TODAY: Putin and Poroshenko agree on winter gas price; Ukraine has money to pay debt but not to pay upfront, Putin tells Europe to help out; Duma members want to act against ‘negative’ news; St. Petersburg lawmakers wants Finnish stamps banned; Lavrov says Russia will not accept sanctions conditions; state television slams German Gref and blames liberals for crisis; tennis head suspended for racist comment.
President Vladimir Putin and President Petro Poroshenko reached a preliminary agreement on a gas price for this winter’s supplies to Ukraine, though Naftogaz is currently facing a lack of funds and may require support from the IMF to meet costs. Putin suggested that Europe ‘can and should lend a hand’ to help Ukraine pay upfront and ensure supplies. Ukrainian Prime Minister Arseniy Yatsenyuk says his country has saved $500 million by replacing Russian gas supplies with reverse flows from Europe, and that Kiev now has the $1.3 billion needed in order to pay off its gas debt to Russia. Foreign Minister Sergei Lavrov says Russia will not accept the West’s conditions to end sanctions imposed in retaliation for the fighting in Ukraine, insisting that ‘Russia is doing more than anyone else to resolve the crisis’. In retaliation, Russian consumer safety regulators are inspecting more than 200 McDonald’s restaurants around the country, temporarily closing nine thus far. Members of the State Duma want the state to intervene against ‘negative’ news stories, sparking fears of more censorship. A St. Petersburg lawmaker wants Russian Post to ban incoming mail from Finland bearing homoerotic postage stamps, on grounds that they violate the anti-gay propaganda law. Several people were detained at a motor rally in Moscow yesterday held in protest of the city’s new parking policies.
TODAY: Putin allies wait to pounce on Vedomosti; Duma deputy accuses colleagues of lying about assets; Putin threatens European gas cut-off; Moscow to expand military presence and boost defence budget; Rosneft launches legal challenges against E.U. sanctions; Navalny interview with Ekho Moskvy.
Following the signing of a bill that will limit foreign ownership of Russian mass media to 20%, a rumour is circulating that close associates of Putin are preparing to acquire Vedomosti – the largest newspaper outlet currently not under Kremlin control. Under the new law, the owners of the Wall Street Journal and Financial Times will also need to sell or reduce their 33% stakes in Vedomosti by the end of 2016. ‘The Kremlin sees Vedomosti’s shareholders as foreign governments. The WSJ equals the U.S. and the FT the U.K. They want a Russian owner so they have someone to call.’ Glossy magazines will also be hit hard by the new law, prompting speculation as to ‘whether the culture of glamour is a threat to Russia’. A State Duma deputy has accused 100 colleagues of failing to disclose their ownership of foreign assets, and thereby being in violation of a recent transparency law. President Vladimir Putin arrived in Milan last night for peace talks with European Union leaders today, after threatening to reduce gas supplies to Europe if Ukraine should take any gas from transit pipelines to cover its own deficit this winter. The European Energy Chief, Guenther Oettinger, said that if a gas cut-off were to happen, the only nation to suffer would be Estonia. ‘If we work together, show solidarity and implement the recommendations of this report, no household in the EU has to be left out in the cold this winter,’ he said.
TODAY: Putin says sanctions make peace with Ukraine less likely; Russians support direction of economy; half of Russians see a Putin personality cult; Central Bank considering ‘stress scenario’ of lower oil prices for longer; less bureaucrats, more wages; foreign mass media ownership bill signed into law; Yankauskas house arrest extended.
President Vladimir Putin said that the pressure of Western sanctions ‘complicate[s] dialogue’ on the issue of Ukraine, further distancing the possibility of making a peace settlement with Kiev. The compliance of Western companies in following sanctions and avoiding cooperation with Russia, he added, will damage their reputations, making it ‘difficult to recover’, and causing other countries think twice about investing in the U.S. banking system. Sergei Ivanov refuted rumours that sanctions have split Putin’s inner circle, and insisted that, despite the economic damage caused, sanctions have had a ‘positive psychological effect on the public opinion’; an estimated 62% of Russians believe that the economy is going in the right direction. Analyst Vasily Kashin says technology export sanctions will only boost cooperation between Russian and Chinese technology industries. The unwillingness of foreign banks to engage with Russian projects is delaying financing for the South Stream gas pipeline project, according to Gazprom. Prime Minister Dmitry Medvedev says U.S. President Barack Obama must have an ‘aberration in the brain’ for having called Russia a threat to humanity. Putin will be a guest of honour at a military parade in Belgrade today, but the country’s sights are set on Europe.
TODAY: Ruble and oil price falling; Europe to be hit by anti-Russia sanctions; Gazprom losing European customers; crude deliveries to China hit new record; Chinese media lashes out at Western criticism of friendship with Russia; Moldova bans Russian television stations; Putin says rights groups turn a blind eye to Ukraine hardships, Kremlin official alleges uncovering of mass graves.
