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Press review: Putin eases EU gas prices and Moscow to strike back at NATO expulsion

Top stories from the Russian press on Friday, October 8th

Kommersant: How Russia can respond to expulsion of its diplomats from NATO

Moscow is weighing various responses to NATO’s decision to halve the size of the Russian mission at the alliance, sources told Kommersant. Measures are also very likely to be taken in relation to the NATO Military Liaison Mission in the Russian capital, operating under the auspices of the Belgian Embassy. At the same time, Kommersant's sources suggest that it is likely that Russia will generally close its permanent mission to NATO.

Kommersant’s informed sources say that countermeasures against NATO are now being coordinated in an interdepartmental format. However, it has already been decided that they will concern the NATO Military Liaison Mission in Moscow, which was established in 2002 and was designed to help expand dialogue between Russia and the alliance.

The NATO website says that the mission consists of 13 people, but this information, according to Kommersant, is outdated. At present, there are at least half that number. Meanwhile, military cooperation between Russia and NATO was frozen back in April 2014 at the initiative of the alliance. In particular, on issues related to the programs of the NATO-Russia Council (NRC), and its work plans for military cooperation. NRC meetings have not been held for more than two years.

Without regular contacts along military lines and against the background of the NRC's paralysis in the NATO Military Liaison Mission, one of Kommersant's sources said, "you can leave one person, and that would be enough."

That said, Kommersant's sources do not rule out that Russia will close its mission to NATO itself. "If the alliance does not come to its senses, it may well come to the winding down of our permanent mission there," one of the newspaper’s sources said.


Izvestia: Why EU gas prices started to backpedal

It is possible that gas prices in Europe will once again start to climb amid a shortage of raw materials and verbal interventions by European regulators, according to analysts interviewed by Izvestia. On October 7, gas prices dropped below $1,000 per 1,000 cubic meters, essentially halving in less than a day. EU media linked the drop in energy prices to statements by President Putin about the possibility of boosting supply on the market.

The hikes in fuel prices has been evident since the beginning of summer, when, due to the increasing demand for resources in Asia, suppliers shifted to this region. In August, when it became clear that European underground gas storage facilities were not ready for the heating season, the price of fuel began to break records almost every day. However, the recent reversal in prices could be associated with Russian President Vladimir Putin’s recent comment about the country's readiness to stabilize energy prices.

That said, Head of the Center for Analysis of Strategy and Technologies for the Development of the Fuel and Energy Complex at the Gubkin Russian State University of Oil and Gas Vyacheslav Mishchenko believes that what is happening in Europe is "a man-made crisis". "The foundations that had been created over the previous several decades were systematically destroyed. This is a system of long-term contracts, which was based on oil index formulas for gas supplies primarily from Russia," he told Izvestia.

According to analyst at Raiffeisenbank Andrey Polishchuk, what is happening now in Europe can be called a traders’ panic. From the point of view of supply and demand, the situation has changed very little, and what we are seeing is a price hike not on the physical shipment market but on the futures market," he stressed.


Izvestia: Why Russia’s COVID-19 incidence rate renewed records

The daily coronavirus incidence in Russia has broken an annual record. On October 7, the country reported 27,500 new cases, a first since December 31, 2020. The spike is likely due to the fact that Russians have become more likely to be tested for COVID-19, and are reluctant to get vaccinated, virologists told Izvestia. At the same time, the mortality rate has been at its highest since the beginning of the pandemic.

The record growth of nationwide incidence is because of several reasons, according to Head of the Gamaleya National Research Center’s Department for Epidemiology and Microbiology, Professor Alexander Butenko.

"First, we expected such growth similar to the last year’s fall. The vacation period is over and people have returned home from trips where they met individuals from other regions and countries. Someone eventually became infected and brought it home. The second reason is that now the morbidity statistics include asymptomatic and "mild" patients. In addition, in large cities, especially in Moscow, the number of PCR tests has dramatically increased," he told the newspaper.

He added that in Russia, like in many other countries, the most aggressive Delta strain is now widespread, which is considered to be more infectious.

The expert emphasized that Russians are still not vaccinating actively, pointing out that about 30% of the population is vaccinated, and in order to form herd immunity, 60-80% of residents need to either get sick or get vaccinated.


Nezavisimaya Gazeta: White House’s new sanctions coordinator can impact Russia

Washington has resurrected an Obama-era post in the State Department known as the Office of Sanctions Coordination. US President Joe Biden nominated James O'Brien to the post of Coordinator for US Sanctions Policy. This department is of great concern to Russia, because it will be responsible for all matters relating to the establishment and coordination of the White House’s blacklists. O'Brien worked on the teams of Presidents Barack Obama and Bill Clinton. According to Nezavisimaya Gazeta, he does not have a reputation as a critic of the Kremlin.

Rather, O'Brien is a highly qualified performer with experience of behind-the-scenes negotiations rather than an official with his own political position, the newspaper writes. It could also play against his candidacy during his approval in the Senate. O'Brien is not well known and does not come from an official government post. He was recently employed at a large consulting company.

Director of the Franklin D Roosevelt Foundation for United States Studies at Moscow State University Yuri Rogulev told Nezavisimaya Gazeta that given the current hardline standoff between Republicans and Democrats, who have an equal vote in the Senate, problems with approving a nominee to any post, even an insignificant one, are quite possible.

"Coordinator for sanctions policy is just a post that could spark a conflict out of the blue," he said. "If we talk about the American system of power, then the President, his National Security Assistant, and the Secretary of State determine the foreign policy line. Now, all these three people are on the same team … O'Brien most likely won’t have such a big role to play," Rogulev noted.


Nezavisimaya Gazeta: Inflation in Russia becomes one of the highest in Europe

The Bank of Russia has been raising its key rate since March to combat inflation. However, the rise in prices is only accelerating. In September, the annual growth in consumer prices rose from 6.7% to 7.4%. Meanwhile, Central Bank officials believe that this rising inflation is due to cheap loans amid too soft of a monetary policy. In October, Governor of the Bank of Russia Elvira Nabiullina is likely to once again increase the cost of loans, Nezavisimaya Gazeta writes.

However, the regulator’s logic does not explain why inflation in Russia is surpassing almost all European countries, as well as G20 countries, the newspaper writes. That said, the Bank of Russia is one of the few financial regulators that has been constantly raising the lending rate this year. Independent experts believe that the inflation targeting policy pursued by the Russian regulator introduces serious distortions in the economy and does not always help reduce inflation.

"In general, increasing rates usually reduces consumer and investment spending. However, in countries with strong property stratification (like Russia or Brazil), there are nuances. Not all households will cut consumer spending when the rate rises. There is a redistribution effect: net savers are getting richer, while net borrowers are getting poorer," Deputy Director of the HSE Development Center Institute Valery Mironov told the newspaper.

"Inflation in Russia, like in other emerging markets, is higher than in developed countries, largely due to the weakness of the economy and the significant impact of external factors. The fact is that the main reasons for the growing prices in our country are not internal," chief analyst at TeleTrade Mark Goikhman told Nezavisimaya Gazeta.

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