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Press review: EU to save Iran from sanctions and China may drive wedge between US, Israel

Top stories in the Russian press on Wednesday

Kommersant: EU to set up mechanism to shield Iran from US sanctions

The European Union will create a mechanism, called "a special purpose vehicle," for trade with Iran to reduce the effect of US sanctions against Tehran, and salvage the 2015 Iran nuclear deal, a joint statement by Russia, the United Kingdom, France, Germany, China, the European Union and also Iran said after a ministerial meeting at the UN General Assembly in New York. Kommersant business daily writes that this decision is set to calm Tehran ahead of the second package of US sanctions, which limit cooperation with Iran in the oil and gas sector. Dozens of international companies, including European ones, have halted cooperation with Iran. Tehran has threatened to abandon the nuclear deal if its interests are not protected.

According to EU foreign policy chief Federica Mogherini, the EU member-states will create a legal entity to carry out financial transactions with Iran, thus allowing European companies to work with the country in line with European laws. This mechanism will be open for other partners. Five signatories of the deal believe that Tehran is fully committed to the nuclear deal and are doing their utmost to preserve the agreement. Tehran has earlier threatened to leave the JCPOA if Europe did not develop a mechanism for trade with Iran by November 4.

"Europe is trying to calm Iran, which is threatening to withdraw from the Joint Comprehensive Plan of Action (JCPOA). In this context, the creation of a mechanism is certainly a positive step, but it’s unclear how it will work. Most likely, it will be aimed at small and medium-sized business. Large companies such as Total are too integrated in the global financial system and for them the US sanctions pose a significant threat. It’s hard to imagine how they can be forced to remain in Iran," Yuliya Sveshnikova, Research Associate at the Higher School of Economics, told the paper.

Andrei Baklitsky, an expert with the PIR Center, noted that a plan to create a new mechanism for accounts with Iran has been on the agenda for a long time and the lack of progress by the EU signaled that Brussels was not seeking to seriously counter Washington. So, Mogherini’s statement is an important and real step towards preserving the JCPOA, he said. The question was whether to use EU structures, which were protected from US sanctions (such as central banks of France and Germany), or to create new ones, which would be isolated from Washington’s influence, and the latter option was chosen.

"Now the idea is most likely to establish a sort of a clearing office that will receive money from European companies for Iranian oil and from Iran for European goods. The money won’t de facto leave the EU thus limiting US pressure," the expert said. Nevertheless, he did note the possibility that Washington could slap individual sanctions against the leadership and personnel of the new structure. Meanwhile, fewer private European companies are ready to take risks and continue working with Iran, under the threat of US sanctions. "The financial channel won’t help trade if there is no buyer. Perhaps, the EU’s next step will be to set up a state structure for buying oil," he said.

 

Nezavisimaya Gazeta: Despite S-300s, Iran still in crosshairs in Syria

At last, Washington has unveiled the true goals of its military contingent in Syria, Nezavisimaya Gazeta writes. The statement by US National Security Adviser John Bolton that Washington would not leave Syria as long as Iranian forces were outside Iranian borders (Syria and Iraq) reveals US far-reaching plans in the Middle East. Since terrorist groups in Syria have been de facto defeated, the US and its allies in the war-torn country's occupied territories will focus on countering Iranian forces and Iranian henchmen, and also non-regular military units.

Bolton said they were the key reason for the US military presence in Syria. He labelled Russia’s decision to deploy the S-300 missile system to Syria a "major mistake," which would cause a "significant escalation" of tensions in the region.

Meanwhile, the conclusions by some experts about a potential major war in Syria amid the reinforcement of its air defenses are apparently exaggerated, the paper says. Israel and Russia are trying to avoid confrontation after the downing of Russia’s Il-20 jet on September 17.

According to military expert Lt. Col. Alexander Ovchinnikov, the Israeli leadership is planning to carry out tough military operations against Iranian facilities in Syria. In late August, Tehran and Damascus signed a military deal under which Iran will build several military plants in Syria. During their meeting, Iranian Defense Minister Amir Hatami and Syrian President Bashar Assad discussed constructing plants to manufacture Fateh-110 ballistic missiles. "The Jewish state is against this believing that the plants will produce missiles, which may be used by Shia units against Israel. So, all such military industrial facilities in Syria are being targeted for destruction," Ovchinnikov said. "However, now Israel will be more careful in conducting these military operations so as not to complicate relations with Russia," he noted.