The ruble continues to hit new lows against the euro and dollar this week, and national reserves are at a four-year-low thanks to the Central Bank’s spending in an effort to support it. Vladimir Putin has not ruled out cuts to this year’s budget, which loses $2 billion for every dollar the oil price falls, according to a Finance Ministry analyst. But Europe could also take a hit, standing to lose €90 billion as a result of sanctions imposed against Russia from 2014-2015. Gazprom reported second-quarter profits up 13%, but the company is losing customers in Poland and Bulgaria – not just because they are worried about the security of its supply, but also because of its prices, which are much higher than those at European trading hubs. On the bright side, plunging oil prices may end up producing ‘an extraordinary peace dividend,’ says The Times. A new exhibition in Moscow puts Pussy Riot into the context of a ‘long lineage’ of Russian performance art.
TODAY: Russia and China sign 40 agreements, secure mutual favours; Kremlin to create state oil-drilling giant; Rosneft hires London firm to fight sanctions in European courts; Siluanov calculates worst-case scenario; Fedotov speaks up for Memorial; Australian PM’s comment creates tensions; Ukraine and Russia not seeing eye-to-eye on energy payments.
Russia and China signed 40 agreements yesterday across the energy, finance, and technology sectors – most significantly, China agreed to provide $4.5 billion worth of credit lines to Russian banks; a separate memorandum takes the pair closer to their $25 billion high-speed rail project. The deals will help Russia to weather itself against Western sanctions, and helps China further its plans to promote international usage of the yuan. A giant, state-owned oil drilling corporation, uniting all the necessary expertise, has been approved by President Vladimir Putin for creation; the company will replace foreign oil service companies that have been banned from working in Russia by Western sanctions. Meanwhile, Rosneft has hired a London-based law firm to work on a legal strategy to fight sanctions in European courts. Finance Minister Anton Siluanov says that if the ruble and the price of oil do not recover, Russia will have $12.5 billion worth of holes in its federal budget next year. The ruble still shows no signs of recovery. In a piece examining the ideologies of the Kremlin’s inner circle, Mikhail Khodorkovsky likens Dmitry Kiselev, the head of state news network Russia Today, to ‘Dr. Strangelove’.
TODAY: Putin orders Russian forces to leave Ukrainian border, Poroshenko optimistic about a cease-fire; Finland says navy interfered with a state vessel; China visit to deepen a much-needed friendship; Memorial rights group under threat; Bolotnaya activist jailed; inflation boosts budget food retailers; Russian Grand Prix.
President Vladimir Putin ordered Russian forces to withdraw from the Ukrainian border this weekend, which analysts see more as preparation for Putin’s attendance at a G20 summit in Australia next month than as a genuine bid for a de-escalation of ongoing violence. According to Dmitry Peskov, the order will affect 17,600 military servicemen who were ‘exercising’ away from their permanent bases. Ukrainian President Petro Poroshenko, after meeting with Russian officials yesterday, said he has confidence that a full cease-fire will soon be achieved. Finland says the Russian navy twice interfered with a state environmental research vessel in international waters in recent months; and that Russia violated Finnish airspace three times in August. Chinese Premier Li Keqiang is in Moscow for a three-day visit which is expected to see further oil and gas deals to deepen China’s friendship with Russia. Its investments are keeping Russia out of a recession, says Bloomberg: ‘China is wasting no time filling the void created by the closure of U.S. and European debt markets to Russia’s largest borrowers.’ The Justice Ministry is seeking to destroy Memorial, a 30-year-old independent human rights group, by filing a claim with the Supreme Court to have it dissolved, attacking it on grounds of structural issues. Activist Dmitry Ishevsky has been sentenced to three years in prison for his role in Moscow’s Bolotnaya Square protest in May 2012.
TODAY: New all-time low for ruble, reserves down; sanctions will stay until Russia leaves Ukraine, says U.S.; ECHR Yukos decision to be appealed; Navalny says Khodorkovsky is an ally; activist released; Foreign Ministry not pleased with NATO comments; Moscow to support election process in eastern Ukraine; Putin says Russia will act as global sporting events consultant; Manifesta biennial.
The ruble hit its weakest-ever level yesterday, of 45.03 versus the euro-dollar basket, causing the Central Bank to intervene and shift its trading band, albeit to no effect. Russia has lost a tenth of its hard currency reserves so far this year, and is down to $457 billion. The U.S. Assistant Secretary of State says that sanctions on Russia will not be lifted until all foreign forces are out of Ukraine - not that Russia is asking. The FT agrees that the West should hold its ground. Before the end of this month, Russia is planning to appeal a decision by the European Court of Human Rights to award Yukos shareholders $2.42 billion. Former corruption whistleblower and opposition figure Alexei Navalny says he sees Mikhail Khodorkovsky as ‘an ally’, and welcomes any opportunity to collaborate with him in the future; though the opposition ‘is still far from presenting a unified front in the 2016 race’, says the Moscow Times. Activist Sergei Mokhnatkin, charged with violence against police for his role in a demonstration on Triumfalnaya Square in 2013, has been released.
