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Press review: What’s on the horizon for Russian politics and the ruble in 2020

Top stories in the Russian press on Tuesday, December 31

Vedomosti: New Year to bring more political risks

As 2019 comes to a close, it was an uneasy year for the Russian authorities, given the Moscow City Council election and the wave of protests. No crucial events are expected to take place next year but it may turn out to be no less difficult, said experts interviewed by Vedomosti.

Director of the Institute of Socio-Economic and Political Research Dmitry Badovsky believes that "2020 will be a busy year for Russian politics in terms of ideology." "The authorities will seek to take advantage of the 75th anniversary celebration of the Soviet Union’s Victory [over Nazi Germany in the Great Patriotic War] and the fight against attempts to falsify history in a bid to unite society," he added. According to the expert, developments in other countries will remain important for Russian politics.

Gleb Kuznetsov, head of the Expert Council at the Expert Institute of Social Studies, pointed out that "the US presidential election is important [for Russia] because it will clarify whether the policy of sanctions will remain ludicrous, inconsistent and focused on external effects (just like US President Donald Trump’s foreign policy is in general) or whether a Democrat will take over the White House, giving consistency to the anti-Russian consensus among the US political elite," he noted. "In this regard, Trump’s second term is in the interests of not only Russia but the entire world as well. His political style, his drastic swings and tendency to show off and boast about his ‘deals’ to his voters is the best possible contribution to building a multi-polar world," the expert explained.

When speaking about the domestic situation, political scientist Abbas Gallyamov emphasized that a rise in protest sentiment would be the main trend as demonstrations would move from Moscow to other Russian regions. "The main question here is whether these moods will reach a degree that will pave the way for a protest vote," he added.

According to Civil Society Development Fund’s Chairman of the Board Konstantin Kostin, 2020 will see all political players in Russia get ready for the 2021 parliamentary election. They will choose and test new electoral strategies, technologies, practices and communication models. All political forces will search for new faces because Unified Election Day 2020 will prove to be a dress rehearsal for the State Duma election.


Izvestia: What 2020 has in store for Donbass

The resumption of the Normandy Four talks, the disengagement of forces in Stanitsa Luganskaya, Zolotoye and Petrovskoye, and a prisoner swap are all Ukrainian President Vladimir Zelensky’s first steps towards resolving the Donbass conflict. According to experts interviewed by Izvestia, this offers specifics to look into 2020 with cautious optimism but no breakthroughs can be expected on the horizon.

If the Ukrainian president becomes more determined in 2020, more impressive results may be achieved, Chairman of the State Duma Committee for CIS Affairs, Eurasian Integration and Relations with Compatriots Leonid Kalashnikov told the newspaper. "As of now, one can look at the prospects for resolving the conflict with cautious optimism. There are reasons for that, which include the disengagement of forces and the prisoner exchange. I think this trend will remain for quite a long time. Ukraine is not ready to take more decisive steps. However, Zelensky is indeed trying to contain the forces that seek to undermine the peace process," he pointed out.

The recent Normandy Four summit does offer a glimmer of hope, said Director of the Institute of Peacekeeping Initiatives and Conflictology Denis Denisov. However, in his view, the problem is that no breakthroughs have been achieved. "If the process remains limited to prisoner exchanges and the disengagement of forces, then efforts to resolve the situation may stall once again," the commentator emphasized.

The issue is that there is no systemic movement towards a solution, Director of the Kiev Center for Political Studies and Conflictology Mikhail Pogrebinsky explained. Donbass needs the Minsk Agreements to be fully implemented and the war in the trenches to end, but the current Ukrainian authorities are not yet ready for that. According to the Ukrainian political analyst, 2020 may see "slow efforts to implement disengagement agreements in new areas, which will reduce the number of shelling attacks," but nothing more can be expected.


Izvestia: What awaits the ruble in 2020

Remarkably, 2019 turned out to be one of the best years in the ruble’s history, as the Russian currency went up by more than ten percent. Izvestia asked experts if the ruble will be able to maintain its position next year.

