Fitch does not know what to say about Ukraine

Ukraine’s statement on the suspension of preparation for signing an association agreement with the European Union threatens the loss of the possibility of strengthening the country's credit profile in the future, however, this decision reduces the risk of response from Russia, which is consistently abandoning Ukrainian exports in 2013. This is discussed today in the message of Fitch Riving.

The call of the government on the creation of a three -way commission with the participation of the EU and Russia indicates that Nikolai Azarov wants to maintain European agreements as an option. Nevertheless, next year the EU will choose a new parliament, and in 2015, Ukraine will be president. Obviously, it will take time to resume negotiations, it is clear that the Ukrainian authorities strive to maintain the status quo in relation to both the EU and the Customs Union.

The benefits of signing membership in the Customs Union will be less significant than from the Association with the EU. A comprehensive free trade agreement will become positive for the sovereign creditworthiness of Ukraine, and will make it possible to increase export to Europe.

The announcement made on Thursday on the eve of the Third Summit of Eastern Partnership in Vilnius has no direct influence on the sovereign rating of Ukraine. The risks for the agreement, including the position of Russia, were well known.

“When we revised the forecast for the rating of Ukraine to the negative from stable in July, we said that there was less than 50 percent of the probability of ratification,” Fitch writes today, “later we reduced Ukraine to“ B - “from“ B ”this month.