TODAY: Sanctions compensation bill passes first reading; ‘foreign agent’ law fines may be softened; Russia’s business landscape looks feudal, says Putin associate; budget boosts RT funding by 41%; art market at a high, ruble still not recovering; Gazprom signs deal with Argentina; Rosneft will struggle at Arctic wells without Western assistance; 331 killed in Ukraine since ceasefire.
A bill dubbed the ‘Roterberg law’, which seeks to provide financial compensation to Russian companies and citizens affected by sanctions, has passed its first reading in the Duma. Initially ‘sneered at’ by the Kremlin, the name of the bill comes from the government’s U-turn last month after ‘Putin pal’ Arkady Rotenberg’s four Italian villas were seized as a result of sanctions. A separate bill proposes reducing the fines levied against non-governmental organisations under the new ‘Foreign Agent’ law – apparently in response to complaints from the human rights commissioner. Sergei Pugachev, a former close associate of Vladimir Putin, described Russian businessmen as ‘serfs’ who belong to the President, and that there are no longer any ‘untouchables’ or private property in the business landscape. The new state budget includes a 41% funding increase for Russia Today, the ambitious, global, state-run television network; and just this year Putin cut a deal that will allow RT’s Spanish-language channel to broadcast 24/7 in Argentina. The Central Bank’s interventions have not stopped the ruble from falling this week. But despite Russia’s economic hardships, its art market is at a six-year high. A majority of Russians believe that their country is seen by foreigners as ‘interesting’, and generally viewed favorably, according to a new poll.
TODAY: Siluanov says Russia can’t afford military upgrade; Central Bank intervenes as ruble falls; low oil price will create deficit next year; Putin cancels budget address; eighth anniversary of Politkovskaya murder; Kostroma court rules in favour of gay rights activist; gay exchange student seeks U.S. asylum.
Finance Minister Anton Siluanov says Russia cannot afford the costly military upgrade that is currently underway: ‘When we were adopting the defense program, the forecasts for the economy and budget revenues were completely different. Right now, we just cannot afford it.’ The Central Bank spent $1.75 billion trying to keep the ruble afloat over the last two days of trading. If oil prices were to continue at their current 27-month low of $90 a barrel, Russia would see a budget deficit next year, but the lower prices has short-term implications also, according to former Finance Minister Alexei Kudrin. Russia’s economy has been a broken record for the past ten years, says Forbes. If Russia wants to survive current Western sanctions, it needs to establish a domestic credit system, says Presidential Aide Sergei Glazyev. Vladimir Putin’s cancellation of his yearly budget address gives the impression of ‘a presidential admission that Russia’s economic woes are real’. Yesterday was the eighth anniversary of the murder of Anna Politkovskaya; flowers made from newspaper were left outside the headquarters of Novaya Gazeta, her former employer, as a memorial. The person who ordered her killing has still not been brought to justice.
TODAY: Ruble hits all-time low; Khodorkovsky says stringent sanctions needed but would destabilise the West, Peskov dismisses him; Navalny ally seeking British asylum; Putin turns 62, bans nighttime gatherings; Russian nuclear threat? Orthodox Church seen as ‘soft power’ in Ukraine; Romania seizes Lukoil’s supplies.
The ruble hit another new all-time low against the dollar last night, falling below 40 to the dollar. The E.U.’s new foreign policy chief acknowledges that sanctions are impacting the Russian economy, but having no impact on the Kremlin’s political decisions. Mikhail Khodorkovsky says that, in order to really have any influence, sanctions would have to be much more strident, but that the West would not be able to handle the knock-on economic effects. Vladimir Putin’s spokesman, Dmitry Peskov, disparaged Khodorkovsky, saying that the Kremlin ‘doesn’t follow’ his speeches and appearances, and that ‘he spent so much time in prison that he lost touch with reality.’ Vladimir Ashurkov, a close ally of anti-Kremlin dissident Alexei Navalny who fled Russia earlier this year, has applied for political asylum in the U.K. after the FSB opened an investigation against him for allegedly stealing money from Navalny’s campaign. The Moscow Times describes ex-A Just Russia member Dmitry Gudkov as ‘at once an insider and a crusading outsider’. Happy 62nd Birthday to President Vladimir Putin, who is celebrating with a holiday in the Siberian taiga forest, hot on the heels of signing one law banning nighttime demonstrations and meetings between 10pm and 7am, and another that will increase property tax rates for homeowners. The Moscow Times compiled a ‘bucket list’ of Putin’s most attention-grabbing stunts since coming to power in 1999.