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Press review: US keeps threatening Nord Stream 2 and how a Biden win would impact Russia

Top stories from the Russian press on Monday, July 27th

Izvestia: Washington’s looming sanctions against Nord Stream 2 stir up rift between US, EU


The United States continues its crusade against the Nord Stream 2 pipeline project. In the coming days, both houses of Congress are expected to agree on a bill expanding sanctions against European players in the pipeline’s construction. According to Izvestia, Washington's tough line opposing the project has already spoiled and may further undermine relations between the United States and Europe.

American senators have put forward restrictions against all participants in the pipe-laying work, as well as companies engaged in insuring ships and technical equipment. According to the US, the main reason for these restrictions against the pipeline is the desire to prevent Europe from becoming dependent on Russian energy supplies. At the same time, Washington is clearly protecting the interests of its own liquefied natural gas producers eyeing the European market, Izvestia wrote. Gazprom's European partners will be the main targets of the new American sanctions.

Germany, the largest EU economy, met the looming sanctions with hostility. According to Oliver Hermes, Chairman of the German Eastern Business Association, Washington’s threats create investment risks for the EU to the tune of roughly 12 bln euro, and the sanctions may affect about 120 companies from 12 European countries.

If the new US threats become a reality, Europe could introduce counter-sanctions, the newspaper wrote. One of the most obvious options is a new hike in import duties on US goods - for example, on LNG. The "war of duties" is already familiar territory for Europe and the United States, the question is where it can lead to, Izvestia noted. Analyst from Grand Capital Vladimir Rozhankovsky told the newspaper, such a confrontation may result in "the nationalism of markets - Europe will roll out the ‘Buy European’ label as a slogan, while the United States will say ‘Buy American’, and China, respectively, will push ‘Buy Chinese‘".

Izvestia notes that this pattern of production and consumption will only lead to even greater self-isolation of national and regional economies against the backdrop of the COVID-19 pandemic. The economies focused on the international market might suffer the most, including the US itself. Thus, by trying to "turn off" Russian gas to Europe, Washington is cutting the very branch on which they are sitting, Izvestia wrote.


Izvestia: Charter flights to popular Turkish resorts from Russia to resume on August 10

Turkish officials will permit charter flights from Russian cities to enter the country starting on August 10, the Federal Air Transport Agency told Izvestia. This will allow charter companies to load their planes and tour operators to increase sales to the country. After the flights were announced, sales began to soar, according to ticket aggregators. However, experts caution that profitability on these flights will be high for the first two weeks, after which the passenger traffic may dry up.

The Federal Air Transport Agency told Izvestia, that charter flights to Turkey will open on August 10 to popular resorts, such as Antalya, Dalaman, and Bodrum. Meanwhile, flights to London, Istanbul, Ankara, and the island of Zanzibar (Tanzania) will begin on August 1.

The newspaper’s sources in the aviation industry believe that passenger traffic to Turkey will be constrained. "If the authorities had warned about the resumption of flights a month in advance, passenger traffic on these international routes would have been significantly higher. By the end of July, some tourists lost hope for open borders and chose vacations inside the country, having already booked flights and hotels," a source in one of the airport holdings told Izvestia.

Aeroflot spokesman Mikhail Demin called the government's decision on opening flights an important and long-awaited step towards restoring full-fledged air traffic. "Of course, a complete recovery will take time. Nevertheless, Aeroflot has always assumed that we must be operationally ready for the restoration of flights. On August 1, we will fly to London and Istanbul and will await further government decisions," he said.

According to experts, high demand in the first days after the resumption of flights was due to delayed demand. General Director of Friendly Avia Support Alexander Lanetsky told the newspaper that many foreigners who were waiting out the pandemic in Russia are in a hurry to return home, taking advantage of the opportunity.


Vedomosti: Russia could launch COVID-19 vaccination program in August

As of July 26, since the beginning of the pandemic, 16.1 mln people have been infected with coronavirus around the world, and 645,000 people have died. Hundreds of companies in dozens of countries are rushing to create a vaccine. The first batches could be available to a limited number of consumers in a few weeks. According to Vedomosti, the world's first vaccination program for risk groups (in particular, doctors) might be launched in Russia in August.

