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Press review: Will Trump, Xi meet at G20 and what awaits Council of Europe if Russia exits

May 17, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Friday

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© AP Photo/Pablo Martinez Monsivais

Nezavisimaya Gazeta: Trump and Xi may not meet at G20

After China and the US failed to reach a trade agreement, they exchanged tariff blows that shook the world’s stock exchanges. Hopes for talks between the two countries’ leaders at the G20 summit in Japan may be dashed. If that happens, though, Trump will have more time for talks with Russian President Vladimir Putin, Nezavisimaya Gazeta writes.

When Trump announced that US tariffs on Chinese goods would be raised from 10% to 25%, Beijing furnished a tit-for-tat response, raising tariffs on $60 bln worth of US imports, starting on June 1. Meanwhile, the US Department of Commerce said it was blacklisting China’s Huawei Technologies and its 70 affiliates, which confirms the assumption that this is not about trade but about Trump’s attempts to contain the technological development of the United States’ global rival.

As a result, stock markets tumbled not only in the US and China. According to the Institute of International Finance, the trade war caused the biggest outflow of capital from developing markets in the past seven months. April’s retail figures hit 16-year lows in China, echoed by a decline in April’s retail sales in the US.

More and more American analysts have been pointing out that the US and China need each other as their economies are closely intertwined, while the tariff war poses a threat to economic relations. However, experts say there is little hope that Trump will backpedal easily.

"Trump will not agree to a watered down agreement," Head of the School of Oriental Studies at the Higher School of Economics Alexei Maslov told the paper. "Although China still considers the conflict to be a trade one, the US president seeks to force Beijing into a 'war,’ which would allow him to accuse China of being aggressive and unable to make agreements. However, China is also trying to see beyond the surface and impose tariffs on goods manufactured in those states of the US that will be important for the next presidential election. In my view, the conflict is unlikely to be resolved sooner than six months. Over this period, China’s economy will suffer a considerable blow but US manufacturers will also face significant losses," the expert emphasized.

 

Kommersant: Gazprom may sign five-year contract to buy Turkmen gas

Gazprom is in talks with Turkmenistan on a five-year contract to buy gas, said Russian Deputy Energy Minister Anatoly Yanovsky. If concluded, the deal would allow Gazprom to make it through to 2023, when the Kharasavey gas field will be put into operation. Meanwhile, the current peak production capacity gaps, stemming from record-high exports, are becoming more and more obvious, Kommersant notes.

Gazprom started buying gas in Turkmenistan back in the Soviet times, but when the 2008 crisis hit gas demand both in Russia and Europe, gas purchases began to decline. In 2016, The Russian gas giant stopped them saying the company was losing money re-exporting Turkmen gas because Ashgabat had refused to lower its price.

Although gas exports and domestic demand declined this year, Gazprom is increasing gas production to fill its underground storage facilities and get more room to maneuver.

From this standpoint, the five-year contract with Turkmenistan comes as no surprise because in late 2023, Gazprom plans to start the exploitation of the Kharasavey gas field on the Yamal Peninsula, reaching production of 32 bln cubic meters by 2027. At the same time, the agreement with Turkmenistan will also mean Gazprom does believe that the 2018 record-high exports to Europe (200 bln cubic meters) did not come about by chance and gas demand will at least remain the same.

Gas prices in Europe have risen, allowing Gazprom to make money from reselling Turkmen gas, said Maria Belova of Vygon Consulting. She pointed out that Turkmenistan has few alternatives. If the country fails to sell gas to Russia, it will just remain in the ground. According to the expert, strategically, Gazprom should be interested in maintaining good contracts with Turkmenistan that has the world’s fourth largest gas reserves, which are relatively easy to exploit. In the long term, Gazprom could supply Turkmen gas to third countries, namely Iran and India.

 

Nezavisimaya Gazeta: Russia’s exit would leave the Council of Europe with no future

The Helsinki-hosted meeting of the Council of Europe’s Committee of Ministers has kicked off, and a key point on its agenda includes the Russian membership issue, Nezavisimaya Gazeta wrote.

Following Crimea’s reunification with Russia in 2014, Moscow’s delegation to the Parliamentary Assembly of the Council of Europe (PACE) was stripped of its rights to vote, be represented in the organization’s governing bodies and take part in observer missions. In response, Russia suspended its contribution payments to the Council of Europe’s budget in 2017. In October 2018, the Council’s secretary general warned that Russia’s rights to be represented in charter bodies - the Committee of Ministers and PACE - might be suspended in June 2019. Moscow, in turn, made it clear that if an expulsion decision was made, Russia would pull out of the Council.