 

Nezavisimaya Gazeta: China getting keys to Haifa port may drive a wedge between US, Israel

The United States Sixth Fleet, based in the Mediterranean Sea, may abandon the use of Israel’s major port of Haifa, Seth Cropsey, former US Assistant Secretary of Defense, told Nezavisimaya Gazeta. The reason for the move is China’s permission to build and control a new port terminal in Haifa. Everyone in Israel is trying to figure out who made the decision to allow America’s major strategic adversary to take over this crucial port.

Cropsey, who now heads the Center for American Seapower at the Washington-based Hudson Institute, believes that the deal will have significant geopolitical consequences. China will get an important position for eavesdropping and monitoring at the Haifa port, which is Israel’s key naval base, he told the paper.

The former Pentagon assistant, who worked in the Reagan and Bush Sr. administrations, explained that China may be able to spy on important Israeli communications and every vessel at the port will be under its thumb.

China’s positions at the Haifa port will further set the tone for potential US decisions on collaborative efforts with the Israeli Navy, including visits of US ships to Haifa and any more cooperation between the two countries, Cropsey said.

The Israelis fear that China’s presence in the Mediterranean will drive a wedge between Jerusalem and Washington. Another alarming sign is strong relations between China and Iran, which is Israel’s major foe in the Middle East. Another confirmation of this is that despite the US tough rhetoric against the regime, China’s imports of Iranian oil rose 9.3% in the first five months of 2018. Beijing is expected to boost these purchases, the paper says.

Given the US plans to launch a major "administration-wide" campaign against China, according to the Axios portal, Beijing’s attempt to advance its interests through America’s allies in the Middle East seems to be justified, the paper writes.

 

Izvestia: Russia’s key economy sectors demonstrate growth

Four out of five key economic sectors in Russia - agriculture, retail sales, commercial services and the manufacturing sector - grew more than by 2% in the first six months of this year, Izvestia writes, citing a study by the Russian Institute of Comprehensive Research.

Meanwhile, the construction sector is still declining, but the drop slowed to 1% against 3.4% a year ago. In general, Russia’s GDP in the second half of the year is expected to rise, but the risk of recession still looms.

In all five sectors, positive growth rates were observed in 15 Russian regions, including in St. Petersburg, the Kaliningrad and Sverdlovsk Regions, and also in Mordovia, which hosted the World Cup. This sporting event bolstered the situation in various business areas, a senior researcher at the Russian Presidential Academy of National Economy and Public Administration, Stepan Zemtsov, said.

However, not a single Russian federal district showed growth of more than 1% in these five sectors, the research said. Positive dynamics were seen in Northwestern and Southern Russia in addition to the Urals.

The hardest economic situation in the first half of the year was seen in the Ivanov, Vladimir, Komi, and Khabarovsk Regions along with the Chukotka Region, where there was a decline in agriculture, industry and commercial services.

 

Kommersant: Trump mum on Russia in UN General Assembly address

US President Donald Trump’s address at the UN General Assembly was a major event on Tuesday, Kommersant writes. The White House occupant focused on the outcome of his efforts in domestic and foreign policy, describing his strategy as rejecting "the ideology of globalism" and accepting "the doctrine of patriotism." Dividing the world into allies (India, Saudi Arabia, Israel and Poland) and adversaries (Iran and Venezuela), the US president made only a passing mention of Russia, the paper writes.

World leaders laughed at the US president, when he boasted that in less than two years his administration had accomplished more than almost any other in US history. Trump continued speaking about his success in a manner, which would be more suitable at an election rally, Kommersant writes. Meanwhile, the campaign for the mid-term congressional elections in November is gaining steam now and the UN pulpit is a good platform to tell the whole world about America’s developments under President Trump.

The key part of Trump’s speech was that it mentioned a list of states, on which the US administration is placing a key bet on various world regions, namely India, Saudi Arabia, Israel and Poland. However, Trump spoke neither of the European Union nor of the United Kingdom, its traditional allies in the West’s coalition.

Touching on Russia, Trump only called on Germany to get rid of its energy dependence. Representatives of the German delegation, who attended the meeting, only smirked.

Commenting on Trump’s speech, Russian Foreign Ministry Spokeswoman Maria Zakharova noted that the US leader touched on two issues: the need to maintain sovereignty and the lack of alternatives for defending national interests. "He decided not to take Russia’s name in vain, it seems."

 

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