Crisis Risks Ease, But Ties To Remain Tense

The broadly peaceful passing of the first anniversary of the 2008 Russia-Georgia war bodes well for an abatement of immediate crisis risks in the region, given the focus of sabre-rattling that the anniversary had become. This bolsters our core view that continued 'frozen conflict' is more likely than the renewal of outright war. That said, we caution that the border between Georgia and its separatist regions will remain a dangerous geopolitical flashpoint through the medium term, and this will act as a drag on broader ties between Russia and NATO.

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