Russia's rouble devaluation is piling pressure on the currencies of its neighbours and putting those without Moscow's sizeable reserves at risk of foreign debt default and further capital flight, Forbes reported. Investors are shying away from currencies such as Ukraine's hryvnia as the world economic slowdown crushes demand for its exports, global risk aversion shines a harsh light on Kiev's turbulent politics and Russia demonstrates its stranglehold on the country's energy supplies.

Ukrainian state energy company Naftogaz said on Tuesday it has published its 2007 audited accounts, allowing it to avoid technical default on a $500 million Eurobond, Reuters reported. Bondholders had agreed in November to extend the deadline for receiving the accounts--one of the conditions of the bond--until the end of this year after the financially ailing company missed a summer deadline.