Vedomosti: Russia believes relations with US on verge of breakdown

The Russian Foreign Ministry summoned US Ambassador John Sullivan following US President Joe Biden’s caustic remarks about Russian leader Vladimir Putin. The envoy was handed a note of protest. Moscow also warned that hostile actions against Russia would be met with a robust response, Vedomosti writes.

Biden on March 17 called Putin a "murderous dictator" and a "pure thug" who "is waging an immoral war against the people of Ukraine." In response to a reporter’s question the day before, Biden claimed that Putin was a "war criminal." The first scandal over the US president’s insulting statements about his Russian counterpart erupted in March 2021, when Biden agreed with an ABC News interviewer’s remark that Putin was "a killer."

It is too early to talk about the severance of diplomatic relations between Russia and the United States, Russian International Affairs Council Director General Andrey Kortunov pointed out. Russia is unlikely to initiate the move. Moscow may only do it if the US went beyond rhetoric and took some extraordinary steps. However, such rhetoric on behalf of Washington makes it psychologically difficult to return to dialogue, Kortunov stressed.

It’s not about a total breakdown of Russian-US diplomatic relations no matter what the current situation and narrative are like, Director of the Franklin D. Roosevelt Foundation for United States Studies at Moscow State University Yury Rogulev emphasized. According to him, it’s crucial for Washington and Moscow to maintain a channel of communication though the burden of sanctions and damage from them are comparable to a declaration of war, on the brink of which the two countries are actually poised. A mutual recalling of ambassadors may become a compromise solution if the choice is between cutting ties completely and responding to some actions, the expert noted.

 

Nezavisimaya Gazeta: Hostilities in Ukraine helping China drive US out of East Asia

Beijing has completed the process of turning three artificial islands in the South China Sea into military bases, arming them with anti-ship and anti-aircraft missile systems, and laser equipment, US Indo-Pacific Commander Admiral John Aquilino said onboard a US navy reconnaissance aircraft that flew over the South China Sea. The situation in Ukraine is forcing the Pentagon to deploy weapons to Europe, making it easier for China to strengthen its position in its surrounding seas. The fact that the plane continued its flight after the Chinese had demanded it leave China’s territory shows how close the two superpowers are to a standoff, Nezavisimaya Gazeta writes.

Senior Researcher at the Higher School of Economics Vasily Kashin points out that China has "indeed stepped up" efforts to increase its military might. "Military spending is growing along with the country’s economic growth. During the Cold War, military expenditures reached six percent of GDP, while the economy was far smaller in size. Now, their share stands at about two percent of GDP. The Ukrainian crisis is certainly influencing China. The United States is expected to keep much of its forces in Europe, it will remain stuck in Europe and will not be ready to take any actions in Asia. This does limit the United States’ ability to contain China," the expert pointed out.

As for the South China Sea, Beijing has a clear advantage over Washington, the analyst stressed. The largest of China’s three fleets is stationed there. The military infrastructure on the Spratly Archipelago allows Beijing to monitor the movement of any US ship and aircraft in the area.

Coupled with unique powerful weapons systems such as anti-ship ballistic missiles, this makes it possible for China to get the upper hand. However, the danger of a standoff is not that high because neither China nor the US needs it. Taiwan remains the hottest spot in their relations, Kashin concluded.

 

Media: Russia officially bans Facebook and Instagram

A Russian court’s decision to designate Meta Platforms as an extremist organization will change little for Russian users, they won’t be held accountable for using Meta’s social media networks as long as the content that they post does not violate Russian laws, said experts interviewed by Izvestia. However, bloggers and advertisers may face liability.

Using VPN services and other tools to circumvent the ban is legal for now, an attorney from the Rustam Kurmayev and Partners firm Yaroslav Shitsle told Kommersant. According to him, simply browsing Facebook and Instagram feeds is not fraught with serious risks. It is users who promote businesses on Facebook and Instagram that are in danger, lawyers insist. Paying for Facebook’s advertising tools or trading Meta’s stocks may be classified as funding extremist activities, said Yevgenia Savelyeva, a lawyer with Kosenkov and Suvorov. Companies will have to either remove links to Meta apps from their websites or add notes indicating that the organization is outlawed, otherwise it would be viewed as an abuse of freedom of the media, she added.

The designation of Meta as an extremist organization is an unprecedented move because until recently, only certain communities had been labeled as such rather than entire social media networks, Maxim Strilchenko, a lawyer from the S&K Vertikal law office, told Izvestia. Holding users who monetize their content accountable will require proving that they had a malicious intent to fund an extremist organization, Strilchenko pointed out.

As for ordinary users, they won’t face a penalty for posting photos on Facebook or Instagram, provided that their content does not violate Russian laws, Head of the Content Review project Sergey Polovnikov explained.

 

Rossiyskaya Gazeta: Stock market trading resumes in Russia after pause

Russia’s financial market partially reopened after a three-week pause, with the resumption of trading in government bonds on Monday. The Central Bank is now present on the market, ready to purchase federal loan bonds to prevent massive sell-offs by investors, Rossiyskaya Gazeta notes.

Bonds with a short-term maturity showed a yield close to the Central Bank’s key interest rate, which has been 20% since February 28. The longer the maturity of bonds, the lower yields they showed though normally, longer-term bonds have higher yields. This is the result of the Central Bank’s activities as it seeks to prevent a major decline on the market.

The main factor that defines the current situation is uncertainty in terms of possible new sanctions on Russia and the impact of the already imposed restrictions, Head of Debt Market Analysis at Otkritie Investment Vladimir Malinovsky noted.

According to the expert, the suspension of trading in Russian stocks and bonds made it possible to avoid panic sell-offs and gave investors time to adapt to the situation. "On the other hand, the longer investment remains frozen, the more agitated and concerned market players become. This is why the decision to gradually reopen trading was a necessary and important one," the expert stressed.

"For now, purchasing short-term bonds seems to be the best tactic. Apparently, it is too early to open positions in long-term fixed-coupon bonds because there is no complete certainty that February’s move to raise the key interest rate was the final one in this cycle," Finam Analyst Alexey Kovalev said. In his view, the Central Bank may once again use this tool in order to stabilize the situation on the financial market.

 

Rossiyskaya Gazeta: Western brands may quietly return to Russia’s market soon

Western brands that earlier suspended their activities in Russia may soon resume operations, albeit quietly, said experts interviewed by Rossiyskaya Gazeta. Western companies are unwilling to knuckle under to their Russian competitors just like that. The Spanish retailer Inditex, which owns brands such as Zara and Bershka, has announced plans to return to the Russian market at the earliest opportunity.

The public move to suspend operations in Russia doesn’t make any sense as a restriction aimed at economically strangling Russia, said Director of the Institute of Social and Economic Research at the Russian Government’s Financial University Alexey Zubets. It was about making a psychological impact rather than an economic one, the expert noted. Daily announcements about dozens of brands leaving Russia were expected to unnerve Russian consumers, he explained.

However, the psychological attack failed. So what’s next? Clearly, the companies were forced to make such a demarche under the pressure of their governments but no one has plans to offset the losses they are suffering from withdrawing from Russia, which is the largest European country in terms of population size. After all, Western businesses don’t serve governments but their shareholders who have the right to demand corporate management explain lost profits, the expert emphasized. So a quiet return of these companies to the Russian market is the most likely scenario for the coming months, Zubets emphasized.

Meanwhile, as soon as foreign companies closed their cafes and shops, Russian producers stepped up their activities because there is now a real chance for them to grab the spotlight, Editor-in-Chief of the Marketing and Logistics magazine Olga Zhiltsova pointed out.

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