Media: Moscow, Washington agree on landmark Putin-Trump summit
The long-awaited meeting between Russian and US Presidents Vladimir Putin and Donald Trump, which was given the green light on Wednesday, dominated the headlines in the Russian press on Thursday. Russian Presidential Aide Yuri Ushakov said earlier that Moscow and Washington had agreed on the date and venue for what is going to become this summer's key global event. The agreement was struck following the visit of US National Security Adviser John Bolton to Moscow and his meeting with President Putin. Experts interviewed by Izvestia believe that Bolton’s visit once again indicates the need for top-level talks between the two sides.
"Obviously, the time is ripe for a meeting between the leaders of Russia and the US. Both parties and the whole world need this - not politically charged - but as constructive Russian-US cooperation on many current global issues that truly determines the settlement of respective problems," Chairman of Russia’s Federation Council (upper house) Committee for International Affairs Konstantin Kosachev told Izvestia. He considers Bolton’s visit to be a good sign, adding that expectations are high that it will "pave the way to a comprehensive and effective top-level meeting." Senior Fellow and Director of the Center for Political-Military Analysis at the Hudson Institute Richard Weitz does not anticipate any "immediate result" from the recent visit, but shares the view that it paves the way for the first-ever bilateral summit between Putin and Trump.
The upcoming event is Washington’s initiative, Director General of the Russian International Affairs Council Andrey Kortunov told RBC, adding that he see several reasons for that. First, it may bolster the diplomatic success of Trump’s recent meeting with the North Korean leader in Singapore. According to the expert, the White House occupant wants "to demonstrate a different diplomatic style compared to his predecessors, as well as the skill of solving challenging issues." Second, a major international political triumph can strengthen the Republicans’ positions at the US Congressional polls in November. Following the summit with Putin, Trump plans to obtain an opportunity "to ensure his supporters and opponents that Russia does not intend to meddle in the voting," he noted. The last but not least factor is the need to settle urgent issues that have accumulated over the last year and a half, such as the INF Treaty and the New START Treaty, Kortunov explained.
Nezavisimaya Gazeta: Moscow may offer Tehran oil-for-goods lifeline
With Washington requesting the suspension of Iranian oil imports through November 2018, Russia can offer Tehran a lifeline by agreeing to accept its oil in exchange for goods, Nezavisimaya Gazeta writes. Nonetheless, experts interviewed by the newspaper do not expect global players to cut down on crude purchases from Iran. Professor Vladimir Sazhin, Senior Researcher at the Russian Academy of Sciences’ Institute of Oriental Studies, told the newspaper that "it is next to impossible to reduce purchases of Iranian oil to zero."
"Even under the terms of the previous sanctions package (against Tehran prior to the signing of the nuclear deal - TASS) countries importing Iranian oil agreed with the US that they would reduce purchases, but not totally suspend them," he pointed out. Sazhin also confirmed that Washington’s unilateral restrictions would most likely generate a spike in oil prices. "Saudi Arabia can also raise crude production, and even more than Russia," he explained, adding that "Moscow still faces certain limitations related to technological problems."
The expert expects few importers to accept the US requests regarding Iranian oil imports. "China, India, South Korea and Turkey buy large volumes of oil from Iran (648,000, 502,000, 314,000 and 165,000 barrels a day, respectively, according to Nezavisimaya). Previously, when tough sanctions were in place (against Iran) in 2012-2015, the main importers of Iranian oil did cut back their purchases, but never stopped them," Sazhin explained. Moreover, if Tehran is indeed cut off from global buyers, Russia could extend a helping hand, he believes. "There was much talk about oil exchanged for goods a while ago, meaning Iranian oil supplies to Russia in exchange for Russian supplies of various goods worth the same amount to Iran. Probably, signing this kind of an agreement is a way out," he said, adding that this will provide Moscow with an opportunity to sell Iranian crude as its own.
Earlier this month, Washington urged its allies to stop importing oil from Iran by early November. In May 2017, Tehran and Moscow struck an agreement to begin oil supplies under the oil-for-goods program established back in 2014, when the anti-Iranian sanctions were still in effect. The volume of the deal was agreed to stand at 100,000 barrels a day. Prior to the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear issue, Novak spoke of extending the agreement on Iranian oil supplies to Russia under the oil-for-goods program for another five years.