If Russia is forced to withdraw from the Council of Europe, the organization won’t last long, said Executive Secretary of the Trinanon Dialogue Russian-French Civil Society Forum Alexander Orlov, who served as Russia’s envoy to the Council of Europe in 2001-2007. "The European Union in fact duplicates the Council of Europe in many ways so I think the moment of truth has come," he pointed out. "It is actually the same common legal framework that we have been trying to establish since 2000, or even from Mikhail Gorbachev’s time," Orlov said, adding that the Council was one of the tools to build a Greater Europe stretching from the Atlantic to the Urals.

"Russia belongs in the Council of Europe and we want it back," PACE member representing Austria Stefan Schennach told the newspaper. According to him, Russia’s legal community can plan a positive role. "We receive numerous letters from Russian lawyers and human rights experts who say: ‘please don’t close the doors of the European Court of Human Rights on millions of people.’ We can’t ignore these voices," Schennach noted. However, in his words, the problem is that a number of Council of Europe members view the current situation as "a Cold War game." In this regard, Schennach pointed to Ukraine, Georgia, the Baltics and Sweden.

 

Izvestia: Hungary to demand Zelensky protect minority languages

Ukraine’s state language law, which violates the rights of ethnic minorities, needs to be revised once Vladimir Zelensky takes the reins as president, a source in the Hungarian Foreign Ministry told Izvestia. Moscow, in turn, will continue efforts to ensure the interests of Russian-speaking Ukrainians, a State Duma member confirmed to the newspaper.

Outgoing Ukrainian President Pyotr Poroshenko has recently signed the much-discussed controversial language law. Just like Russia, Hungary has voiced its opposition to the legislation from the very beginning because it views it as a violation of the rights of ethnic minorities, including Hungarians living in Transcarpathia.

The Hungarian Foreign Ministry source specified that Budapest was hopeful that Zelensky would put an end to the discrimination against ethnic minorities in Ukraine. The ministry pointed out that in fact, "the law declares the use of the Ukrainian language mandatory at all times, except for private conversations and religious services," while the wrong use of Ukrainian might lead to litigation. Hungary believes these circumstances are unacceptable.

The language issue would be the focus of the first talks with the new Ukrainian leadership, because without reaching a solution, it will be difficult to build normal relations, the newspaper quoted a Hungarian government source as saying.

Russia supports Hungary on this issue because Moscow is very concerned about the plight of ethnic minorities in Ukraine, Chairman of the State Duma Committee for CIS Affairs, Eurasian Integration and Relations with Compatriots Leonid Kalashnikov told Izvestia. According to him, Russia will demand that international institutions try to make Kiev change its discriminatory policy and abolish the controversial law. In this connection, Budapest’s unwavering stance can produce results sooner or later.

"Apart from other things, Hungary is an EU member and Brussels is capable of making Ukraine change the law. Kiev dreams of entering European institutions, so it will have to meet their demands," Kalashnikov noted. "We are keeping an eye on the situation, trying to influence Kiev. The recent economic sanctions, including restrictions on the supply of petroleum products, are related to this law. We will do everything in our power to protect the rights of Russian-speaking Ukrainians," the senior Russian lawmaker added.

 

Kommersant: Russia’s consumer confidence index plunges to historic low

The consumer confidence index has plunged to a historic low of 62 points in Russia in the first quarter of 2019 as a result of rising taxes and the continuing decline in real incomes. Only 25% of consumers expect their financial situation to improve in the future, while the number of those ready to spend money has dropped to 14%. Russia’s consumer confidence will remain weak this year, Kommersant wrote, citing research by The Conference Board and Nielsen.

"Given the current economic situation, consumers tend to have an increasingly negative outlook on their financial prospects, believing it is not the best time to spend money. That said, they are tightening their purse strings and trying to put money aside, said Nielsen Analytics and Consulting Director Marina Volkova.

According to head of the Investment Department at BKS Broker Narek Avakyan, the growing tax burden makes it impossible for businesses to increase their expenditures, including staff wages that make up the bulk of the people’s incomes.

Marketing Director at Moscow’s Mozaika shopping mall Olga Starichenko agrees that consumers now have less spare cash. Business revenues have been declining in certain sectors, including jewelry, gifts and books, which shows that people are making less spontaneous purchases, she pointed out.

Russia’s consumer confidence will remain weak in 2019 because the VAT hike continues to negatively affect the situation, Avakyan said, adding that things were unlikely to improve before 2022.

TASS is not responsible for the material quoted in the press review

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