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Press review: EU backs down on new sanctions and Kremlin shrugs off unauthorized protests

Top stories in the Russian press on Tuesday, January 26
European Union for Foreign Affairs and Security Policy Josep Borrell EPA-EFE/JOHN THYS/POOL
European Union for Foreign Affairs and Security Policy Josep Borrell

Izvestia: EU backs down from slapping sanctions on Russia

The EU has chosen not to introduce punitive measures against Russia over the arrest of Alexey Navalny during a meeting of EU foreign ministers earlier. According to Russia, this could point to a certain change in Brussels’ tactics with Moscow, a Russian senator told Izvestia that no matter how tough the EU’s restrictions are, they do not affect Moscow’s stance, and the EU is starting to take note of that.

The fact that the EU top diplomats did not discuss sanctions against Russia over Navalny’s arrest could mean that Brussels has changed its Russia strategy, Chairman of the Russian Federation Council’s (upper house of parliament) Foreign Affairs Committee Konstantin Kosachev told the newspaper.

"There are two approaches to overcoming conflict situations: either ‘we do not agree, but we carry on dialogue,’ or ‘we do not agree and we switch the dialogue to the language of sanctions.’ So far, the second approach has prevailed in the EU, and it is clear that they have gained some experience that shows that this language does not work in relations with Russia," the senator noted. "No matter how expansive the sanctions are, this does not affect our position on certain matters in any way - in this case, on maintaining Russian sovereignty and adhering to Russian law. The EU has not changed its principal stance on what is happening, since it is their right. However, it is possible that Brussels is beginning to understand that this strategy has no prospects and has embarked on changing its tactics. If that is so, we can only welcome such a development."

Earlier, EU High Representative for Foreign Affairs and Security Policy Josep Borrell informed European ministers of his plans to visit Russia on the invitation of Russian Foreign Minister Sergey Lavrov. Earlier, the Baltic states called on Borrell to abandon his plans. During the visit set for February 4-6, Borrell intends to discuss the way Brussels and Moscow will build their relations further.

"The EU has already expressed its concern over the situation with the blogger [Navalny], and the calls to introduce sanctions came from several countries. However, there is not much that can be added to that," Program Director of the Russian International Affairs Council (RIAC) and the Valdai Discussion Club Ivan Timofeev told the newspaper. "There is no point in any new restrictions, and, perhaps, this is what’s behind some of the sluggishness. I think it is likely that the EU will introduce some targeted restrictions, however, this won’t lead to any fundamental changes in bilateral relations."


Kommersant: Kremlin shrugs off unauthorized rallies as politically insignificant

The mass unsanctioned rallies calling for the release of Russian opposition figure Alexey Navalny held on January 23 did not lead to any political steps by the federal government so far. Sources in the presidential administration told Kommersant that they see the rallies as "regular protest actions," while the Russian State Duma (lower house of parliament) plans to discuss the matter on Tuesday. Meanwhile, Navalny supporters have already announced plans for new rallies, promising to improve their coordination.

A source in the Kremlin told Kommersant that the number of people attending Saturday’s unauthorized rallies in support of Alexey Navalny is not that different from regular protest actions, so the reaction to them has been calm. According to the source, these demonstrations do not require any specific reaction, like holding counter rallies in support of the president or introducing tougher laws. During a video session with Russian students on Monday, Russian President Vladimir Putin stated that everyone has a right to express their point of view, but it should remain within the law.

Another source familiar with the situation in Moscow told the paper that the capital had managed to fulfill the objective of "maximum civility": "In the first two hours, law enforcement did not touch citizens that did not violate public order. There were no serious injuries among those attending the rally, members of law enforcement looked for teenagers and parents with small children in the crowd so that they wouldn’t be trampled on or harmed." Besides, the rallies did not disturb the city’s public services. There were no incidents on public transportation or in city facilities, the source added.

Head of the Just Russia parliamentary faction Sergei Mironov deemed the January 23 protests "society's reaction to growing social inequality, widespread poverty and the illegitimate enrichment of the minority." "Navalny and his supporters are skillfully exploiting the rightful discontent of the population, purposefully using it in an attempt to discredit the Russian leader," he told Kommersant. "Their goal is to cause turmoil that will open up wide opportunities for anti-national forces within Russia and outside of it."


Nezavisimaya Gazeta: Despite Democratic majority, Biden’s aid package may face resistance in Congress

The administration of US President Joe Biden is actively promoting the need to approve an aid package for American citizens to the tune of nearly $2 trln. Both sides of the aisle agree that vaccinating the US population should be the utmost priority. Biden thinks that within 100 days, 50 mln Americans (two doses each) will be vaccinated. Dr. Anthony Fauci, head of the US National Institute of Allergy and Infectious Diseases thinks that this can be done.

