Press review: Poroshenko surrenders to radicals and IS sets up new 'capital'

Kommersant: Poroshenko surrenders to radicals’ demands

Ukrainian President Pyotr Poroshenko’s decision to cut transport links with Donbass and to slap sanctions on the subsidiary of Russia’s top lender, Sberbank, has been viewed as concession to radical forces that stole the initiative from the leading party and promoted the idea of early elections, Kommersant writes on Thursday. The meeting of Ukraine’s National Security and Defense Council where its head Alexander Turchinov announced the blocking of all roads and railways leading to the self-proclaimed republics - Lugansk and Donetsk - demonstrated that the president’s opponents have virtually forced their own agenda on him and are making Poroshenko take controversial steps, the newspaper says.

Viktor Ukolov, a political analyst close to President Poroshenko’s administration, told Kommersant that the blockade will only be against those companies that have been "illegally" confiscated from Ukrainian ownership. "This will concern supplies from enterprises that have decided to pay taxes on the territories of the self-proclaimed republics instead of Ukraine," he said. The analyst also thinks that Poroshenko’s opponents have united efforts with the aim of destabilizing the situation in the country in general.

"The technology of a centralized Maidan has been put into operation in Ukraine as various smaller "Maidans" are being used for destabilization and the initiation of snap parliamentary and presidential elections," he said.

Vedomosti: Ukrainian sanctions fail to impact money transfers from Russia

Sanctions against Russian payment systems imposed by Kiev in October 2016, have had almost no effect on traffic, Vedomosti business daily says. In Q4 2016, the amount of funds transferred from Russia to Ukraine via payment systems came to $150 mln, only a 4.5% decrease compared with the previous quarter, according to the Central Bank’s data.

According to Olga Vilkul, head of Leader payment system, the sanctions forced customers to use foreign systems operating in Russia, which were not put on Kiev's sanctions list. Amid this background, foreign players "seriously changed" the terms by actually making them equal with Russian players, and enticed their clients.

In 2011-2016, Ukraine ranked 3-4th among CIS countries in terms of transfers from Russia, Vedomosti writes. Western Union reduced tariffs on transfers from Russia to Ukraine starting December 1, 2016. The company refused to unveil its financials, though it representative told the newspaper that the amount of transfers from Russia to Ukraine is "traditionally large." Some Russian operators dodge sanctions by making transfers to Ukraine via their partners.

In a move to protect Russian market players, the State Duma has drawn up a bill to counter the Ukrainian sanctions, which has already been approved in its first reading. The bill implies that only systems operating in the countries that imposed sanctions, through Russia-based structures, will be allowed to transfer funds from Russia to those countries. Vilkul expects the bill to bring previous positions to companies like Leader that they lost in the fourth quarter of last year due to the sanctions.

Izvestia: Deir ez-Zor on track to becoming new ‘capital’ of Islamic State

Top commanders of the Islamic State are being pushed out of Mosul and Raqqa and moving to Deir ez-Zor, Izvestia daily reports citing sources in the Syrian army. The city may become the next capital for the terrorists who are ceding regions in Syria and Iraq each day, which experts say will only put off an imminent collapse. Syrian military expert Hassan Turki told the newspaper that commanders have been moving to the new location together with their families. "They probably won’t stay in the city, but rather move on to south-eastern regions. But it’s very likely those militants will be participating in attacks on the Syrian army that partially controls Deir ez-Zor," he said, adding that he does not rule out that "the city will become a new capital of the Islamic State, though in order to accomplish this the terrorists will have to liquidate the Syrian military, otherwise only al-Mayadin (a town 50 kilometers away to south-east) may claim this."

The Syrian army has been holed up in Deir ez-Zor since 2014. Boris Dolgov of the Oriental Studies Institute under the Russian Academy of Sciences, told Izvestia that the chief goal of the Islamic State is to consolidate forces at a certain stronghold, and Deir ez-Zor suits this perfectly. "The terrorists continue to resist, but chances are high that this city will be their last big bastion," Dolgov said.

"If the current approach by those countries involved in fighting the terrorist organization persists, it will transform into a number of armed groups that will not control territories," he added.

Izvestia: NATO 'membership fee' needless burden for certain EU states

NATO’s demand to bring defense budgets of all member-states in line with the organization’s guidelines, which is to 2% of GDP regardless of their economic status, may become the reason for a serious breakdown in the alliance, Izvestia writes. Some countries, such as the Czech Republic and Slovakia, are reluctant to raise expenses to the required minimum level, while some are willing to put defense spending above the interests of their own citizens. Politicians from several Western European countries polled by the newspaper consider the increase in defense expenditures senseless as the safety of NATO states will be intact they say.

According to a European deputy from the Czech Republic and member of the Communist party, Katerina Konecna, the alliance’s request to raise military spending is not warranted by the current situation in the security area. She also thinks that the country’s government could make more efficient investment decisions, for example, in local education and the medical system. "The Communist Party of Bohemia and Moravia, among other issues, supports the idea of holding a referendum on the country’s membership in the alliance," the politician told Izvestia.

The referendum issue is also being considered in Slovakia. "At first glance, the NATO-set minimum may not seem high, however, it is hardly affordable to increase defense expenses to 2% of GDP for those countries, which are even unable to provide finances for better social services," Slovak analyst Mikhail Andreychik told the newspaper, adding that countries such as Romania and Bulgaria are definitely going to face difficulties on this issue. Latvian political analyst Andrey Gaponenko shares this view, saying that "it will be really challenging for Latvia to meet the objective. "Riga has already refused to raise teachers' salaries due to this, despite previously announced pledges. Doctors are ready to go on strike over low wages, they are also leaving for Scandinavian countries. Nevertheless, the Latvian government is not going to abandon its source, despite the prospects of this becoming a serious burden for the population," the analyst said.

Kommersant: Russia’s exports of radio electronics skyrocket to record highs

Last year saw a 13.7% rise in Russia’s market of radio electronics to 3.3 trillion rubles, despite the overall economic situation and the US sanctions against big players, such as Angstrem and Micron. Against this backdrop, Russian companies almost doubled their supplies to military producers abroad, while in Iran the sky was the limit on demand for Russian radio electronics, Kommersant writes.

The amount of radio electronics exports from Russia in 2016 increased by 81.5% to preliminarily $3.3 bln, the newspaper says. Meanwhile, the amount of Russia’s import of radio electronics dropped 31.2% in the period to $300 mln (with military products accounting for 61.4%). The sanctions imposed in September 2016 by the US government cover the Micron facility controlled by Russia’s Sistema conglomerate and the Angstrem Group owned by ex-minister of communications Leonid Reiman and the state-controlled corporation Rostec. Head of Angstrem Konstantin Nosov told Kommersant that the company faced almost no problems following the restrictive measures as it did not supply microchips to US companies.

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