Emerging Europe Weekly: Peace talks, gas flows & defence spending

President Putin this week described Moscow’s initial contact with the Trump administration as “inspiring a certain degree of hope” and, as we explained in an in-depth piece, an end to the war with favourable terms for Russia would boost its economy and the ruble. But that would come at the expense of a slower recovery in Ukraine. And the extent to which any peace agreement would pull down European natural gas prices is likely to be small in our view – that would limit the scale of any benefits to the economies of Central and Eastern Europe. Meanwhile, security concerns are likely to lead to higher defence expenditure across Europe.