However, some lawmakers are concerned over the fact that the massive aid package will be approved shortly after another project totaling $900 bln, while the US budget deficit reaches 18% of the GDP, Nezavisimaya Gazeta notes. Experts suggest that there is no need to worry about new debts, since the American economy is constantly expanding financial resources. With the majority in the House and in the Senate, it seems like the Democrats do not have to worry about their political opponents. However, unity among Democrats may be disputable, the paper notes.

Director of the Franklin D. Roosevelt Foundation for United States Studies at Moscow State University Yuri Rogulev thinks that the stipulated sums may be considered reasonable, given the deep crisis and the scale of the American economy. However, ways to spend the money more effectively can be disputed. Besides, it is unclear how fast and to what extent the package will be approved in Congress.

"There is no full unity among Democrats, besides, we should not forget that they have the majority in the Senate only if the Vice President is present. So, there will be a need for a discussion, just like on other issues. Here, a lot remains unclear. For example: which spheres of business should receive aid? Should they stimulate demand or concentrate more on unemployment?" the expert told Nezavisimaya Gazeta.

Kiplinger, an American publisher of business forecasts, suggests that Democratic Senator Joe Manchin of West Virginia, could seriously dispute the need to pay out such a huge sum of money. Reporters note that he may not be the only one.

It remains to be seen whether the White House will be able to push through a legislative initiative with ease. Practice shows that even if a party has a majority within the legislature, disputes may arise within it, like it happened in the UK, the newspaper points out.


Izvestia: One in five Russian businesses shut down in 2020

Some 1.54 mln companies, individual entrepreneurs and farms shut down in 2020, which boils down to about 20% of all active businesses in Russia. This is a record figure in the past six years, the Russian Federal Tax Service’s statistical data analyzed by Izvestia suggests. However, the number of dissolved companies turned out to be 17% lower than the year before, showing a positive trend. The decrease in individual entrepreneurs was the main factor affecting the sharp decline. Their number dropped by 36%, which comes down to about a million people. This negative trend can be explained by the consequences of the COVID-19 pandemic and a switch to self-employment, experts suggest.

The plunge in the number of individual entrepreneurs is related to the fact that this form of business is more common among sectors that suffered the most due to COVID-19 restrictive measures, Associate Director of ACRA’s Sovereign Ratings and Macroeconomic Analysis Group Dmitry Kulikov told Izvestia.

"At the beginning of the pandemic, about 55% of individual entrepreneurs and 70% of their revenue corresponded to enterprises in the sphere of trade, public catering and the service sector, which require a personal presence," he stated.

The mass shutdown of individual entrepreneurs is related to the fact that small and medium-sized businesses do not have a lot of leeway to overcome crises, managing director of the corporate ratings group at NKR agency Dmitry Orekhov said. On the whole, businesses that managed to rebuild in order to cut the mustard have managed to stay afloat, he noted, and these companies are likely to find commercial success in the future. "Companies that survived the 2020 crisis will likely be able to continue functioning in the future," the expert predicts.


Kommersant: Russia’s oil companies to raise volume of domestic oil refining

As wholesale prices increase, Russian oil companies are getting ready to move the oil meant to be exported to domestic oil refining plants. According to the draft plan, in February, oil export from Russia’s European ports might drop by a third compared to January. The Russian Ministry of Energy has tried to increase the volume of oil at refineries for a while, and Kommersant’s sources suggest that this move has now become profitable for oil companies.

Oil producers will decrease oil export from Transneft’s European ports in February by 34% compared to January (to reach 3.36 mln tonnes), Russian media informed earlier. Rosneft, a major oil shipper, may decrease export through European ports by 50% in February, to reach 0.9 mln tonnes. LUKOIL expects to reduce exports by 26% reaching 680,000 tonnes.

Oil companies and the Russian Ministry of Energy did not provide a commentary to Kommersant, while Transneft has remained tight-lipped on the issue.

According to Kommersant’s sources, the decline in export can be related to the need to increase production at Russian oil refineries. This move may aim to lower the wholesale prices for fuel, which have resumed growth this winter and reached an annual high at the Saint-Petersburg International Mercantile Exchange last week. In this context, the Russian Ministry of Energy demanded that oil companies increase fuel export to the Russian market.

Although the further increase in wholesale prices can lead to closer inspections of regulators, Kommersant’s sources point out that the decisive factor behind the move towards the domestic market is the improved economic situation in the oil refining sphere.

According to one of the sources, in February, oil refining will become profitable for the majority of major refineries.


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