A vector-based vaccine was developed at Oxford University and has been tested by AstraZeneca for more than three months. A vaccine of the same type was created at the Moscow Scientific Research Institute of Epidemiology and Microbiology. Russia plans to manufacture both of these vaccines. The Oxford vaccine will be produced by the R-Pharm company. "Now all the resources we have are used for vaccine production. Later, we plan to introduce new capacities for the production of vaccines and drugs for the treatment of coronavirus," Chairman of the board of directors of the R-Pharm group of companies Alexey Repik told Vedomosti. The project will be financed from the company's own funds and by the Russian Direct Investment Fund (RDIF).

He did not say which of the vaccines will be manufactured first. "We are only at the beginning of the road. In the fall, we hope to ensure commercial production so that representatives of risk groups can get the vaccine. Our goal is to reach the monthly total volume of 100 mln doses," he said.

According to CEO of AstraZeneca for Russia and Eurasia Irina Panarina, Russia will be one of the hubs for the production and supply of vaccines to international markets. Exports are planned to more than 30 countries, including the Middle East, the Balkan region, and CIS countries.


Kommersant: What a Joe Biden election victory would mean for Russia

With the US presidential election scheduled for November 3, just over three months away, the outcome appears to be increasingly unpredictable. Starting from June, former Vice President Joe Biden has consistently outpaced Donald Trump in opinion polls. According to experts interviewed by Kommersant, Biden’s potential victory could turn out to be disappointing for bilateral relations with Russia.

Biden is not expected to radically reconsider Washington’s sanctions policy against Russia. According to Director of Programs at the Russian International Affairs Council Ivan Timofeev, Moscow will face one of two scenarios: either a moderately negative one or radically negative one. A moderately negative scenario, according to him, is possible in the absence of a new "crisis of interference" and with the maintenance of the status quo in key areas of relations between the two countries. "Especially those that are the direct causes of the sanctions. Among them are the situations in Ukraine and Syria. It is also important that there are no new crises like the Skripal case," he said. Any sort of easing of the sanctions or a normalization of relations will definitely not happen after the elections, the expert added.

At the same time, some space for maneuvering may appear in certain areas. "For example, Joe Biden may be less inclined to put pressure on the European Union. Perhaps, he could turn a blind eye to Nord Stream 2," Timofeev added.

Arms control and the nonproliferation of weapons of mass destruction are perhaps the only areas where Biden can be expected to make progress that is beneficial to Russia, Kommersant wrote. This concerns the New START (Strategic Arms Reduction Treaty) deal, which Biden has already promised to extend if elected.

As for American nuclear weapons in Poland, along with transferring a part of the US contingent there, Biden's advisers have already promised to revise these plans. Overall, his administration will try to make up for the damage done to Euro-Atlantic relations by Donald Trump, the newspaper wrote.


Vedomosti: Total profit of Russian enterprises halved due to pandemic

The share of unprofitable organizations in Russia in January-May 2020 amounted to 36%. At the same time, the profits of Russian enterprises more than halved, according to statistics. Recovery of the service sector will be the longest among all basic economic activities, experts told Vedomosti. However, the situation might soon improve in the oil and gas industry, as well as in the transportation sector.

In January-May 2020, the financial results of organizations dropped by 51.6% and amounted to 3.246 trillion rubles ($45.35 bln) compared to 6.702 trillion rubles ($93.63 bln) in January-May 2019, according to the operational data of the Russian State Statistics Service.

Alim Bishenov, member of the general council of Delovaya Rossiya, told the newspaper that oil and gas companies reduced their profits due to falling energy demand and political agreements within the OPEC+. According to him, the situation is complicated by the fact that companies cannot plan their activities due to the likelihood of a second wave of coronavirus in the fall.

According to Georgiy Ostapkovich, head of the Center for Market Studies at the Higher School of Economics, personal services to the population suffered most from the coronavirus pandemic. According to his forecasts, "the process of recovery of the service sector will be the longest and most uncertain among all the consolidated basic types of economic activity" and a number of companies will leave the market. However, massive bankruptcies will be avoided, experts told Vedomosti. "State support kept many organizations afloat, less than 6% of companies will leave the market," Bishenov said.

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