Kommersant: EU to extend anti-Russia sanctions despite Italy’s opposition
The EU summit that is kicking off in Brussels later in the day will focus on extending the anti-Russia sectoral economic sanctions that expire on July 31. After Italian Prime Minister Giuseppe Conte objected to an automatic prolongation of the EU’s restrictions earlier this week, the issue may take a while to be at least discussed, Kommersant reported. However, the paper’s sources in the European Union do not expect Rome to block the extension of sanctions despite the stance of Italy’s new government.
"True, a discussion can take place, but there has been no progress in implementing the Minsk deal, which leaves no reason to speak about easing or lifting sanctions. That is why we do not expect any surprises," one of the sources said. Meanwhile, he did not rule out that the Italian side would use the talks to request that its needs be met on another issues connected with Moscow. For instance, the partial restoration of Russia-based operations of the EBRD (European Bank for Reconstruction and Development), which suspended investments in the country after the EU and the US slapped sanctions on Moscow back in 2014. Italy believes that the measures affecting the interests of Russia’s small and mid-sized businesses are excessive and contradictory to EU’s initial goals.
The EU’s sanction policy against Russia includes three independent tracks: visa restrictions against the country’s citizens, economic sectoral sanctions against a number of Russian state-run companies in the oil, defense and financial sectors, and restrictions against Crimea. All these packages were introduced in 2014. The two previous ones are extended once every six months, and the restrictions against Crimea - once per year.
RBC: Russia’s trade barriers against EU surpass all other trade partners
Russia outpaced China, India and the US in terms of the number of trade and investment restrictions against EU companies in 2017, according to the EU Commission’s annual report on Trade and Investment Barriers, RBC writes. The report analyzes restrictions related to services, investments, public procurements and intellectual property rights, as well as other technical barriers against European companies regarding the EU’s 57 trade partners. Russia has the largest number of trade restrictions against the union, even despite the recent worsening of the US-European trade ties, the newspaper reported. Currently, there are 36 trade restrictions imposed by Russia against the EU (compared with 22 trade barriers against Russia in the EU), versus 25 imposed by China, 21 - by India, and 20 - by the United States. Out of those 36 measures, only the food embargo introduced by Moscow in 2014, directly relates to the so-called counter-sanctions.
According to Alexander Knobel, Head of the International Trade Department at the Russian Academy of National Economy and Public Administration, the impressive number of restrictions against the EU in Russia is logical, as the European Union is Russia’s largest trade partner. Those measures are not targeted directly at the EU, but at all external partners of the country for protecting its companies and creating a more favorable environment for them, the expert told RBC. Vladimir Salamatov, Director General of the Research Center for International Trade and Economic Integration, thinks that the Russian government is forced to look for a balance between relations with trade partners seeking a transparent Russian market, and the interests of the country’s own industry that is lobbying for state support for separate segments of the economy. In this regard, the position of the Russian authorities, which impose the trade barriers, is based on protecting national interests, he noted.
Vedomosti: Russian economic growth to slow due to VAT rate hike in 2019
Next year’s expected VAT (value-added tax) rate increase will slow Russia’s economic growth from 1.9% in 2018 to 1.4% in 2019, while investment and real wage growth will drop from 3.5% and 6.3% to 3.1% and 1%, respectively, Vedomosti says. The Economic Development Ministry has submitted an adjusted macroeconomic outlook to the government, two officials in the financial and economic bloc told the paper. Further on, economic growth will accelerate nearing 3% in 2022, provided that annual investment growth reached 6% starting in 2020, sources said. On Wednesday, Economic Development Minister Maxim Oreshkin said that the plan is to meet those targets by raising investments using the Development Fund finances, boosting corporate lending, encouraging people to save more, and companies - to allocate earnings for investments.
The government’s initiative for a VAT rate hike to 20% from 18% starting in 2019 is expected to bring 620 bln rubles ($9.8 bln) worth of additional revenues to the Russian budget annually starting next year. The generated funds are planned to be allocated for the development of infrastructure and new sectors of the economy. Oreshkin said earlier this week that capital investment growth should be raised to 6% per year in order to meet the target of increasing the share of investments in GDP from 21% to 25% by 2024 as has been requested by President Putin.
According to Oreshkin, the plan of action on boosting capital investments and raising their share to 25% of GDP is being drafted and is almost ready for final approval. It contains a set of measures aimed at improving the country’s investment climate and access to infrastructure, as well as changes in the structure of expenditures and financing of the Russian economy.
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