Before the recent events in the Black Sea, few investors, financiers or market commentators would have been able to place Crimea on a map, much less appreciate its impact on the global financial markets, investment portfolios and stock market risk.  The events of the past several weeks in the Ukraine and Crimea have captured everyone’s attention as hot headed media analysts talk of a new Cold War and Putin’s annexation of Crimea.  The truth is much more complicated than that and the impact of these events is much more subtle than the headline grabbing sanctions against Russian oligarchs seeking to fill their shopping bags in New York or London.

The Ukraine has been at a crossroads of east and west, Europe and Asia for hundreds of years and ethnic boundaries are rarely as easily drawn as the maps we use to find these distant lands.  Elections over the past several years have worn out these historic fault lines – the east pulling towards Russia and the west aspiring to join the EU.  Historically, the Russians, the Poles, the Austro-Hungarians and the Ottomans (to name a few) have battled and controlled these lands at various points in history pulling the country, its borders, its culture and religion in different directions.  During the second world war (or the Great Patriotic War as the Russians and eastern Ukrainian’s refer to it), these tensions were strained further as fascist resistance to communist forces moving west made a hero out of Ukrainian Insurgent Army leader, Stepan Bandera (to western Ukrainian’s) (in 2006 a statue was erected in the central square of Lviv.)  While not the majority of protesters, members of the extreme nationalist right wing who were involved in driving President Yanukovych out, draw much inspiration from Bandara’s fascism and rumors are rampant about the extent to which right wing protesters were involved in scuttling the compromise, which ultimately lead to the departure of Yanukovych and then subsequent Russian action in Crimea.

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