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Press review: Moscow lockdown to impact business and Central Bank may gamble on quarantine

Top stories from the Russian press on Friday, October 22nd

Vedomosti: New NATO strategy focused on unlikely threats

NATO’s standoff with Russia in space and cyberspace without a large-scale war does not mean much, experts think. However, the bloc’s new strategy on the containment of Russia emphasizes precisely these spheres along with the readiness to counteract possible attacks simultaneously in the Baltics and the Black Sea region. This new master plan, Concept for Deterrence and Defence in the Euro-Atlantic Area, according to Reuters, is being discussed at a meeting of NATO defense ministers in Brussels on October 21-22.

The development of a new concept is conditioned by the fact that NATO needs to constantly "stand shoulder to shoulder" and discover new threats in order to justify its existence, according to Dmitry Stefanovich, a researcher at the International Security Center with the Russian Academy of Sciences’ Institute of World Economy and International Relations. The containment of an armed conflict with Moscow is conducted by NATO rather successfully simply because Russia has no reasons for such a conflict. However, at least some NATO countries would like to contain Russia in general, therefore new tools are being sought out and created. The expert pointed out that situations in the Baltics and the Black Sea region are radically different and it is not correct to lump them together while most "attack" scenarios seem improbable. Speaking of cyber threats, he noted that the main problem is related to mixing up cyber espionage with cyber attacks.

Expert at the Russian International Affairs Council Alexander Yermakov told Vedomosti that space as a threat source became fashionable lately at Washington’s initiative when the Space Force was created during the Trump administration, however, he thinks that this concept will consist of provisions from earlier documents. He added that the discussion of the new strategy is taking place amid the diplomatic scandal between NATO and Russia, with the alliance yanking the accreditation of Russian representatives to the organization, and Russia suspending the operations of its mission to NATO and the alliance’s representation in Moscow.


Nezavisimaya Gazeta: Russia’s Central Bank to gamble on quarantine-spurred nosedive

Russia’s economic revival began to fade even before the non-working days. The Center for Macroeconomic Analysis and Short-Term Forecasting announced the beginning of stagflation. The Institute of Economic Forecasting of the Russian Academy of Sciences warned that a new wave of the pandemic would accelerate a natural population decrease which would impact demand. And now the "soft lockdown" has been added into the mix. Thus, the Central Bank will have to make a decision on the key rate in special conditions, considering that the problem of accelerating inflation has not gone away despite the fact that the Central Bank has already raised the key rate five times during the year. Experts think that the possible interval of the new hike is about 25-75 basis points.

"The raising of the key rate which began this spring began to gradually slow economic growth," Artem Tuzov from Univer Capital said. According to him, the non-working days, if they last only a week, won’t impact the yearly statistics, yet there are significant risks that certain restrictions on business will be extended until the end of November which will affect economic growth. In his opinion, it is possible that the Central Bank will leave the key rate unchanged against the background of growing cases and the week-long lockdown.

However, most analysts expect that the key rate will be raised. "We think that the Bank of Russia may raise the key percentage rate to 7%-7.25% annually," Natalya Milchakova, deputy head of the Alpari analytical center, said, stressing that it is very probable that the Central Bank will take into account the non-working days and the short-term lockdowns in a number of regions. "The slowing down of the economic recovery began back in the summer together with an increase in coronavirus incidences," Sergey Kuchin of the BCS World of Investments noted, adding that the regulator would most likely proceed from the evaluation of the inflation dynamics. Head of Macroeconomic Analysis at Finam, Olga Belenkaya, noted that the inflation structure indicates that food products and automobiles are getting more expensive at the highest rates, although the toughening of the Bank of Russia’s money-and-credit policy cannot help here.


Izvestia: Czech Republic to reassess ties with Russia

The new Czech authorities announced their intentions to revise Prague’s relations with Moscow and Beijing. Czech politician Martin Dvorak said that a new document is being hammered out which would prioritize relations with Germany, indicate its intention to form a strategic partnership with Israel and review the relations with Russia and China, allowing for the introduction of Prague’s own Magnitsky Act.