Chief Economist at Alfa-Bank Natalia Orlova believes that "the situation is likely to be positive for the ruble in the first six months of the year." "The markets will react to improving dialogue between Russia, Ukraine and Western countries," she explained, adding that "in the second half of the year, the focus will be on the US presidential election." "Russian market participants currently expect that Donald Trump will be re-elected for a second term. However, if some threats emerge within this scenario, the rate will go back again, hovering between 65 and 70 rubles per dollar," Orlova noted.

Although the passing year was quite good for the Russian currency, global financial and commodity markets may face a rise in volatility in 2020 amid complicated trade relations between Washington and Beijing, along with the kickoff of the US presidential race. It will become a factor of instability for the ruble, which will range between 60 and 67 rubles per dollar, Finam Group Analyst Sergey Drozdov pointed out.

"My forecast is clear, the ruble will strengthen slowly but somewhat steadily in the first half of 2020 and will carry on moving calmly in the second half of the year," said TeleTrade Chief Analyst Pyotr Pushkarev. "The trade conflict between the US and China has waned, while their talks on a deal will linger on for months. It will provide overall support to the euphemistically termed risk-based investment, which is how the financial world sees investment in developing economies. As of now, Russia is one of the most attractive targets for investment," the expert emphasized.


Nezavisimaya Gazeta: Nord Stream 2 fails to be completed in 2019

The implementation of the Nord Stream 2 gas pipeline project was one of the most pressing issues of the passing year, Nezavisimaya Gazeta wrote.

Since the gas pipeline’s launch will double the amount of gas transported to Europe via Germany, the country’s Chancellor Angela Merkel continues to support the project although Washington and some EU members aren’t happy about it.

German legislators for the most part see eye to eye with Merkel on this project. According to head of the Russian State Duma Energy Committee Pavel Zavalny, it means that the project has been depoliticized. In his view, the German parliament has recognized the project’s commercial nature by passing a bill, which incorporates the EU Gas Directive into Germany’s laws but makes it possible not to apply it to Nord Stream 2.

As is well known, it was not Russia, but Europe’s leading energy companies that put forward the idea of building Nord Stream 2. It is a commercial project with a clear payback period based on its projected utilization rate. Clearly, the EU Gas Directive, which concerns all gas pipeline projects put into operation after May 2019 (that is, after investment decisions are made and the companies make the actual investment), should not apply to Nord Stream 2, according to economic logic, Zavalny emphasized.

In this regard, the recent tensions between Russia and Germany, which followed Berlin’s reaction to the killing of a former Chechen field commander, as well as the United States’ move to impose additional sanctions on foreign companies involved in the construction of the pipeline across the Baltic Sea, will hardly prevent the project from being completed.


Rossiyskaya Gazeta: Russian company to make credit card microchips

In 2020, Russia’s Mir credit cards will be fitted with Russian-made chips instead of imported ones. A test batch of cards with dual chips for contactless payment has already been made, Rossiyskaya Gazeta writes.

The microchips are manufactured by the Mikron company based at the Technopolis Moscow technology center in the Russian capital.

"The new chip is completely Russian-made, it was developed especially for the national payment system and is in line with all international standards. It has its own operating system, which is strategically important in terms of the Russian financial system’s cyber security," Moscow Deputy Mayor for Economic Policy and Development Vladimir Efimov told the newspaper.

According to Head of the Moscow Department for Investment and Industrial Policies Alexander Prokhorov, Mikron currently produces more than 12 mln chip modules for national credit cards, travel passports with biometric data and other digital ID documents.

"Imported microchips prevail on the Russian market at the moment," Mikron Director General Gulnara Khasyanova pointed out. "The Russian-made credit card chip will be competitive not only on the domestic market but globally as well," she added.

According to the Moscow Mayor’s Office, Mikron is capable of meeting the needs of all Russian banks whose payment systems cover 20 mln Mir cards every year. One in five cards already has a chip made by Mikron.


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