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Press review: NATO on guard over space threats and the ruble’s direction after US election

Top stories in the Russian press on Thursday, October 22
NATO Secretary-General Jens Stoltenberg AP Photo/Olivier Matthys
NATO Secretary-General Jens Stoltenberg
© AP Photo/Olivier Matthys


Media: Russia sees no alternative to peace settlement in Nagorno-Karabakh

Moscow is calling on Baku and Yerevan to refrain from military action to iron out the Nagorno-Karabakh conflict and resume talks. Armenian Prime Minister Nikol Pashinyan stated on October 21 that "at the moment there is no diplomatic solution to the conflict in Karabakh." Vice President of the National Assembly of Armenia Alen Simonyan told Izvestia that Yerevan was forced to make this statement due to Baku’s aggression, but actually Armenia does not see any alternatives to a political settlement to the conflict. Azerbaijan’s MP Sabir Gadzhiyev assured that Baku backs peace talks and expected Yerevan to be ready to start substantive dialogue.

Political scientist Denis Denisov told Izvestia that the Armenian prime minister’s statement ran counter to Russia’s general line towards reconciling the two countries and a political settlement to the conflict. Therefore, soon Moscow will take steps to encourage Yerevan to sit down at the negotiating table. "Russia will call on Armenia to change its bellicose rhetoric and switch to peaceful dialogue," the expert said.

Armenian political scientist Grant Mikaelyan told Kommersant that Yerevan’s diplomatic efforts and the calls by international mediators to observe the ceasefire are unlikely to be effective. However, this is a necessary effort in order to prevent serious bloodshed and the infiltration of terrorists into the region, he noted. According to Azerbaijani political scientist Ilgar Velizade, Yerevan’s contradictory statements are likely to backfire.

Editor-in-chief of Caucasian Knot online media outlet Grigory Shvedov told Vedomosti that given the achieved military successes, Baku won’t just seek a ceasefire, but will now demand the region’s status quo be changed. At this stage, the issue of a ceasefire tops the agenda for Armenia, he pointed out. According to him, neither side will agree to a total change of Karabakh’s status, but some compromises are possible.


Izvestia: Russian industry seeks to retaliate against EU’s carbon border tax

Russian businesses are not planning to put up with the EU’s proposed introduction of its so-called carbon border tax. Members of the Russian Union of Industrialists and Entrepreneurs (RSPP) concur unanimously that this tax is a protectionist measure and its key goal is to ensure European producers’ competitive advantage at the expense of other countries. Russian exporters could lose anywhere between 1 bln euro and 5 bln euro per year due to this new EU tax move, Izvestia writes. Russian entrepreneurs submitted their proposals on retaliatory measures against the EU at a meeting between the lobby group and President Vladimir Putin on Wednesday. One of the initiatives was a potential review of conditions for EU companies’ investments in Russia. As a party to the Paris Agreement, Russia should take a more active position in its negotiations with European colleagues, experts said.

A source familiar with the lobby’s proposals recalled that measures like a carbon border adjustment mechanism, which is expected to be introduced by 2023, contradict the rules of the World Trade Organization.

The proposed carbon border tax as part of the European Green Deal could really impact the Russian economy, said Anastasiya Okorochkova, who is responsible for environmental security at the Presidential Commission for Strategic Development of the Fuel and Energy Sector. According to her, Moscow’s advantage is that it is a member of the Paris climate deal. Therefore, Russia should take a more active stance at its talks with its European colleagues on issues regarding adapting to negative consequences, monitoring and easing the consequences of climate change as well as ensuring a global shift to sustainable development, she stressed. Nowadays, it is vital to discuss and coordinate principles, norms and rules of ensuring a new economic order, she pointed out.

The expert also highlighted that Russia, which is a leader in terms of cutting greenhouse emissions among major economies, should hold talks and advocate its position and the right to independently count carbon balance.


Kommersant: NATO gears up to counter Russian and Chinese ‘space threats’

The defense chiefs of 30 NATO member-states are due to deliberate over key security threats on Thursday and Friday, which customarily point to Russia. The North Atlantic Alliance now plans to counter Moscow in outer space. For this goal, a new space center will be created at the alliance’s Air Command at the Ramstein Air Base in Germany. NATO will have enough money to open the new facility. For the first time in history, ten member-states increased their defense spending to 2% of their GDP. So, the NATO defense budget in 2020 exceeded $1 trln, Kommersant business daily writes.

