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Press review: Trump terrifies Western elites and Alibaba eyes partnership with Sberbank

January 18, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Wednesday, January 18

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© AP Photo/Evan Vucci

 

Kommersant: US post-inauguration policy course stirs up dread among Western elites

In the run-up to the inauguration of the 45th President of the United States, Donald Trump, a tug-of-war is heating up between the new White House administration and the EU, which threatens to cause a rift in the transatlantic community. European leaders protested Trump’s recent statements, and his reluctance to seek reconciliation with them, or to look for new ways to consolidate the EU and NATO as their members are increasingly wary of any potential collusion between Moscow and Washington, Kommersant wrote.

In a recent interview Trump talked about Brexit, slammed Europe’s immigration policy and questioned NATO’s future, which whipped up a political storm in Europe and a series of responses from top European politicians. Trump’s most controversial statements were related to the United States and NATO, as he repeated his well-known argument against the alliance functioning in its present form - the US does not have to pay for the security of its allies.

According to Kommersant, "The fact that Donald Trump’s attacks on NATO were accompanied by him urging to normalize relations with Russia resulted in an even greater discord in ties with transatlantic counterparts, especially since Russia was moved from partners to the category of potential adversary after the Ukrainian crisis. In this situation, the European allies are increasingly wary of possible future "conspiracy" between Moscow and Washington."

"After the inauguration of the US President-elect, an obvious difference in style and political priorities in transatlantic ties will play an increasingly important role in relations between the US and its European allies," Head of Department of Strategic Assessment at the Russian Academy of Sciences, Sergey Utkin, told Kommersant. "Differences in concepts will undermine the relationship between the allies more than differences in opinion on certain issues," he added.

According to him, the Munich Security Conference, which will take place on February 17-19, will be one of the closest possibilities to verify how serious the differences between the US and its allies are.

 

Izvestia: Finance Ministry rejects World Bank’s idea to authorize regions to set income tax rate

The World Bank in a recent 230-page report on the Russian economy, proposed an unusual idea to the Finance Ministry to help struggling regional budgets suggesting the regions could be given the right to set their own personal income tax within a predetermined range in the Ministry. However, the Finance Ministry press service told Izvestia that it did not support this idea and is not working on this issue.

The idea, according to international experts, could have helped regional budgets in theory. However, according to Finance Ministry’s estimates, raising the personal income tax would only boomerang and essentially hurt the most distressed regions, not to mention that it would only worsen their plight. A source close to the Finance Ministry told Izvestia that if the regions had the right to cut the rate from its current 13%, the most wealthy regions would likely take advantage of it.

According Senior Director, Head of Sovereign and Regional Ratings Group of the Analytical Credit Rating Agency (ACRA) Andrey Piskunov believes it could make sense to use the idea in a limited number of regions. "You could probably introduce it in Moscow, due to the concentration of people with high income. But Moscow does not need it, and neither do the regions that are already providing fiscal incentives, such as Tyumen region," Piskunov said, adding that prosperous areas of the country are concerned with diversifying the economy rather than fiscal consolidation.

Regional representatives also doubt the measures proposed by the World Bank. "I’m touched by the World Bank’s concern about the needs of Russia’s regions," Deputy Chairman of the Kaliningrad regional government Eduard Batanov told the newspaper. "But if there are regions that believe they collect too much personal income tax, these surpluses can be returned in the form of social benefits," he added.

The budgets of Russia’s regions currently receive 85% of personal income tax revenues. During the first 11 months of 2016, revenues that the local governments raked in exceeded 2.6 trillion rubles ($40.98 bln).

 

Kommersant: Alibaba Group may team up with Sberbank for potential e-commerce partnership

Sberbank and China’s Alibaba Group might set up a joint venture in the field of e-commerce in the first half of 2017. The Russian side expects the Alibaba Group to contribute its operating business for cross-border trade in Russia and the CIS, and possibly in other countries. Sberbank would have control mainly over financial investments, Kommersant wrote citing sources familiar with the situation.

According to a source close to the government, a round of meetings took place in December - January, at the Finance Ministry’s site, while the most recent one took place last week. The parties agreed to create a joint venture only as a Russian legal entity, with Sberbank owning at least 50% stake. "It will be a company worth several billion dollars, which will become the largest player in the market of cross-border e-commerce in Russia and some other countries," the source told Kommersant.

However, the plans discussed are not final, and taking into account how difficult it is to negotiate with the Chinese, the time frame for establishing the company might be modified, an informed source in the e-commerce market told Kommersant. So far, the parties are not commenting on the reports.

 

Vedomosti: Russia’s top intel agency reminds telecoms to gear up 2017 budgets for anti-terror package

The Russian Federal Security Service (FSB) has written a letter to telecom operators, reminding them to include costs for implementing the package of anti-terrorist laws (the so-called "Yarovaya Package") in their 2017 budgets, employees of two large telecom operators told Vedomosti. According to them, the operators received the letter about a month ago.

Telecom operators have 1.5 years to prepare for the carrying out the anti-terror legislation package, which will go into effect on July 1, 2018. According to the legislation, telecom operators and Internet services are required to store their users’ phone calls, text messages, images, sounds, video and other electronic communication for six months.

However, there hasn’t still been any assessment of the law and there aren’t any technical specifications for creating such a data storage system, Vedomosti noted. Therefore, it is unclear what to finance, a representative from one of the operators told the newspaper. It is unlikely that anything will be completed by 2018, an employee of another operator said, since next year’s budget is usually formed in October-November.

At the end of June 2016, the leaders of the big four operators estimated the cost of implementing the law at 2.2 trillion rubles ($34.68 bln).

 

Izvestia: Government cracks down on illegal booze

The Russian Government has drawn up a favorable report on a draft law tightening criminal penalties on those trafficking in illegal alcohol. The crackdown will result in higher penalties, with up to six years jail time for bootleggers, Izvestia noted.

The new proposals to the Criminal Code would make it possible to fine those selling alcohol without a license in the amount of 2-3 mln rubles ($31,508 - $47,262), or a penalty amounting to up to two years of income. The changes to the Criminal Code would also enable lawbreakers to be sentenced to forced labor for up to 3 years or imprisonment for the same term.

Senator Sergey Ryabukhin told Izvestia, that together with colleagues he intends to back the proposed fines. "Due to counterfeit alcohol, the budget loses roughly 180-200 bln rubles ($2.83 bln - $3.15 bln) per year. There can be no compromise, the legal framework should be strict. It is necessary to restore order in this sphere," he said.

Head of the Center for Federal and Regional Alcohol Market Research (CFRAMR) Vadim Drobiz told Izvestia that he believes that even millions in fines would not spare Russians from illegal booze. "The existence of illegal alcohol is dictated by people who cannot afford legal vodka, but illegal spirits for 100 rubles per bottle. Experience shows that toughening penalties does not reduce the amount of crimes," Drobiz said.

According to CFRAMR, Russia’s illegal vodka market currently stands at about 500 mln bottles per year. At the same time, the legal market of vodka and distillery products is estimated at 1.8 bln bottles a year.

 

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

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