"Unfortunately, the Czech Republic is affected not only by the coronavirus pandemic but by the Russophobic pandemic as well," First Deputy Chairman of the Russian Federation Council Committee on Foreign Affairs Vladimir Dzhabarov told Izvestia, adding that if Prague approves the analogue of the Magnitsky Act, it will receive equally harsh sanctions in return which would greatly damage the relations between the two countries. However, Director of the Center for European Information Nikolai Topornin believes that it is too early to think that the new authorities plan to exacerbate the situation, saying that they simply want to structure their foreign policy system.

If several years ago, the Czech Republic’s relations with Russia and China were at a relatively decent level, the situation has changed since the promised billions in investments from Beijing had never materialized, while relations with Moscow worsened after the Czech Republic accused Russian intelligence of being involved in the 2014 Vrbetice ammunition depot blasts. The departure of the last parties friendly to Russia and China - the Communists and the Social Democrats - from the Czech political arena shifted the confrontation with these two powers towards a total political mainstream direction. According to Topornin, this is not surprising, since this is the general climate of Russia’s relations with NATO and the EU, so the Czech Republic is simply spearheading this trend.


Kommersant: How Moscow’s lockdown will hurt retailers, movie theaters and restaurants

A lockdown declared in Moscow caused panic among market players who did not expect such harsh restrictions. Movie theaters are postponing new openings, retailers again are refocusing on online sales while for concert organizers and food service industry the suspension of operations may turn into a new wave of bankruptcies.

According to Marketing Director of the Formula Kino and Cinema Park chains Sergey Kuznetsov, such stiff restrictions turned out to be unexpected and the cinema distribution industry "is not ready for it." "The new lockdown launches a chain of consequences that are unfavorable for the market," Karo Film told the newspaper adding that the state support is much needed in this situation. Moscow’s major concert venues were fully booked for the lockdown dates, according to Mikhail Minin of the MTS Entertainment. "We are observing a complete suspension of ticket sales for events and mass returns," Olga Shpigalskikh, social ombudsperson in the sphere of cultural and mass events, noted, adding that this is a disaster for the industry where the volumes have already plummeted by more than 90%.

The lockdown may become the last straw for restaurants that have not recovered from their summer losses due to QR-codes and some may close for good, co-founder of the Rakovaya chain Evgeny Nichipuruk says, adding that the delivery option is not likely to help keep their heads above water unless it is fast food. Retailers second this pessimistic outlook although some of them treat the restrictive measures with understanding. President of the Inventive Retail Group Tikhon Smykov noted that the demand for their products would obviously move online.


Rossiyskaya Gazeta: New coronavirus variant comes to Russia

The AY.4.2 coronavirus variant that "occupied" the UK and the US has arrived in Russia. According to Kamil Khafizov, who heads a research group developing new diagnostic methods for human diseases at the Central Scientific Research Institute of Epidemiology of the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing the isolated cases of this variant have already been uncovered in the country. Essentially this is a variant of the Delta strain yet according to preliminary data, it is 10% more contagious than Delta.

According to Khafizov, this is not much in comparison to the Alpha and Delta strains that were 50-60% more contagious than the previous versions. "However, the emergence of the initial Delta version has already caused a serious increase in incidence and AY.4.2 may add an additional impulse to its increase," the expert thinks, stressing that vaccination is the only thing that can counteract the new variant. According to him, the AY.4.2 version may gradually displace the old Delta version although this is unlikely to happen very fast.

Meanwhile, the process of the preliminary evaluation of the Sputnik V vaccine by the WHO is underway and will soon reach a concluding stage. According to the vaccine’s Twitter account, a group of WHO experts will visit Russia soon in order to gather all the necessary documents on the jab.

TASS is not responsible for the material quoted in these press reviews.