NATO Secretary-General Jens Stoltenberg said on Wednesday that competition in space is rising every year and claimed that Russia and China are developing anti-satellite systems, which could "blind, disable or shoot down satellites and create dangerous debris in orbit." According to Dmitry Stefanovich, research fellow at the Center for International Security at the Institute of World Economy and International Relations, the focus on "space threats coming from Russia and China" was expected. “This has become the universal rationale for any activity in the field of military development of NATO countries,” he told the newspaper. The commentator believes that at the first stage a more advanced system for space monitoring will be created, "which is not bad for mankind." "Moreover, in the event of some normalization of NATO-Russia relations, a kind of a "single window" for cooperation could emerge, for example, with our system for space control." Earlier, Russia put forward initiatives on creating a single catalogue of space objects, he recalled.

On the other hand, according to German media reports, the new center could further coordinate "space defense." "This is just a step away from a ‘space attack'," the expert warned. So far, space has not become a battleground, but space infrastructure is a key element of ensuring combat actions on the planet’s surface.

Russia and China have accused the US and NATO of seeking to turn outer space into a new battleground. At the UN, Moscow and Beijing are promoting the idea of signing a legally binding agreement on banning space militarization. However, the countries fail to agree on universal rules of behavior in this field.


Izvestia: How a Trump or Biden win could impact Russia’s currency

Any outcome of the US election could positively influence the ruble and the price of Russian assets. Should Donald Trump emerge victorious this would be a long-term factor, whereas if Joe Biden won, this would have a short-term effect, experts questioned by Izvestia said.

Nearly the entire Senate Committee on Banking, which imposes financial sanctions, consists of Democrats, who accuse Russia of meddling in the 2016 election and seek revenge, said Executive Director of Trade OneTwoThree company Vladimir Rozhankovsky. "If Donald Trump leaves and Joe Biden becomes president, restrictions will come down like lightning since it will be easier to adopt them," the expert said.

A Trump victory is more advantageous for the ruble and Russian assets, said Yevgeny Mironyuk, an analyst at Freedom Finance. This will ease geopolitical risks and make the hydrocarbon market more stable. If Biden takes the presidential reins, sanctions could target energy projects ranging from Nord Stream 2 to LNG and developing shelf fields. Besides, under a harsh scenario, export and even Russia’s foreign trade partners could be targeted.

According to Kirill Sokolov, chief economist at Sovkombank, a Biden victory would be moderately negative for Russian assets. "We believe that Russian-US relations could worsen to a certain extent. But we don’t expect the introduction of harsh sanctions against ruble-based government debt and a ban on settlement in dollars because this would harm American investors. That’s why a moderately negative impact on Russian assets could be short-term," the expert noted.

The most unfavorable scenario for investors could be where a candidate refuses to recognize the outcome of the election and the vote counting process would be delayed. In this case, analysts believe that the S&P 500 indexes would drop 8% with further sales around the world.


RBC: Experts praise Russia’s measures to curb COVID-19 during first wave

The Russian Presidential Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) released a 740-page study devoted to Russia’s struggle against COVID-19. The report, which also involved leading state scientific institutes and the Central Bank, evaluates how Russia’s healthcare system, the economy and financial sector, education and the social support system handled the first wave of the pandemic and how the crisis affects the adjustment of the state administration’s model.

The key conclusion made by the experts is that Russia managed to prevent an explosion of COVID-19 cases and a dire crisis in the healthcare system. However, the authorities failed to stop the mass spread of the virus in the regions. Only South Korea carried out effective measures to contain the spread of the virus at home, they said.

According to the authors, the hopes that harsh self-isolation measures would be effective were not justified: there was neither a plateau after the first incubation period (on April 14-16) nor a decrease in incidence after two periods (by April 30). However, the self-isolation measures helped to slow the growth in new cases and buy time to prepare the healthcare system to receive new patients.

The government’s anti-crisis response was generally effective and more socially-oriented than many foreign programs, experts said. The government’s three packages of economic support measures as of July 1reached 2.7% of the GDP. This is much less than in developed countries, where the significant share of state support relies on state guarantees, while in Russia the share of direct spending in 2020 exceeded 70%, the authors said.

The study notes that the pandemic crisis could encourage positive changes in many fields in Russia. For example, the oil and gas sector could become a driver of the entire economic development. The pandemic also showed the importance of digital technologies for the economy and public life.


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