18.07.2016 - Oil Must Go to $40 and Stay There to Buy Russia Reforms at Last
At an oil price of $40 or below, Russian President Vladimir Putin introduced a flat income tax, built a sovereign wealth fund and delivered speeches to the Bundestag in German. When it was over $100, he fought two wars with neighbors and splashed over $40 billion on a Winter Olympics. Brent crude at $40 is the key threshold for Russia, so low that institutional reforms become unavoidable but high enough to prevent a financial meltdown, according to a Bloomberg survey of economists. While more than a decade of booming revenue brought a $2.1 trillion energy windfall -- and with it prosperity the like of which Russia has never seen -- the economy hasn’t grown faster than 5 percent in eight years and has spent the last two in recession...............................................Full Article: Source
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